Energy has become an indispensable part of our lives to the point that we take it for granted and almost never question about its sources and environmental impact. Increasing efficiency of energy consumption has proved to be the most straightforward and practical way for climate change mitigation.
The energy sector is the key emitter of greenhouse gases (GHG), with 67 percent share in total emissions of Armenia. At the same time, the energy sector has major potential for reducing emissions, both on generation and consumption side, directly impacting local pollution and economic growth. But what is more important for Armenian households and businesses is the cost of energy, and energy efficiency can alleviate the burden of increasing energy tariffs on the family budgets without jeopardizing quality of life.
Historically, Armenia suffers from very poorly insulated housing stock. Most of its multi-apartment buildings were built 40, 50, even 60 years ago without a consideration that energy prices might increase, and the operational costs of the buildings would ever become such a burden. The same issue is palpable in the public sector: schools, hospitals, kindergartens, etc. Buildings represent also the largest energy users, accounting for almost 40 percent of electricity and 25 percent of gas consumption in Armenia.
To change this pattern and promote energy efficiency and energy saving, Armenia has recently adopted a number of policies, including the Energy Security Concept (2013) and the corresponding action plan for 2014-2020, aiming to boost production of renewable energy, particularly hydro and solar power, and increase energy efficiency in the industry sector as well as in urban and rural communities. New standards for businesses and households have also been adopted to guide the country towards a more sustainable energy consumption pattern.
In the framework of UNDP’s partnership with the Government of Armenia, since 2010 the assistance in promotion of energy efficiency was prioritized, particularly in the sectors of municipal heating, street lighting, public and residential buildings.
UNDP focused its assistance on the residential sector, which is one of the largest energy consumers in Armenia. The challenge was to develop a proper financial model for Soviet-era residential buildings energy efficient retrofit. A successful pilot in Yerevan where UNDP showcased a new insulation technology in a nine-story apartment building, with about 60 percent energy savings, paved the way to secure the region’s first investment from the Green Climate Fund (GCF) worth USD 20 million. It was also only the second GCF grant on energy efficiency worldwide, as well as one of the largest single investments UNDP in Armenia has ever received. The grant will allow UNDP and the Municipality of Yerevan to retrofit the envelopes and insulate external walls, entrances, roofs, floors and windows of around 300 multi-apartment buildings, 6,000 single-family houses, and over 170 public buildings, with a total of over 200k beneficiaries, thus helping to achieve a reduction in energy use for heating, cost-savings, and associated reduction in CO2 emissions. This will create a paradigm shift towards the development of new financial models targeted towards financial and legal de-risking of investments in energy-efficient building retrofits.
The cooperation of UNDP with communities during the recent years proved to be quite successful, as there is a significant interest to improve the municipal services provided to residents. Street lighting is among the most essential services of the urban economy, which is also quite energy-intensive and one of the major sources of GHG emissions. The UNDP’s demonstration projects proved that annual savings achieved by municipalities are substantial - in monetary terms around USD 170,000. Modernization of street lighting along 60 km of major urban roads was carried out in 18 cities, the installed LED lighting provided at least 60 percent efficiency (reaching as much as 80 percent in certain cases). In total, about 3,000 light-emitting diode (LED) luminaries were installed, which ensured savings of 2000 MWh of energy. Based on the savings from the energy-efficient lighting and in agreement with the cities’ administration, Revolving Urban Funds were established that have ensured the sustainability and replicability of the Green Urban Lighting project throughout Armenia. New initiatives were co-financed from the annual savings accumulated in the Revolving Funds, while the upgrade of the lighting systems in major transportation sections of Yerevan - Arshakunyats Avenue, Athens Street, Brazil Square, and Tsitsernakaberd highway – were carried out solely from the Revolving Fund of Yerevan Municipality.
UNDP’s intervention has also helped to improve the legal and regulatory framework, including amendments to the Energy Saving and Renewable Energy Law, which makes the energy performance requirements mandatory in all newly built or retrofitted/reconstructed buildings funded from public finance sources. New national construction standards on buildings energy performance, building energy audit and energy passport were adopted, standard on natural and artificial lighting was introduced aligning energy efficiency requirements with new technologies in the market.