Caspian Sea opens up great prospects for green energy

By Azernews

Oil and gas are commodities that have left their mark on the world economy in the last two hundred years. All the big countries raced to keep oil production under their control and even risked waging wars in this direction. Oil and gas are used in a variety of sectors, from heating houses to producing fertilisers. However, today, the world speaks about the new commodity that is going to replace them in the long run. It is called green energy, which is more harmonious with nature and less harmful than old commodities.

Understanding new global challenges, fossil-fuel-rich Azerbaijan takes proper measures towards cementing its status as a reliable energy supplier as well. Azerbaijan, located on the shore of the Caspian Sea, which is abundant not only with oil and gas but also with green energy, has 200 GW of renewable energy potential, of which 157 GW is located on the sea. The country intends to increase the share of renewable energy sources in overall domestic energy production to 30 percent by 2030.

In January 2023, Azerbaijan’s SOCAR and MASDAR of the UAE signed an agreement to develop four gigawatts of wind and solar power plants in Azerbaijan. It is only a short-term project, and mid-term projects will increase the volume to 10 gigawatts. In addition, MoUs and agreements signed by Azerbaijan with international energy companies will allow Azerbaijan to produce up to 22 gigawatts of wind and solar energy.

Azerbaijan has started to reap the fruits of its efforts. Last month, the Garadagh Solar Power Plant was inaugurated.

The country has a big ambition to realise some of this potential and to export it to Europe under the Black Sea. For this purpose, government leaders from Azerbaijan, Georgia, Hungary, and Romania have signed a Memorandum of Understanding (MoU) for the development of the Black Sea Energy submarine cable. Azerbaijan plans to export 4 GW of its green energy through this submarine cable. Besides, Azerbaijan is also eager to see other Caspian littoral countries, such as Kazakhstan and Turkmenistan, involved in this project. Not just Baku, but also Brussels, is interested in including Central Asian countries in this project. As for their technical feasibility of participating in the project, speaking to Azernews British journalist and analyst Neil Watson noted that Azerbaijan, Kazakhstan, and Turkmenistan are well-placed to provide green energy that could be transmitted via the Caspian-EU energy corridor. All are blessed with copious and infinite amounts of wind, waves, and solar energy.

“The only issues emanate from the investment and political will required to make this a reality. The technologies behind harnessing, generating, and storing energy are always being developed to enhance their efficiency. However, unfortunately, they come at a considerable cost, and significant amounts of EU funding will be required to make this massive investment possible. Secondly, the planning permission from nation states required to facilitate the construction of wind turbines, etc., will be extremely complex and require expensive legal teams to navigate,” the analyst said.

He added that there is a political will. Historically, all three countries have been hydrocarbon producers, with varying degrees of allegiance to Russia. Neil Watson said that all the infrastructure is in place for exporting hydrocarbons to time-honored customers. This corridor is something new, with fresh customers in the EU. Politicians, particularly in Turkmenistan and Kazakhstan, may be unwilling to make any move that is contrary to the status quo.

“Fourthly, there is the role of Russia. Turkmenistan remains close to Russia, Kazakhstan, and Azerbaijan, but less so. But all understand that an energy corridor to the EU, fuelled by renewables, would make their countries appear to be closer to the EU and, therefore, NATO. Furthermore, some of the beneficiaries of this energy will have previously been Gazprom-reliant. Russia could regard this as a threat and respond to these countries in some way. Fifthly, there are the massive logistical and legal issues in laying such an underwater cable,” Watson noted.

He also stressed that the demarcation of seas has always been unclear, particularly in the former Soviet period. It could potentially take years of wrangling to get the necessary permissions, particularly as not all countries with ownership overseas will be uniformly in favour of the project. He concluded that this is a great initiative, but a great deal of legal and political wrangling, together with investment, will be required after a strategic plan has been drawn up.