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As a result of two new power plants with operations set to begin in 2013, the Azerbaijani electricity sector is benefitting from increased activity and access. The larger of the […]

As a result of two new power plants with operations set to begin in 2013, the Azerbaijani electricity sector is benefitting from increased activity and access. The larger of the two, the Janub power plant, is a project being carried out in partnership with a Japanese-led company, and will supply 780 MW of electricity using gas, diesel, and fuel oil.

Meanwhile, Finnish company Wärtsilä was awarded the contract to build its largest project ever, a gas-powered plant called Boyuk Shor, which will generate approximately 384 MW. Leading power and automation technology group ABB won the order to manufacture 21 generators for the project. Government enterprise Azerengery will commence operations at the plant by autumn 2013 with the purpose of supplying energy to the Baku regional grid. As the main electricity producer in the country, Azerenergy is responsible for the generation of approximately 6,000 MW of electricity and owns more than 200 substations, six hydroelectric plants, and 13 thermal power stations. The construction of several more hydropower plants is in the pipeline for 2013. In total, Azerbaijan generated more than 21.3 billion kWh of power in 2012, 5% more than the 20.3 billion kWh produced in 2011. Displaying a consistent upward trend, the 2011 figure also marked a growth rate of 8% year on year. In parallel, 17.7 billion kWh of electricity was consumed in 2102, up from 13.217 million kWh the previous year.

Shifting from its background as a net importer of energy, Azerbaijan has become a prime exporter in the region, producing 804.8 million kWh for regional markets in 2011. Since 2009, exports to countries such as Russia, Turkey, Georgia, and Iran have increased by approximately 112%, with Georgia set to receive 200 MW per month starting in January 2013. Although energy imports have fallen sharply since 2007, 128 million kWh was imported from Russia, Turkey, Iran, and Georgia in 2011, a figure that is seeing a gradual rise.

Although the percentage of electricity generated from hydroelectric sources fell from 13.5% in 2011 to 8.7% in 2012, the amount of electricity sourced from thermal energy heat stations grew from 85% in 2011 to 91.7% in 2012. Hydroelectric power plants reached 1.7 billion kWh (33.4% less than in 2011), and thermal power plants produced 18.7 billion kW/h (12.9% more year on year).

Currently, the total installed capacity of thermal energy stands at 5,252 MW, while hydroelectricity accounts for 998 MW. The combined installed capacity of electricity generation stood at 6,250 MW by 2012.

In terms of distribution, BakiEletrikShebeke is playing a significant role in 2013. Having undergone a recent modernization process with an investment of AZN606 million for 20 new 110-kV substations, the company’s network has contributed to the 8% decrease in losses and the 12% increase in network efficiency.

Despite the fact that only about 1.5% of the total installed capacity is non-power enterprises and renewable energy, the segment is poised for growth with the support of government initiatives. Having drafted a plan to develop alternative energy for 2012-2020, the government agency seeks to install 2,000 MW of renewable energy. Noting that Azerbaijan has wind, solar, and thermal water potential, Minister Aliyev said, “We have a new strategy and program for developing renewables, and we expect 2013 to be successful year in this regard.” Over the past four years, $100 million has been allocated by the government for the development of renewables, but a further $8.9 billion is necessary to meet the goals of 20% renewables in the larger energy grid. The power generation potential of the rivers in Azerbaijan is estimated at 40 billion kWh, and feasible potential is 16 billion kWh. However, the lack of a supervisory or regulatory body for renewable and alternative energy sources remains a key challenge for the segment as the country moves forward.

Pioneering the sector, Tamiz Shahar has made use of waste energy by expanding steam into a turbine generator, thereby turning energy into electricity. Through this process, 270 million kWh per year will be generated, of which 15% is to be consumed by the Baku Waste-to-Energy Plant, and 85% transferred to the electrical grid. This recycled energy is expected to meet the electricity demand of 100,000 households and save 60 million cubic meters of natural gas.

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