BAKU, Azerbaijan, September 26. The cost of green hydrogen in Azerbaijan is estimated at three euros per kilogram of LCOE (levelized cost of energy), Deputy Director of the State Agency for Renewable Energy Sources under the Ministry of Energy, Rana Humbatova, said at the event "Green Energy Week 2025: Azerbaijan and Central Asia" held in Baku, Trend reports.
She noted that Azerbaijan has been supported by the European Bank for Reconstruction and Development (EBRD), and a study on the hydrogen economy has been conducted.
"This was a year-long study with the Worley Consulting Group, and interesting results were obtained in terms of LCOE (unit cost of energy). The full report of the study has not been published, but a summary is posted on our website. The report estimates the LCOE of green hydrogen at around €3 per kilogram. This seems quite competitive.
However, the results are not yet fully substantiated because a clear view of all resources must be formed. The study showed that blue hydrogen can be slightly cheaper than green hydrogen. However, regulation regarding blue hydrogen has not yet been formed in Europe," she explained.
The agency official emphasized that, in fact, Azerbaijan has been a hydrogen producer for many years.
"As a country with a developed oil and gas industry, we are well aware of the production of 'gray hydrogen' and its safety regulations, but additional research is needed on carbon capture and storage (CCS), or carbon capture, utilization, and storage (CCUS). Here, too, Azerbaijan has a good base because we have depleted fields, the capacity of which can be used, as Norway has done. In addition, there are existing pipelines, and it's important to upgrade them for carbon capture and storage.
Europe has decarbonization goals. Therefore, they are considering the possibilities of using all innovative technologies. There is even talk that the use of carbon capture and storage technologies will be mandatory for oil and gas companies. Azerbaijan, on the other hand, is a developing, oil and gas-based country. Of course, we have assets. On the other hand, natural gas is quite cheap in Azerbaijan. Therefore, it is very important to take into account social impacts, the interests of the state, and other factors.
We also touched on the issue of water in the study," she pointed out.
Noting that Azerbaijan has serious water problems, the agency official noted that, according to the results, water from the Caspian Sea can be used for hydrogen production.
"This water is not salty, but semi-salty, but it still needs to be purified, which means additional costs. On the other hand, dumping waste into the Caspian Sea can also create environmental problems. The level in the Caspian Sea is already decreasing year by year, which is damaging to biodiversity. Therefore, we need to be very careful," Humbatova added.
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