Oil and Natural Gas Exports Funding Azerbaijan’s Renewable Energy Boom

Country Overview

The Republic of Azerbaijan is bordered by Iran, Turkey, Armenia, Georgia, Russia, and the Caspian Sea. The population of Azerbaijan is approximately 10.44 million people.

In 1920, Azerbaijan Democratic Republic was invaded, subjugated, and incorporated into the Union of Soviet Socialist Republics (USSR). On 30 August 1991, Azerbaijan gained its independence as a sovereign nation, following the dissolution of the USSR.

In 2022, Azerbaijan’s economy was ranked 71st in the world in gross domestic product (GDP). The country’s economy is dependent on the export of crude oil, natural gas, refined petroleum, raw cotton, and gold.

Environmental Policies

In 2016, Azerbaijan signed the Paris Climate Agreement, committing a 35% cut in greenhouse gas emissions by 2030, compared to 1990 levels in all sectors of the economy.

Power Generation Capabilities

In 2021, 100% of the people in Azerbaijan had access to electricity. In 2022, the nation’s power companies used natural gas (92.3%), renewable energy (5.4%), and refined petroleum (2.3%) to generate electricity in Azerbaijan. Hydropower is the dominant type of renewable energy used to generate electricity in Azerbaijan.

Recent renewable energy projects in Azerbaijan include:

  • 1,000 MW Solar + Wind Projects – In October 2023, United Arab Emirates (UAE) company Masdar signed contracts to develop two solar and one onshore wind project with the government of Azerbaijan. The total capacity of the three projects is 1,000 MW.
  • 230 MW Solar Project – In October 2023, Masdar commissioned the Garadagh Solar Park project at a site approximately 5 miles southwest of the nation’s capital, Baku.

Conclusions

Oil was first discovered in Azerbaijan in 1846. In 2022, Azerbaijan was the 11th largest natural gas and 18th largest crude oil exporting country in the world.

The export of oil and natural gas is the cornerstone of Azerbaijan’s economy. In 2021, Azerbaijan exported U.S. $13.5 Billion of crude oil, $5.73 Billion of natural gas, and $641 Million of refined petroleum.

Why has Azerbaijan begun to accelerate develop of its renewable energy resources? Economics pure and simple.

Azerbaijan’s economy is dependent on the export of oil and natural gas. The country also has vast undeveloped hydropower, wind, solar, and biomass resources.

Azerbaijan’s government intends to replace the nation’s natural gas and refined petroleum fueled power plants with renewable energy power plants, preserving the oil and natural gas resources for export. Oil and natural gas exports are now funding Azerbaijan’s renewable energy boom.

Jack Kerfoot

Website – “Our Energy Conundrum”

www.jackkerfoot.com

 

Jack Kerfoot is a scientist, energy expert, and author of the book FUELING AMERICA, An Insider’s Journey and articles for The Hill, one of the largest independent political news sites in the United States. He has been interviewed on over 100 radio, podcast, and television stations from New York City to Los Angeles on numerous energy related topics.

 

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