The AI Factory and Energy Trap: How Armenia Becomes Dependent on Azerbaijan
They want to shut down Metsamor and then put up a small modular reactor, which is capable of 300 to 350 megawatts. We're suddenly going to lose power rather than add power.
Armenia’s government program includes a massive data center expansion in Hrazdan, planned to grow from 15 MW to 300 MW capacity. Simultaneously, the program proposes keeping the Metsamor Nuclear Power Plant open only until 2036, after which a small modular reactor might replace it. A small modular reactor typically generates 300-350 MW, roughly equivalent to current Metsamor output.
The arithmetic reveals a trap. If Metsamor closes and is replaced by a small reactor producing 300 MW, and the AI facility requires 300 MW, then Armenia gains zero additional power generation capacity while consuming all new output for a single industrial project. The rest of the country’s electricity needs would remain unmet. To bridge this gap, the government program explicitly proposes importing electricity from Azerbaijan. This transforms Armenia’s energy strategy from Russian dependence to Azerbaijani and Turkish dependence-a shift that concentrates leverage in the hands of hostile regional rivals.
Martirosyan highlights the cascading uncertainties: How much water will cooling systems require? Could this affect Lake Sevan? How many customers does the facility actually have? Is there a pipeline of orders, or is this based on speculative AI market projections? These are unknowns with profound environmental and strategic consequences. The government presents the project as a high-tech panacea, a magnet for diaspora investment and global business, yet offers no concrete targets, logframes, or detailed feasibility studies-the kind of professional planning that any corporation would demand.
More fundamentally, by leaving energy security dependent on Azerbaijan, Pashinyan surrenders additional leverage in any future dispute. Azerbaijan controls territory (Jermuk, and more), now it would control electricity supplies as well. This is not energy diversification; it is substitution of one dependency for another, with the new master less stable and more hostile than the previous one.
Transcript
Asbed Bedrossian: Yeah. Arthur, I wanted to get your ideas about another wish list item that we have on this program, and that has to do with the AI, energy infrastructure, other infrastructure that have just been put in there. Apparently, they would like to decide within a year what kind of a nuclear power plant they want to have. They want to keep their chances open of extending the current power plant, Metsamor, to beyond 2036, and explore all these other geothermal, hydrogen, blah, blah, blah, you know. But the thing is that there are some plans also to have this AI factory in Hrazdan, which is currently at about 15 megawatts, and they plan to explode it to about 300 megawatts. Of course, if they're going to shut down Metsamor and then they're going to put up a small modular reactor, which is capable of 300 to 350, We're suddenly going to lose power rather than add power in the country. So all of the power of the new power plant is going to go to basically this AI factory. And then what's going to happen to the country? And apparently they're proposing electric lines so that we can buy power from Azerbaijan. What are your thoughts about this math?
Arthur Martirosyan: Well, again, I think they will be building all sorts of new dependencies on Azerbaijan and Turkey. That's obvious. If they're going to get out of Eurasian Union, I mean, there's not going to be any alternative left.