BAKU, Azerbaijan, September 9. Azerbaijan’s green energy policy is based not only on increasing renewable energy generation but also on broader strategic objectives, including maintaining energy security, modernizing electricity networks, introducing new technologies and turning the country into a regional green energy hub, political analyst Azer Garayev told Trend.
According to him, the Fourth Climate Week of the UN Framework Convention on Climate Change and Baku Climate Action Week 2026 demonstrate that Azerbaijan continues to play an active role in the global climate agenda following COP29.
“It would be incorrect to view Azerbaijan’s green transition strategy solely through the prism of building solar and wind power plants. This is about a much broader energy transformation. New generation capacities are being created, the electricity grid is being strengthened, energy storage systems are being introduced, the flexibility of the energy system is being increased, and work is underway on new interconnectors. All of this shows that Azerbaijan is seeking to transform the entire energy system rather than develop individual elements of the green transition separately,” the political analyst said.
Garayev noted that the figures announced by Energy Minister Parviz Shahbazov during Climate Week demonstrate that this transformation is already producing tangible results in Azerbaijan’s energy balance.
“The expected increase in wind power generation by approximately six times and solar power generation by more than 26 percent by the end of this year is a significant indicator. This is no longer about plans and intentions related to renewable energy, but about the rapidly growing share of actual renewable generation in the energy balance. As this trend continues, the structure of Azerbaijan’s electricity production will gradually change,” the expert said.
According to him, the implementation of solar and wind energy projects with a total capacity of around 8 GW demonstrates the scale of Azerbaijan’s long-term goals in the renewable energy sector.
“What is particularly important here is that the creation of new generation capacity is being carried out in parallel with grid development. Building thousands of megawatts of solar and wind capacity alone is not enough. Such energy must be safely integrated into the grid, the balance between production and consumption must be maintained, variable generation must be managed, and energy storage solutions must be available when needed. Azerbaijan is entering the next, more complex stage of the energy transition,” Garayev said.
He noted that the planned integration of around 2 GW of solar and wind capacity into the electricity grid by the end of 2027 will have significant environmental and economic effects.
“According to calculations by the Energy Ministry, integrating these capacities will allow Azerbaijan to reduce emissions by approximately 2.4 million tons annually. This figure demonstrates the practical impact of renewable energy projects on climate policy. At the same time, increasing the share of renewables in domestic electricity generation creates additional opportunities for more efficient use of natural gas. In other words, the green transition is becoming a process that serves Azerbaijan’s climate commitments, energy security and economic interests simultaneously,” the political analyst said.
Garayev believes that Energy Minister Parviz Shahbazov’s remarks that a rapid withdrawal from fossil fuels does not necessarily constitute a successful energy transition are particularly relevant given current global energy realities.
“The energy crises of recent years have shown that the green transition cannot replace energy security. On the contrary, these two areas must complement each other. Electrification, digitalization, artificial intelligence and the rapid development of data centers are increasing global electricity demand. Under such conditions, an unplanned withdrawal from existing energy sources may create new risks. Azerbaijan’s approach is based on implementing the transition at an optimal pace, while preserving energy security and simultaneously developing new green capacities,” the expert said.
In his view, one of the key advantages of President Ilham Aliyev’s energy strategy is that Azerbaijan does not place its traditional energy potential and new green energy opportunities in opposition to each other.
“Azerbaijan has for many years played an important role in ensuring the energy security of Europe and the region as an oil and gas producer. Today, a new component — green energy — is being added to this position. The goal is not to abandon traditional energy resources overnight, but to use existing potential to create a more sustainable and low-carbon system. At the same time, through new energy connections, Azerbaijan aims to become one of the regional energy hubs exporting not only oil and gas but also green electricity in the future,” Garayev said.
The political analyst noted that the rapid development of renewable energy makes the modernization of electricity networks a strategic necessity.
“The key feature of solar and wind energy is that their generation is variable. The availability of sunlight and wind is not constant. As the share of such generation increases within the system, grid flexibility, energy storage and balancing capabilities become increasingly important. As SOCAR Green CEO Elmir Musayev also noted, the integration of 2 GW of renewable energy capacity into the system by 2027 will create additional demands on the grid. Therefore, at the next stage, the main challenge will not only be producing more green energy, but also managing this energy safely and efficiently,” he said.
