Azerbaijan has signed a memorandum of understanding with the World Bank’s International Finance Corporation (IFC) to cooperate on the use of offshore wind energy.
The MoU was signed in the context of the common goals of the country’s Ministry of Energy and the IFC, such as promoting the use of renewable energy, supporting the participation of the private sector in this area to improve the financial sustainability and efficiency of the energy sector.
The MoU envisages an assessment of the potential of offshore wind in Azerbaijan and the development of a roadmap.
A future stage would cover tender management related to relevant offshore projects, the definition of partnerships with the private sector and the implementation of auxiliary investments.
Minister of Energy Parviz Shahbazov said: “Renewable Energy has been determined by the Head of State Ilham Aliyev as one of the significant priorities of Azerbaijan’s socio-economic and diversified development course, as well as achieving a clean environment by 2030.
“It is necessary to use the offshore wind energy potential to ensure that the renewable energy has a significant position in production and consumption.
“The rich energy resources of the Caspian Sea are an important source for the development of not only the hydrocarbon industry, but also the green energy sector.
“Cooperation efforts with IFC will contribute to the development of offshore wind energy production in Azerbaijan, as well as the use of renewable energy and the reduction of carbon emissions.”
IFC director for Europe and Central Asia Wiebke Schloemer said: “One of IFC’s strategic priorities in Azerbaijan is to support the country’s move to a new private-sector led growth model.
“Helping the nation – rich in oil and gas resources – explore and develop offshore wind energy can increase private sector participation, while also supporting energy transition.
“This will play a catalytic role, strengthening Azerbaijan’s infrastructure and tackling climate change.”
Meanwhile, a new report by Aegir Insights has highlighted the potential for offshore wind in the Eastern Mediterranean, Black and Caspian Seas, including Azerbaijan, as well as Turkey, Bulgaria, Romania, Ukraine, Russia, Turkmenistan and Kazakhstan.
Aegir Insights said it expects the Turkish market to take off first.
If an auction is carried out and a winner announced by the beginning of 2024, Aegir Insights expects Turkey to have turbines deployed by 2030.
However, uncertainty regarding financing could mean longer lead times, and a preference for building more land-based wind first could push the date by which offshore wind is operational in Turkish waters back to the early 2030’s, it said.
The report said that Romania and Bulgaria also have good potential for offshore wind and could end up rivalling Turkey in market attractiveness as they boast bigger technical capacity.
Aegir Insights said the Caspian Sea has the best wind resources in the region and shallow waters optimal for fixed-bottom turbines.
But it doesn’t expect to see build-out from the markets surrounding it – Russia, Kazakhstan, Turkmenistan and Azerbaijan – in the foreseeable future, as these markets have access to cheap energy from fossil fuels and likely won’t prioritise offshore wind.