Renewables
Azerbaijan expands renewable capacity and reduces domestic gas use
Azerbaijan is scaling up its solar and wind infrastructure to diversify its power sector and reduce domestic reliance on fossil fuels.
Key points
- Renewable energy accounted for 20 percent of electricity generation in the first nine months of the year.
- Foreign direct investment exceeding $500 million has supported the rapid deployment of solar and wind projects.
- The expansion helped the country avoid consuming 840 million cubic metres of natural gas during the same period.
What happened
Azerbaijan is rapidly increasing its clean energy generation capacity, shifting a portion of its power production away from traditional hydrocarbons. According to official figures cited by OilPrice.com, green sources generated 20 percent of the nation's electricity during the initial nine months of the year, improving upon the 13.4 percent recorded across 2025. Total electricity output reached 21.2 billion kilowatt-hours between January and September.
The administration intends to elevate the proportion of renewable technology within its total installed capacity to 33.3 percent by 2027. The country possesses significant technical potential, including an estimated 135 gigawatts onshore and 157 gigawatts of offshore wind capacity in the Caspian Sea. Government objectives target 8 gigawatts of operational renewable capacity by 2032.
Foreign direct investment exceeding $500 million has driven much of this progress, with firms from China, Saudi Arabia, and the United Arab Emirates backing large-scale installations. Energy Minister Parviz Shahbazov noted that competitive auctions for renewable projects are scheduled to begin in 2028 to maintain momentum.
Infrastructure and future plans
To accommodate rising intermittent generation, authorities are investing heavily in network upgrades and storage solutions. Plans involve committing approximately $2.6 billion towards grid development and clean energy projects by 2027, with $600 million dedicated strictly to strengthening transmission infrastructure such as the AZURE initiative and the Navoi substation.
Simultaneously, the administration is exploring the integration of nuclear power into the national energy mix. Discussions have also begun regarding the establishment of local manufacturing facilities for solar panels, wind turbine blades, and towers within the Alat Free Economic Zone.
Why it matters
As a nation where fuel exports accounted for 85.9 percent of merchandise exports in 2025 according to World Bank figures, Azerbaijan's transition offers lessons for resource-dependent economies seeking to free up valuable hydrocarbons for international export. By utilizing wind and solar generation to substitute domestic gas consumption—saving 840 million cubic metres in nine months—the country preserves high-value commodities for external markets while simultaneously lowering carbon emissions. For African energy producers and investors navigating similar domestic supply pressures, integrating foreign capital and targeted grid enhancements remains a viable pathway to expanding domestic energy access and system flexibility.
Original reporting
This article draws on the following reports. Read them in full on the publishers’ sites.
Context from CEII
Renewables are the fastest-growing part of the world’s energy system. The COP28 goal is to triple capacity by 2030, and solar mini-grids are the fastest route to power for millions of people without electricity.
5.8% of electricity in Azerbaijan was renewable in 2021Countries in this story
Written by the CEII Desk, the Centre’s automated newsroom, from the reporting credited above and CEII’s own data. Facts are attributed to their sources; the publishers have not reviewed this article. Spotted an error? Tell our editors.