According to Garayev, this is why Azerbaijan’s COP29 presidency placed energy storage and electricity grids among the key issues of the global climate agenda.
“The fact that 74 countries have joined the Global Energy Storage and Grids Pledge, 70 countries have joined the Hydrogen Declaration, and 64 countries have joined the Green Energy Pledge demonstrates that the initiatives put forward by Azerbaijan within COP29 have gained international recognition. The important change is that climate policy is no longer only a discussion about reducing emissions. Issues such as grids, storage, hydrogen, investment and technology have become integral parts of the climate agenda,” the expert said.
Garayev also highlighted the role of SOCAR Green projects in expanding Azerbaijan’s green transition into the areas of private sector participation and industrial decarbonization.
“The Shafag Solar Power Plant in Jabrayil is an interesting model in this regard. The project not only generates clean electricity but also contributes to the decarbonization of oil and gas infrastructure such as the Sangachal Terminal through the virtual power purchase agreement (VPPA) mechanism. This is a very important approach because the energy transition is not limited to building new green power plants; it also involves reducing the carbon intensity of existing industrial and energy facilities,” Garayev said.
According to him, considering a similar VPPA model for the decarbonization of facilities operated by the State Water Resources Agency shows that this mechanism could become a broader business-to-business energy solution in Azerbaijan.
“If major electricity consumers are connected with renewable energy projects through long-term contractual mechanisms, this could both facilitate financing for new investments and reduce the carbon footprint of enterprises. This is important for expanding the green transition from government-led projects to various sectors of the economy,” the expert said.
Garayev believes that cooperation with international financial institutions and foreign technology companies will become increasingly important at the next stage of Azerbaijan’s energy transformation.
“The participation of international financial institutions such as the EBRD, AIIB and ADB in the first projects is not only a source of financing. This cooperation also enables the introduction of international standards, risk management mechanisms and technical expertise into Azerbaijan. SOCAR Green’s cooperation with companies from the United States, China and the Middle East also demonstrates that Azerbaijan is seeking to adapt globally tested technologies and business models to local conditions,” the expert said.
According to the political analyst, the exploration of areas such as green hydrogen and geothermal energy also shows that Azerbaijan is not limiting itself to existing technologies.
“Green hydrogen currently has significant potential, but it also faces challenges related to high costs, infrastructure and market development. Therefore, technologies should not be adopted simply because they are global trends; it is necessary to identify economically viable models that are suitable for Azerbaijan. Exploring green hydrogen derivatives, energy storage and geothermal energy is important for diversifying the future energy system. The key principle should be adapting technologies to the country’s specific needs,” Garayev said.
He added that the agenda of Climate Week in Baku demonstrates that the green transformation is no longer limited to the energy sector.
“Discussions on sustainable cities, transport, water resources, agriculture, digital infrastructure and artificial intelligence demonstrate the comprehensive nature of climate policy. Climate change is not only an energy issue. It directly affects cities, food security, water systems, transport and social infrastructure. Therefore, effective climate policy should bring all these areas together within a unified resilience strategy,” the political analyst said.
Garayev emphasized that changes taking place in the Caspian Sea require particular attention.
“Changes in the Caspian Sea level are not only an environmental issue. They affect coastal cities, ports, transport infrastructure, economic activity, biodiversity and local communities. Therefore, assessing climate risks related to the Caspian Sea within the framework of regional cooperation and developing long-term adaptation measures are essential. Bringing this issue to the international agenda during Baku Climate Week is also an important message,” he said.
The expert also considers the growing role of artificial intelligence and digital technologies in climate policy to be one of the defining features of the new stage.
“On the one hand, artificial intelligence and data centers require significant amounts of energy; on the other hand, these technologies create important opportunities for weather forecasting, early warning systems, water resource management, improving agricultural productivity and optimizing energy systems. Therefore, the energy demand created by digitalization and the opportunities it provides for addressing climate challenges should be assessed together,” Garayev noted.
According to him, discussions in Baku on climate-resilient cities and green infrastructure will also become increasingly important for Azerbaijan in the coming years.
“Preparing cities for climate risks is no longer only an environmental issue. Heavy rainfall, high temperatures, water shortages and other extreme weather events require a reassessment of urban planning standards, transport systems, building energy efficiency and municipal infrastructure. In this regard, linking the outcomes of the World Urban Forum with the COP31 agenda demonstrates that climate policy and urban development policy are becoming increasingly interconnected,” the expert said.
