Azerbaijan is one of the major exporters of traditional energy, with the oil and gas sector accounting for approximately one-third of the country’s GDP and 90% of its exports. The country also possesses significant potential for renewable energy development. According to the Azerbaijan Ministry of Energy, the potential for onshore renewable energy generation is around 135 GW, while the Caspian Sea area offers an additional 157 GW. Currently, about 27 GW of renewable energy is deemed feasible for development, including 3 GW from wind power and 23 GW from solar energy, with the remainder from biomass and hydropower.
To reduce greenhouse gas emissions and promote energy diversification, Azerbaijan has established a national development strategy for renewable energy. In 2019, President Ilham Aliyev signed measures to implement pilot projects in the renewable energy sector, granting exemptions from land taxes for investment projects and income tax reductions for companies over a seven-year period. The Azerbaijani government also released the document “Azerbaijan 2030: National Socio-Economic Development Priorities” in 2021, aiming to reduce greenhouse gas emissions by 35% compared to 1990 levels by 2030, and increase the share of renewable energy generation to 30%. By 2050, the goal is a 40% reduction in emissions from 1990 levels.
With the support of favorable policies, Azerbaijan’s renewable energy industry is steadily progressing. A report from the International Renewable Energy Agency in March indicated that Azerbaijan’s renewable energy installed capacity increased from 1,325 MW in 2022 to 1,688 MW in 2023, raising its share in total electricity generation from 16.6% to 20.3%. From 2014 to 2023, the country’s renewable energy capacity nearly doubled, with solar capacity growing from 2 MW to 282 MW and wind capacity from 3 MW to 67 MW.
President Aliyev noted that Azerbaijan has signed agreements and memoranda of understanding for wind and solar projects totaling 22 GW with foreign energy companies. The World Bank’s “Azerbaijan Country Climate and Development Report” published last year highlighted that accelerating the green low-carbon transition will help diversify the economy, create new growth opportunities, and enhance the well-being of its citizens. This year, Azerbaijan will host the 29th Conference of the Parties to the United Nations Framework Convention on Climate Change, which Minister of Economy Mikayil Jabbarov believes will further promote the country’s green energy transition.
In recent years, China and Azerbaijan have been enhancing cooperation in the renewable energy sector. In October last year, the Gobustan photovoltaic power plant project, contracted by China’s Dongfang Electric Corporation, began phased grid connection. This is Azerbaijan’s first large-scale renewable energy project, expected to generate 500 million kWh annually, enough to meet the electricity needs of 110,000 households and reduce CO2 emissions by over 200,000 tons each year.
Assistant to the President Hikmet Hajiyev stated that China is a global leader in green energy, and Azerbaijan looks forward to strengthening collaboration with China in renewable energy and other fields to promote the country’s green energy transition and sustainable development.
