During Azerbaijani President Ilham Aliyev’s recent visit to the People’s Republic of China (PRC), both nations signed a series of major renewable energy agreements. The deals mark a significant shift in Azerbaijan’s green transition strategy and deepen bilateral ties with Beijing.
Major Solar and Wind Projects Announced
Among the most notable agreements is a partnership between Azerbaijan’s Ministry of Energy and Universal Solar Azerbaijan LLC to construct a 100 MW solar power plant in Gobustan, scheduled for commissioning in 2026.
Two other landmark projects were signed:
- A 100 MW floating solar plant with 30 MW of battery storage on Lake Boyukshor, in collaboration with China Datang Overseas Investment Co. Ltd.
- A 160 MW solar plant by SOCAR Green LLC and PowerChina Resources Limited, expected to be operational by 2028.
A separate 2 GW offshore wind project was outlined in a memorandum of understanding involving SOCAR Green, PowerChina, and China Datang. Additionally, cooperation was agreed with the Electric Power Planning & Engineering Institute to integrate renewable power into the national grid post-2028.
“These agreements reflect our long-term commitment to decarbonization and energy diversification,” stated the Azerbaijani Ministry of Energy.
Economic Benefits and Energy Export Strategy
Partnering with Chinese firms gives Azerbaijan a clear economic advantage. China’s dominance in clean energy manufacturing has driven down costs—photovoltaic module prices have fallen by 50%, and wind technologies are 40–70% cheaper than those in other Asia-Pacific markets (UNDP, August 2024).
The Gobustan solar project alone is expected to generate 180 million kWh annually and save 39 million cubic meters of natural gas, which could be redirected to European export markets, increasing state revenues.
Beyond exports, these projects will foster job creation, carbon reduction, and environmental health benefits at home.
Strategic Alignment with National Goals
Azerbaijan plans to double its installed power capacity by 2030, targeting 6.5 GW from renewables and aiming for a 30% clean energy mix. The PRC partnership is pivotal in achieving this, especially as Azerbaijan looks to enhance its international profile as host of COP29 in 2024.
“Green diplomacy is now central to our global identity,” said President Aliyev earlier this year.
The agreements also bolster Azerbaijan’s goal to become a regional green energy hub, exporting electricity to Europe via trans-Caspian corridors, supported by trilateral cooperation with Kazakhstan and Uzbekistan.
Long-Term Opportunities and Challenges
While the PRC’s involvement offers short-term momentum, it also raises questions about local content, technology dependence, and strategic autonomy.
For Azerbaijan to fully capitalize on this green transition, it must:
- Develop local manufacturing capabilities in solar and wind tech.
- Establish training programs and joint research centers.
- Build a resilient domestic supply chain to reduce foreign reliance.
- Prepare for the technical upkeep of advanced systems, including floating and offshore installations.
Balancing Benefits with Regional Geopolitics
China’s growing role in the South Caucasus comes as the region seeks to diversify alliances beyond traditional partners like Russia. While beneficial economically, PRC presence brings geopolitical complexity, particularly amid shifting global power balances.
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