Publication: Eurasia Daily Monitor Volume: 2 Issue: 154

Armenia appears to have decided to keep its vital nuclear power station at Metsamor operational for another decade, despite persisting Western concerns about the safety of the Soviet-built facility. The authorities in Yerevan, reluctant to set a date for the plant’s inevitable closure until recently, have deferred the decision over the past few months.

The director general of the International Atomic Energy Agency (IAEA), Mohamed El Baradei, ascertained their intentions during a recent visit to Yerevan. “I think the Armenian authorities would like to continue to operate the reactor for around ten years,” El Baradei said after talks with President Robert Kocharian and other senior Armenian officials on July 28.

This will hardly please the United States and especially the European Union. They have for years been pushing for a quick decommissioning of Metsamor, saying that it is located in a seismically active region and that its sole operating reactor is inherently flawed. But the United States and the EU seem to have no option other than continuing to work with Yerevan in further boosting the plant’s safety during its final years of operation. They are also clearly conscious of the fact that it meets as much as 40% of Armenia’s energy needs.

Built 35 kilometers west of Yerevan in 1977, the nuclear plant was promptly shut down by Soviet authorities following the December 1988 earthquake that devastated much of northern Armenia. Metsamor’s closure was hardly felt until the collapse of the Soviet Union and the outbreak of wars in Karabakh and elsewhere in the South Caucasus. Those events plunged Armenia into a crippling energy crisis that forced its first post-communist government to reactivate one of the plant’s two reactors in 1995. The move, coupled with a radical reform of the Armenian energy sector, not only ended the power shortages but also enabled the landlocked, resource-poor country to export to some of its neighbors.

The West opposed Metsamor’s reactivation from the outset, but eventually had to come to terms with it. The Americans and Europeans have each spent tens of millions of dollars on measures to improve the plant’s operational safety over the past decade. In return for the large-scale assistance, the administration of Armenia’s former president Levon Ter-Petrosian reportedly promised to decommission it in 2004. However, Kocharian never felt bound by that pledge and his government insists that Metsamor is safe enough to continue its operations.

Kocharian told El Baradei that his administration is committed to further improving safety standards at Metsamor. The Vienna-based IAEA has regularly inspected the plant and has not reported serious violations so far. El Baradei commended the Armenian authorities for their “good” cooperation with the UN’s nuclear watchdog.

Armenian energy officials say Metsamor’s VVER-440 light-water reactor is more advanced than any of the RBMK-1000 reactors of the Chernobyl nuclear station that exploded in 1986. Their European counterparts, however, believe VVER-440 is one of the most dangerous facilities of its kind in the world. The European Commission said in a report last March that the closure of all Soviet-built nuclear facilities remains “a key EU objective.”

The Armenian government may have coped with Western pressure well, but it clearly cannot avoid setting a date for the nuclear plant’s closure anymore. Deputy Energy Minister Areg Galstian told journalists on June 23 that the government is already preparing for the start of the decommissioning process, which he said would be complete before 2016. The process promises to be very costly. According to Galstian, its first stage alone requires $44 million worth of expenditures. That includes the construction of a second storage site for nuclear waste.

Yerevan hopes that Western donors will foot most of the multimillion-dollar bill. It has contended all along that Armenia cannot afford to halt the Metsamor reactor before developing alternative sources of power generation. Yet it appears that the problem is not so much the availability of those sources as their production costs. Thermal power plants already account for 40% of electricity production in Armenia and can substantially increase their output at any moment. The problem is that the electricity generated by them is much more expensive than nuclear energy.

The Armenian authorities borrowed $150 million from the Japanese development agency last March for a complete reconstruction of an old thermal plant in Yerevan. Its production costs are due to fall dramatically as a result. The authorities are also looking for a foreign investor to complete the protracted construction of a new gas-powered plant in the central town of Hrazdan. The two facilities are expected to be the main recipients of Iranian natural gas that will be delivered to Armenia through a pipeline currently under construction.

The pipeline is a key component of a 20-year energy sector development plan that the Armenian government approved on June 23. The plan also envisages the construction of new hydroelectric stations across the country.

The government’s decisions on the issue are also bound to be influenced by the fact that Metsamor’s finances are managed by Russia’s state-owned power monopoly, Unified Energy Systems, in accordance with a 2003 swap agreement that settled the plant’s $40 million debt to Russian nuclear fuel suppliers. The deal enabled Metsamor to balance its books and secure fresh fuel deliveries. It remains to be seen at what cost.

(Hayastani Hanrapetutyun, July 29; Statement by the Armenian president’s press service, July 28; RFE/RL Armenia Report, July 28, March 28; Haykakan Zhamanak, June 24)