The three Flame Towers are the modern landmark of the vibrant metropolis of Baku. In the evening, their glass façades bathed in LED projections flicker like blazing flames across the skyline of the Azerbaijani capital. The striking skyscrapers are symbolic in two respects. On the one hand, they are a reminder of the ancient heritage of the "Land of Fire" (the literal translation of Azerbaijan) and, on the other, of the economically dominant oil and gas industry.
Oil, gas and oil products account for 90 percent of exports and 60 percent of the national budget of this country of 10 million inhabitants on the Caspian Sea. Azerbaijan was part of the Soviet Union for 70 years before regaining its independence in 1991.
Gas from the Caspian Sea instead of Siberia
As a result of the Western boycott measures against Russia due to the attack on Ukraine, Azerbaijan has become more of a focus, particularly as a gas supplier for Europe. Gas from the Caspian Sea is to replace gas from Siberia. Natural gas deliveries to the European Union increased from around 8 billion cubic meters in 2022 to around 12 billion cubic meters in 2023. Natural gas imports to the EU are set to rise to around 20 billion cubic meters by 2027 in accordance with a bilateral agreement from 2022.
In addition, Bulgaria is currently negotiating with Azerbaijan on additional gas supplies to Romania, Moldova and Ukraine via the future Balkan Gas Corridor. Bulgaria has been connected to the Trans Adriatic Pipeline (Tap) via a new gas pipeline to Greece for one and a half years. This transports natural gas from Azerbaijan via Turkey to Greece and on to Italy.
"We will save a lot of gas that Europe needs"
Azerbaijan's strong man, President Ilham Aliyev, sees the increasing gas exports to Europe and the parallel expansion of renewable energies as a "win-win situation", as he emphasized last Friday (26 April) at the Petersberg Climate Dialogue in Berlin. Ministers from 40 countries had gathered in Berlin to prepare for the next World Climate Summit (COP29), which Azerbaijan will host in November this year.
This is because more renewable energy in Azerbaijan means that less gas will be burned in power plants for its own supply. "We will save a lot of gas that Europe needs," said Aliyev. Azerbaijan wants to expand installed renewable power generation from solar and wind parks to 5 gigawatts (GW) by 2030, compared to 1.3 GW at present.
"Defending the right" to continue producing fossil fuels
Aliyev also reported that a feasibility study on the construction of transmission lines for offshore wind power from the Caspian Sea to Europe, including an undersea cable under the Black Sea, is in the final stages. This would enable Azerbaijan to export green electricity to Europe on a larger scale in the future. "As the head of government of a country rich in fossil fuels, we will defend the right of these countries to continue producing and investing, because both are necessary. At the same time, however, fossil fuel countries should also be among those who show solidarity on climate change issues," Aliyev clarified.
35 percent less CO2 by 2030
Azerbaijan ratified the Paris Climate Agreement in 2017. The country aims to reduce its CO2 emissions by 35 percent by 2030 and by 40 percent by 2050 (compared to 1990 levels). "I hope that the World Climate Conference will provide important impetus. I believe that we can be pioneers in the green transformation," emphasized Elnur Soltanov, Deputy Energy Minister and COP29 Executive Director, at a press conference with international journalists in Baku in mid-April. The practical implementation of climate protection measures is crucial.
Teymur Guliyev, Deputy Director General of the state energy company SOCAR (State Oil Company of the Republic of Azerbaijan), expressed a similar view. The company's strategy is geared towards decarbonization and corporate sustainability. The subsidiary SOCAR Green LLC was founded to drive forward projects in the areas of renewable energies, green hydrogen and CCUS (Carbon Capture, Utilization and Storage).
Big plans for wind, PV and green hydrogen
These include agreements with the state-owned energy company Masdar (Abu Dhabi) for the joint development of 2 GW of photovoltaic and onshore wind projects as well as the production of green hydrogen from 2 GW of offshore wind energy. A 240 megawatt (MW) solar park, which is being developed jointly with AIC and BP, is due to be connected to the grid at the end of 2025. SOCAR has also already implemented its first renewable energy projects abroad, such as wind farms in Turkey and solar projects in Georgia and Romania.
At the most recent World Climate Change Conference (COP28) in Dubai, SOCAR joined the Oil & Gas Decarbonization Charter (OGDC), which more than 50 companies worldwide have signed up to so far. The goals are net-zero emissions by 2050, no routine flaring of associated gas in oil and gas production by 2030 and virtually no methane emissions in the upstream sector.
Efforts to reduce methane emissions
To reduce methane emissions, the company has launched a Leak Detection and Repair (LDAR) project under the auspices of the United Nations Framework Convention on Climate Change (UNFCCC). In collaboration with Total Energies, drones are being used to detect and quantify methane emissions from offshore activities, and SOCAR is participating in a satellite measurement program to accurately identify methane emissions.
By participating in the OGMP 2.0 (Oil and Gas Methane Partnership 2.0) initiative, which is also under the auspices of the United Nations, SOCAR intends to further intensify its efforts to reduce methane emissions, reported Guliyev.
H.C. Neidlein
Solar power from Garadagh
A greener - at least somewhat - energy future for Azerbaijan has already begun in concrete terms around 75 kilometers southwest of Baku. The 570,000 photovoltaic modules of the 230 MW Garadagh solar park stretch almost to the horizon of the barren, dusty steppe landscape. Masdar is the operator and investor of the plant, which went into operation last year, and several international development banks, including the EBRD (European Bank for Reconstruction and Development), have provided a loan package.
The approximately 500 million kilowatt hours will be supplied to SOCAR via a multi-year power purchase agreement (PPA); the contractual partner is the Azerbaijani Ministry of Energy, which also owns the land. The plant is connected to the electricity grid via a new 330-kilovolt substation.
H.C. Neidlein
More battery storage in future
The technology at the solar park is of the highest quality: bifacial high-performance modules from Longi, mounted on single-axis trackers, and string inverters from Sungrov. In the evenings and at night, cleaning robots that do not require water clean the modules. "Otherwise, the yield would be 20 to 30 percent lower," reports Kamran Huseynov, Deputy Head of the Azerbaijan Renewable Energy Agency (AREA).
However, he sees the existing electricity grid capacities as a limiting factor for the further expansion of solar and wind projects in the country - as is the case in many places. This is why new projects are increasingly being planned in combination with battery storage systems. A few days ago, the Ministry of Energy in Baku, with the support of the EBRD, announced the first state tender for renewable energies, a 100 MW solar park in Gobustan, albeit without mandatory battery storage.
Smart Village as a blueprint for green energy zone
The Smart Village pilot project in Zangilan focuses on a decentralized supply of renewable energy. Azerbaijani troops recaptured the town in fertile, water-rich Nagorno-Karabakh during the war with Armenia in October 2020. Since then, around 200 low-energy houses with solar thermal systems have already been built in the smart village. Around 175 Azerbaijani families have been resettled - on a voluntary basis," emphasizes Vahid Hajiyev, Special Presidential Envoy for the region.
H.C. Neidlein
The electricity is supplied by a small hydroelectric power plant with a capacity of 636 kilowatts on the edge of the settlement, which uses German technology. In addition, a school, a kindergarten, a health center, craft businesses, an eco-hotel, agricultural land for self-sufficiency and a rail connection are also being built on the site, which is equipped with high-speed Internet. According to Hajiyev, the planning is based on the sustainability goals of the United Nations.
The Smart Village is intended to serve as a blueprint for the massive reconstruction of the so-called "liberated areas" in Nagorno-Karabakh as a green energy zone.
Hans-Christoph Neidlein
