BAKU, Azerbaijan, June 1
By Leman Zeynalova – Trend:
Development of renewable energy sphere in Azerbaijan is very relevant in the current energy context, Francis Perrin, Senior Fellow at the Policy Center for the New South (PCNS, Rabat) and at the French Institute for International and Strategic Affairs (IRIS, Paris), told Trend.
“As some oil and natural gas producing and exporting countries, Azerbaijan has taken several steps in the field of renewable energy in recent years, especially solar energy, wind energy and hydroelectricity. In this regard, the 2019-2020 period was particularly important in terms of political orientations, decisions and projects. The setting up of the Commission on the implementation of pilot projects in the field of use of renewable energy was a significant progress in this direction,” said the expert.
He pointed out that the main goals are to diversify the country's energy mix and the national economy, to reduce its dependence on hydrocarbons, to increase energy security, to develop sustainable/clean energies, to provide affordable energy to the population and to contribute to the world's efforts to fight climate change.
“One of the key targets is to produce about 30 percent of Azerbaijan's power from renewable sources by 2030. The diversification of the country's power mix is one of the priorities of the national energy policy. In the current economic and energy context, with very low oil prices and difficult times for producing countries, these strategic orientations are of course very relevant. Azerbaijan's oil production should fall from 771,000 barrels per day in April 2020 to 620,000 b/d in 2021 further in accordance with the 'OPEC+' ministerial meetings in April. And oil prices are about 50 percent lower than at the beginning of this year. The state of Azerbaijan, the Ministry of Energy, other national entities and Azerenerji OJSC want to accelerate this evolution even if oil and gas will remain for a long time the backbone of the national economy,” said Perrin.
He went on to add that the two projects involving the Saudi company ACWA Power and Abu Dhabi's Masdar are in line with these goals. Both projects present some similarities: they will be developed by Middle Eastern companies which have an expertise in renewable energies; they will be developed on a BOO (build-own-operate) basis; there will be power purchase agreements (PPA); and both are important in terms of capacity (200 MW for the solar photovoltaic plant to be built by Masdar and 240 MW for the wind power project with ACWA Power).
“Several aspects remain to be dealt with in order to make further progress: the creation of terms and conditions conducive to investment, including of course foreign investment, the strengthening of the power network and the improvement of the cooperation between various ministries and entities. Further studies will have to be conducted; new partnerships will have to be negotiated, including with companies presently active in the country (BP is one of them); and technical and financial support will be required. The European Bank for Reconstruction and Development (EBRD) could be one of the key providers of this support,” the expert concluded.
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