Azerbaijan starts development of test project in renewable sector (Interview)

Zaur Mammadov, the office head of Azerbaijan’s Energy Ministry, told about the implementation of projects in the field of renewable energy sources and the measures taken for this in an interview with Trend.

On purpose of renewable sources

“One of the goals of expanding the use of renewable energy sources is to create favorable investment climate and support private entrepreneurship,” Mammadov noted.

“In accordance with the Azerbaijani presidential order No. 1209 dated May 29, 2019 “On accelerating reforms in Azerbaijan’s energy sector”, the Energy Ministry was instructed to take measures to encourage the use of renewable energy sources, create favorable investment climate and support the activities of private entrepreneurship, as well as todraft Azerbaijan’s law “On the use of renewable energy sources in the electricity production,” the office head added.

“This draft has already been developed and is being agreed upon,” said Mammadov. “The Energy Ministry, together with the relevant government agencies, has prioritized sites that have the potential for the use of renewable energy sources. Memorandums have been signed with companies interested in the development of this area. The total number of priority sites is eight, and they are mainly located in the vicinity of Baku city, as well as Absheron and Khizi districts.”

“These sites have been presented to private investors, and the relevant proposals have already been received from investors,” the office head noted. “In order to encourage the use of renewable energy sources and attract private investments in this sector, the presidential order No. 1673 dated Dec. 5, 2019 “On measures for the implementation of test projects in the field of using renewable energy sources” was issued.”

“Under the order, a commission was created to implement pilot projects for the construction of renewable energy (wind and solar) power plants and coordinate their implementation,” Mammadov added. “Presently, the implementation of measures envisaged by the order has begun and working groups have been formed in the relevant areas.”

Economic feasibility of projects

“With financial and technical support from the Asian Development Bank, Azerbaijan’s Energy Ministry is implementing a pilot project on the exchange of knowledge and technical support for the development of floating solar panels,” said the office head.

“The project involves creation of a 100 kilowatt solar panel network on Lake Boyuk Shor, as well as the development of business models to encourage private sector participation in the use of solar energy and strengthen national capacity through training,” Mammadov noted. “Tenders are being held, and after the selection of the appropriate companies, construction will begin.”

“Diversification of energy production using renewable energy sources won’t only contribute to energy security, but also to the fulfillment of the commitments under the UN Framework Convention on Climate Change, and will also have a positive impact on attracting foreign investments in Azerbaijan,” added the office head.

Potential for introduction of alternative energy sources

“Azerbaijan is one of the countries with high potential for renewable energy sources,” Mammadov said. “The economic and technical potential of renewable energy in our country is estimated at 26,940 megawatts, including wind energy at 3,000 megawatts, solar energy at 23,040 megawatts, bioenergy potential at 380 megawatts, mountain river energy at 520 megawatts.”

“In 2018, 25.2 billion kilowatt-hours of electricity were generated in Azerbaijan, 2.04 billion kilowatt-hours of which accounted for renewable energy sources,” the office head noted. “During the year, 85.7 million kilowatt-hours were generated at wind farms, 39.3 million kilowatt-hours at solar power plants and 162.3 million kilowatt-hours at solid waste incinerators. Electricity generated from renewable energy sources amounted to 8.1 percent of the total production volume.”

What is the benefit?

“Increasing the use of renewable energy sources will contribute to the creation of new services, production capacities and new jobs, as well as diversification of energy production, increase our export potential through the saved natural gas and reduce the negative impact on the environment,” said Mammadov. “Financing of these projects is planned to be implemented through private investors by concluding direct sale agreements and holding auctions.”

Partnership results

“In order to strengthen cooperation in the use of renewable energy sources and stimulate investments in this sector in the future, cooperation with international companies is expanding,” the office head noted.

A memorandum of understanding and documents on cooperation have been signed with nine companies including BP (UK), Masdar (UAE), Avelar Solar (Russia), Tekfen (Turkey), Total Eren (France), Equinor (Norway), ACWA Power (Saudi Arabia), Mitsui & Co. (Japan), and Quadran International (France), Mammadov added.

The office head also noted that in order to maintain a high level of cooperation with companies, the necessary steps are being taken, discussions are being held, working groups are being created, meetings are being held and information is being exchanged.

“At the same time, discussions are being held with companies to develop legislative acts and a contractual basis, and their proposals in this area are taken into account,” Mammadov added.