President Ilham Aliyev's new energy policy - Azerbaijan diversifies supplies

Politics Materials 2 February 2023 23:55 (UTC +04:00)
President Ilham Aliyev's new energy policy - Azerbaijan diversifies supplies
Laman Zeynalova
Laman Zeynalova
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BAKU, Azerbaijan, February 2. Tomorrow, global attention will once again be drawn to Azerbaijan, where the ninth ministerial meeting of the Southern Gas Corridor Advisory Council will be held. Every year this event becomes increasingly popular and brings together more and more potential partners who are seeking to be part of efforts to address energy issues. Azerbaijan, which is a source of natural gas for this significant infrastructure project, which is now of particular importance, is certainly at the center of these efforts. European countries have repeatedly stated that the implementation of the Southern Gas Corridor project was a wise decision, and that without this project, the countries of the continent would have struggled more amid the current energy crisis.

The idea of the Southern Gas Corridor was implemented thanks to the political will and foreign policy of President of Azerbaijan Ilham Aliyev. The project Azerbaijan initiated has been outlined for the long-term future at the very beginning, since the talks on its expansion have started. In this regard, the Southern Gas Corridor is a result of the far-sighted policy of President Ilham Aliyev. And now, when there is a real need to increase gas supplies for this infrastructure, Azerbaijan, as a reliable partner, keeps its word and expresses its readiness to supply more gas.

Tomorrow's meeting has a special significance and differs from previous ones. Traditionally, issues related to the increase of natural gas supplies from the Caspian region to Europe are discussed. So, within the framework of this event, the first meeting of ministers on green energy will be held. And this is not accidental, as European countries have something to discuss with Azerbaijan in this area. Thanks to the new energy policy implemented under the leadership of President Ilham Aliyev, our country is turning into a reliable supplier of green energy.

Two main components form the basis of President Ilham Aliyev's new energy policy

The first one is the Memorandum of Understanding on strategic partnership in the field of energy signed on July 18, 2022 between Azerbaijan and the EU. The document signed by President of Azerbaijan Ilham Aliyev and European Commission President Ursula von der Leyen envisages doubling natural gas supplies from Azerbaijan to Europe, as well as expanding cooperation in alternative energy. The implementation of this document has already begun.

The second component is the energy "bridge", which is being constructed by Azerbaijan to Europe. Under the leadership of President Ilham Aliyev, Azerbaijan plans to become an important supplier of electricity produced from green energy to Europe.

Azerbaijan has a huge potential in the production of both natural gas and renewable energy to cover the growing energy needs of Europe.

The confirmed gas reserves in Azerbaijan amount to 2.6 trillion cubic meters, and the expected reserves are about 3 trillion cubic meters. Only the potential of the Umid gas field exceeds more than 200 billion cubic meters. And this allows Azerbaijan to remain a reliable supplier of hydrocarbon resources in the next 100 years.

In 2022, Azerbaijan exported 11.3 billion cubic meters of gas to Europe, while supplying 8.2 billion cubic meters in 2021. In 2023, Azerbaijan plans to export at least 11.6 billion cubic meters to Europe, and the total volume of natural gas exports from Azerbaijan in 2023 will total approximately 24 billion cubic meters. For comparison, in 2021 this figure stood at 19 billion cubic meters. Azerbaijan is expanding the geography of gas supplies to the European market. This is a win-win situation, because Europe needs gas to maintain its energy security, and Azerbaijan needs a reliable market for the sale of large volumes of energy resources.

As President Ilham Aliyev said today in a press statement after meeting Romanian President Klaus Iohannis in an expanded format, Azerbaijan has successfully implemented the Trans-Adriatic Pipeline (TAP) project and has become a reliable energy partner for the EU.

“This is acknowledged by the leaders of the European Union. The Strategic Partnership Memorandum on natural gas signed between the European Union and Azerbaijan in Baku last year shows this again,” President Ilham Aliyev said.

The TAP consortium has recently started the first stage of increasing the throughput. The consortium will add 1.2 billion cubic meters of capacity per year under long-term contracts starting in 2026.

On the development of renewable energy in Azerbaijan

Azerbaijan’s renewable energy potential, mainly, onshore wind and solar power, exceeds 27 GW, while offshore wind potential in the Caspian amounts to 157 GW. Azerbaijan plans to produce 3 GW of wind and 1 GW of solar energy by 2027 with one of its strategic investors, and 80 percent of these energy volumes will be exported. Azerbaijan also eyes developing an additional capacity of at least 6 GW by 2037.

The already implemented green energy projects will connect Azerbaijan and Europe even more.

Thus, on December 17, 2022 in Bucharest an Agreement on strategic partnership in the field of development and transfer of green energy was signed between the governments of the Republic of Azerbaijan, Georgia, Romania and Hungary. A cable will be laid on the bottom of the Black Sea, through which green energy will be supplied from Azerbaijan to Europe. This means that Azerbaijan will fully participate in ensuring the energy security of the region. The decision of bp to invest in a 230 MW solar power project in Azerbaijan’s Jabrayil, one of the regions, liberated from Armenian occupation in 2020, is also commendable. It is envisaged that the electricity from Jabrayil will be transferred along the Zangazur corridor, and for this a large junction substation is under construction in the region.

The minimal capacity of solar and wind energy in Karabakh and Eastern Zangazur, which have been declared a green energy zone, is 9,200 MW, while the hydropower potential accounts for at least 600 MW. Meanwhile, more than 30 medium and small hydroelectric power plants will be built in the liberated territories, and 5 of them have already been put into operation.

Overall, ongoing investments in solar and wind power projects in Azerbaijan will provide for the production of more than 700 MW of clean energy. At the same time, Azerbaijan plans to build solar and wind power plants with a capacity of up to 22,000 MW on the basis of protocols of intentions signed with two leading global manufacturers.

Today, as a result of the successful implementation of a comprehensive energy strategy under the leadership of President Ilham Aliyev, Azerbaijan managed to find a balance between hydrocarbons and green energy and turn into a comprehensive energy supplier in Europe. As President Ilham Aliyev stressed during the meeting with US Deputy Assistant Secretary for Energy Diplomacy in the Bureau of Energy Resources Laura Lochman, foundation laid by the Southern Gas Corridor provided favorable conditions for renewable energy cooperation.

The SGC is the most important international asset of Azerbaijan and in synergy with the green "corridor" makes the country the most important link in the energy artery of Europe.