On January 9, 2020, the Ministry of Energy of the Republic of Azerbaijan and Masdar Company of the United Arab Emirates signed an Implementation Agreement.

According to the Agreement, the pilot project will be implemented for the construction of a solar power plant - Garadagh solar power plant, with a capacity of 230 MW by “Masdar”. In this regard, on April 6, 2021, an Investment agreement, a Power Purchase agreement, and a Transmission Connection agreement were signed on a 230 MW solar power plant between the Ministry of Energy, Azerenergy OJSC and “Masdar” of the United Arab Emirates.

The project with a total installed capacity of 230 MW will be implemented in an area 9 km northwest of the Alat settlement.

Developed by United Arab Emirates-based renewable energy company Masdar, the plant is expected to be operating by the end of this year, producing 500 gigawatt hours (GWh) annually.

Azerbaijan has been encouraging the development of new renewable energy projects with the aim of meeting 30 percent of the country's power demand from renewables by 2030.

Baku believes that by developing its renewable energy potential, it can reduce its dependence on natural gas for power generation, freeing up more gas for export thus maintaining its export revenues as production from the country's oil fields declines.

The Garadagh plant alone is expected to generate sufficient power to save an annual 110 million cubic meters of gas

The potential to reduce the use of gas for power generation is certainly real.

According to the most recent official data over the first five months of this year, 93 percent of the 11.887 GWh of power

Azerbaijan's power plants produced came from plants burning gas, and just 6.1 percent from the country's hydro, wind, and solar plants.

This imbalance highlights the significance of the start of work on the Garadagh plant for Azerbaijan's renewable energy plans.

As the first independent, foreign investment-based "utility-scale" solar power plant, the project offers some level of confirmation that Baku's efforts to get foreign investors to develop its renewable energy potential can bear fruit.

Up to now, Baku has proved adept at generating interest and signing vague non-binding agreements for new renewable energy projects, but unsuccessful at getting the projects developed.

At the Baku Energy Week Forum earlier this month, Azerbaijan signed "cooperation agreements" for the development of 900 MW of wind and solar power capacity with Total Energies and Nobel Energy, of which 650MW will be in the Azeri enclave of Nakhchivan, including a 400 MW solar power plant to be developed by Nobel.

Also at the start of June, Azerbaijan's Energy Ministry signed a memorandum of understanding with China Gezhouba Group Overseas Investment for a potential 2 GW of renewable energy projects.

In April, Azerbaijani Deputy Energy Minister Elnur Soltanov announced that Azerbaijan was hoping to develop 60 new hydroelectric projects by 2026 but gave no details.

The largest solar power plant in the region will be put into operation in the near future.

Analytic group of News.az

The article focuses on the theme of Socio-economic development of regions

The article was published with the support of the Media Development Agency of the Republic of Azerbaijan (MEDIA)