Among the major challenges highlighted are:
1. Highest-cost and dilapidated Hrazdan TPP will need to run post 2016 to avoid supply gap because new lower cost CCGT cannot be realistically constructed earlier than 2020.
2. Several transmission assets are a threat to supply reliability. Many transmission lines and substations incur high outage rates, which could lead to system-wide failure.
3. Affordability is a growing concern. Climbing energy costs increased the share of household energy expenses to 10%. It will get worse as the much needed new investments are made.
4. Deterioration of governance and financial standing of state power companies. In recent years tariffs were frequently lagging cost-recovery, the financial management decisions were not always prudent, and a key generation asset was sold through a direct negotiated sale.