2024-07-10 10:47:24
Source: International Information Agency Trend
Azerbaijan has significant potential for the development of renewable and “green” energy, for example, through the use of solar and wind energy. With a competent approach to the energy transition, ensuring an optimal balance in the use of various energy sources, the country will be able to maintain its influence in the energy sector both at the regional and global levels.
As reported by Day.Az, this was stated in an exclusive interview with Trend by Patrick Herhold, senior partner and managing director of Boston Consulting Group.
“Here in Azerbaijan there is a huge potential for the development of renewable and “green” energy. There is a lot of sun for solar panels, fairly strong winds – in general, there are all the possibilities for obtaining environmentally friendly energy,” he emphasized.
He mentioned that Azerbaijan has always been a reliable supplier of energy resources for Europe.
“Today, in the context of geopolitical tensions and significant changes in energy corridors and the balance of supply and demand, Azerbaijan continues to play a key role in providing Europe with the energy it needs. Europe has asked Azerbaijan to increase its natural gas production, which could strengthen the country’s position as an important partner in gas supplies,” Herhold said.
According to him, the country’s rich oil and gas reserves and the availability of resources for renewable energy production create conditions for a turning point in Azerbaijan’s energy strategy.
“The transition to renewable energy sources will allow the country to increase its exports of natural gas and low-carbon electricity. Azerbaijan has already started to develop renewable energy sources, partially replacing gas-fired electricity generation, which allows it to export more gas, which in itself is a good economic justification. In the future, it will be able to export even more electricity, low-carbon hydrogen and its derivatives through energy corridors to neighboring countries and, perhaps, even to Europe. All this contributes to the diversification and greening of the local energy system,” says Herhold.
According to Herhold, some regions of Azerbaijan have excellent opportunities to build a “green” economy from scratch, using all the wealth of natural resources.
“Interesting projects in the field of renewable energy have been announced and are already being implemented in Azerbaijan. In my opinion, one of the unique and exceptional features of Azerbaijan is the significant potential of some of its regions to build a “green” economy practically from scratch. Unlike many other countries facing the need to decarbonize existing industrial production, these regions of Azerbaijan do not yet have a developed industrial base. This is a very attractive and amazing opportunity to think not only about how to “make dirty clean”, but also about how to build a “green” economy in the absence of an already formed ramified industrial base. This is also an excellent opportunity for the country itself, given the wealth of its natural resources,” he noted.
Herhold stressed that hosting the global climate conference COP29 in Azerbaijan is not only a significant opportunity for the country, but also a commitment, and it is also a chance to demonstrate its achievements and potential in the fight against climate change.
“The question is whether Azerbaijan will be able to fulfill its commitments in the coming years. Thus, Azerbaijan has committed to developing an action program that will help keep global warming within 1.5 degrees Celsius – a very ambitious task for the country’s decarbonization. The question is what strategy, what plan, what measures and actions will be required from Azerbaijan to achieve such a goal.
To achieve this, changes in the structure of energy sources are necessary. Therefore, Azerbaijan will need to review its energy portfolio, which will require new approaches and measures both in the field of state regulation and in the field of financing business projects,” he explained.
According to Herhold, the legal framework in Azerbaijan is relatively stable, but improvements will be needed.
“This is something all countries face as they move towards cleaner energy production. Azerbaijan has a very strong starting position.
Ensuring global energy security and achieving net zero emissions requires the right regulatory framework to ensure investment is safe and sustainable. Companies also need to do their part by taking on business risks and adopting new strategies and technologies. They will have to take on business risks, they will have to find new strategies. They will have to master new technologies, step by step preparing themselves for a world in which, hopefully, net zero emissions will be achieved at some point in time,” Herhold said.
In his opinion, attracting investment will be a key factor in the development of low-carbon technologies.
“Personally, I almost always say that it is not a question of funding as such, but of making sure that the business models work. So far, only about half of the technologies we need to decarbonize the economy have a convincing business case. We need to make sure that the remaining technologies also get funding. There are already working business models for renewable energy sources such as solar panels and wind turbines. Partially also for heat pumps. There is no business case for carbon capture and storage technology that would work for all regions and all areas of application. And not yet fully for hydrogen,” said Herhold.
He also mentioned that there is a lot of talk about carbon capture and hydrogen these days, but regulators, governments and industry associations have yet to develop more compelling business cases.
“I think a good outcome and confirmation of the commitments made would be a confirmation of the direction that was already discussed at previous COP conferences. I do not think that we need additional commitments at this stage. The main thing now is to implement what is planned, to start acting and to achieve real progress. First of all, regulators need to prepare the legal framework and economic justifications. And, in my opinion, Azerbaijan can play a key role in this process. However, we should not place the entire burden of responsibility for solving the global problem of climate change on one country, in particular Azerbaijan. We have already held 28 COP conferences, and all this time emissions have been steadily increasing. I think the most reasonable concept is the “troika”, when we consider three conferences at once in development: COP28 in Dubai, COP29 in Azerbaijan and then COP30 in Brazil. This will ensure a more consistent action plan and evolution within the COP conferences, and this will be much more in demand than each time putting forward different agendas by one or another country,” he added.