Energy Efficient Buildings in Armenia: A Roadmap

This roadmap is intended as a resource for policy makers, investors, representatives from development banks and international organisations, and other stakeholders working to advance building sector energy efficiency in Armenia. It may also be of interest to other countries at a similar stage of buildings sector efficiency improvements. Although specific energy, CO₂ or other reduction targets are not the focus, this roadmap’s insights and information can be useful for both target-setting and goal achievement.

To understand Armenia’s current buildings sector efficiency and to explore pathways for the future, this roadmap examines some of the key areas affecting the sector, including policy, market and technology issues, within five main sections:

1. buildings sector and energy-use indicators
2. influencing factors such as policies, financing and markets
3. energy-efficient technology deployment
4. emerging trends, including digitalisation
5. a summary roadmap containing insights from the text as well as guidance and recommendations for policy makers.

Rather than being an exhaustive and detailed study, this relatively brief document is intended to provide a high-level overview, offering insights based on international best practice as well as relevant examples and case studies. It is not meant to replace the detailed policy and project discussions taking place among dedicated experts working both in Armenia and internationally to advance progress on buildings sector efficiency.

Development of this roadmap for Armenia complements several notable ongoing and parallel efforts, including:

1. EU-led initiatives such as implementation of the EU-Armenia CEPA, dedicated funding streams and high-level dialogue with international financial institutions, featuring establishment of a board to steer progress on energy efficiency.
2. An International Energy Agency (IEA) in-depth review (IDR) of Armenia’s energy policies.
3. Armenia’s 3rd National Energy Efficiency and Renewable Energy Action Plan (NEEAP-3).
4. EU4Energy’s Nearly Zero-Energy Buildings (NZEB) Roadmap, and its action plan to develop a calculation methodology for buildings’ energy performance.
5. International organisation and international financial institution (IFI) efficiency and clean-energy programmes with buildings sector components and projects.

Improving building energy efficiency is central to the strategic development of the Republic of Armenia (“Armenia”). As Armenia’s largest energy-consuming sector, buildings account for nearly 40% of the country’s total electricity demand and more than 25% of its gas demand. Estimated energy-saving potential ranges from 40% to 60% across residential, public and commercial buildings, depending on interventions. This level of savings could translate into significantly lower household energy bills, greater energy security, improved thermal comfort in homes, offices and schools, and many other benefits.

The residential subsector especially holds significant energy-saving potential. Along with transport, the residential subsector consistently accounts for the highest share of Armenia’s total final energy consumption (TFC), and this amount is projected to rise by up to 40% above the 2018 level by 2036 (see Figure 1). For public sector buildings, exemplar or “lighthouse” projects that build on past success and demonstrate leadership could stimulate the domestic high-efficiency building products and services market, with both local and international lenders providing project financing.

Armenia could also address the energy consumption of specific building technologies (e.g. for lighting, heating and, increasingly, cooling). Not only would heating and cooling technology improvements raise energy efficiency considerably, they would increase warmth, comfort and indoor air quality to improve household health and wellbeing. 

Armenia has made some progress towards developing a basic building-efficiency policy framework, and further efforts are underway, including as part of the Comprehensive Enhanced Partnership Agreement (CEPA) with the European Union. As part of CEPA, energy efficiency standards and norms are being aligned line with the EU acquis established by laws such as the Energy Performance of Buildings Directive (EPBD) and Ecodesign.

Nevertheless, Armenia must finish establishing a comprehensive regulatory framework for building efficiency that allows laws to be fully implemented and enforced. Building codes and other efficiency requirements for new construction and reforms related to managing multi-apartment buildings (MABs) are examples of areas in which policies may exist, but capacity constraints and other issues limit their practical effectiveness. In the absence of well-enforced rules, opportunities to improve the efficiency of buildings are likely to remain disregarded.

As with many other countries, Armenia has a mixture of market barriers and other issues to address before it can make its buildings sector more efficient. These include general awareness about the benefits of efficiency investments and available options, data collection and quality, administrative and market capacity, and access to financing. Whole-building retrofits, for example, are particularly challenging to achieve in Armenia, where the market for comprehensive, project-based building interventions remains nascent. 

Recognising the importance of raising building energy efficiency, several international organisations and lenders are working in Armenia alongside government officials, experts and other stakeholders to address persistent challenges and unlock the sector’s potential. Successful building efficiency projects completed in the past decade provide demonstrable results and lessons for future efforts, and other countries’ experiences and best-practice case studies can also inform efforts in Armenia.

In this context, roadmap development is an opportunity to take stock of the current situation and consider strategies for both the medium and long term (to 2040). This relatively brief document is therefore designed to provide an overview of Armenia’s current buildings sector situation, with international case studies supplying the context and – when applicable – practicable insights. This roadmap is intended to support wider discussion among policy makers and experts working every day to advance building sector efficiency in Armenia.