New Roadmap to Help Unlock 7GW of Offshore Wind Potential in Azerbaijan by 2040

​BAKU, June 3, 2022 – A new roadmap released today by the Ministry of Energy of the Republic of Azerbaijan, the World Bank and the International Finance Corporation (IFC) shows that Azerbaijan has the potential to install 7GW of offshore wind power by 2040, with the right long-term vision, infrastructure development, investment, and policies - which could play an important role in achieving the country's parallel priorities of decarbonization and sustainable growth.

The first-of-its-kind Offshore Wind Roadmap for Azerbaijan provides strategic vision under two scenarios – a low growth and high growth scenario - to support decision-making about regulations, frameworks, and infrastructure related to this new industry at a time when interest in developing offshore wind is increasing globally.

Analysis of the low growth scenario envisions a moderate expansion of offshore wind resulting in 1.5GW of fixed foundation offshore wind by 2040, making up 7 percent of the country's electricity supply under a decarbonization scenario. The high growth scenario outlines a more ambitious expansion with 7.2GW of offshore wind by 2040, making up 37 percent of its electricity supply.

The high growth scenario will result in more energy, more jobs, faster pay-back and more carbon dioxide avoided compared to the low growth scenario due to the increased cost reduction delivered by a larger market. However, significant and early action needs to be taken for this to happen. Both scenarios would only be tapping into a fraction of the vast technical potential for offshore wind resource in the country.

The roadmap sets out the recommended actions to be taken in order to realize the offshore wind potential under both scenarios. These recommendations include setting targets for 2030 and 2036, developing and competitively bidding a 200MW demonstration project followed by larger projects, further exploring potential offshore wind development zones, modernizing infrastructure, adopting international best practices to attract financing, educating all government agencies and the future workforce to build the knowledge and capacity needed to deliver a pipeline of offshore wind projects.

"Over the past few decades, Azerbaijan has effectively leveraged our oil and gas resources in the Caspian Sea for the benefit of our country's economic development. But the world is changing, and it is time to tap into a new resource in our seas – the power of offshore wind," said Elnur Soltanov, Deputy Minister of Energy for the Republic of Azerbaijan. "Offshore wind offers our country a unique opportunity to transfer our oil & gas expertise and workforce to a new sector that can simultaneously help us achieve our goals of decarbonization and economic diversification to pave the way to a prosperous future for Azerbaijanis", he added.

According to Sarah G. Michael, World Bank Country Manager for Azerbaijan, offshore wind offers Azerbaijan a local, competitively priced, large scale, clean source of energy and long-term jobs. "Our analysis of the high growth scenario suggests that offshore wind power could create thousands of jobs by 2040, as well as provide billions in local gross value added to the economy in Azerbaijan – all while avoiding millions of tons in carbon emissions. Further analysis shows offshore wind will play a significant role in reaching net zero emissions in Azerbaijan's power sector – a key priority for the country as highlighted in the Azerbaijan 2030 National Priorities," she added.

Ivana Fernandes Duarte, IFC's Regional Manager for the South Caucasus, commented that this roadmap is an important milestone in IFC's collaboration with the Government of Azerbaijan to deploy offshore wind as part of the country's wider decarbonization strategy. "We at IFC are proud of our excellent collaboration with the government of Azerbaijan. We look forward to supporting the country in its journey towards renewable energy deployment that can create new economic growth opportunities in the country, by providing both the advisory services and financing to support private sector investment in this sector," she said.

This Roadmap is one of a series of offshore wind roadmap studies commissioned by the World Bank Group under the joint Energy Sector Management Assistance Program-International Finance Corporation (ESMAP-IFC) Offshore Wind Development Program. Funding for this study was provided by the Energy Sector Management Assistance Program (ESMAP) and PROBLUE. The roadmap was produced, under contract to the World Bank, by BVG Associates in association with Kent, and Encotec, and with the input of The Biodiversity Consultancy. The roadmap has been prepared with the consultation of stakeholders from a wide range of public and private representatives from across the local the global offshore wind industry.

The full roadmap can be downloaded here.

About the World Bank Group's Offshore Wind Development Program

The joint ESMAP-IFC Offshore Wind Development Program's aims to accelerate the uptake of offshore wind in emerging markets. It supports the inclusion of offshore wind into the energy sector policies and strategies of World Bank Group client countries. The Program was started in 2019 and is already actively supporting 10 governments to explore their offshore wind development potential. For further information, visit: https://esmap.org/offshore-wind

Ministry of Energy for the Republic of Azerbaijan

Website: https://minenergy.gov.az/en

Twitter: https://twitter.com/minenergyaze

LinkedIn: https://www.linkedin.com/company/ministry-of-energy-of-the-republic-of-azerbaijan

World Bank

Website: https://www.worldbank.org/en/country/azerbaijan

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Twitter:https://twitter.com/WorldBankECA

YouTube: www.youtube.com/worldbank

IFC

Website: https://www.ifc.org/

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Twitter: https://twitter.com/ifc_eca