In recent years, climate change has become one of the most serious global problems. This issue significantly impacts ecosystems and economies, the energy sector, and the sustainability of societies. Many countries are launching various initiatives to prevent this threat and accelerate the transition to green energy. International cooperation and innovative solutions play a crucial role in this process.

Amid these global challenges, Azerbaijan has also identified the development of green energy as its priority direction. The country is not only increasing sustainability in the energy sector but also implementing large-scale projects to contribute to global efforts. The declaration of 2024 as the Green World Solidarity Year in Azerbaijan, as well as hosting COP29 last year, is clear evidence of this.

To learn more about Azerbaijan’s steps in the green energy sector, collaborations with international companies, the first auction, and future prospects, Report spoke with Javid Abdullayev, Director of the State Agency for Renewable Energy Sources under the Ministry of Energy.

– What important events in the field of renewable energy in Azerbaijan were memorable in 2024?

– 2024 was a year of special significance for Azerbaijan in terms of renewable energy. There are several main reasons for this. The declaration of 2024 as the Green World Solidarity Year by the country’s president further increased the importance of this year in terms of green development. At the same time, Azerbaijan hosted COP29 last year, which strengthened our country’s position on the climate agenda.

Regarding the important projects implemented in 2024, our main priority was the construction of industrial-scale power plants. By 2027, it is planned to commission eight stations with a total capacity of approximately two gigawatts. Among these stations, solar and wind power plants predominate.

One of the notable projects this year was the installation of the first wind turbines. Construction of 3 wind turbines has already been completed, and an industrial-scale wind farm with a capacity of 240 megawatts is planned to be fully operational by the end of this year. Additionally, foundations were laid for two solar power plants and one wind power plant with a total capacity of one gigawatt, and work in this regard continues rapidly.

Within the framework of cooperation with BP, the analysis phase of the Shafag Solar Power Plant to be built in Jabrayil has been completed, and the groundbreaking ceremony for the plant was held during COP29. Also, China’s Universal International Holdings Limited won the first auction for the construction of a 100-megawatt Solar Power Plant in Gobustan. Work on the implementation of this project has already begun.

Another notable project is the floating solar station located on Lake Boyuk-Shor. The station is currently in its testing phase, and the results obtained are promising for the future expansion of such projects.

The issue of allocating special land plots for renewable energy has also been resolved. For example, areas in Jabrayil and Fuzuli districts have been declared renewable energy zones for the construction of new stations.

Grid strengthening was also in focus. Analyses conducted with international consultants, including US-based Tetra Tech, Türkiye’s EPRA, and Italy’s CESI companies, revealed that approximately two gigawatts of renewable energy could be connected to the grid. Our plans for network strengthening and new infrastructure projects have already been finalized.

Thus, 2024 was remarkable for major advances in renewable energy for Azerbaijan, moving closer to the target of 30% green energy share in energy production by 2030 (in 2027).

– In total, how much produced green energy will be possible to connect to the country’s power grid by the end of this year?

– By the end of this year, a 240-megawatt wind power plant built by Saudi Arabia’s Acwa Power is planned to be connected to the general power grid. With the full commissioning of this project, the share of green energy in our country will increase significantly.

From 2026, we will witness the connection of solar power plants implemented by the UAE’s Masdar company to the grid. Additionally, work continues through auctions towards commissioning another solar power plant in the Karabakh region.

There is significant progress in the project implemented by BP in Jabrayil. Construction of the substation in the project area is being carried out intensively, and issues related to roads and other infrastructure are being resolved. The mine clearance process in the area has been completely finished, which creates conditions for accelerating construction work.

The implementation of all these projects will increase the country’s green energy potential and allow for achieving significant results in terms of the integration of renewable energy into the grid.

– Last year, the first auction for renewable energy sources was held in Azerbaijan. Have there been any developments in this field after the auction?

– Of course, work on the project actively continues after the auction. Currently, the winning company is conducting geotechnical and geological surveys and has started preparatory work on the site. In parallel, work is being done on resolving institutional and legal issues. We plan to soon move to the stage of signing project contracts and announce the results to the public.

– Is another such auction planned? If planned, when could it take place?

– According to Azerbaijani legislation, the construction of power plants is carried out in two options. The first option is through auctions, and the second option is through a direct involvement mechanism for strategically important projects. The first auction was a very useful experience for us. The information and results obtained during this procedure are currently being extensively analyzed and the processes are being closely monitored.

We believe that an auction is a very promising tool, but holding such events depends on several factors, including the existing capabilities of the power grid. Currently, the grid capacity and resource compatibility are being analyzed. The decision regarding future auctions will be made taking these factors into account.

– What works are to be done in the field of green energy in 2025?

– Our plans for this year are quite extensive. As you know, in the first phase, we have managed to systematically solve many of the tasks set and move to the implementation phase. Now, we are focusing mainly on realizing the full potential of Azerbaijan’s large renewable energy resources and particularly on export projects.

At this stage, one of our main goals is to develop work related to the planned cable project towards Europe, connections with Central Asia, and energy exports to Türkiye through Nakhchivan. It should be particularly noted that initiatives regarding the creation of interconnectors were put forward during COP29. Currently, the analyses of these projects are being finalized, and certain steps are planned to be taken based on the obtained results.

