Can Azerbaijan benefit from artificial islands in Caspian?
By Asif Aydinli
The Azerbaijani parliament recently approved a law that facilitates the construction of artificial islands in the Caspian Sea, which means that Azerbaijan may see the creation of such islands in the next few decades. The practice of constructing artificial islands is widespread around the world. For example, artificial islands can help megacities cope with overpopulation, as is the case in Hong Kong, or serve to concentrate exclusive luxury like in Qatar and the UAE.
However, considering the latest trends in the development of green energy, Azerbaijan could benefit from the experience of Denmark and Belgium. In February 2021, Denmark announced plans to build an artificial island that will be filled with wind turbines and will produce 10 GW of energy, enough to supply about 10 million European households. The project is expected to become operational by 2033.
Building wind farms at sea is more advantageous than on land, as the wind is more stable and energetic offshore. For this reason, Belgium plans to start implementing the Princess Elisabeth Island project this year — creating an artificial island 45 km off the country's coast, which will act as an energy hub connecting marine wind farms to mainland Belgium and serve as a hub for future connections to the UK and Denmark.
The island is intended to play a crucial role in achieving Belgium's renewable energy goals and reducing greenhouse gas emissions. In this context, the Belgian government has allocated a grant of about 100 million euros to the project.
The implementation of similar projects is also relevant for Azerbaijan. According to the Global Wind Energy Council (GWEC), Azerbaijan ranks among the top four countries in the world with the most significant offshore wind energy potential.
The wind energy potential of the Azerbaijani sector of the Caspian Sea is twenty times greater than the current installed capacity of the country's power system. Therefore, even tapping into a small portion of this potential would enable Azerbaijan to be supplied with energy from renewable sources. The total wind energy of the Caspian Sea, which could theoretically be utilized within the country, is estimated at 157 GW, with up to 35 GW in shallow waters (requiring less financial expenditure for utilization) and 122 GW in deeper waters.
By 2027, the Azerbaijani government aims to produce 3 GW of wind and 1 GW of solar energy, 80% of which will be exported, and to create at least an additional 6 GW of alternative energy capacity. This rapid growth in renewable energy production not only provides Azerbaijan with an opportunity to diversify its energy balance but also sets the stage for significant developments in green technology and infrastructure.
Companies like Masdar (UAE), ACWA Power (Saudi Arabia), and Fortescue Future Industries (Australia) are actively working in this sector in Azerbaijan. In 2022, ACWA Power and Masdar signed an agreement to develop renewable energy projects in Azerbaijan with a total capacity of over 10 GW, including 2 GW of wind power for producing "green" hydrogen.
In partnership with SOCAR, ACWA Power is already implementing several green energy projects both offshore and onshore with a total production capacity of 2.5 GW. Furthermore, the Ministry of Energy of Azerbaijan and ACWA Power have signed an agreement to construct a 200 MW renewable energy storage system and have agreed to build a 200 MW onshore wind farm.
In April 2021, the Ministry of Energy of Azerbaijan and the International Finance Corporation (IFC, a member of the World Bank Group) signed a Memorandum of Understanding on cooperation in the field of offshore wind energy. On 13 January 2022, the Ministry of Energy and ACWA Power (Saudi Arabia) signed a Memorandum of Understanding on cooperation in the field of offshore wind energy.
In June 2023, the Ministry of Energy of Azerbaijan signed an agreement with the Chinese company China Gezhouba Group Overseas Investment to jointly assess investment opportunities in solar, terrestrial, and marine wind energy, and integrated smart energy systems. Moreover, the agreement also involves implementing renewable energy projects with a total capacity of 2 GW by 2025. The company will also assist the Ministry of Energy of Azerbaijan in developing and implementing an effective legal framework for investment in renewable energy.
According to the German Federal Agency for Economic Development (GTAI), the total planned investment in renewable energy sources in Azerbaijan amounts to around $1 billion. This will enable about 30% of the electricity generated in the country to be "green" by 2030.
The construction of five solar and wind power stations with a capacity of 1.3 GW will begin in Azerbaijan this year. The recently adopted law that facilitates the construction of artificial islands in the Caspian Sea will open up vast opportunities for developing offshore wind energy, which will undoubtedly lead to an increase in the production of "green energy" and allow Azerbaijan to become one of the main suppliers of "green energy" to Europe through the Black Sea Energy project in the coming years.
