Armenia’s Energy Balancing Act: Gas Reliance, Nuclear Lifeline, and the Push to 66% Renewables by 2036

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Armenia is reshaping its energy system at a pivotal moment for the region and for global clean energy supply chains. Landlocked and import dependent on fossil fuels, the country is pursuing a three track strategy: secure gas supplies in the near term, extend the life of its nuclear generation, and accelerate a meaningful buildout of renewables to reach 66% of power generation by 2036.

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Strategic context and trajectory

Energy security is pivotal for Armenia’s industrial growth and the scaling of strategic sectors like mining and downstream metals, with a cleaner, more diversified power mix reducing exposure to commodity shocks and aligning with investor and off‑taker ESG expectations. Today, imports dominate fossil supply: natural gas provides roughly 60% of total energy, largely from Russia, with additional volumes from Iran via an electricity‑for‑gas swap. Armenia also has a unique nuclear anchor, the only nuclear operation in the South Caucasus supplying about one‑quarter to one‑third of electricity in recent years; a life extension has been approved and a further extension is under consideration. Regional power trade is constrained: links with Georgia operate asynchronously, limiting volumes, while interconnections with Türkiye and Azerbaijan remain inactive for political reasons. Looking ahead to 2036, the government targets renewables at 66% of the generation mix, implying around 2,185 MW of new capacity about 950 MW solar PV, 500 MW wind, plus incremental hydropower alongside national energy‑efficiency programs backed by donor financing to curb demand growth and improve affordability.

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Industrial upside and market reforms to enable it

For industry and investors, a more resilient power system can enable midstream processing of copper, molybdenum, and gold, moving beyond raw ore exports; however, rapid PV and wind growth will demand grid upgrades, storage, and market reforms to integrate variable generation and facilitate seasonal swaps with neighbors. Cleaner electricity will also enhance the carbon profile of Armenian metals, supporting competitiveness amid CBAM‑like policies and green procurement mandates. Key developments to watch include nuclear life‑extension or replacement decisions and financing, PPA frameworks and auction pipelines for utility‑scale solar and wind, progress on synchronizing the Georgia interconnection and expanding trading windows, and regulatory steps to open the electricity market and incentivize storage and flexibility services.

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Armenia’s path to 2036 is a pragmatic balancing act: keeping the lights on with gas, maintaining a nuclear baseload, and building a renewables backbone at pace. If executed, the strategy can deliver greater energy independence, lower emissions intensity, and a stronger platform for industrial upgrading positioning Armenia as a more competitive, reliable node in regional and global value chains.

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