Azerbaijan's Green Transition - ANALYSIS

On the opening day of the Week, an important event took place - President of Azerbaijan Ilham Aliyev and Minister of Industry and Advanced Technologies of the United Arab Emirates Sultan bin Ahmed Al-Jaber launched the implementation of projects for the Neftchala and Bilasuvar solar power plants, as well as the Absheron-Garadagh wind power plant. The power plants are being built by the Emirati company Masdar.

It should be recalled that on October 26 last year, the Garadagh solar power plant with a capacity of 230 MW was launched in Baku Masdar, which became the largest SES in the South Caucasus and is capable of providing electricity to 110 thousand apartments, that is, the whole city. On the same day, Masdar signed three more investment agreements with the Azerbaijani side in the field of green energy with a total capacity of 1,000 MW. These are a solar power plant with a capacity of 445 MW in the village of Gunesh in Bilasuvar district, a 315 MW SES in the village of Bank in Neftchala district, as well as a 240 MW wind power plant in the territory of Absheron and Garadagh districts. These agreements are the initial stage of the Executive Agreements concluded by Azerbaijan with Masdar in June 2022 and related to the implementation of megaprojects in the field of renewable energy sources with a total capacity of 4 GW.

Minister Sultan Ahmed Al-Jaber is in Baku as part of the Baku Energy Week. Speaking at the opening of the event, he confirmed his country's intention to work closely with Azerbaijan both in the field of renewable energy (RES) and in preparation for the SOR29. It should be noted that Sultan Ahmed Al-Jaber is also the CEO of the Abu Dhabi National Oil Company (ADNOC).

Cooperation between Azerbaijan and the UAE in the field of renewable energy is a success story. As oil and gas producing countries, they are simultaneously promoting projects aimed at combating climate change. The Emirates has already reached the level of world leadership in some positions. Thus, the UAE has built the world's largest solar power plant (the largest in Europe was launched in Turkey in 2023) and the world's largest waste-to-energy processing plant. Azerbaijan is still leading in this regard only in its region, but its potential in the field of renewable energy opens up opportunities for leadership in a wider geography in the future.

By order of President Ilham Aliyev, 2024 has been declared the Year of Solidarity in the Name of a Green World in the country. One of the five national priorities of socio-economic development until 2030 is defined as "A country with a clean environment and green growth". In accordance with this priority, work is underway to improve the environment, restore and increase landscaping, ensure efficient use of water resources and sustainable energy sources. Azerbaijan has set a goal to reduce greenhouse gas emissions by 35 percent by 2030 compared to the base year (1990), and by 40 percent by 2050. Diversification of green energy types and its transportation to world markets are also priorities of Azerbaijan's energy policy.

These goals will be served by the implementation of large-scale projects in the territories liberated from the Armenian occupation.

As President Ilham Aliyev stated at the opening of the Baku Energy Week, by the end of 2027 we will receive 2 GW of energy from renewable energy sources. And this is just the beginning, he stressed. The Head of State noted that the liberated Karabakh and East Zangezur regions have huge hydropower potential. From November 2020 to the present day, 270 MW hydroelectric power plants have already been commissioned in these territories, and this figure is planned to increase to 500 MW over the coming years.

The country's potential in the field of renewable energy is really not small.

Most of the total potential of alternative and renewable energy sources in Azerbaijan is accounted for by solar energy - 5,000 MW. In second place is wind with a potential of 4,500 MW. The Caspian Sea has the greatest potential in this regard. According to preliminary estimates, 157,000 MW of energy can be generated in the Azerbaijani sector of the sea alone. This is much more than the total capacity of Azerbaijan's power plants.

The next decade will be marked by a transition to the widespread use of green energy in Azerbaijan. Several years ago, the International Renewable Energy Agency (IRENA) noted in its report the high potential of renewable energy in Azerbaijan. "Despite the fact that the country now relies on oil and gas, it has excellent wind and solar resources, along with significant potential for biological, geothermal and hydropower projects," the report noted.

Let's start with the sun.

