The development of renewable energy sources outside the European Union The Potential of the Caucasus and Central Asia

It is widely acknowledged that renewable energy production capacities are being actively developed in European countries, with a concomitant growth in consumption. It is important to acknowledge that the conditions for accessing such energy are more favourable and that the potential of renewable energy sources is significantly greater outside the EU. In particular, solar energy is a relatively straightforward technology to deploy in the South Caucasus and Central Asia, given the favourable natural conditions.

To illustrate, few European countries enjoy the same level of solar intensity and favourable conditions for solar energy production as Uzbekistan or Turkmenistan. Furthermore, Azerbaijan has the capacity to generate solar energy from panels that is greater than that of most European countries.

A number of countries in Central Asia and the South Caucasus also have the potential to develop hydropower, with the capacity to supply it to Europe in the future. This is particularly the case in the countries with significant hydropower resources, which are located in mountainous regions, such as Georgia, Tajikistan and Kyrgyzstan. This electricity, together with solar and wind power, can form the basis of energy generation in the countries of the Middle Corridor.

The potential for renewable energy sources (RES) in Central Asia and the South Caucasus is considerable.

Estimates from the International Energy Agency (IEA) and the United Nations Economic Commission for Europe (UNECE) suggest that Uzbekistan has a total potential of 2,091 billion kWh from RES for electricity generation, which is 30 times higher than its annual consumption. Due to its favourable climatic conditions, with approximately 320 sunny days per year, Uzbekistan is well-positioned to develop solar energy. From this perspective, the most promising regions of Uzbekistan are the Surkhandarya, Bukhara and Kashkadarya regions, where the average output per panel is 1,680-1,700 kWh per year. At present, eight public-private partnership projects are being implemented with the objective of developing the potential of solar energy, with an estimated generation capacity of 4.3 billion kWh (1.6 GW) at an estimated cost of $1.3 billion. Furthermore, Uzbekistan displays favourable conditions for the utilisation of wind energy, particularly in the northwestern and southwestern regions. The neighbouring country of Kazakhstan exhibits an even greater total potential for renewable energy sources. In addition to solar energy, wind energy is also a promising source of energy in the southern regions of the country, particularly in areas where strong winds are consistently present, such as the intermountain pass "Dzungarian Gate" in the east of the country on the border with China. Azerbaijan also possesses considerable potential for renewable energy sources (RES), given that the duration of sunshine is longer than in neighbouring countries of the South Caucasus in the majority of its territory, particularly in the Kura-Arka lowland. Furthermore, numerous regions along the Caspian Sea coastline, particularly the Absheron Peninsula, exhibit favourable conditions for wind energy generation.

Azerbaijan serves as a case study exemplifying the successful transition to alternative energy sources. Despite the fact that the formation of modern Azerbaijan is inextricably linked with oil production, the country is a regional leader in the application of innovative approaches aimed at the transition to green energy, thereby making a tangible contribution to the fight against the effects of climate change. Azerbaijan's contributions to the fight against climate change and the commencement of the country's transition to a green economy were instrumental in the decision to hold one of the largest and most esteemed events in the world in Baku: the 29th session of the Conference of the Parties to the UN Framework Convention on Climate Change (COP29).

In the field of alternative energy, the government of Azerbaijan has announced plans to implement a project to construct a power plant in Yashma with the objective of transforming Nakhchivan into a green energy zone, along with Karabakh and Eastern Zangezur. The possibility of building a solar power plant with a capacity of 500 MW is currently under consideration. Additionally, a solar power plant with a capacity of 240 MW is set to be launched in Jabrayil, with the British company BP acting as a direct foreign investor. As indicated by the Ministry of Energy of Azerbaijan, the technical potential of renewable energy sources in the country is estimated to be 135 GW on land and 157 GW at sea. The economic potential of renewable energy sources is estimated at 27 GW, comprising wind energy (3,000 MW), solar energy (23,000 MW), and bioenergy (380 MW). The potential of mountain rivers is estimated to be 520 MW.

As forecast by experts, the proportion of renewable energy sources in the installed capacity of electricity production in Azerbaijan will reach 30% by 2030.

