Azerbaijan’s President Ilham Aliyev inaugurated on Thursday the 230-MW photovoltaic station located in Garadagh, just 23 kilometers southwest of Baku and constructed by the UAE-based Masdar Clean Energy Company.
The head of the country said that the launch of the region’s largest solar power plant marked the beginning of a “significant journey” for Azerbaijan and the UAE, in which they would jointly harness the extensive renewable energy potential of the South Caucasus country.
“Today, we are very proud to see that in a relatively short period, something more than a year and a half, this empty part of the Absheron Peninsula became a source of green energy. This is a remarkable achievement,” President Aliyev added.
In January 2020, Masdar signed an implementation agreement to develop a utility-scale solar photovoltaic (PV) project in Azerbaijan. The Garadagh Solar Power Plant is the country’s first independent utility-scale solar project based on foreign investment and structured as a public-private partnership. In April 2021, Masdar signed the Investment Agreement with the government of Azerbaijan and the Power Purchase Agreement and Transmission Connection Agreement with the state-run power company Azerenerji.
Masdar, the UAE’s leading developer and operator of utility-scale renewable energy projects, laid the foundation of the $200-million plant in Azerbaijan in March 2022. The first solar panel at this state-of-the-art power generation center was installed in May of the same year.
The total energy output of the Garadagh Solar Power Plant is estimated at half a billion kilowatt-hours of electricity per year, sufficient to power over 110,000 households and reduce greenhouse gas emissions by 200,000 tons annually.
“Garadagh is a testament to our shared commitment to diversifying the global energy mix. Azerbaijan’s ambition to develop low and zero-carbon solutions through renewable energy, is exactly what the world needs at this time,” Sultan Al Jaber, Chairman of Masdar said.
“The UAE is proud to support Azerbaijan’s clean energy goals, to generate more than 30 percent of its overall energy capacity from renewables by 2030. We need all nations of the world to set out clear energy transition plans with clear targets for renewable energy capacity,” he added.
Renewables are expected to account for 30 percent of Azerbaijan’s electricity generation by 2030. Estimates indicate that Azerbaijan’s renewable energy potential is approximately 37,000 MW, with 10,000 MW unveiled after the country’s territories were liberated from Armenian occupation in 2020.
Meanwhile, the state-of-the-art photovoltaic station in Garadagh marked Masdar’s intention to expand its presence in the Caucasus through more substantial investments in Azerbaijan. On Thursday, the UAE’s leading clean energy company signed three additional agreements with the Azerbaijani government for two solar projects and one onshore wind project, boasting a combined capacity of 1 gigawatt (GW).
Masdar CEO, Mohamed Jameel Al Ramahi, commended Azerbaijan as a crucial strategic partner for the company, emphasizing that these newly inked agreements open the door to accelerating Azerbaijan’s clean energy vision.
“Garadagh is the first in a number of potential projects to develop onshore wind, offshore wind, solar and green hydrogen with a total combined capacity of 10GW. This will lead to greater investment and international collaboration as we work together to help Azerbaijan achieve its ambitious climate goals,” Al Ramahi stated.
In the meantime, President Aliyev said that these investments would enable Azerbaijan to save billions of cubic meters of natural gas used for electricity production and expand its exports of fossil fuels to European markets.
“Because the Azerbaijani gas is needed more than ever in Europe due to recent geopolitical changes,” he noted.
European Union (EU) countries are grappling with a severe gas crisis amidst an escalating economic conflict between the West and Russia. Due to Western economic sanctions against Moscow following its invasion of Ukraine, the supply from Russia has significantly diminished. As of June 2022, Russia’s share of EU gas imports had plummeted to below 20 percent, and by November of the same year, it had dwindled to 12.9 percent. Between January and November 2022, less than a quarter of EU gas imports came from pipeline gas and LNG imports from Russia, while another quarter originated from Norway and Algeria. To address the gas crisis, EU leaders reached an agreement in April 2022 to completely cease the supply of Russian fossil fuels by 2027.
Since late 2020, Azerbaijan has emerged as a reliable energy partner for the EU, thanks to its direct gas supply via the Southern Gas Corridor (SGC). In 2021, European Union consumers received 8.2 billion cubic meters (bcm) of gas from Azerbaijan, a figure that increased to 11.4 bcm in 2022, and is projected to reach 11.6 bcm this year.
Azerbaijan currently exports approximately 27 million cubic meters of natural gas to European consumers daily. In the coming year, Azerbaijan is poised to supply 12 bcm of gas to the European Union, with estimates indicating a further rise in total gas deliveries to reach 20 bcm annually by 2027. President Aliyev has expressed confidence in Azerbaijan’s ability to provide additional gas to Europe, citing the country’s proven gas reserves of 2.6 trillion cubic meters.