Gobustan solar power plant: new scale of green energy development in Azerbaijan (PHOTO)

BAKU, Azerbaijan, September 18. For Azerbaijan,
2026 is shaping up to be a pivotal year for the development of
renewable energy. The commissioning of new solar and wind
facilities, the deployment of energy storage systems, the
modernization of grid infrastructure, and expanded cooperation with
international investors demonstrate that the growth of renewable
energy is gradually moving beyond isolated projects to become part
of a broader transformation of the country's energy system.

The next step in this direction was the inauguration of the 100
MW Gobustan solar power plant in Baku’s Garadagh district on
September 16. The project holds particular importance for the
market, as it marks the first renewable energy project in
Azerbaijan realized through an auction process, as well as
Universal Energy’s first project in the country.

A 300.77-hectare land plot in Pirsaat settlement, Garadagh
district, was designated by a 2023 Cabinet of Ministers decision as
the site for a renewable energy facility. In 2024, following an
auction, the Chinese company Universal International Holdings
Limited won the right to implement the project.

Once the plant reaches its design capacity, it is expected to
generate approximately 200 million kWh of electricity annually.
This will save around 45 million cubic meters of natural gas per
year and reduce carbon dioxide emissions by approximately 97,000
tons.

"Gobustan," however, is just one element of a broader program
that gained significant momentum throughout 2026.

2026: phase of scaling up

The year began with the commissioning of one of the country's
largest wind energy facilities—the 240 MW Khizi-Absheron power
plant, built by Saudi Arabia's ACWA Power. Its annual output is
projected at approximately 1 billion kWh. Operation of the plant is
expected to save about 220 million cubic meters of natural gas
annually and prevent the emission of over 400,000 tons of carbon
dioxide.

Thus, the development of renewable energy in Azerbaijan is
increasingly linked not only to decarbonization but also to the
optimization of traditional energy resource use. Electricity
generated by solar and wind plants frees up natural gas for other
purposes, including potential export.

Speaking at the opening ceremony, President Ilham Aliyev stated
that the construction of renewable energy plants in Azerbaijan
would expand significantly in the coming years.

"Considering that the construction of renewable energy plants in
Azerbaijan will be very widespread in the coming years, the
performance of Azerbaijani energy professionals must always be at a
high level.

Here we also see a very successful example of international
cooperation. I should also note that from now on, more and more
foreign investors will be engaged in the development of renewable
energy. However, Azerbaijani companies have also begun to take
interest in this issue, and the construction of several solar power
plants has already begun," the head of state said.

This model is already being put into practice through ongoing
projects. While state and international institutions played a
significant role in the early stages, foreign energy companies and
the private sector are now actively engaging with the industry, and
the auction mechanism is creating further opportunities to attract
investment.

From generation to creation of new energy
infrastructure

Another key area of ​​focus has been the strengthening of grid
infrastructure. In May, a 330-kilovolt substation built by
AzerEnergy was inaugurated in the Jabrayil district. In August, the
Yeni Sangachal substation (220/110/10 kV) was commissioned.

The latter is directly linked to the decarbonization of
industrial infrastructure. Under this project, renewable sources
will meet approximately 500 million kWh of the Sangachal Terminal’s
annual electricity demand. This will save 120–150 million cubic
meters of natural gas annually and reduce carbon emissions by
260,000–330,000 tons.

Thus, the scope extends beyond the mere construction of new
power plants; an integrated infrastructure is taking shape that
encompasses generation, storage, transmission, and end-use
consumption.

Growth centered in regions

A significant portion of new projects is concentrated outside
Baku. Renewable energy development is proceeding particularly
actively in the territories liberated from occupation.

Three solar power plants with a combined capacity of 340 MW are
under construction in the Jabrayil district. Hydroelectric power
plants with a total capacity exceeding 300 MW have already been
commissioned in Zangilan, Lachin, and Kalbajar. In the coming
years, the combined solar and hydroelectric generation potential of
these territories is expected to approach 700 MW.

Projects are simultaneously being developed in Nakhchivan. The
"Shams 1" and "Garbi Ufug" solar power plants, with a combined
capacity of 50 MW, are under construction there.

The 25 MW "Shams 1" project is being implemented on a 52-hectare
site. CEI Nakhchivan LLC has already completed the installation of
solar panels with a capacity of 10 MW, and construction work is
scheduled to conclude in November. Commissioning the plant will
also depend on the completion of the necessary grid
infrastructure.

Masdar (UAE) remains one of Azerbaijan's key international
partners in the renewable energy sector. The scale of this
cooperation demonstrates that the focus has shifted from individual
facilities to the development of an entire portfolio of
projects.

Masdar and SOCAR Green have recently confirmed the financial
close for a 315 MW solar power plant project in the Neftchala
district. The plant is expected to generate over 686 million kWh of
electricity annually, supplying power to approximately 140,000
households, while reducing carbon emissions by around 280,000 tons
per year.

In addition to the Neftchala project, Masdar and SOCAR Green are
developing a 445 MW solar power plant in Bilasuvar and the 240 MW
Absheron-Garadagh onshore wind farm. The combined capacity of these
projects exceeds 1.2 GW.