Consequently, numerous countries, including the United States and Australia, have expressed interest in Azerbaijan's green energy sector. The Federal Republic of Germany has earmarked approximately $1 billion for investment in Azerbaijan's renewable energy sources. The prospective expansion of the alternative energy market in Azerbaijan offers numerous companies with pertinent expertise the chance to undertake a variety of projects in the domains of wind energy, solar generation, hydropower, and other realms of green energy. The aforementioned factors provide compelling evidence that Uzbekistan, Kazakhstan and Azerbaijan possess the potential to generate "green" energy. The question of how to transport green energy from Central Asia and Azerbaijan to Europe remains unresolved, but is being addressed on an ongoing basis.

The formation of concrete agreements pertaining to the collaboration in the domain of environmentally sustainable energy provision.

In November 2023, Azerbaijan, Uzbekistan and Kazakhstan, three countries that have been particularly active in implementing renewable energy projects, reached an agreement on the supply of "green" energy to Europe. As stated in the communiqué signed by the parties, a joint working group will be established with the objective of developing the technical specifications for the project.

It is anticipated that electricity generated from renewable energy sources in Kazakhstan and Uzbekistan will be transmitted to Azerbaijan, where it will subsequently be exported to Europe via Georgia and the Black Sea. Consequently, Romania and Hungary will become importers of this environmentally-friendly electricity. As part of the project, the world's longest underwater cable for the transmission of electricity will be constructed along the bottom of the Black Sea.
In May 2024, a feasibility study (FS) was initiated by Kazakhstan, Azerbaijan and Uzbekistan to assess the viability of a project to integrate energy systems and lay a high-voltage cable along the bottom of the Caspian Sea, with the objective of selling "green" energy to the countries of the European Union. In the view of representatives of the Hungarian government, the European Commission regards this project as being of importance for the whole of Europe and has set aside 2.3 billion euros for it. The projected investment period is estimated to span up to four years.

On 3 September 2024, at the 8th meeting of the Black Sea Energy project at the ministerial level in Bucharest, Azerbaijan, Georgia, Romania and Hungary signed an agreement on the establishment of a joint venture for the implementation of the Black Sea Energy project. The project aims to lay a cable along the bottom of the Black Sea to supply renewable energy to Europe.

The agreement was signed by four operators: Transelectrica SA (Romania), AzerEnerji JSC (Azerbaijan), Georgian State Electrosystem (Georgia) and MVM Zrt (Hungary). A company with its headquarters in Bucharest is being established with the objective of implementing the "green" energy corridor project. The joint venture and the working group are directed to expedite collaborative processes with a consulting company to complete the feasibility study of the project within the prescribed timeframe, prepare an action plan for the joint venture prior to the forthcoming ministerial meeting, and initiate consultations on the business models of the project. The Green Energy Corridor will assume responsibility for financing the feasibility study for the project, as well as for overseeing its preparation and implementation.

It should be noted that this is not a cost-effective project; the final costs will only be known once the feasibility study has been presented for review. However, it is known that 3.5 billion euros will be required to construct a submarine cable between Georgia and Romania. Furthermore, it is evident that this project will prove beneficial for the energy security of the region. From our perspective, this project is of significant national security importance. The necessity of diversifying energy supplies is frequently discussed. "A review of the energy map of Europe over recent days reveals that prices on the eastern flank are significantly elevated, which is a consequence of the lack of diversification of supply chains," stated Romanian Energy Minister Sebastiana Burduja.

He asserts that the European market is not operating effectively. The availability of inexpensive energy resources is not consistently distributed throughout the eastern regions of the continent. This necessitates the implementation of supplementary energy supply routes to guarantee the security and competitiveness of the energy sector.

In the long term, the establishment of renewable energy production in Central Asia and the South Caucasus, coupled with the assurance of a reliable supply to consumers in Europe and China, could facilitate the creation of an effective "energy component" of the Middle Corridor. This would allow for the optimal utilisation of "green" energy.

The supply of environmentally friendly electricity along the Middle Corridor can make effective use of the difference in time zones. To illustrate, at midday in Central Asia, when solar power plants are operating at their maximum output, it is already evening in Beijing and other eastern Chinese cities, where electricity consumption is at its highest. In Europe, by contrast, it is still morning, with energy consumption at its lowest.

Gulnara Safarli
Center for Information Support of the Strategic Partnership Azerbaijan-Georgia-Turkey

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