Azerbaijan’s renewable energy path: ongoing and future projects

Oil&Gas Materials 7 May 2021 12:02 (UTC +04:00)
Azerbaijan’s renewable energy path: ongoing and future projects

BAKU, Azerbaijan, May 7

By Leman Zeynalova – Trend:

Azerbaijan is a country with vast potential for renewable energy development. The country has excellent wind and solar resources and significant prospects for biomass, geothermal and hydropower.

Azerbaijan has potential to generate 62.8 billion kilowatt-hours of electricity per year in the future.

Special attention is paid to implementation of pilot projects for the construction of a wind power plant with a capacity of 240 megawatts and a solar power plant with a capacity of 200 megawatts in accordance with the agreements signed with ACWA Power and Masdar (UAE) on January 9, 2021.

On April 6, 2021, Investment agreement, Power Purchase agreement and Transmission Connection agreement were signed on a solar power plant between the Azerbaijani Ministry of Energy, Azerenergy OJSC and Masdar company of the United Arab Emirates.

On April 14, 2021, a Memorandum of Understanding was signed between the Azerbaijani Ministry of Energy and the International Finance Corporation (IFC), a member of the World Bank Group, on cooperation in the use of offshore wind energy for the development of renewable energy sources in Azerbaijan.The memorandum was signed in the context of the common goals of the Ministry of Energy and the IFC, such as promoting the use of renewable energy sources in Azerbaijan, as well as supporting private sector participation in this sphere to improve the financial sustainability and efficiency of the energy sector.

The International Finance Corporation is interested in supporting Azerbaijan’s energy transition through both investments and advisory services, says Wiebke Schloemer, IFC Director for Europe and Central Asia.

An analysis from the World Bank’s Energy Sector Management Assistance Program (ESMAP) found the technical potential of the country’s offshore wind energy is up to 157 gigawatts. This represents immense potential when compared to the country’s total installed capacity of around 8 gigawatts.

UK-based BVG Associates (BVGA) is working with the World Bank and the government of Azerbaijan to assess Azerbaijan’s offshore wind potential.

BVG will develop of a roadmap for offshore wind. Other objectives include the promotion of renewable energy use and supporting private sector participation to improve the energy sector’s financial sustainability and efficiency.

BVGA will work with the World Bank team to establish the best locations for Azerbaijan offshore wind. The ranking of suitable wind energy areas will identify preferred development areas, including a demonstration project. The roadmap will combine geospatial analysis, cost modelling and economic analysis, supply chain and infrastructure assessment, consideration of social and environmental impacts, and detailed industry and stakeholder consultation.

BVGA will lead the delivery of the roadmap through 2021 with valuable technical support from Atkins and Encotec in Azerbaijan.

Azerbaijan’s Energy Ministry and the Japanese TEPSCO company signed agreement on creating the ‘green energy’ zone in the country’s liberated territories.

To effectively use renewable energy potential such as wind, solar, hydro, geo-thermal and bio-energy in the liberated territories of Azerbaijan, it’s planned to create energy efficiency technologies based on modern energy management approaches. The project envisages research of the international experience, energy demand and power supply of the region, as well as network integration of renewable energy resources.

International cooperation in renewable energy field

Germany’s Federal Foreign Office has said the country intends to increase cooperation in the fields of energy efficiency and renewable energies with Azerbaijan.

“In view of the ambitious European climate goals and the also globally necessary energy transition we intend to increase cooperation in the fields of energy efficiency and renewable energies,” said the ministry.

The Asian Development Bank (ADB) will fund the installation of the first photovoltaic power supply system with solar panels on Azerbaijan’s Boyukshor Lake. The Spanish Gamma Solutions company was declared the winner of the tender for the engineering, procurement, construction, operation, and maintenance of the floating solar station with a total capacity of 100 kW.

Hungarian companies may be involved in projects on the use of renewable energy sources in our country.

Czech companies are interested in participating in Azerbaijan’s renewable energy sphere.

“We see the perspective especially in the production of energy from renewable sources. Czech companies are interested in actively participating primarily in the energy use of water resources in Azerbaijan, but also in wind and solar energy. We see another promising area of cooperation in the energy sector in the field of energy efficiency, especially energy savings,” said the Czech Ministry of Industry and Trade.