A supplementary agreement between Masdar and the Azerbaijan
Green Energy Company (AGEC) outlines plans to explore new
opportunities. Specifically, the parties are considering increasing
the capacity of Masdar’s Garadagh solar power plant—currently 230
MW—by at least another 350 MW, as well as establishing an energy
storage system with a capacity of up to 200 MWh.

The Garadagh solar project itself is a landmark initiative,
representing Azerbaijan’s first large-scale solar power project
driven by foreign investment. The plant generates approximately 500
million kWh of electricity annually, enough to meet the needs of
over 110,000 households.

Masdar and AGEC will also explore the feasibility of a 100 MW
project capable of providing round-the-clock power supply. Such
projects are particularly significant given the rising share of
variable solar and wind generation, as they combine generation
assets with technologies that ensure a more stable electricity
supply.

From domestic energy balance to exports

The scale of the projects currently underway is gradually
shifting the very nature of the objective. While the initial
development of renewable energy sources (RES) was largely driven by
the need to diversify domestic power generation, conserve gas, and
reduce emissions, the next phase involves creating surplus capacity
for export.

Azerbaijan’s technical potential for green energy is estimated
at 135 GW onshore and 157 GW offshore. Its economic potential
stands at approximately 27 GW, comprising 23 GW of solar and 3 GW
of wind energy. The potential for bioenergy is estimated at 380 MW,
and that of mountain rivers at 520 MW.

Once the Gobustan Solar Power Plant is commissioned, the total
capacity of renewable energy facilities in Azerbaijan will reach
2,170 MW. The country will have 85 such facilities, including 65
hydroelectric power plants, six wind farms, ten solar power plants,
three hybrid plants, and one bioenergy plant. Renewable energy
sources will account for approximately 21.5% of the country's total
power generation capacity.

However, the current figures represent interim results. Plans
are in place to implement renewable energy projects with a total
capacity of approximately 1.5 GW by the end of 2027.

As Director of the State for Azerbaijan Renewable Energy Agency
under the Ministry of Energy, Javid Abdullayev, told Trend in an exclusive interview that up to three
additional renewable energy plants are scheduled to be commissioned
before the end of the year.

"We envision the development of renewable energy sources in
Azerbaijan proceeding in three stages. The first stage concludes at
the end of 2027, and by its completion, we aim to have commissioned
approximately two gigawatts of renewable energy capacity," he
said.

According to him, all necessary work for the first stage has
already been carried out, relevant contracts have been signed, and
investors are actively working across virtually all project
phases.

"The Gobustan Solar Power Plant is the third of the 11 plants we
have commissioned. We anticipate bringing another three plants
online by the end of the year," Abdullayev noted.

However, the second stage goes beyond merely increasing domestic
generation. According to Abdullayev, Azerbaijan needs to begin
developing capacity specifically geared toward exporting
electricity via designated routes.

One of the most significant initiatives is the project to
transmit electricity along the Azerbaijan–Georgia–Black
Sea–Romania–Hungary route. A preliminary feasibility study for this
project has already been prepared and submitted.

"As you know, we currently have four interconnectors on the
agenda. A preliminary feasibility study has already been prepared
and submitted for one of them—the route spanning Azerbaijan,
Georgia, the Black Sea seabed, Romania, and Hungary. It is
encouraging that the study demonstrated the route's attractiveness
from both technical and economic perspectives.

Steps are currently being taken to activate the necessary
financial mechanisms to enhance the project's appeal.

As part of these efforts, work is nearing completion to include
this project in the ten-year development plan for the European
energy system. Subsequently, work will proceed to secure one of two
designations for the project: 'Project of Mutual Interest' or
'Project of Common Interest,'" noted Abdullayev.

To implement this cross-border infrastructure, a joint venture
has been established involving the transmission system operators
from the respective countries.

"This entity coordinates all necessary activities on behalf of
each country's grid operators. This will enable us to secure
funding from specific financial institutions for such projects on
concessional terms—or, in some instances, even in the form of
grants," the agency director said.

Third stage: green energy as new export
resource

In the long term, the development of renewable energy sources is
viewed as more than just a means to alter the domestic generation
mix. It represents the shaping of a new direction in energy policy,
wherein electricity generated from renewable sources could become
an additional export resource for Azerbaijan.

According to Abdullayev, this third stage will require new
technological solutions and will entail a broader utilization of
the country's energy potential.

"Azerbaijan is rich in oil, gas, and green energy. We have
always ensured Europe's energy security. Now, we aim to continue
this process through electricity and green energy as well. In the
third stage, realizing Azerbaijan's existing potential will foster
the development of hydrogen, the utilization of other resources,
and the adoption of additional technologies," he said.

Thus, the development of renewable energy in Azerbaijan is
gradually shaping several interconnected areas. The first involves
replacing a portion of traditional power generation and freeing up
natural gas. The second entails creating new infrastructure. The
third focuses on attracting foreign investment and establishing
major energy clusters. The fourth involves preparing infrastructure
for the export of electricity and, in the future, other forms of
green energy.

In this context, the opening of the Gobustan Solar Power Plant
represents not merely an isolated event, but the next stage in
scaling up the sector. The auction model, the participation of
international investors, the development of storage systems, and
the preparation of cross-border interconnectors signal Azerbaijan's
transition to the next phase of its energy transformation: moving
from the construction of individual renewable energy facilities to
the creation of a comprehensive green energy ecosystem.