Azerbaijan has launched the country's biggest renewable energy investment project to date: the construction of two solar plants and a wind power plant. It marks a major step in Baku's ambitious plan to generate 30 percent of its power needs via renewable sources by 2030.
The three plants - the 445 Megawatt (MW) Bilasuvar solar facility, the 315 MW Neftchala solar plant and the 240 MW Absheron-Garadagh wind farm are being developed by a consortium of UAE renewable energy company Masdar and Azerbaijan's state oil company Socar.
Speaking at the groundbreaking ceremony for the three plants, held during Baku's "Energy Week" conference, Azerbaijan's energy minister, Parviz Shahbazov, said the projects were a signal of the country's "solidarity and commitment to energy transition" ahead of hosting the UN COP 29 Climate Change Conference in November this year.
Sultan Al Jaber, the UAE's minister of industry and advanced technology, said the Emirates were eager to "support Azerbaijan's journey toward energy diversification."
The groundbreaking ceremony followed the signing of three agreements between the Azerbaijani government and Masdar, covering the leasing of land for construction of the three plants, enabling the transmission of the power they will produce via Azerbaijan's power grid and for the purchase of the electricity. No details were released about the three agreements.
However, Masdar representatives confirmed to Eurasianet that the UAE company owns 75 percent of the three projects, with Socar possessing the remaining 25 percent. The Bilasuvar solar facility is expected to be operational by the end of 2026, Masdar representatives added. The other two facilities should be generating power by the end of the following year.
Azerbaijan has been pursuing an aggressive replacement strategy to produce power, striving to reduce its dependence on natural gas-fired plants by upping renewalable sources, primarily wind and solar.
Baku's motivation is not entirely green or altruistic.
Azerbaijan is dependent on exports of oil and gas for as much as 95 percent of its export revenue, a situation not expected to change dramatically for the foreseeable future. The country's renewable energy strategy not only will help in the "greening" of the Azerbaijani power sector, but it will also make gas currently used to generate Azerbaijan's power available for export. That means extra revenues for state coffers.
The three plants now being constructed alone are expected to reduce the country's annual gas demand by 500 million cubic meters. That volume will now be freed for export. Baku needs all the extra gas it can free up to help meet its commitments to the EU to double its supply of gas by 2027.
Baku's progress in implementing its replacement power strategy has been slower than it originally hoped. The country's first grid-scale solar plant, the 230 MW Garadagh plant, only became operational last year. But the pace now appears to be picking up.
The three plants now under construction are projected to generate 1 Gigawatt of power. And during the Energy Week, Shahbazov met with representatives of the Saudi energy group ACWA to discuss two new potential projects, the construction of onshore facilities with a total capacity of 1 GW, and a 1.5 GW off-shore wind farm and battery storage facility. ACWA's existing project, the 240 MW Khizi-Absheron wind farm, is due to start generating power in 2025.
Shahbazov also met with officials from France's TotalEnergies to discuss both the Absheron gas field the company operates and explore ways to move forward with planned cooperation in development of projects in the Nakhchivan exclave capable of generating 500 MW of power.
Separately, the Baku Energy Week also saw the signing of five new natural gas agreements with Turkey.
One of the agreements extends an existing supply arrangement for five years between Azerbaijan's state gas export company AGSC and Turkey's state gas importer Botas. The agreement had been due to expire at the end of this year. Details of the extension were not disclosed, but under the existing agreement, Botas was expected to import around 13 bcm of gas over a three-year period ending 2024.
The other four agreements signed between Azerbaijan's state oil company and Botas cover the transit of gas from Azerbaijan and Turkmenistan to Turkey and Europe, and, separately, to Azerbaijan's exclave of Nakhchivan. No details of those agreements were disclosed either.
Officials have confirmed only that the agreement concerning Nakhchivan relates to a gas pipeline to connect Turkey and Nakhchivan. The project is slated for completion this year. This new pipeline will allow Baku to supply the enclave with its own gas via Turkey.
The other agreements appear to reflect Turkey's desire to reduce its dependency on Russian gas by increasing its import options to include Turkmen energy, as well as Ankara's efforts to create a transit hub for Turkmen and Azerbaijani energy bound for Europe.
By David O'Byrne via Eurasianet.org
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