Garayev believes that hosting the Fourth Climate Week in Baku also has significant political and diplomatic importance.
“After COP29 concluded, there may have been expectations that Azerbaijan’s role in climate diplomacy would weaken. However, developments have shown the opposite. Baku has maintained its position as one of the platforms where global climate discussions take place. The high appreciation of Azerbaijan’s role in climate diplomacy by the COP31 leadership also demonstrates this. The continuation of initiatives launched during COP29 into future COP processes shows that Azerbaijan has left an institutional footprint on the global climate agenda,” the political analyst said.
Azer Garayev noted that the development of renewable energy is making the modernization of the electricity grid a strategic necessity.
“Solar and wind energy have a specific feature: their generation is variable. The availability of sunlight and wind is not constant. As the share of such generation in the system increases, grid flexibility, energy storage and balancing capabilities become increasingly important. As SOCAR Green CEO Elmir Musayev also noted, the integration of 2 GW of renewable energy capacity into the system by 2027 will create additional requirements for the grid. Therefore, the next stage is not only about producing more green energy, but also about managing this energy safely and efficiently,” he said.
According to Garayev, this is precisely why energy storage and power grid development became among the key topics of the global climate agenda during Azerbaijan’s COP29 presidency.
“The fact that 74 countries have joined the Global Energy Storage and Grids Pledge, 70 countries have joined the Hydrogen Declaration, and 64 countries have joined the Green Energy Pledge demonstrates that the initiatives put forward by Azerbaijan within COP29 have gained international recognition. The important change is that climate policy is no longer limited to discussions about reducing emissions. Issues such as grids, storage, hydrogen, investment and technology have become an integral part of the climate agenda,” the political analyst said.
The expert noted that projects implemented by SOCAR Green demonstrate that Azerbaijan’s green transition is also expanding into the areas of private sector participation and industrial decarbonization.
“The Shafag Solar Power Plant in Jabrayil is an interesting example in this regard. The project does not only generate clean electricity; through the virtual power purchase agreement (VPPA) mechanism, it also contributes to the decarbonization of oil and gas infrastructure such as the Sangachal Terminal. This is a very important approach. Because the energy transition is not only about building new green power plants, but also about reducing the carbon intensity of existing industrial and energy facilities,” Garayev said.
He added that considering a similar VPPA model for the decarbonization of facilities operated by the State Water Resources Agency shows that this mechanism could become a broader B2B energy solution in Azerbaijan.
“If large electricity consumers are linked with renewable energy projects through long-term contractual mechanisms, this can both facilitate financing for new investments and reduce companies’ carbon footprints. This is important in terms of expanding the green transition from state-led projects to different sectors of the economy,” the political analyst said.
Garayev believes that cooperation with international financial institutions and foreign technology companies will become increasingly important at the next stage of Azerbaijan’s energy transformation.
“The participation of international financial institutions such as the EBRD, AIIB and ADB in initial projects is not only a source of financing. This cooperation also allows Azerbaijan to benefit from international standards, risk management mechanisms and technical expertise. SOCAR Green’s cooperation with companies from the United States, China and the Middle East also shows that Azerbaijan seeks to adapt globally tested technologies and business models to local conditions,” the expert noted.
According to the political analyst, the exploration of areas such as green hydrogen and geothermal energy demonstrates that Azerbaijan is not limiting itself to existing technologies.
“Green hydrogen currently has significant potential, but it also faces challenges related to high costs, infrastructure and market development. Therefore, technologies should not be introduced simply because they are global trends; it is necessary to identify economically viable models suitable for Azerbaijan. Exploring green hydrogen derivatives, energy storage and geothermal energy is important for diversifying the future energy system. The key principle should be adapting technologies to the country’s specific needs,” Garayev emphasized.
He added that the agenda of the Climate Week held in Baku demonstrates that the green transformation is no longer limited to the energy sector.
“Discussions on sustainable cities, transport, water resources, agriculture, digital infrastructure and artificial intelligence show the comprehensive nature of climate policy. Climate change is not only an energy issue. It directly affects cities, food security, water systems, transport and social infrastructure. Therefore, effective climate policy must combine all these areas within a unified resilience strategy,” the political analyst said.
