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Southern Gas Corridor: Baku reaffirms its role as reliable energy supplier to Europe

The ninth ministerial meeting of the Southern Gas Corridor Advisory Council and the inaugural Green Energy Advisory Council meeting has reaffirmed the strategic energy partnership between the European Union and Azerbaijan, the Co-Chairs of the councils said.

Both meetings took place on 3 February in Baku, Azerbaijan – co-chaired by Parviz Shahbazov, Azerbaijan’s Minister of Energy and Kadri Simson, EU Commissioner for Energy.

The partnership serves common goals including long-term energy security, sustainability, diversification of supply, and expanding cooperation on the energy transition agenda, according to the Co-Chairs.

Minister Shahbazov and Commissioner Simson welcomed the full-scale operation of the Southern Gas Corridor and its contribution to securing “a reliable, competitive, and affordable energy supply from Azerbaijan to Europe.”

The successful commissioning of the Greece-Bulgaria Interconnector is another important development which will further support the diversification of supplies in Europe, according to a press statement from the Co-Chairs. Both council heads expressed their support for the expansion of the Southern Gas Corridor, indicating that it would offer a potential supply source for new energy markets. The co-chairs also acknowledged the importance of taking necessary steps to reduce methane emissions across supply chains.

Is Azerbaijan set to become a strategic green energy supplier for the EU?

“The Green Energy Advisory Council Ministerial meeting, held for the first time, creates an excellent opportunity for partner countries, financial institutions, and companies to have productive discussions on expanding cooperation on the green agenda,” the press statement added. It also noted this platform will contribute to creating “international green energy linkages” and “turning Azerbaijan into a green energy supplier for European markets.”

The “Memorandum of Understanding on a Strategic Partnership in the Field of Energy between the European Union represented by the European Commission and the Republic of Azerbaijan” signed in Baku on 18 July 2022, along with the expansion of existing cooperation in the areas of energy transition, renewable energy, energy efficiency and renewable hydrogen will “pave the way” for new opportunities for enhanced development of the EU-Azerbaijani partnership, the press statement added.

Separately, Minister Shahbazov said that following the signing of the Memorandum with the EU, Azerbaijan “immediately” began working on creating additional opportunities to supply more gas to the European bloc. “Currently, in addition to the production we expect this year from the new fields, as well as increasing production at the existing “Shah Deniz” field – which is clearly happening – we are also working on energy efficiency within the country. We are working on a loss reduction program, including a domestic consumption program based on a combination of electricity and natural gas,” added Mr Shahbazov.

In addition, the Co-Chairs ‘noted the importance’ of the “Agreement on strategic partnership in the field of green energy development and transmission between the governments of the Republic Azerbaijan, Georgia, Romania and Hungary” signed in Bucharest in December 2022.

The co-chairs also stressed their determination to continue the “effective dialogue”, which contributes to strengthening their energy security and their joint action against climate change.

Azerbaijan’s ‘green potential’

The Azerbaijani Energy Minister said that according to estimates by energy companies cooperating with Azerbaijan, 25 gigawatts of renewable solar and wind energy will be produced both on land and at sea in the country. 10 gigawatts of this volume will be produced by a UEA-based company “Masdar” and 12 gigawatts by an Australia-based company “Fortescue”. Whilst “ACWA Power”, a company based in Saudi Arabia, will undertake the production of additional 2.5 gigawatts.

“Azerbaijan also has a huge green energy potential. This is already a confirmed fact. The potential of wind energy in the sea alone is 157 gigawatts, the potential of wind and solar energy on land is 27 gigawatts, and in the lands we liberated more than two years ago during the Patriotic War, it is about 10 gigawatts. We have also identified a large renewable energy potential in the Nakhchivan Autonomous Republic,” said Minister Shahbazov. “Currently, negotiations are underway regarding the possibility of building a 500-megawatt solar power plant. I think this potential will be more. That is, these are the possibilities that we currently have,” he added.

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