Electricity of Azerbaijan: Export to Europe in future

Analysis Materials 3 May 2011 12:34 (UTC +04:00)

Azerbaijan 's President Ilham Aliyev, summing up April 12 meeting of the Cabinet of Ministers dedicated to the socio-economic development in the first quarter of this year, said that currently there are additional energy generation capacity of about 1,000 megawatts, which are not used. "In the future we certainly need to pay serious attention to electricity export. To do this, also in the gas sphere, we must increase exports to existing markets, while at the same time, enter new markets. "After oil and gas, electricity exports have to become the third major export line of Azerbaijan," the President said.

In 2010, the works continued on reconstruction and modernization of power system of Azerbaijan. As a result of these measures, the losses in the transmission system which are inevitable with older equipment have greatly decreased. In addition, after installing new electricity meters, the population started to more economically consume it. All these played a role in reducing consumption.

Today, Azerbaijan is totally self-sufficient country in the production of electricity. Capacity of electricity production in Azerbaijan is 6,400 megawatts. Specified production capacity is due to the 20 main power stations, of which 13 are power plants (5,400 megawatts) and the remaining seven - hydro (1,000 MW). In 2010, work was continued to create an automated information system SCADA, designed to balance production and consumption of electricity. Work under this project will be completed in the first half of this year.

Also, as part of the development of renewable energy, work has begun on construction of several small hydroelectric plants. According to the report of Azerenerji (production and distribution of electricity in Azerbaijan), ten power plants with total generating capacity of more than 1500 MW have been constructed in the country over the past seven years, and as a result of reconstruction of the existing facilities, additional 600 MW capacity was received. Despite this, the country continues to improve its own power capacity. This year Fizuli hydropower with a capacity of 25 megawatt and Janub power plant with a capacity of 800 megawatts should be put into operation.

As stated in the government report on the results of 2010, Azerbaijan's export opportunities also increased, which had been brought up to 1200 megawatts, and this created opportunities for the sale of electricity to Russia, Iran and Georgia, as well as created conditions to return the accumulated debt to Turkey (Turkey supplies electricity to Nakhchivan Autonomous Republic).

According to the State Customs Committee, in the first quarter, exports of electricity from the country amounted to 198.307 million kilowatt-hours. In this case, the export price on it was 0.0467 U.S. dollars per 1 kilowatt/hour.

Azerbaijan participates in various international programs and projects on European integration in different areas. INOGATE is a program of international cooperation in the energy sector between the European Union, Turkey and CIS countries, the major goal of which is to integrate energy markets of participating countries to the EU market. One of the important problems the country faces is the renovation and construction of new power lines to increase the volume of transportation abroad.

Today, Azerenergy JSC is building 500-kilovolt power lines as part of a energy bridge "Azerbaijan-Georgia-Turkey". The project is planned to be completed by the end of this year and in May 2012 it will be technically possible to start the export of Azerbaijan's electricity to Europe via Georgia and Turkey. According to the head of Azerenerji, creation of an energy bridge will give the country an opportunity to transport 600-700 MW electricity to Europe.

Given the scope and intensity of the country's measures on reconstruction and modernization of the electricity system, as well as growing electricity consumption in the EU, it could become the third major export line in Azerbaijan after oil and gas.