By 2020 the Azerbaijan government plans to increase its share of renewable energy sources to 9.7 percent of its total energy consumption, which is three times higher than today's rates. This goal is part of its recently approved plan “National Strategy for the Development of Alternative and Renewable Energy Sources in 2012-2020.”
According to the strategy, renewable energy development will be held in two stages with an emphasis on solar and wind energy. The program calls for 2,500 megawatts (MW) of installation capacity, which will require about US$6-7 billion of investment, according to preliminary experts’ estimations.
Experts note that Azerbaijan has the perfect conditions for renewable energy development and estimate that it could become one of the leaders in renewable output among the European countries. It has an abundance of energy sources such as solar, wind, hydro, and others, but has long-suffered from a lack of necessary investments, according to Telman Zeynalov, head of the National Center for Environmental Research.
"For example, the country is well placed for the use of solar energy. Azerbaijan located in the hot climate conditions and has from 250 to 280 sunny days per year with a very high level of lightning," he said.
Azerbaijan has very good prospects for the development of wind energy, noted Zeynalov. The average annual wind speed in the country ranges between 5-7 meters per second, and in mountain areas the wind can blow twice as fast. “Such conditions are perfect for the efficient operation of wind generators. Thus, it is possible to use wind power for many months of the year,” he added.
Two Stages, Two Technologies
During Azerbaijan's first stage of its development plan, by 2015 most investments will go towards the development of wind power, according to Jamil Melukov, deputy head of the State Agency for Alternative and Renewable Energy of Azerbaijan. by 2015, the government hopes that wind energy will account for 50 percent of its overall renewable capacity. During the second stage of the plan (2015-2020), Azerbaijan will focus on the development of solar energy sources, and the resulting share of wind power will be reduced to 32 percent.
"The wind industry has great potential — capacities will reach 240 MW in 2015 and 800 MW in 2020, and photovoltaic installations will reach 290 MW and 600 MW respectively. With the potential of solar [heating and cooling] systems, which amount to 50 MW and 350 MW respectively, solar energy is the most promising form of alternative energy," said Melukov. "[Other minor] potential energies include [biomass] combustion at 25 MW in 2015 and 125 MW in 2020, geothermal energy at 15 MW and 150 MW, and small hydro stations at 80 MW and 150 MW."
However, the implementation Azerbaijan's strategy requires the adoption of the new legislative framework which will provide a number of tax grants and support for renewable energy producers, said Ramiz Rezaev, head of the investment department at the Ministry of Industry and Energy of Azerbaijan.
According to Rezaev, Azerbaijan has recently developed "wind inventory," and currently is working on the preparation of "sun inventory." "These inventories will more accurately determine the types of power plants that can be used in the respective territories," he said.
Referring to energy inefficiency issues in Azerbaijan, Rezaev noted that there is still a lack of monitoring and regulatory body for renewable and alternative energy sources. "Also, there is the issue of tariffs, since the production of electricity from these plants are more expensive than conventional systems," he said.
He also noted that there are problems financing energy efficiency initiatives and slow development and implementation of clean energy goals at the district level. In the future, Azerbaijan may adopt renewable energy laws that will include the propositions necessary to develop this area, said Rezaev.
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