17 January 2022

Monday, 05:03

CURRENCY

ON BOTH SIDES OF ARAZ

New joint energy projects to be implemented on the liberated border of Azerbaijan with Iran in Karabakh

Author:

01.11.2020

The victorious advancement of the Azerbaijani Armed Forces, which liberated four regions in the south of Karabakh from the Armenian occupation, will solve a number of important infrastructure projects in the fields of hydropower, land reclamation, etc. In particular, it is planned to star the construction of hydropower plants Khudaferin and Gyz Galasy on the banks of the Araz River in the de-occupied Jabrayil and Zangilan districts of Azerbaijan. These projects will accelerate the power transit through the North-South energy corridor jointly constructed by Azerbaijan, Russia and Iran.

 

Our historical project

Azerbaijan's cooperation with Iran in the electricity sector spans almost fifty years. It began with the construction back in 1971 of the Araz hydroelectric complex and a 22 MW hydroelectric power plant along the Araz River in the Nakhchivan Autonomous Republic (NAR). This very successful joint venture created the preconditions for the implementation of an even more ambitious project - the construction of a large reservoir in the southwest of Azerbaijan.

“In 1988, USSR and Iran concluded a long-term agreement on economic, trade, scientific and technical cooperation. It was followed by signing a bilateral agreement on the construction and operation of the Khudaferin and Gyz Galasy HPPs. Later, given the dilapidated and decommissioned status of the equipment, the Cabinet of Ministers of Azerbaijan in 1992 instructed on the establishment of an independent expert group to re-develop the projects. Subsequently, after the occupation of Azerbaijani lands by Armenia, including the Zangilan district, cooperation between Azerbaijan and Iran was suspended,” First Vice Speaker of the Milli Majlis Ali Huseynli commented on the history of the project.

All subsequent works on the construction of hydro-power plants was carried out only by Iran. The situation was reversed only after an agreement was signed in February 2016 "On cooperation between the governments of Azerbaijan and Iran to continue the construction of hydropower facilities Khudaferin and Gyz Galasy on the Araz River, their operation and use of energy and water resources". The document proclaimed the principles of respect for the sovereignty and territorial integrity of Azerbaijan and Iran, the same rights to water and energy resources of hydroelectric facilities. In addition, the agreement reflects that the completion of the construction of hydropower plants, as well as the protection of water and energy resources at hydropower plants until the restoration of the territorial integrity of Azerbaijan will be provided by Iran. It was also prohibited to transfer the protection and operation of these waterworks on a temporary or permanent basis to individuals or legal entities of a third country. Thus, it was specifically stipulated that only Azerbaijan and Iran can use these two hydroelectric facilities. It was also agreed that the state borders of Azerbaijan and Iran on the water surface of the reservoir will be determined and fixed after filling the power facilities.

In subsequent years, Baku and Tehran continued consultations on the construction of power facilities. In particular, in mid-August 2020, during an online conference, the energy ministers of Azerbaijan and Iran agreed to accelerate the construction of hydroelectric facilities. During the videoconference of the bilateral Technical Commission held on September 4, the parties discussed the issues of joint funding of the construction of hydroelectric power plants, including the calculation of construction costs and damage assessment for the Khudafarin and Gyz Galasy hydroelectric complexes, as well as the purchase and installation of equipment for hydroelectric power plants.

However, the counter-offensive operation of the Azerbaijani army that began on September 27, which led to the liberation of the Azerbaijani border districts, radically changed the situation around the joint Azerbaijani-Iranian energy project.

 

Collaboration nodes

“The signing of an agreement on these projects in 2016 based on the sovereignty and territorial integrity of Azerbaijan was an expression of great confidence that our occupied territories will be returned. The recent liberation of the Jebrail and Zangilan districts by our victorious army has once again demonstrated the far-sighted policy of the President of Azerbaijan and his strategic vision for the use of hydroelectric facilities during the restoration of the liberated territories,” Energy Minister Parviz Shahbazov said recently.

According to the minister, the de-occupation of the territories creates opportunities for the joint use of water and energy resources of the Araz River. The construction of the Khudaferin and Gyz Galasy hydroelectric complexes with a total capacity of over 1.6 billion cubic meters and the planned two HPPs with a total capacity of 280 MW will allow Azerbaijan to generate 368 million kWh of electricity annually.

This project is also of great importance for agriculture: the 64m-high and 400m-long dam of the two hydroelectric facilities will make it possible to generate 1.6 billion cubic meters of water. In other words, in terms of parameters, it will be the third largest reservoir in Azerbaijan after Mingachevir and Shamkirchay. The new water reservoir will improve the irrigation of the existing 252,000 hectares of arable lands, as well as additionally irrigate 8,000 hectares of new cultivated areas.

