Azerbaijan plans to liberalize the electricity market in five years

The rules of organization and functioning the electricity market in Azerbaijan have been defined. The process of introducing elements of the electricity market will consist of three stages. This is reflected in the draft Law “On Electric Power Industry” adopted by the Milli Majlis in the first reading.

In accordance with the draft, the application process is expected to be carried out in the following periods:

– the first stage will last from the date of entry into force of this Law until June 30, 2025;

– the second stage will last from July 1, 2025, to June 30, 2028;

– the third stage will begin on July 1, 2028.

At the first stage, it is planned to implement the following measures: administrative and legal separation of activities for the production and transmission of electric energy, the acquisition of licenses by subjects of the electric power industry, taking into account the deadlines established by law, the separation of activities for the distribution and supply of electric energy from a financial and functional point of view, the corresponding transmission of electricity by the executive authority, regulation of wholesale and retail prices (tariffs) for electricity.

At the second stage, the following activities are planned: the creation of the operator as a separate legal entity within the transmission system, the purchase of electricity by the market operator from all producers, the sale of electricity by the market operator to all suppliers, legal and administrative division of activities for the distribution and supply of electricity. At the third stage, it is planned to create an independent operator of the transmission system market within the framework of the wholesale electricity market.

Caspian Barrel