Azerbaijan is now partnering with Masdar, a United Arab Emirates (UAE)- based company, to create substantial new renewable energy resources. Azerbaijan’s renewable energy project will annually produce four gigawatts (4GW) of wind and solar power. This should help preserve energy security. It should also create a more sustainable economic future for the country.
The State Oil Company of Azerbaijan (SOCAR), which is Azerbaijan’s national integrated oil and gas company, represented Azerbaijan in the January 2023 agreement. SOCAR strives to improve Azerbaijan’s energy security. Significantly, Azerbaijan’s renewable energy project should energize the country’s sustainability goal to have 30% of its energy from renewables by 2030.
The Republic of Azerbaijan is a nation located in the south Caucasus region. Russia borders it to the north, the Caspian Sea to the east, Iran to the south and Armenia and Georgia to the west. Its population of approximately 10.1 million live on 86,600 square kilometers.
Azerbaijan’s gross domestic product (GDP) has been steadily increasing since the country’s economic crisis between 2015 and 2016 left people in poverty. The current GDP per capita in Azerbaijan is $5,388. Moreover, a 2018 United Nations report found Azerbaijan to be the country with the highest rate of social equality in an index of 194 countries.
Energy in Azerbaijan
Azerbaijan’s energy supply is still largely reliant on fossil fuels. In fact, 98% of the country’s energy supply comes from oil and gas. It is also a key oil and gas supplier to other nations. At the end of 2017, Azerbaijan’s oil reserves accounted for 0.4% of the total global energy reserves.
In 2015, falling oil prices devastated Azerbaijan’s economy. More diverse energy sources, such as those offered by Azerbaijan’s renewable energy project, could help Azerbaijan to achieve greater energy stability.
Also, while Azerbaijan’s energy security remains strong, the finite and polluting nature of fossil fuels means that their longevity cannot be assured. That is why SOCAR wishes to transition towards more renewable resources to greater Azerbaijan’s energy security and secure a more sustainable future.
Masdar’s Investment in Azerbaijan and Green Energy
Madsar chairman Dr. Sultan Ahmed Al Jaber said of Azerbaijan’s renewable energy project: “Masdar sees Azerbaijan as a key strategic partner, one we are proud to support in its clean energy journey. This signing marks a milestone on the development and delivery of a significant collaboration that will advance Azerbaijan’s renewable energy goals and support its ongoing sustainable economic development.”
This is not Masdar’s first investment in Azerbaijan. First, Masdar is developing a solar power plant in Garadagh on the east coast of Azerbaijan. It will generate 500 million kilowatt-hours of electricity a year. In addition, in 2022, the firm had already signed agreements with the country’s Ministry of Energy for the development of a 10GW renewable energy program. That program’s first phase focuses on corraling onshore wind and solar power. The second phase will focus on offshore wind and green hydrogen energy production.
Madsar is a growing company in the green energy transition. They also recently signed a 1GW wind energy deal with Kazakhstan in January 2023.
Azerbaijan’s Economic Future
Azerbaijan’s renewable energy project could be an effective means of stabilizing and diversifying its economy. Not only is Azerbaijan’s renewable energy project good for a more stable economy, but it is also good for the country’s environment and its citizens’ health.
– Florence Jones