BAKU, Azerbaijan, October 10. Azerbaijan will become a major player in power generation in the near future, Allan Mustard, co-founder and co-head of the Trans-Caspian Resources energy startup, Former US Ambassador to Turkmenistan, told Trend.
According to the expert, Azerbaijan has the potential to export electricity, and green electricity, in particular, generating it from natural gas, blue hydrogen, hydroelectric generators, wind, tide in the Caspian, and solar panels.
“Which of these Azerbaijan pursues, and in what proportion of total output - these will be determined by market forces, such as the price of electricity, the cost of transmission, and the cost of generation infrastructure. I believe Azerbaijan will be a major player in power generation, thanks to its natural endowment and ability to attract foreign investment,” he said.
Regarding Azerbaijan’s potential to significantly boost its share in the European gas market, Mustard noted that it will depend on the capacity of pipelines connecting Azerbaijan to European consumers.
Europe’s need to find substitutes for Russian-origin gas calls for additional gas flows from the Caspian region. This is a logical response to that need, particularly since the infrastructure investment required is relatively modest, the expert noted.
“The Southern Gas Corridor (SGC) can double its throughput by adding compression, but going beyond will require laying more pipes. The right-of-way exists, so the other real question is the bankability of laying more pipes. The only real obstacle is Europe's policy of going green as soon as possible, which could constrain permitting and finance,” he explained.
As the ex-ambassador pointed out, Azerbaijan can serve two functions, first as a source of natural gas itself, and second - as a transit country for gas from other origins east of the Caspian, such as Kazakhstan and Turkmenistan.
“As Europe adjusts to the reality of reduced supplies from Russia, it will balance the need for gas against the bankability of natural gas projects, which will compete for euros with green energy projects,” he said.
Mustard believes that the chokepoint is the capacity of pipelines to Europe that bypass Russia, which will require large capital investment to expand. If the money is available, there will be no technical barriers to the expansion of pipeline capacities.
---
Follow the author on Twitter: @mariiiakhm