“Grid resilience and connectivity are vital for Azerbaijan’s energy system,” said Azerbaijan’s Deputy Minister of Energy Elnur Soltanov, during a speech at the European Bank for Reconstruction and Development (EBRD) event, APA reports.
In his remarks, Elnur Soltanov emphasized that the intermittent nature of renewable energy poses challenges for integration, and there are two main ways to address them: the size of the energy system and regional connectivity. According to him, Azerbaijan is not a large country geographically, and the national power system has an installed capacity of approximately 8 gigawatts, while average annual consumption is around 3 gigawatts.
“Large energy systems and strong interconnections with neighbors help to mitigate such challenges. European countries benefit from both. However, the recent energy crisis in Spain demonstrated that limited connectivity—specifically, having only one link with France—can create serious issues,” the deputy minister said.
He noted that for Azerbaijan, energy interconnectivity is not only about economic potential but also about ensuring grid resilience: “The need for regional energy connections stems from geographic constraints, system size, and our distance from major global markets and technology hubs.”
Energy prices and integration costs
Soltanov also pointed out that although the levelized cost of solar and wind power is low, additional expenses related to integration, modernization, and system resilience are often overlooked: “When these are included, renewable energy is still competitive in many cases, but gas-fired plants offer more technological flexibility.”
$2 billion investment and public expectations
He noted that the planned integration of over 2 gigawatts of renewable capacity is expected to bring approximately $2 billion in foreign and domestic investment to Azerbaijan. However, implementing these projects involves high costs, and the key question remains—who will bear the financial burden?
“In a country like Azerbaijan, which inherited a Soviet mindset, there is a kind of social contract between the state and population when it comes to utilities—people expect services to be free. So transferring the cost to consumers is a difficult challenge and must be carefully communicated,” he said.
Finally, Soltanov stressed that international financial institutions, including the EBRD, can play a vital role in addressing these challenges and in partially underwriting the costs of this energy transition.
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