Armenia to require licences for energy storage stations above 1 MW from December 4
Energy storage will become a new licensed activity in Armenia’s energy sector, with a licence required for storage stations with installed capacity above 1 MW. The draft decision of the Public Services Regulatory Commission (PSRC), the energy sector regulator, is due to take effect on December 4 and is open for public comment until November 24.
A licence holder will have the right to build (or rebuild) an energy storage station in the area set by the licence, buy and sell electricity on the wholesale market under the market rules and provide storage services to market participants. No licence will be needed for stations of up to 1 MW, or for stations above 1 MW during the storage period if they store energy only for their own needs. For electricity producers, own needs will also include storing electricity they generate. Holders of electricity transmission and distribution licences will be barred from storage, except in cases set by law.
Licences will be issued with or without an energy storage guarantee. A licence with a guarantee will be granted on a first-come basis, through a tender or under a public-private partnership (PPP) deal. According to the justification, its holder will have to provide storage at a tariff set by the PSRC, following dispatch instructions from the power system operator. For stations of up to 30 MW, licensing will take into account maximum total capacities proposed by the government’s authorised energy body, while stations of 30 MW and above will also need that body’s consent. The construction period will be 2 years and 6 months.
Tenders will be held at the authorised body’s proposal. Within 30 working days of receiving it, the PSRC will approve the tender limit (the total capacity or energy volume to be allocated), the maximum price and the construction and storage periods. The invitation will be published at least 30 calendar days before the bid deadline. Bids above the maximum price will be rejected, and the rest ranked from the lowest price up until the limit is filled. The winner must apply for a licence within 6 months and, after receiving it, sign a storage service contract within 30 working days.
The draft also changes the bank guarantee for generation and storage licences that include a construction period. It will equal the station’s capacity in kW multiplied by ten times the base duty, instead of the current 2.5 times. The first extension of the construction period will require twenty times the base duty, and later extensions thirty times. According to a Business Daily calculation, with a base duty of AMD 1,000, the guarantee for a 1 MW station will be AMD 10 million (about $27.7 thousand) instead of AMD 2.5 million, and AMD 20 million and AMD 30 million for extensions.
For the security and reliability of the power system, the authorised body will be able to set maximum total capacities for generation licences at stations of any type up to 30 MW, and for connecting stations of autonomous producers and micro-producers. Once these limits are used up, new licences and grid connections will stop. Applicants for a generation or storage licence will in all cases have to submit a certificate confirming that grid connection is possible.
The draft follows 2026 amendments to the Law on Energy, which take effect on December 4; by then the PSRC must bring its acts in line with the law. The document was prepared with support from the RECONOMY programme implemented by Helvetas Swiss Intercooperation.
