Rystad Energy: Azerbaijan to triple renewable energy production by 2030

Azerbaijan is set to significantly boost its renewable energy production, including hydropower, with an expected increase from just over 7% last year to 22% of total energy output by 2030, according to independent research and analytics firm Rystad Energy (Norway).

“Azerbaijan is stepping up efforts to increase the share of renewable energy in its energy mix to reduce its domestic carbon footprint and free up natural gas for export," the company said, Caliber.Az reports, citing local media.

"The country aims to harness its solar and wind energy potential, increasing the share of renewables in electricity production to nearly one-third from less than 10% currently, supported by $2 billion in green energy initiatives. International investors have shown significant interest in financing these projects, and Azerbaijan seeks to solidify these commitments by hosting the UN Climate Change Conference (COP29) in November this year,” Rystad Energy experts said.

The expansion of renewables will support Azerbaijan’s goal of doubling gas exports to Europe by 2027 and could pave the way for the inclusion of green hydrogen production in the country’s long-term energy strategy.

Rystad Energy also highlighted that non-fossil fuel energy expenditures in Azerbaijan have risen from less than 1% in 2020 to over 7% last year and are expected to exceed 20% by the end of the decade.

“This will increase installed capacity from 19% this year to 30% by 2027. Meanwhile, the country will continue to invest in fossil fuels to meet both export ambitions and growing domestic demand,” analysts noted.

According to the company, natural gas accounted for 92% of Azerbaijan's fossil fuel energy balance last year, supplying almost half of the country’s total gas demand. Hydropower represented 6%, while onshore wind, solar panels, and bioenergy combined made up 2%.

"In Rystad Energy's base scenario, renewable electricity production (including hydropower) is expected to triple from just over 7% last year to 22% by 2030. The share of renewables in annual installed capacity is projected to double from 19% last year (mainly due to hydropower) to 38% by 2030, driven by new solar and onshore wind projects. Nevertheless, gas-generated electricity will remain the dominant energy source, accounting for over 75% of total production in 2030 and continuing to serve as a transitional fuel in the long term," the company's expert said.

Azerbaijan is implementing a focused state policy to efficiently utilize its green energy potential, and expanding the use of renewable energy sources has been identified as a national priority. Studies indicate that Azerbaijan’s technical renewable energy potential amounts to 135 GW onshore and 157 GW offshore.

By Khagan Isayev