The Azerbaijani parliament recently approved a law that facilitates the construction of artificial islands in the Caspian Sea, which means that Azerbaijan may see the creation of such islands in the next few decades. The practice of constructing artificial islands is widespread around the world. For example, artificial islands can help megacities cope with overpopulation, as is the case in Hong Kong, or serve to concentrate exclusive luxury like in Qatar and the UAE.
However, considering the latest trends in the development of green energy, Azerbaijan could benefit from the experience of Denmark and Belgium. In February 2021, Denmark announced plans to build an artificial island that will be filled with wind turbines and will produce 10 GW of energy, enough to supply about 10 million European households. The project is expected to become operational by 2033.
Building wind farms at sea is more advantageous than on land, as the wind is more stable and energetic offshore. For this reason, Belgium plans to start implementing the Princess Elisabeth Island project this year — creating an artificial island 45 km off the country's coast, which will act as an energy hub connecting marine wind farms to mainland Belgium and serve as a hub for future connections to the UK and Denmark.
The island is intended to play a crucial role in achieving Belgium's renewable energy goals and reducing greenhouse gas emissions. In this context, the Belgian government has allocated a grant of about 100 million euros to the project.
The implementation of similar projects is also relevant for Azerbaijan. According to the Global Wind Energy Council (GWEC), Azerbaijan ranks among the top four countries in the world with the most significant offshore wind energy potential.
The wind energy potential of the Azerbaijani sector of the Caspian Sea is twenty times greater than the current installed capacity of the country's power system. Therefore, even tapping into a small portion of this potential would enable Azerbaijan to be supplied with energy from renewable sources. The total wind energy of the Caspian Sea, which could theoretically be utilized within the country, is estimated at 157 GW, with up to 35 GW in shallow waters (requiring less financial expenditure for utilization) and 122 GW in deeper waters.
By 2027, the Azerbaijani government aims to produce 3 GW of wind and 1 GW of solar energy, 80% of which will be exported, and to create at least an additional 6 GW of alternative energy capacity. This rapid growth in renewable energy production not only provides Azerbaijan with an opportunity to diversify its energy balance but also sets the stage for significant developments in green technology and infrastructure.
Companies like Masdar (UAE), ACWA Power (Saudi Arabia), and Fortescue Future Industries (Australia) are actively working in this sector in Azerbaijan. In 2022, ACWA Power and Masdar signed an agreement to develop renewable energy projects in Azerbaijan with a total capacity of over 10 GW, including 2 GW of wind power for producing "green" hydrogen.
In partnership with SOCAR, ACWA Power is already implementing several green energy projects both offshore and onshore with a total production capacity of 2.5 GW. Furthermore, the Ministry of Energy of Azerbaijan and ACWA Power have signed an agreement to construct a 200 MW renewable energy storage system and have agreed to build a 200 MW onshore wind farm.
In April 2021, the Ministry of Energy of Azerbaijan and the International Finance Corporation (IFC, a member of the World Bank Group) signed a Memorandum of Understanding on cooperation in the field of offshore wind energy. On 13 January 2022, the Ministry of Energy and ACWA Power (Saudi Arabia) signed a Memorandum of Understanding on cooperation in the field of offshore wind energy.
In June 2023, the Ministry of Energy of Azerbaijan signed an agreement with the Chinese company China Gezhouba Group Overseas Investment to jointly assess investment opportunities in solar, terrestrial, and marine wind energy, and integrated smart energy systems. Moreover, the agreement also involves implementing renewable energy projects with a total capacity of 2 GW by 2025. The company will also assist the Ministry of Energy of Azerbaijan in developing and implementing an effective legal framework for investment in renewable energy.
According to the German Federal Agency for Economic Development (GTAI), the total planned investment in renewable energy sources in Azerbaijan amounts to around $1 billion. This will enable about 30% of the electricity generated in the country to be "green" by 2030.
The construction of five solar and wind power stations with a capacity of 1.3 GW will begin in Azerbaijan this year. The recently adopted law that facilitates the construction of artificial islands in the Caspian Sea will open up vast opportunities for developing offshore wind energy, which will undoubtedly lead to an increase in the production of "green energy" and allow Azerbaijan to become one of the main suppliers of "green energy" to Europe through the Black Sea Energy project in the coming years.
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