Azerbaijan, Turkiye set to enhance energy cooperation with new agreement

In a significant development for regional energy markets, Azerbaijan and Turkiye are poised to formalize an "Operation Agreement" between the Nakhchivan State Energy Service and the Turkish Electricity Transmission Corporation (TEIASH). This upcoming agreement, reported by Azernews via the Telegram channel of the Ministry of Economy of Azerbaijan, aims to streamline and expand energy exchanges between the two nations.

The planned agreement marks a crucial step in deepening the energy cooperation between Azerbaijan and Turkiye. The discussions leading up to this agreement have addressed several technical and operational aspects, including the transmission and distribution substations on both sides of the border. Key considerations have been the current condition of the power transmission lines, the precise locations of the meters, and the application of relay protection systems. This comprehensive approach is expected to enhance the reliability and efficiency of energy flows between the two countries.

The European Network of Transmission System Operators (ENTSO) has granted approval for specific energy transmission parameters under this agreement. ENTSO’s endorsement allows for the export of 75 megawatts from Turkiye to Nakhchivan, with the Turkish side operating in passive island mode. Conversely, Nakhchivan will be permitted to import 40 megawatts while in passive island mode. These stipulations are designed to ensure stable and balanced energy exchanges, mitigating risks associated with grid imbalances and operational disruptions.

The anticipated agreement holds several economic implications for both Azerbaijan and Turkiye. For Azerbaijan, which has been investing in its energy infrastructure and seeking to increase its role in regional energy markets, this agreement represents a significant boost. It not only diversifies its energy export opportunities but also strengthens its position as a critical player in regional energy security.

For Turkiye, the arrangement provides an opportunity to optimize its energy exports and manage its grid more effectively. The ability to export surplus energy to Nakhchivan can help Turkiye balance its energy production with demand, potentially leading to increased revenue from energy sales and enhanced grid stability.

The agreement could also have broader implications for regional energy cooperation. By solidifying the energy link between Azerbaijan and Turkiye, it may encourage other neighboring countries to explore similar collaborations. This could pave the way for more integrated regional energy markets, fostering greater energy security and economic stability across the area.

The forthcoming "Operation Agreement" between the Nakhchivan State Energy Service and TEIASH is poised to enhance energy cooperation between Azerbaijan and Turkiye significantly. With the backing of ENTSO and a detailed operational framework, this agreement promises to bolster energy security, optimize resource use, and strengthen economic ties between the two nations. As the finalization of the agreement approaches, stakeholders on both sides will be keenly observing its potential to transform regional energy dynamics.