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Forecasts of Government of Azerbaijan Do Not Coincide with Reality

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The Azerbaijani government sets the task to bring the volume of electricity production per capita to 2.5 MW / h in 2018, the Energy Minister of Azerbaijan Natig Aliyev said.

effect“Over the past 10 years in the regions of Azerbaijan 17 power plants were built with total capacity of about 2,000 MW. At the end of 2015 Azerbaijan’s power grid generation reached 7,149 MW,” the Minister stressed in an article published in the official newspaper Respublika.

The Minister noted that the main task is to bring electrification level to 100%.

Aliyev said that in the medium term, Azerbaijan plans to start new power plants. “This will bring the country’s power grid to more than 10,000 MW in 2020. As a result, the volume of electricity production per capita can be brought up to 3,600 kW / h, which will correspond to the index of developed European countries,” he said.

He added that one of the main tasks is also a further reduction of power losses.

Caspian Barrel analyzing the statements of the Minister of Energy of the impending 40% increase in the country’s generating capacity over the next four years wonders why it is necessary. For the last 10-15 years in developed countries to achieve economic success in the economy the focus was not made on the growth of energy consumption, but on the contrary on increasing the energy efficiency of entire industries, as well as machinery. So actually in Europe over the past five years the consumption of gas and electricity has not increased, and fuel consumption of cars has fallen to the times of 1985, although their number has increased several times.

The Azerbaijani government still, as in Soviet times, dreams every year to catch up and overtake the digital performance of recent years, and it leaves quality issues without due attention. Probably for this reason, the Minister had to admit that in 2016 for the production of 1 kW / h of electricity thermal power plants have to burn 314.2 grams of equivalent fuel. Although this is a very high figure for the sector – in developed countries to produce the same amount of electricity they spend at least 200 grams of equivalent fuel.

Therefore, the government had better reduce the losses in the energy sector than seek ways for the growth of production. After all, the production increase will need fuel – natural gas, which in the domestic market today and in the next few years we will have to use very sparingly. Since demand is growing constantly: on the one hand, new settlements are connected to the network, on the other hand, industrial facilities running on natural gas are put into operation.

Production of electricity in Azerbaijan and losses (in millions of kW / h)
Years Output Losses
2011 20,293.8 3,973.4
2012 22,988.1 3,367.6
2013 23,354.4 3,280.6
2014 24,727.7 3,362.5
2015 24,688.4 2,868.6

In Azerbaijan, another illusion of the government is the fact that Azerbaijan, by introducing new generation facilities, will in the coming years earn a lot of money from the export of electricity.

Caspian Barrel reports, citing the country’s energy balance, give statistics on export and import operations in the electric power industry of Azerbaijan.

Volumes of export and import of electricity in Azerbaijan (in millions of kW / h)
Years Export Import
2011 804.8 128.0
2012 680.3 140.9
2013 495.6 127.3
2014 489.3 124.1
2015 265.0 107.5
2016 – H1 166.6 No data

As the table shows, the peak electricity exports were in 2011. After that, for the last five years, exports decreased 3.04 times, reaching 265 million kW / h in 2015. According to the State Customs Committee, Azerbaijan’s income from this amounted to only $ 16.2 million. However, under commercial agreements Azerbaijan still does not sell electricity to any customer outside of the country. All current operations are carried out under intergovernmental agreements in the framework of energy exchange. Therefore, Azerbaijan also imports electricity and on the results of 2015 the net export volume amounted to only 157.5 million kilowatt / hour.

Why has Azerbaijan reduced electricity exports for the five-year period? Competitors have emerged, or rather they have always been, but at this time they were able to fight in the market more effectively. In Georgia, 90% of “light” is obtained from water resources. In the electricity market of Georgia Turkish businessmen have invested hundreds of millions, and they already transfer a part of the cheap energy generated to Turkey. To Iran cheap energy flows from two post-Soviet countries – Turkmenistan and Tajikistan. Turkmenistan through Iran even directs the energy to the Turkish market. Russia is also one of the largest exporters of electricity in the region.

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