DOI: https://doi.org/10.36719/2789-6919/57/186-192
Alakbar Heydarov
Azerbaijan State Oil and Industry University
PhD student
https://orcid.org/0009-0001-8020-9431
elekberhydrv@gmail.com
Shahla Bullayeva
Azerbaijan State Oil and Industry University
https://orcid.org/0009-0009-8230-0413
shahlabullayevaa@gmail.com
Agil Hasanov
Azerbaijan State Oil and Industry University
https://orcid.org/0009-0000-0125-1125
aqilhasanov23@gmail.com
Giymat Hasanova
Azerbaijan State Oil and Industry University
https://orcid.org/0009-0006-4685-3027
giymathasanova@gmail.com
Azerbaijan’s Renewable Energy Strategy: Technical and Financial Barriers to 2030 Targets
Abstract
The Republic of Azerbaijan is implementing a strategy to transition from its traditional status as a hydrocarbon exporter to a “green energy hub” within the global energy transition process. This article examines the technical, economic, and regulatory feasibility of achieving the 2030 targets – increasing the installed capacity share of renewable energy sources (RES) to 30% and reducing greenhouse gas emissions by 35%. The study draws on reports from IRENA, IEA, and the World Bank, national statistical data, and grid analysis results conducted by three international companies (Tetra Tech, EPRA, and CESI). The analysis reveals that the existing grid infrastructure can only absorb up to 2 GW of variable RES capacity. This technical limit is conditioned by fundamental barriers such as loss of synchronous inertia, scarcity of battery energy storage systems (BESS), and geographical imbalance. Although the AZURE project, the Virtual Power Transfer Mechanism (VPTM), and financial instruments (PPA, CfD) partially address these barriers, the sharp disproportion between the 250 MW BESS capacity and the 8 GW target for 2032 limits the system’s full potential. In conclusion, the success of the energy transition depends on new generation facilities being accompanied in parallel by storage capacity expansion, grid modernization, and market liberalization measures.
Keywords: renewable energy, grid integration, energy storage systems, COP29, Azerbaijan energy transition, RES, Virtual Power Transfer Mechanism