Azerbaijan state energy company signs deal with UAE energy giant

Azerbaijan’s state energy company SOCAR signed a deal with UAE energy giant Masdar during last week’s Abu Dhabi Sustainability Week Forum. The agreement marks another step in Azerbaijan’s stated commitment to develop its renewable energy capacity.

The new public-private agreement makes a commitment to produce 2 gigawatts of offshore wind energy and green hydrogen, in addition to 1 gigawatt of onshore wind energy and 1 gigawatt of solar power.

This is not Azerbaijan’s first deal with Masdar. The same UAE company had partnered with Azerbaijan in 2020 for the nation’s “first major solar power plant – the 230-megawatt Garadagh facility.” That power plant, which is set to start operation later this year, will reportedly “reduce emissions by 200,000 tons a year.”

“Yesterday, MASDAR and Azerbaijan’s national energy company SOCAR signed an agreement to develop four gigawatts of wind and solar power plants in Azerbaijan, and this is only a short-term project. Mid-term projects will increase the volume up to 10 gigawatts,” Azerbaijani President Ilham Aliyev said of the most recent deal.

Azerbaijan’s Energy Minister Parviz Shahbazov has commented that the country has the potential to generate as much as 200 gigawatts of renewable energy, which is much more than its domestic needs.

An Azerbaijani newspaper reports that the nation’s goal is “to meet 30% of its domestic needs for electricity from renewable sources by 2030.” State leaders have previously also made agreements and statements reflecting a commitment to reducing greenhouse gas emissions and exporting renewable energy to Europe, which has become dependent on new energy sources following Russia’s invasion of Ukraine.

Analyzing the recent developments, energy journalist David O’Byrne comments on the feasibility of these ambitions. O’Byrne points to the ambiguity of statements surrounding Azerbaijan’s transfer of electricity to Europe via in an international power line across the Black Sea, in addition to Aliyev’s affirmation that there is a need for investment for the success of existing project. O’Byrne says that this is “all very admirable, but with few details offered and no funding confirmed and no projected timelines for completion, it's far from clear how much of this potential will or even can be developed.”