On January 8, 2026, the commissioning of the 240 MW Khizi–Absheron Wind Power Plant in Azerbaijan signifies not only the addition of new generation capacity in the country’s green energy policy but also a shift toward a structural transformation of the overall energy system.
The implementation of the project by Saudi Arabia’s ACWA Power company and the participation of President Ilham Aliyev in the inauguration ceremony also demonstrate that this power plant carries not only economic significance but also strategic and political importance.
"I remember quite vividly that exactly four years ago, in January 2022, we laid the foundation of this plant in this very hall. Extensive work has been carried out over these years, and today we are celebrating this wonderful occasion together. First of all, I would like to express my gratitude to all the people and companies that have contributed to the construction of this plant, first and foremost to the investor “ACWA Power” and its managers. This is the first renewable power plant built by “ACWA Power” in Azerbaijan, but not the last one. The company has bigger plans, and the Government of Azerbaijan fully supports these plans. I should also note that “ACWA Power” is one of the leading companies in the world in this field. It is also interested in implementing new projects in cooperation with the Azerbaijani state agencies. In particular, the company, as an investor, will also implement the Caspian Sea desalination project, the first for our country," the President Ilham Aliyev noted.
Energy potential: resource abundance creates a system challenge
Azerbaijan’s wind energy potential alone exceeds 150 gigawatts, and this figure surpasses the country’s existing installed electricity capacity many times over. This fact shows that the main constraint for Azerbaijan is not the availability of energy resources, but rather the conversion of these resources into a real energy system from a technical and institutional perspective.
The placement map for solar and wind power plants on land and at sea, including in the liberated territories, has already been approved, and at the current stage, the main task is to expand the capacity of energy sources to be absorbed into the system.
Investor portfolio: global companies are taking a position in green energy
Projects implemented in recent years show that Azerbaijan has become an attractive platform for global investors in the field of green energy, and this interest is already confirmed by specific projects. The first 230 MW Solar Power Plant was built by the UAE’s Masdar company, the investor of the 240 MW Khizi–Absheron Wind Power Plant was ACWA Power, and another large 240 MW plant is being constructed by BP in the Jabrayil district.
At the same time, the interest of Chinese and Turkish companies in green energy projects demonstrates that the investment environment in this field is not limited to a single region or source of capital, and a diversified model is taking shape.
Capacities to be integrated into the system: the main burden falls on the transmission infrastructure
Within the framework of existing state plans, by 2030, 6,000 MW from solar, wind, and hydropower, and by 2032, 8,000 MW will be integrated into Azerbaijan’s energy system. These volumes create a serious modernization requirement not only in terms of generation but also regarding transmission lines, substations, and system management mechanisms.
The head of state’s special emphasis on the concept of the “absorption capacity of the energy system” reflects the technical and institutional challenges arising precisely at this stage.
Battery storage: the balancing mechanism for green energy
As the share of renewable energy sources increases, energy storage systems become strategically important, and this area is turning into one of the main directions of state policy. Through state initiatives, the first battery storage systems with a capacity of approximately 250 MW are already being installed, but this volume is considered insufficient and will be significantly increased in the future.
According to him, short-term plans envisage the creation of energy generation and balancing capacities of 8 gigawatts, while in the long-term perspective, Azerbaijan should become an energy hub capable of receiving and transmitting energy flows of 20, 30, or even 40 gigawatts.
State targets: phased transition and economic logic
In accordance with the strategy adopted in 2020, Azerbaijan aims to increase the share of renewable energy sources in installed electricity capacity to 30 percent by 2030, and according to current forecasts, this indicator will already reach 25 percent by 2027.
Within the first phase currently being implemented, that is, by the end of 2027, it is planned to commission approximately 2 gigawatts of RES (renewable energy sources) projects, and in the subsequent five years and beyond, an additional capacity of more than 6 gigawatts is expected to be integrated into the system. In the first phase, it is planned to focus the generated power mainly on domestic consumption, and in the subsequent stages, based on economic efficiency, it is planned to prioritize export and energy supply for data centers.
Regional green zones and the hydropower component
The Karabakh and East Zangezur economic regions, as well as the Nakhchivan Autonomous Republic, have been declared “green energy zones,” and the technical potential of renewable energy resources in these regions is estimated at 10 gigawatts in Karabakh and East Zangezur, and 5 gigawatts in Nakhchivan.
Currently, the total capacity of hydropower plants is 1,444 MW, accounting for 14.7 percent of the total installed capacity, and it is planned to increase this figure to 1,800 MW by 2030. The 38 hydropower plants operating in Karabakh and East Zangezur have a total capacity of 307 MW, and with the commissioning of the “Khudafarin” and “Giz Galasi” projects, this figure is expected to exceed 600 MW.
Green energy corridors: from internal transformation to export
Azerbaijan is shaping its green energy policy not only as an internal balancing tool but also as a strategic resource that provides access to regional and European markets, and this approach is reflected in a number of international green energy corridor projects. In this regard, the Caspian–Black Sea–Europe, Central Asia–Azerbaijan, Azerbaijan–Türkiye–Europe, and Azerbaijan–Türkiye–Georgia–Bulgaria routes are considered the main directions.
The main issue is not capacity, but the system
The commissioning of the Khizi–Absheron Wind Power Plant demonstrates that Azerbaijan has already left behind the phase of creating new capacities in its green energy policy and has entered a period of energy system transformation. In the coming years, the success of this policy will be determined more by expanding transmission capacity, implementing energy storage technologies, and deepening regional energy integration than by the number of stations, and the logical outcome of this process will be Azerbaijan’s emergence as a regional green energy hub.
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