Electricity auctioning: a new approach to developing alternative energy in Azerbaijan
Baku, Azerbaijan, Feb. 14
By Sara Israfilbayova – Trend:
Azerbaijan’s Ministry of Energy is proposing to auction the areas promising for production of renewable energy and the electricity generated in those areas, Alasgar Hasanov, Director of the Department of Energy Efficiency and Ecology of the Ministry of Energy of Azerbaijan, told Trend.
The auctions, according to him, will provide more favorable conditions in the country, along with facilitating competition.
“The purchase of energy put up for auction will be guaranteed by the state for 10-15 years. At the same time, installation of equipment for obtaining renewable energy will be provided,” he said.
It is also proposed to introduce guaranteed tariffs for alternative energy, which will ensure attractiveness for investors, Hasanov noted.
In the long run, incentive measures may be considered for active consumers, who produce renewable energy for their own use and wish to sell the rest.
“Possibility for incentive measures for the alternative energy projects that were not suitable for auctioning may be also considered,” Hasanov noted.
He stated that Azerbaijan is one of the countries applying tax incentives for the use of renewable energy sources, adding that possessing an investment promotion document exempts entrepreneurs from land tax, provides benefits at 50 percent when paying income and profit taxes, and completely exempts from paying value added tax (VAT) and customs duties when importing equipment and installations for 7 years.
Consistent steps are currently being taken in Azerbaijan to develop alternative energy.
To this end, negotiations are being held with foreign companies and investors, including companies from China, the UAE, the US and the EU. The Norwegian company DNV GL, for example, will help create a support system and a legal framework for the alternative energy sector in Azerbaijan.
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