Mr. Shahbazov noted that the construction of the dam of the Khudaferin hydroelectric complex is almost completed, and by the beginning of next year, the works on the Giz Galasy dam will also be completed. In the near future, it is planned to organize the construction of two hydroelectric power plants to be commissioned by the end of 2022.

According to expert Eldaniz Amirov, this project is very beneficial for Iran. In addition to generating electricity and solving irrigation problems in arid border regions, the Islamic Republic will receive major contracts for the supply of building materials and the construction of hydroelectric facilities and, in general, will take an active part in restoring energy and other infrastructure in the region liberated by the Azerbaijani army. The scale of these projects is indicated by the published plans of Azerenerji OJSC, which is completing the design of the new 110 kW transmission substations and two 110 kW transmission lines in Fizuli, Jebrail, Zangilan and Gubadli districts of Azerbaijan. At the same time, Azerishig OJSC is preparing design documents for the construction of 35-kV distribution substations in these districts.

In 2020, Baku and Tehran also agreed to intensify cooperation on joint projects of other hydroelectric power plants. As Mr. Shahbazov noted, at present, two hydroelectric power plants Ordubad (Nakhchivan) and Marazad (Iran) are being constructed. Ordubad HPP with a capacity of 36 MW has been constructed since January 2017. According to Mr. Shahbazov, the construction of the hydroelectric power plant is implemented at an accelerated pace.

In addition, Baku and Tehran agreed to build a thermal power plant with a capacity of 500 MW/h in the Astara district of Azerbaijan. Iran will supply gas to the station, and the generated electricity will either be sold to Iran or exported to other countries.

 

Profitable trio

It is noteworthy that Azerbaijan and Iran are joined by Russia to expand the format of cooperation on the regional electric power supply. One of such projects is the Russia-Azerbaijan-Iran energy corridor as part of the North-South project, which is supposed to created a single energy network with broad export opportunities.

Together with the profits from the direct import of electricity, the project participants will be able to further satisfy the seasonal needs for power. All three countries will no more need to build additional generating capacities and will save money using electricity supplied from their neighbors.

For the first time, the issue of synchronizing the energy systems of Azerbaijan, Iran and Russia was put on the agenda back in 2005 at the 28th meeting of the Electric Power Council (EPC) of the CIS countries held in Tbilisi, where the post-Soviet countries agreed to form a common electricity market.

At the same time, RAO Unified Energy System of Russia suggested Azerenerji OJSC to join the process of synchronizing energy systems together with Iran. Originally, it was planned to start the project in 2007 with Azerbaijan as a key link in the transit of Russian electricity to Iran. According to the plan, power transmission lines and infrastructure for energy exchange between Iran and Russia had to be constructed in Azerbaijan, in particular, to complete the third stage of the Yashma-Derbend power transmission line.

The energy systems of Azerbaijan and Russia have long been connected through the two transmission lines - Derbend (330 kW) and Yalama (110 kW). Both countries agreed to construct a third parallel high-voltage transmission line – the 330 kV power transmission line Absheron-Yashma-Derbend, which will not only improve energy exchange with Russia, but also increase the transmission of electric power through the territory of Azerbaijan.

Electricity exchange mechanism with Iran was designed differently. Since the 1990s, relations with Iran have been based mainly on the expectation of power supply to the Azerbaijani enclave of Nakhchivan, which is under blockade. That is, Iran transferred its own electricity to the Nakhchivan in exchange for similar supplies from Azerbaijan to eliminate the shortage of electricity in its northern regions in summer and winter seasons. With the commissioning of new energy capacities in Nakhchivan, the republic meets its power demand mostly through its own power plants. Therefore, supplies from Iran have significantly decreased. In general, over the past 15 years, energy exchange between Azerbaijan and Iran was at the level of 150-180 MW through five high-voltage lines Parsabad I, Parsabad II, Astara (132 kW), as well as through 132-kV power lines Julfa and Araz in Nakhchivan and the neighbouring Julfa region of Iran.

According to Iranian Ambassador to Azerbaijan Seyed Abbas Mousavi, Baku and Tehran continue to work together on energy exchange. “On May 25, 2020, the Iranian energy operator Tavanir and Azerenerji extended the contract until the end of the year. Under the contract, Iran will import 160 MW/h of electricity from Azerbaijan from June 6, 2020. Both sides are demonstrating their will to extend the contract and intend to expand cooperation due to a multiple increase in the volume of electricity imports to Iran,” Mousavi said.

The implementation of these ambitious plans is based on a very realistic technical basis, since the potential for energy exchange between Azerbaijan and Iran will increase even more in the near future. At present, the construction of the new 230-kV power transmission line Masalli-Astara (Iran) (68 km) will be over soon. Thus, in the near future Azerbaijan and Iran will have technical capabilities for energy exchange at the level of 800 MW.

Apparently, there are no serious technical obstacles to the implementation of the North-South joint energy corridor. And the victorious counter-offensive of the Azerbaijani army only accelerates the implementation of trilateral plans.



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