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March 20, 2007

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Errol

Armenia has no energy sources of its own -- no coal, no oil, no natural gas.
...
Armenia is supposed to pay the money back by exporting electricity to Iran. Who knows if that will work, but anyway the two countries are going to link up their power grids later this year.


Shipping gas next door to be turned into electricity and shipped back seems all wrong. So have they started building dams?

Carlos

Trading fuel for electricity is not an uncommon pattern.

I'll make a wild guess that the watershed vis-a-vis political boundaries and the climate patterns aren't real great for further Armenian hydroelectric power, otherwise the Soviets would have already done it.

In terms of use percentage, Armenia is pretty far up the nuclear power list, near 40%. I believe it's the poorest nation to have double-digit nuclear consumption. Soviet-era plants, woo.

Doug M.

Errol, it's not unusual. It can happen for a lot of reasons, some economically legitimate, some not. To give an obvious example, it may be cheaper to build and run a power plant in one country than another.

Carlos, there's some hydropower here, but you're right -- they're about up against the limits.

They have one nuclear power plant: Metsamor. Build in Soviet times, it sits on top of a major fault. The EU has been pressuring Armenia to close it, but without success.


Doug M.

Carlos

... what doesn't sit on top of a fault in Armenia?

Metsamor, Kozloduy, Ignalina, Bohunice -- those were the last four sites where early dodgy Soviet reactor designs operated outside of the current boundaries of Russia. (There was a fifth site...) Those last three are now within the EU. Somehow, I don't see Armenia getting that carrot.

I'll guess that current operation of Metsamor is like the MIT student taking uppers: inspired flashes of brilliance in a very bad place. (IMS, at Kozloduy, in an attempt to introduce an institutional culture of safety, they had to turn over the staff. Twice.)

Errol

I didn't expect the market distortions to be so bad that they could pay back loans on the basis of converting the gas surplus to their own needs to electricity. It would be different if virtually all the gas was being shipped back as power, but if that was the case the Russians wouldn't be that upset.
That suggests that they can pay a LOT less to make powerfrom gas than the Iranians - 'real' costs presumably are different.

I can explain why it makes sense for NZ to import coal to the coal-fired plant sitting on a operating coal field, while exporting coal as well.

Noel Maurer

I smell a case in here. So, Doug, why does Yerevan jump when Moscow says?

Doug M.

Noel, because it's a small country that's surrounded by neighbors who are big, actively hostile, or both.

1) Russia has troops in Armenia, guarding the Turkish border. Turkey is not currently a threat to Armenia, but it's widely believed here that the Turks would side with Azerbaijan in the next war. (And a next war is a real possibility.)

2) Russia is neutral in the Armenia-Azerbaijan conflict, but at least they don't actively favor Baku. Since they're the big dog of the region, the Armenians want to keep them no worse than neutral.

3) Russia favors the status quo, which has Armenia and Azerbaijan in a frozen conflict over Karabakh. Armenia has problems with the status quo in some regards -- the closed borders on two sides are a bitch -- but, other hand, the status quo has them staying in control of Karabakh.

4) If Russia turned cool, Armenia would become -- at best -- a satellite of Iran.

Iran already exercises a certain amount of economic leverage. Half the goods on my shelves are from there. (And there's something slightly disorienting about a jar of Nutella with subtitles in Arabic/Persian.) And then of course, the large Armenian minority in Iran would be a hostage.

Russian friendship keeps Teheran honest, friendly without being too overbearing. Of course, Russian friendship comes at a price, but most things of value do.

Those are the strategic reasons. There are a bunch of others -- cultural attitudes, economic links, Armenians in the KGB, you name it -- but those for starters.


Doug M.

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