Ukraine and Azerbaijan can develop cooperation in the field of alternative energy, Deputy Prime Minister of Ukraine Oleksii Reznikov said. “Baku is a city of winds and this is a great potential for the development of wind energy. Solar and wind energy is also developing in Ukraine. Azerbaijan and Ukraine can cooperate both in increasing production capacity and in selling energy to the foreign markets."

Spanish companies have shown interest in the implementation of renewable energy projects in Azerbaijan, said the Ministry of Foreign Affairs of Spain. “We already have some pilot projects in solar and wind generation. Energy ,transport ,infrastructures and telecommunications are interesting sectors for Spanish investments. Other sectors of interest are construction and building materials, architecture and urban planning, the renovation of power plants and the medical-hospital sector investments made in the construction and real estate development sector.”

Switzerland sees potential in strengthening its ties with Azerbaijan in the field of energy, said Muriel Peneveyre, Ambassador of Switzerland to Azerbaijan and Turkmenistan. Peneveyre noted that this in particular applies to energy efficiency and renewable energy sources. “Switzerland has many providers of innovative energy technologies. As the energy transition advances in Switzerland and many countries, these companies see growing opportunities in markets offering attractive investment conditions.”

With the support of the European Investment Bank (EIB), Azerbaijan is aiming to diversify its economy and this process will likely include investments in renewable energy and energy efficiency, EIB said.

Projects in Nakhchivan

Power plants of various installed capacities are being built in the Nakhchivan Autonomous Republic of Azerbaijan in order to expand the use of renewable energy sources (RES).

In the Ordubad district of Nakhchivan, the construction of the ‘Ordubad’ hydroelectric power plant (HPP) with an installed capacity of 36 megawatts, and the Tivinskaya HPP with an installed capacity of 15.6 megawatts continues.

A solar power plant with an installed capacity of five megawatts is being built in the autonomous republic’s Sharur district, and a wind-solar power plant with an installed capacity of 1.1 megawatts - in the Julfa district.

In order to further modernize the power system of the Nakhchivan Autonomous Republic, the construction of a 35/10 kilovolt transformer substation in Sharur’s Makhta village, a tunnel for a high-voltage cable transmission line in the city of Sharur has been completed, the construction of a 35/10 kilovolt transformer substation in Mughanly village continues.

Alternative energy in Karabakh

Nagorno-Karabakh and surrounding regions are rich of renewables, namely, hydro-energy, solar, wind, bioenergy and geothermal energy. One of the key goals is to ensure the effective use of those resources. To this end, it is planned to build metering and monitoring stations to evaluate the exact potential in the abovementioned spheres and to conduct technical-feasibility study of constructing the stations.

According to preliminary estimates, the region has more than 4,000 megawatts of solar power and up to 500 megawatts of wind energy potential. Initially, there have been selected seven perspective areas with favorable conditions to implement solar energy projects in Fizuli, Jabrail, Zangilan, Gubadli, Lachin and Kalbajar districts. Moreover, mountainous areas of Lachin and Kalbajar districts have wide territories where the average annual wind speed reaches 7-8 meters per second at an altitude of 100 meters.

25 percent of Azerbaijan’s domestic water reserves accounts for Karabakh, which means a great hydro-energy potential. The dam construction at Khudaferin and Giz Galasi hydro-junctions on Aras river is nearing completion and we continue cooperation with Iran on constructing power plants. Preparatory works are underway to start repairs at some small hydro-power plants in the liberated lands.

Azerbaijan is preparing Action Plan for effectively using the potential of renewable energy sources in the liberated territories (Karabakh region).

The plan includes the forthcoming work on the installation of observation measuring stations in areas with high potential for solar and wind energy, as well as an accurate calculation of the potential of renewable energy.

At present, work has begun on the inventory and restoration of small hydroelectric power plants (HPPs) in the liberated territories of Azerbaijan.

The construction of these stations, the capacity of which is generally estimated by Azerbaijan at 140 megawatts, will make a special contribution to providing Azerbaijan with ecologically clean energy.

In order to effectively use the potential of renewable energy sources, an action plan is being developed, which includes the upcoming work. It’s planned to install observation measuring stations in areas with high potential of solar and wind energy, as well as an accurate calculation of the potential of renewable energy.


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