Azerbaijan Energy Transition: Renewable Goals Undermined by Continued Fossil Fuel Expansion

Azerbaijan has set an ambitious target to roll out 8 gigawatts (GW) of wind and solar energy by 2030, but new data from the Global Integrated Power Tracker reveals a lack of significant project developments beyond 2027. This casts doubt on the country’s ability to meet its renewable energy goals.

Key Renewable Projects in Progress

Currently, around 1,000 megawatts (MW) of renewable energy projects are underway, led by partnerships between Abu Dhabi’s Masdar and Azerbaijan’s state oil company SOCAR. These projects include:

Bilasuvar Solar Plant (445 MW)

Neftchala Solar Plant (315 MW)

Absheron-Garadagh Wind Farm (240 MW)

Additionally, Saudi energy giant ACWA is developing the Area 1 / Khizi 3 Wind Farm (240 MW), with three smaller solar projects contributing another 440 MW. Together, these projects total 2 GW, which aligns with Azerbaijan’s target to achieve a 30% renewable energy share by 2030 — a modest 10% increase from the existing hydropower capacity established during the Soviet era.

Fossil Fuel Dominance Remains

Despite the focus on renewables, Azerbaijan plans to bring its largest-ever gas power plant online by the end of 2024. The 1.3 GW Mingecevir Gas Power Station exemplifies the country’s continued reliance on fossil fuels, which dominate its economy:

Fossil fuels account for over 90% of Azerbaijan’s exports and half of its state budget.

Gas plants currently generate over 90% of domestic electricity, driven by a sevenfold increase in gas production over the past two decades.

Regional Trends: Fossil Fuels Outpacing Renewables

The report highlights a broader trend across the Caucasus and Central Asia, where fossil fuel projects significantly outpace renewable developments. Key findings include:

The region is constructing over 12 GW of coal, oil, and gas projects, compared to just 3.5 GW of wind and solar capacity.

Kazakhstan is the only country actively building new coal power plants, with 7.8 GW of coal projects announced or in pre-construction phases.

Fossil fuel projects under development total 32 GW, eclipsing the 26 GW planned for wind and utility-scale solar.

Expert Warnings

James Norman, Project Manager for the Global Integrated Power Tracker, warned that Azerbaijan’s energy transition is under threat:

“The integrity of Azerbaijan’s energy transition is in jeopardy. The country’s 2030 target is unambitious, and continuing to build oil and gas projects undoes any progress made elsewhere.”

Outlook

While Azerbaijan’s renewable energy plans hold promise, the country’s heavy reliance on fossil fuels and slow pace of clean energy adoption threaten its long-term energy goals. The broader regional focus on fossil fuel expansion further complicates the shift toward sustainable energy across the Caucasus and Central Asia.