At the same time, we plan to extend the successful work in creating green energy zones in the liberated territories to the Nakhchivan Autonomous Republic. An international consulting company has been engaged for this purpose, and work continues intensively.

One of the other important focus areas in 2025 is related to hydrogen energy. At the end of last year, Azerbaijan’s first high-level Strategic Vision Document on Hydrogen was presented. Now, concrete steps are planned to be taken in this regard. Additionally, work is being done to finalize and approve the national action plan in the electric vehicle sector.

There are also advances in other types of renewable energy sources, particularly in bioenergy and geothermal energy. Analyses in these areas have already been completed and submitted to relevant authorities. Work continues to broadly explore the possibilities of using geothermal energy.

Additionally, special attention will be paid to offshore wind energy projects in 2025. Initial measurements have already been conducted, but more extensive research and investor involvement in this process are planned. These projects will make a significant contribution to green energy production and create new opportunities in Azerbaijan’s energy sector. Undoubtedly, work in this field is quite complex, and unexpected difficulties may arise. However, steps are being taken gradually to resolve these difficulties. Our plans are dynamic and are regularly updated according to new requirements. We are working with all our strength to achieve the goals we have set.

– What is the planned volume of green energy in total energy production this year?

– I can confidently say that by 2026-2027, Azerbaijan will exceed 30% installed capacity in energy production. As you know, last year a Solar Power Plant was commissioned and will produce more than half a billion kWh of electricity. The Wind Power Plant, which will be commissioned this year, will enable the production of nearly 1 billion kWh of electricity. Of course, traditional electricity production is also expected to increase, as demand is rising according to various scenarios.

– What new developments are expected in the legislation?

– One of the main reasons for the successful progress of projects is the proper formation of the relevant legislative framework, which has already been completed. Although the renewable energy projects in Azerbaijan do not have the status of law like oil and gas contracts (PSA), they are based on Azerbaijani legislation and are implemented within the framework of these agreements.

However, several new initiatives are needed. For example, the implementation of energy storage systems into the grid is on the agenda, and this may require certain clarifications in legislation. At the same time, as new projects emerge, additional legislative initiatives may be needed for their implementation. In other words, progress in legislation will continue dynamically.

– Will Azerbaijan carry out any work this year to transform new territories into green energy production areas?

– A special department of the State Agency for Renewable Energy Sources operates in this regard. As you know, there is a special information system for renewable energy sources, and potential areas are entered into this system. Promising areas and their utilization possibilities are constantly studied and updated in the system. Currently, the main focus is on bringing the already identified and announced areas to the necessary state of preparation and presenting them to investors so that there are no delays in the implementation of signed contracts.

– What new developments are expected in this area in Karabakh and Eastern Zangazur?

– Measurement works are already being carried out in the Lachin district. By the end of this year, we plan to obtain bankable data that will be presented to banks and investors. Initial results show that the district has great potential.

Within the framework of the COP event, an agreement was also signed regarding the launch of new projects in the Kalbajar district. Wind energy measurements will begin there in late March or early April 2025. These measurements will be carried out by investors, as there is serious interest in wind power plants.

There are also updates regarding BP’s project in Jabrayil. Another area for a new station has already been identified in Jabrayil. New work will start soon in the Fuzuli district. This project will be implemented in the Horadiz settlement. Currently, along with site preparations, work is underway on making decisions regarding the selection of manufacturers.

– What stage are the works on the Black Sea Submarine Cable project at?

The project Azerbaijan is involved in is a large-scale initiative aimed at green energy production and export connecting the Caspian Sea, Black Sea, and Europe. Part of the project is called the Black Sea Energy project, which extends between Romania and Georgia. However, the project Azerbaijan is working on is broader and covers the transmission of green energy from Azerbaijan to Europe.

Significant progress has been made in this area over the past year. A joint venture has already been established. The initial leadership of this joint venture has been entrusted to Azerbaijan on a rotation basis, and the managers have already been appointed. Currently, the process of finalizing the company’s founding documents is ongoing, and the enterprise is expected to begin operations in the coming days.

At the same time, technical and analytical work on the project continues rapidly. Italy’s CESI company is working on the project’s Feasibility Study, and the document is expected to be ready soon. With the completion of this study, it will be possible for the parties to move to the next phase and achieve significant progress on the interconnector project.

– Which volumes of electrical energy will Azerbaijan export within the framework of this project?

– It would not be right to rush to state specific numbers at present. We are waiting for the results of CESI’s analyses, as these analyses are based on market equilibrium models. These models cover various scenarios. Green energy refers not only to electrical energy but also to hydrogen production and its export.

There are several scenarios for hydrogen export: for example, hydrogen produced in Azerbaijan can be exported via the Southern Gas Corridor. Alternatively, a new pipeline could be built, or green energy could be exported to Europe with electrolyzers installed in areas close to consumers. Additionally, hydrogen derivatives can be produced and exported to Europe.

The market demand for green energy is rapidly increasing in Europe. CESI is studying this demand, distribution of production, capacity of the pipeline passing through the bottom of the Caspian Sea, distribution of capacity among countries, and energy flow directions. As a result of the analyses, specific figures and proposals will be presented on these issues. Currently, it is not possible to discuss exact volumes for this reason.

– Are new participants and countries expected to join the Black Sea Energy project?