Azerbaijan becomes leader of Central Asia-Europe energy corridor

Azerbaijan, Kazakhstan and Uzbekistan will sign an intergovernmental agreement on strategic partnership in the field of green energy development and transfer on the sidelines of the COP29 climate conference. This was announced recently by Azerbaijani Energy Minister Parviz Shahbazov. The signing will take place within the framework of the Investment Forum on Energy Transition for Central Asia.

The document reflects the intentions of the parties to organize the supply of clean energy to Europe and other regions, cooperation in the application of new technologies and the development of services in the field of energy supply and energy efficiency. The project provides for connecting the energy systems of the three countries by laying a high-voltage cable along the bottom of the Caspian Sea and on land in order to carry out the most technically and economically optimal trade in green energy produced in Azerbaijan, Kazakhstan and Uzbekistan. It is reported that the agreement will be concluded for an indefinite period.

Earlier, an agreement was reached on the establishment of a joint venture in Baku to export green energy from Central Asia to Europe. The terms of reference for conducting a preliminary feasibility study of the project in cooperation with the Italian consulting company CESI have been approved.

In early May, the Ministers of Economy and Energy of Azerbaijan, Uzbekistan and Kazakhstan signed a Memorandum of cooperation on the integration of the energy systems of the three countries in Tashkent. The parties have set joint goals for the production of green energy and its export to Europe. It is expected that it will make it possible to export green energy from these countries to Europe, that is, energy produced from renewable sources.

PhD in Economics, Senior Researcher at the Institute of Economics under the Ministry of Science and Education of Azerbaijan, Azerbaijan, like the countries of Central Asia, has significant potential for solar and wind energy. The relatively low population density, large territory and many sunny days a year make our countries a unique platform for the development of green energy. Joint participation in projects related to alternative energy sources will allow each country to ensure the effective use of its potential in this area of the economy.

"On December 17, 2022, Azerbaijan, Georgia, Romania and Hungary signed a strategic partnership agreement, which provides for the construction of an energy bridge from the Caucasus region to Europe. As part of the agreement reached, it is expected to build an underwater electric cable Black Sea Energy with a capacity of 1,000 MW and a length of 1,195 kilometers. The cable will be designed to supply green electricity produced in Azerbaijan through Georgia and the Black Sea to Romania for subsequent transportation to Hungary and the rest of Europe. And connecting the energy capabilities of the Central Asian countries to the Black Sea Energy project will significantly increase both Azerbaijan's budget revenues from 

This will increase the export revenues of the budgets of Kazakhstan and Uzbekistan, Mammadzade believes," the economist said.

Currently, the installed capacity of renewable energy facilities in Kazakhstan is 2,868.6 MW, at the end of 2023, Uzbekistan commissioned six renewable energy facilities with a capacity of 2,400 MW. In the total electricity production of Azerbaijan, the capacity generated from renewable energy sources is 1,688 MW.

Azerbaijan is increasing its production of green energy and is expected to surpass its partners in terms of production in the coming years. By 2027, it is planned to implement projects for the construction of 8 industrial-scale solar and wind power plants with a total capacity of about 2 GW at the expense of foreign and local investments. About $2.8 billion will be invested in these projects. In the next three years, Azerbaijan plans to increase electricity production to 5.3 billion kWh.

Within the framework of SOR29, the Schafag solar power plant project will be launched and the results of the tender for the construction of the Gobustan solar station with a capacity of 100 MW will be summed up. It should be noted that Shafag will be built in the Jabrayil district and will be the first project in the field of renewable energy in the liberated territories. Investments in the construction project of this 240 MW SES will amount to $ 200 million. BP's subsidiary, Lightsource, will build the station. The solar power plant will supply energy to the Sangachal terminal, and this will reduce harmful emissions into the atmosphere equivalent to 260-330 thousand tons. tons of carbon dioxide per year. The decision to build the SES was made two years ago as part of the strategy of turning the liberated territories into a green energy zone. It is expected that the Jabrayil station will be put into operation in December next year.

In October 2023, the Garadagh solar power plant with a capacity of 230 MW, built by Masdar (UAE), was launched in Baku. The Garadagh solar plant has become the largest solar power plant in the South Caucasus. It is capable of providing electricity to 110 thousand residential buildings. At the opening ceremony, Masdar signed three more investment agreements with the Azerbaijani side in the field of green energy with a total capacity of 1,000 MW. This includes the construction of a 445 MW solar power plant in the village of Gunesh in Bilasuvar district, a 315 MW solar power plant in the village of Bank in Neftchala district, as well as a 240 MW wind power plant in the Absheron and Garadagh districts.

ACWA Power (Saudi Arabia) will commission the Khizi-Absheron wind farm with a capacity of 240 MW in Azerbaijan in 2025. As part of the project, 40 turbines with a capacity of 6 MW each will be installed. Of these, 17 wind turbines will be installed in the village of Pirekyushkul in the Absheron region and 23 turbines in the village of Sitalchai in the Khizi region. It is symbolic that the first 6.5 MW turbine is planned to be installed by the beginning of COP29.

In addition, there is a great potential for the development of offshore wind energy in the Azerbaijani sector of the Caspian Sea - 157 GW. In January of this year, during the groundbreaking ceremony of the Khizi-Absheron wind farm, a memorandum of understanding on cooperation in the field of offshore wind energy was signed between the Ministry of Energy of Azerbaijan and Saudi ACWA Power. In May, the parties concluded a Framework Agreement on the project of an onshore wind power plant with a capacity of 200 MW.

So Azerbaijan can become a leader in the emerging Central Asia-Europe energy corridor. According to experts, even if half of the already implemented and only just conceived projects in the field of renewable energy become a reality, Azerbaijan will turn into the most important source of energy for Europe.