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Eurasianet

Eurasianet

Eurasianet is an independent news organization that covers news from and about the South Caucasus and Central Asia, providing on-the-ground reporting and critical perspectives on…

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First Major Solar Power Plant Takes Shape In Azerbaijan

  • Developed by UAE-based company Masdar, the Garadagh plant is expected to produce 500 GWh annually, saving an estimated 110 million cubic meters of gas per year.
  • The project's progress marks a significant step in Azerbaijan's renewable energy plans, with the country having signed various agreements for the development of up to 12 GW of renewable energy and green hydrogen projects.
  • While Azerbaijan has substantial potential for developing renewable power generation, particularly offshore wind capacity in the Caspian Sea, it is currently relying heavily on foreign investors for the development of its renewable energy capacity.

Azerbaijan has begun installation of solar panels at its 230 MW Garadagh plant, the country's first major solar power plant.

Developed by United Arab Emirates-based renewable energy company Masdar, the plant is expected to be operating by the end of this year, producing 500 gigawatt hours (GWh) annually.

Azerbaijan has been encouraging the development of new renewable energy projects with the aim of meeting 30 percent of the country's power demand from renewables by 2030.

Baku believes that by developing its renewable energy potential, it can reduce its dependence on natural gas for power generation, freeing up more gas for export thus maintaining its export revenues as production from the country's oil fields declines.

The Garadagh plant alone is expected to generate sufficient power to save an annual 110 million cubic meters of gas

The potential to reduce the use of gas for power generation is certainly real.

According to the most recent official data over the first five months of this year, 93 percent of the 11.887 GWh of power Azerbaijan's power plants produced came from plants burning gas, and just 6.1 percent from the country's hydro, wind, and solar plants.

This imbalance highlights the significance of the start of work on the Garadagh plant for Azerbaijan's renewable energy plans.

As the first independent, foreign investment-based independent "utility-scale" solar power plant, the project offers some level of confirmation that Baku's efforts to get foreign investors to develop its renewable energy potential can bear fruit. 

Up to now, Baku has proved adept at generating interest and signing vague non-binding agreements for new renewable energy projects, but unsuccessful at getting the projects developed.

At the Baku Energy Week Forum earlier this month, Azerbaijan signed "cooperation agreements" for the development of 900 MW of wind and solar power capacity with Total Energies and Nobel Energy, of which 650MW will be in the Azeri enclave of Nakhchivan, including a 400 MW solar power plant to be developed by Nobel.

Also at the start of June, Azerbaijan's Energy Ministry signed a memorandum of understanding with China Gezhouba Group Overseas Investment for a potential 2 GW of renewable energy projects.

In April, Azerbaijani Deputy Energy Minister Elnur Soltanov announced that Azerbaijan was hoping to develop 60 new hydroelectric projects by 2026 but gave no details.

Back in January Baku signed a second agreement with Masdar for the development of a 2-GW capacity integrated offshore wind farm and green hydrogen production facility, plus a further 1 GW of on-shore wind capacity and 1 GW of solar capacity.

And in December last year, Azerbaijan's energy ministry signed a "framework agreement" with Australia's Fortescue Future Industries to work together to study the potential for up to 12 GW of renewable energy and green hydrogen projects in Azerbaijan.

Also subject to still non-binding agreements is a BP-sponsored project for the 240 MW Shafag Solar Power at Jabrayil in southwest Azerbaijan.

Last month Elnur Soltanov announced that Baku and BP had agreed the "technical and commercial parameters" for the project and that only some technical issues remained to be settled.

With Baku apparently intent on relying on foreign investors to develop its renewable energy capacity, it remains to be seen just how many of these "projects" will actually be developed.

What isn't in doubt is that Azerbaijan has enormous scope for developing renewable power generation, most notably its offshore wind capacity in the Caspian Sea.

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Baku's own official estimates suggest that the country has the potential to develop 27 gigawatts of renewable energy capacity on land, and a further 135 GW offshore.

Last year the World Bank published its "Offshore Wind Roadmap for Azerbaijan" which estimated that the country has the potential for 35 GW of fixed foundation wind capacity in shallow areas of the Caspian and as much as 122 GW of floating capacity in deep waters. 

According to the bank's estimates, by following a high-growth decarbonizing strategy Azerbaijan could develop as much as 7.2 GW of offshore wind capacity, generating as much as 37 percent of the country's power by 2040.

Whereas a low-growth strategy would see just 1.5 GW of offshore wind developed, meeting just 7 percent of the country's power needs.

By David O’Byrne for Eurasianet.org

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