President Ilham Aliyev’s renewable energy strategy - EU, US look into opportunities not to miss

Economy Materials 4 April 2023 10:00 (UTC +04:00)
President Ilham Aliyev’s renewable energy strategy - EU, US look into opportunities not to miss
Maryana Ahmadova
Maryana Ahmadova
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BAKU, Azerbaijan, April 4. The US-Azerbaijan Green Energy Forum held in Baku today became another milestone in the already successful energy relations between the two countries. President Ilham Aliyev’s new energy strategy aimed at not only expanding the oil and gas industry, but also at the development of green energy projects, has completely transformed Azerbaijan’s energy policy, and the way its international partners see the cooperation with the country.

As President Ilham Aliyev said in one of his recent speeches during a joint press conference with Chancellor of the Federal Republic of Germany Olaf Scholz in Berlin, Azerbaijan has a very large renewable energy potential, and the country will export not only natural gas but also green energy to Europe in the future.

And, indeed, Azerbaijan's renewable energy potential is more than 27 GW of onshore wind and solar energy and 157 GW of wind energy in the Azerbaijani sector of the Caspian Sea. By 2027, the country plans to produce 3 GW of wind and 1 GW of solar energy, 80 percent of which will be exported. By 2037, Azerbaijan expects an additional capacity of at least 6 GW. Just one global energy company has already expressed its desire to invest in the additional 10 GW of green energy in Azerbaijan.

Moreover, the potential of wind, solar and hydropower in the liberated lands (Karabakh and Zangazur Economic Zones) exceeds 10 GW. The plan to turn these territories into green energy zones came up very soon after the liberation. And now, Nakhchivan is also going to join this promising initiative.

"There is a big potential of hydropower station building in Nakhchivan. And also there was an expertise recently conducted there and probably soon we will have some developments with respect to construction of the 500 megawatt solar power station. At the same time, traditional power station in Nakhchivan is also more than welcome because Nakhchivan has a great export potential," President Ilham Aliyev said, while meeting the representatives of German business during his trip to Berlin.

These production capacities, which are planned to be put into use by 2040, largely exceed Azerbaijan’s demand. At the same time, the country’s potential is also way more than the capacities to be created.

Thus, the ample opportunities Azerbaijan is going to provide, and already provides, to its partners cannot be missed. Azerbaijan has already established a strong cooperation model with the EU by signing an agreement on doubling gas supplies to Europe by 2027, which also includes the expansion of cooperation in the green energy field. Several European companies are already engaged in various renewable energy projects in different parts of the country, including in the liberated Karabakh.

One of the most prominent projects that are going to be carried out in the near future implies the launch of green energy exports from Azerbaijan to Europe, following the signing of the "Agreement on a strategic partnership in the field of green energy development and transmission between the Governments of the Republic of Azerbaijan, Georgia, Romania and Hungary." As part of this project, it is planned to lay a 1,195-kilometer power transmission line with a capacity of 1,000 MW between Georgia and Romania and install a digital connecting cable. To this end, with the support of the World Bank, it is planned to prepare a technical and economic justification of the project by the end of 2023.

Speaking about this initiative, President Ilham Aliyev noted that Azerbaijan’s importance as an energy partner for Europe only grows.

"Azerbaijan becomes for the European Union more important partner with respect to the energy supplies. We always were considered by the European Commission as a reliable partner. Today we export oil, natural gas, electricity, petrochemicals, oil products and hopefully soon we will start to export green energy. A corresponding agreement between Azerbaijan, Georgia, Romania and Hungary, which was witnessed by Madamme President of the European Commission, was signed last December in Bucharest. So, this is really a global, mega project, which comes right after the completion of another mega project, which was the Southern Gas Corridor," President Ilham Aliyev said.

The US-Azerbaijan Green Energy Forum was aimed at helping Azerbaijan in boosting its renewable energy capacities, as well as attracting US companies to the market. The US renewable energy producers with their vast technological capabilities can be very much of use to Azerbaijan. And, in turn, the US companies can successfully develop their businesses here, as the Azerbaijani market is very cost-efficient, due to relatively low energy prices.

Remarking the forum, Hugo Guevara, Chargé d’Affaires at the US Embassy in Azerbaijan, said that the forum represents an important area for growth in the bilateral relations between the two states.

"Energy has always played an important part in our economic cooperation and the United States has long supported Azerbaijan’s role as a reliable energy supplier. This forum will help spur the technical and regulatory innovations that will help Azerbaijan take full advantage of its green energy potential," he said.

It is important to recall that, during the last meeting of the Advisory Council of the Southern Gas Corridor in Baku, Laura Lochman, US Deputy Assistant Secretary for Energy Diplomacy in the Bureau of Energy Resources, noted that the US is looking into investing in the development of Azerbaijan’s green energy sector, with particular focus on its exports.

"The US has supported and will continue to support the Southern Gas Corridor project to ensure the energy security of its European partners. This corridor is a very important project for Europe, and Azerbaijan plays a leading role in ensuring energy security," she said, adding that "There is a huge potential in wind and solar, and, eventually, the same will be with hydrogen. And it will continue to be the same as the investments are being made".

As Azerbaijan’s Ministry of Energy announced, the first auctions on renewable energy projects in the country are planned to be held in the first half of the current year. It is expected that the first-ever auction in renewables will apply to the solar energy project. This should give an impetus to the development of cooperation between Azerbaijan and the US in the field of green energy.

The policy pursued by President Ilham Aliyev has transformed Azerbaijan into the leading investment hub in the region, and this is proved by the number of those who want to put their money into promising projects in the country. And Azerbaijan has created the necessary environment for this, which incorporates the high potential, the focus of state policy in the area of alternative energy development, and the new legal framework. Today, the success of Azerbaijan's oil and gas saga repeats itself in a completely new sphere, which entails huge victories.