Solar energy is one of the most favorable energy sources in the world, and it is especially promising in sunny regions. The natural climate of Azerbaijan provides ample opportunities to increase the production of electricity and thermal energy through the use of solar energy. During the year, the number of sunshine hours in Azerbaijan is 2400-3200, which means that the amount of sunlight falling on the territory of Azerbaijan is higher than in other countries. This can be considered one of the criteria for the effectiveness of attracting investments in solar energy. According to experts, the annual solar energy emission in Azerbaijan is 1500-2000 kW/m2 (in the USA - 1500-2000 kW/m2. For comparison, in Russia - 800-1600 kW/m2, in France - 1200-1400 kW/m2.

By the end of this year, construction of the Shafag solar power plant with a capacity of 240 MW will begin in the Jabrayil district (East Zangezur Economic Region). It is expected that the SES will generate 500 kW/hour of electricity annually. The project is being implemented by British BP. In this project, it is planned to introduce a business model involving virtual transmission of electricity.

According to energy experts, a wind speed of 3-4 meters per second is enough to generate electricity. And in Baku and Absheron, the average annual wind speed is more than 11 meters per second.

Azerbaijan is one of the countries where the use of wind energy is beneficial due to geographical conditions. The Absheron Peninsula, the coastline of the Caspian Sea and islands in the northwestern part of the Caspian Sea, the Ganja-Dashkesan zone in western Azerbaijan and the Sharur-Julfa region of the Nakhchivan Autonomous Republic are especially favorable. The largest wind farm in the country is a hybrid power plant at the Gobustan Alternative Energy Test Site.

On January 13, 2022, together with Saudi ACWA Power, construction of the Khizi-Absheron wind farm began. The wind turbines will be located in Sitalchai and the village of Pirakeshkul in the Absheron region. The power plant's capacity will be 240 MW. It is planned that the power plant will generate up to 1 billion kWh per year. The planned coverage of consumers is 300 thousand apartments.

But the Caspian Sea has the greatest potential in terms of wind energy. A Roadmap for the development of offshore wind energy in Azerbaijan, prepared with the support of the World Bank and the International Finance Corporation (IFC), was presented at the Baku Energy Forum in 2022. According to it, by 2040, offshore wind farms (WPP) with a total capacity of 7.2 GW can be installed in Azerbaijan on the territory of the Caspian Sea, which will provide almost 40 percent of the total energy consumption in the country. According to preliminary estimates, 157,000 MW of energy can be generated in the Azerbaijani sector of the sea alone.

And finally, water. Hydroelectric power plants are considered the least expensive and the most environmentally friendly.  Azerbaijan's renewable energy development program is not limited to solar or wind power plants. The hydropower potential is also actively developing. In particular, in the liberated territories of the country. Renewable energy sources in the liberated territories are considered today as a serious help in the development of the green energy sector.

The rivers on the territory of Azerbaijan are convenient for the creation of small hydroelectric power plants. After the Second Karabakh War, access was opened for the use of the Araz, Bargyushad, Terter, Hyakyari, Ohchu, Lev, Zabukh, Tutgun, Turagai, Basit, Gargar, Guru, Khachin and Condelen rivers. To date, in the Lachin district, along with the Agbulag, Alkhasly and Mishni stations, 5 small hydroelectric power plants with a total capacity of 40.5 MW have been reconstructed and put into operation, with an annual energy production potential of 120 million kWh.

A few days ago, a small power plant "Malybey" was laid in Lachin, the first in the liberated territories to be built at the expense of foreign investments. The project is being implemented with the participation of Turkish companies Demirören Holding and Arges Energy Teal, and the station is being built on the basis of European and Chinese technologies. The installed capacity of the HPP will be 5.1 MW, it will produce 14.57 GW of electricity per year.      

The Malybey hydroelectric power plant will be followed by Galacha-1, Galacha-2 and Minkend in the Lachinsky district. At the next stage, it is planned to build "Terter-1" in Kalbajar. The total design capacity of the five HPPs will be 13.8 MW, they will generate 39.7 GW of electricity annually. By the end of the year, it is planned to put into operation 12 small hydroelectric power plants in the liberated territories, followed by a cascade of medium-capacity NPPs in the Zangilan district.

As a result of the implementation of green projects in the liberated territories, 30 hydroelectric power plants will be commissioned, including new ones and those restored after the Armenian occupation.

In short, Azerbaijan is serious about implementing the goals of the green transition. And in the days of SOR29, he will have something to present and share with the world.