Azerbaijan Accelerates Renewable Energy Transition

Azerbaijani Prime Minister Ali Asadov signed a decision designating state-owned land in the Jabrayil district for renewable energy development.

According to the decision, 229 hectares in Jabrayil, within the East Zangazur economic region, will be allocated for constructing clean energy facilities. Initially, a solar power plant with a capacity of 50 MW will be built, with plans to expand the station to a total capacity of 100 MW in subsequent phases.

Since 2021, Baku has taken steps to unlock Jabrayil’s clean energy potential, including projects to be realized by Nobel Energy and BP.

In March 2024, Nobel Energy, a part of NEQSOL Holding, and the Energy Ministry of Azerbaijan signed an agreement to develop a solar power plant in Jabrayil. The development of a 100MW photovoltaic solar power plant will be executed in two stages. The initial phase, comprising 50MW, is scheduled for completion by 2027, with the remaining capacity to be installed in subsequent years. The plant is expected generate around 180 million kilowatt-hours (kWh) of electricity annually, powering around 58,000 households.

In 2021, Azerbaijan’s Energy Ministry and BP signed an Implementation Agreement to cooperate on evaluating and implementing a 240-megawatt (MW) solar power project, known as “Shafag” (Dawn), in this district. In 2022, an addendum to the agreement was signed to initiate the next steps for jointly implementing the 240-MW photovoltaic station. The addendum outlines the use of a "Virtual Energy Transfer" business model to provide effective technical and commercial solutions for timely project execution.

In 2023, BP and Azerbaijan agreed on the technical and commercial parameters of the “Shafag” SPP, scheduled to go online by 2026. The plant is projected to supply electricity to 150,000 households annually, generating over 500 million kWh.

Azerbaijan’s renewable energy potential is estimated at 37,000 MW, around 10,000 MW of which was uncovered in the Karabakh (Garabagh) and East Zangazur regions. These regions hold almost all types of renewable resources, including hydro, solar, wind, and geothermal energy.

After the Nakhchivan Autonomous Republic, the districts of Fuzuli, Jabrayil, and Zangilan rank second in solar power potential, with solar radiation per square meter in these areas reported at 1600-1700 kWh per year and a total solar capacity estimated at 7,200 MW.

Wind energy potential is notably high in Kalbajar and Lachin districts, where the average annual wind speed reaches 10 meters per second, with an estimated capacity of 2,000 MW in the Karabakh region’s mountainous areas. Additionally, Kalbajar, Lachin, and Shusha districts hold significant thermal water resources, with daily output reaching 4,000-5,000 cubic meters.

The Azerbaijani government has prioritized transforming the Karabakh (Garabagh) and East Zangazur regions into a green energy zone as part of its ongoing reconstruction and development initiatives.