Armenia's proposed modular nuclear plant could produce power at higher tariffs, former utility executive says

Electricity generated by a proposed small modular nuclear reactor (SMR) in Armenia could cost between 60 and 80 drams per kilowatt-hour if construction expenses reach $9 billion, a former senior executive of Armenia’s power distribution company said on Tuesday, raising concerns about the project’s financial viability.

David Ghazinyan, former CEO of the Electric Networks of Armenia and a board member of the Strong Armenia party, told a news conference that the government was underestimating the potential cost and risks associated with the U.S.-backed modular nuclear initiative.

“There is deception taking place,” Ghazinyan said, arguing that the projected $5 billion plus an additional $4 billion in costs was not a fixed figure and could increase.

He noted that in the United States the first license for the design and construction of a small modular reactor was issued in 2023, but construction was halted the same year after costs were found to be significantly higher than initially projected.

“That $5+4 billion is not a definitive number,” he said.

Ghazinyan added that no country currently operates a grid-connected small modular nuclear power plant, according to his information. He said a Russian project exists but operates autonomously rather than being connected to a national grid.

“This is new technology that still needs refinement before we take on such debt,” he said.

He also criticized a lack of transparency regarding the plant’s production costs.

“Based on our calculations, if $9 billion is spent, the production cost will be 60–80 drams,” he said. “In that case, either the plant will be built and not operate because the production cost is too high, or electricity tariffs will have to increase, or it will need to be subsidized from the state budget, whether openly or through other mechanisms.”