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Caspian Sea can propel Azerbaijan to forefront of offshore wind power

Azerbaijan is investing heavily in offshore wind power to diversify away from its hydrocarbon sources of energy and tap into its large renewables potential.
Azerbaijan is investing heavily in offshore wind power to diversify away from its hydrocarbon sources of energy and tap into its large renewables potential.


In 2022, the Global Wind Energy Council (GWEC) ranked countries based on their offshore wind energy potential. Azerbaijan joined the top four alongside Australia, Sri Lanka and Turkey.

According to the organisation's report, offshore wind energy could become a developing, competitive and efficient source of clean energy in these countries.

That same year, Azerbaijan presented its Wind Energy Development Roadmap at the Baku Energy Forum. The plan, prepared with support from the World Bank and the International Finance Corporation (IFC) under the World Bank Group's ESMAP program and a memorandum of understanding (MoU) signed between Azerbaijan's Ministry of Energy and IFC, outlines the installation of offshore wind farms with a total capacity of 7.2 GW on the Azerbaijani Caspian shelf by 2040.

These timelines and capacities align with Azerbaijan's decarbonisation and sustainable development priorities. The stated capacities would provide up to 37% of the country's total electricity consumption. The roadmap also includes a scenario for slower industry growth, which would yield 1.5 GW, covering 7% of electricity consumption.

The plan offers recommendations for both scenarios, including setting goals for 2030 and 2036, developing a 200-MW pilot project followed by larger competitive projects, opening new promising directions for offshore wind utilisation, modernising infrastructure, adopting global best practices to attract funding, and enhancing relevant skills and knowledge in government bodies and among workers for the implementation of offshore wind energy projects.

Preliminary analysis conducted by ESMAP estimates Azerbaijan's technical offshore wind energy potential at approximately 157 GW. This means the Azerbaijani sector of the sea alone could produce 157,000 MW of energy, exceeding the total power capacity of Azerbaijan's current power plants. For comparison, the total installed power generation capacity in Azerbaijan, including all renewable and non-renewable sources, is 8 GW.

The British renewable energy consulting company BVG Associates participated in the preparation of Azerbaijan's offshore wind energy map. Both Azerbaijani and international experts agree that the Caspian has enormous potential for offshore wind energy, which could allow the country to export energy in the form of electricity or green hydrogen. Last year, the British newspaper The Daily Telegraph noted that Azerbaijan's offshore wind resources in the Caspian are substantial enough to export green electricity and clean hydrogen. Despite being a relatively small country, Azerbaijan's enormous offshore wind capacities offer significant opportunities, the publication noted.

International offshore wind power projects

Neighbouring Turkey is also actively working on offshore energy development in cooperation with international financial institutions. A tender for implementing 1.2-GW offshore wind energy projects was announced but postponed within the framework of creating a Renewable Energy Sources Zone.

By 2030, Turkey plans to increase its installed wind power capacity by 20 GW. Turkey's offshore wind energy potential is estimated at 70 GW.

The advantage of offshore wind farms lies in the higher utilisation of installed capacity due to stronger winds at sea compared to land. However, the downside is the very high construction costs and the expense of transmission infrastructure.

Europe plans to turn the North Sea into a collective "green power plant." According to an ambitious plan announced by Belgium, Denmark, Germany, Ireland, Luxembourg, the Netherlands, France, Sweden and Norway, the capacity of wind farms in the North Sea will increase nearly four-fold by 2030 to 76 GW, reaching 138 GW by 2040 and 260 GW by 2050.

Offshore wind energy is also considered one of the most promising electricity generation options in the United States. The country has an extensive coastline and stable wind patterns in several states. By 2030, the US plans to generate up to 15 GW from floating offshore wind farms.

Over the past decade, the global offshore wind energy market has grown by an average of 21% per year, resulting in an installed capacity of 64.3 GW. Until 2021, the UK was the leader in this field, but China has now overtaken it, currently producing over 30 GW of offshore electricity. The world's most powerful and largest wind power installation is located in the coastal waters of Fujian Province in China, featuring a rotor with a diameter of 260 metres and capable of supplying electricity to 36,000 homes.

International experts estimate that by 2032, the total capacity of offshore wind farms worldwide will reach 447 GW. As mentioned earlier, Azerbaijan's Caspian sector has a potential capacity of 157 GW, meaning Azerbaijan's share in the global total could be very significant. However, this requires substantial funding and the creation of appropriate infrastructure.

Exports to Europe

Increasingly, Azerbaijan is targeting Europe to off take its energy and increasingly Baku is focusing on becoming a green energy hub to provide the renewable energy that Europe is demanding.

Mega-production capacities will be created on the Caspian Sea to export renewable energy to Europe, Azerbaijan's Energy Minister Parviz Shahbazov announced during a meeting with US Assistant Secretary of State for Energy Resources Geoffrey Pyatt at Azerbaijan’s national pavilion at COP28 in Dubai.

Since 2016, Azerbaijan has been planning to build the largest wind power station on the Caspian Sea. According to the project, the industrial-type station will be located at sea and stretch from the Baku settlement of Pirallahi to Jilov Island. Companies from China, Qatar, the UAE, and Germany immediately showed interest in the project.

In 2023, during the ninth Ministerial Meeting of the Southern Gas Corridor Advisory Council and the first Ministerial Meeting of the Green Energy Advisory Council in Baku, Azerbaijan's Ministry of Energy and Saudi Arabia's ACWA Power signed several documents. This included an execution contract for implementing an offshore wind energy project with a capacity of up to 1.5 GW. In May 2024, a framework agreement was signed between Azerbaijan's Ministry of Energy and ACWA Power for a 200-MW onshore wind power plant project. While project details are not yet disclosed, the Saudi company plans to invest around $5bn in Azerbaijan.

Speaking at the Baku Energy Forum, ACWA Power's vice president-regional director Abid Malik said that Azerbaijan has great prospects for renewable energy. Along with being a politically stable region, Azerbaijan is highly favourable considering the advantages of transit routes and corridors, making it a target country for Saudi Arabia.

It's not all just talk. The government’s attitude is that energy transition is inevitable, and Azerbaijan aims to achieve it most efficiently. Offshore wind energy is beneficial for the country in the face of the inevitable decline in demand for fossil fuels. Although it will be costly, it will open up vast opportunities for Azerbaijan as a potential exporter. Economists believe that if the potential is managed correctly, the costs will be recovered relatively soon. And we think they are not mistaken.