Azerbaijan's Ministry of Energy has announced a significant measure to attract private investment in the renewable energy sector. The government will guarantee the purchase of electricity at a fixed price for a period of 20 to 25 years under a Power Purchase Agreement (PPA). This initiative is part of a comprehensive support package designed to encourage the development of renewable energy projects in the country.
Deputy Minister of Energy, Orkhan Zeynalov, highlighted that this approach differs from mechanisms used in the European Union and the United Kingdom, where similar guarantees are implemented through Contracts for Difference (CFD). Azerbaijan's model offers a more direct and specific set of measures, including a Transmission Connection Agreement (TCA) and various tax benefits and exemptions for private investors and companies.
Zeynalov emphasized the importance of integrating renewable energy sources into the national grid, noting that stability and balance are crucial as the sector develops. He also addressed the topic of localization, suggesting that incorporating local content in renewable energy projects could reduce dependence on external supply chains and benefit the regional economy. However, he cautioned that such measures should be balanced to avoid impacting tariffs and overall project costs.
This guaranteed purchase policy is expected to provide financial stability and predictability for renewable energy projects, reinforcing investor confidence and supporting Azerbaijan's commitment to sustainable energy development.
https://report.az/en/energy/energy-ministry-azerbaijan-guarantees-purchase-of-electricity-at-fixed-price-for-period-of-20-25-years/