Page 67 - bne IntelliNews monthly magazine December 2024

bne December 2024
Opinion 67
COMMENT
Will COP29 become
a milestone in Azerbaijan’s long-term energy strategy?
Fuad Shahbazov in Durham
Despite its heavy reliance on fossil fuel exports for many years, Azerbaijan has now shifted its long- term energy strategy by steadily switching to renew- able energy sources.
Thus, the 29th Conference of the Parties to the UN Framework Convention on Climate Change (COP29) in Baku became a vital platform for Azerbaijan’s main energy giant SOCAR and its affiliate SOCAR Green LLC (established in December 2023) to ink new agreements with countries and companies in the field of green energy, smart technologies and decarbonisation.
Focus on gas
It is noteworthy that SOCAR started supplying North Macedonia with natural gas on November 15, while Azerbaijan was hosting the major climate event on its soil. Considering that natural gas is the cleanest fossil fuel, in contrast to crude oil, Baku did not hesitate to announce the new partnership during COP29.
Although Azerbaijan has maintained the role of a significant crude oil and gas exporter for many years, in the last few years, it has primarily focused on exports of natural gas
to Europe, including developing green energy fields by launching bilateral partnerships and joint projects with global leading companies like ACWA Power, ADNOC, Masdar, Siemens, Total Energy, BP, Fortescue Future Industries and others within the framework of decreasing dependence on oil and gas exports and commitment to reach a higher level of decarbonisation.
According to local sources, Azerbaijan produced 33bn cubic metres (bcm) of natural gas in the first eight months of 2024, while gas sales during this period amounted to approximately 16.4 bcm, reflecting a 3.1% increase compared to 2023. Of this, nearly 6.5 bcm was sold to Turkey, 8.4 bcm to Europe and 1.5 bcm to Georgia. Additionally, 3.7 bcm of gas was exported to Turkey via the Trans-Anatolian Natural Gas Pipeline (TANAP).
President Ilham Aliyev’s praise of the country’s oil/gas resources during the speech at COP29 summit outraged some Western countries, such as Belgium, which dubbed it
The opening ceremony of COP29 in Baku, Azerbaijan. / cop29.az
“inappropriate”. In his turn, Aliyev highlighted the fact that
it was the EU that was asking for additional volumes of Azeri gas after 2022, but now some member countries are “lecturing Baku for having and bringing these resources to the market”.
Greener deals
Seemingly, Azerbaijan will keep demonstrating its strong commitment to increasing gas volumes to Europe, while inking additional agreements on alternative energy sources, with several signed on the sidelines of COP29.
For example, on the first day of COP29, SOCAR signed a new agreement with IntelliGrid, a joint venture between Esyasoft holding and the Presight company. According to the signed document, IntelliGrid's artificial intelligence capabilities will be used to integrate data analysis, predictive maintenance and real-time monitoring into the gas distribution network, optimising gas consumption, minimising losses and improving overall operational efficiency.
On November 13, during the visit of Bulgarian President Rumen Radev to Baku, SOCAR inked the Joint Development Agreement with Bulgaria’s Asarel Energy to enhance joint efforts on renewable energy projects.
In addition, on November 15, during another COP29 session, SOCAR announced a new collaboration with China Energy
to begin decarbonising its offshore facilities soon. SOCAR Green and China Energy Overseas Investment Co. Ltd. signed an additional agreement to build a 160 MW solar power plant in the Fuzuli district, while a separate memorandum
of understanding was signed with China Datang Co. Ltd. on developing a renewable energy field in Azerbaijan.
New partnerships
SOCAR's interest in diversifying partnerships in the renewable energy field can be explained by Azerbaijan’s massive reconstruction of the formerly war-torn Karabakh region and its vast potential for generating green energy.
For example, a few months ago, SOCAR, in partnership with BP, started construction of the 240 MW Shafag solar power
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