QOBUSTAN EXPERIMENT

The State Agency for Alternative and Renewable Energy (ABEMDA) at the Ministry of Industry and Energy has stepped up efforts to develop industrial and technological potential and is expanding the number of pilot projects aimed at harnessing the potential of wind, water and sun. These efforts are supported by a number of international organizations, primarily European structures.

Azerbaijan's potential ...

In mid-April this year, agreements were signed in Baku on the implementation of the second phase of the European Commission's grant project within the framework of reforms in the energy sector. The EU has long provided us with financial and technical assistance in the development of alternative energy, and its grant programme of reforms in the energy sector (ERSP) has been implemented since 2010. The EU has allocated a grant of 13 million euros for the implementation of the programme, plus an additional 1 million euros in the form of technical assistance. About half of the funds have already been used, and the remaining amount will be allocated until the end of the year.

The main objective of the ERSP project is to prepare a comprehensive and complex strategy in the energy sector of Azerbaijan, in particular, to improve the regulatory framework for renewable sources of energy and harmonize it with European legislation.

"Azerbaijan has considerable natural potential for the development of renewable energy," the head of the European Union office in Azerbaijan, Roland Kobia, said recently. And the government has outlined this area as one of its priorities. In turn, the EU countries have the appropriate modern technology, and these circumstances create prerequisites for joint cooperation in this field." As part of the ERSP programme, the State Agency for Alternative and Renewable Energy at the Azerbaijani Ministry of Industry and Energy is actively engaging European consulting companies in the development of feasibility studies for solar, wind and bioenergy projects. Among these companies, we can mention Spain's Alten Group, which is preparing the feasibility study for tens of small hydropower plants in our country.

In the near future, ABEMDA also plans to develop an inventory of renewable sources of energy. Work has already started to identify the most promising areas and install measuring-monitoring stations. There are plans to establish 21 control stations, and their number will be increased to two hundred to cover the whole territory of the country. The equipment that is being installed will determine the parameters of the wind at altitudes of up to 80 metres, research thermal springs at a depth of 200 metres, as well as study the seasonal characteristics of small rivers. In the future, based on the data collected, an inventory that will identify the most appropriate areas for the development of certain types of renewable energy will be created within two years.

One of the most important activities of the state agency must be a solution to the most difficult issue - fiscal regulation and tariff policy in the field of alternative energy. A package of tax breaks for entrepreneurs using renewable energy has already been submitted to the Cabinet of Ministers - it provides for full exemption from taxes for 10 years. The problem of tariffs seems more complicated. "With the wholesale tariff of 0.0415 manats for 1 kW/h of electricity, wind power projects will be repaid within 30-35 years, which is not always acceptable to private investors," the ABEMDA director Akim Badalov says. "The effective purchasing price in our country should be three times larger - about 0.15 manats for 1 kW/h, but then the question arises whether the country's economy is ready to provide such benefits."

For comparison, in Europe, tariffs for 1 kW/h depending on the source of renewable energy and its place of production vary between 11-50 cents. Such high tariffs are not surprising, given that the production cost of 1 kW of electric power in most areas of alternative energy is somewhat higher than at classical large thermal and hydroelectric power plants. To equalize the opportunities of small producers of alternative energy in some European countries, particularly in Spain and Germany, the governments used a system of subsidies to compensate for the difference in the cost of electricity. In the last decade, thanks to government subsidies, solar energy has been rapidly developing in these countries, and major investors who have invested hundreds of millions of euros in solar stations have come to the market. For example, the Spanish government has signed long-term contracts with private power producers to repay huge amounts at the expense of budget funds through stimulating tariffs - about 0.4 euros per 1 kW/h. The volume of production in solar energy is increasing every year, and, accordingly, the budget of Spain is suffering huge losses. But the implementation of the contracts signed for 20-25 years has not reached even the mid-term. In these circumstances, the governments of several European countries have been forced to impose strict quotas on the volume of annual generation of solar energy.

On the other hand, the same Germany, which recently set a world record in the production of solar energy in an hour, will continue to fully develop this area. Thus, according to the Institute of the Renewable Energy Industry - IWR, at midday on 25-26 May, the total output of German solar power installations reached a 22 gigawatt-hours of electricity, meeting about 50 per cent of Germany's demand for energy during this period of time. The IWR stressed that no state has yet been able to come closer to this mark. Such power can be generated by 20 nuclear power plants working at full stretch in an equivalent period of time.

Based on the positive sides, as well as the difficulties arising from the exploitation of solar energy and other renewable sources, the issue of determining purchasing prices in alternative energy in our country is still open. However, it is clear that in Europe great experience gained in this area will provide ABEMDA with considerable help in selecting the most effective pricing model.

European technology and ...

Our country is actively studying European experience in the technology area. European companies have been the leading partners of Azerbaijan for many years, taking the lead in supplying our country with wind turbines, biogas installations and other equipment for the development of alternative energy.

Moreover, in recent years, this cooperation has gone far beyond the purchase of finished energy systems: today our country is in the process of obtaining high-tech power equipment. In particular, with direct technical support from a number of European companies, a modern factory Azguntech, producing solar modules and LED-lamps, was recently opened in Sumqayit. At the initial stage, it will annually produce 120,000 and in the future, 240,000 solar panels. After the industrial site of LED-lights is put into operation here, it will produce 36 million chips and 12 million bulbs per year. "Equipped with 60 solar cells, solar panels with a capacity ranging from 42 to 250 watts will be manufactured in accordance with international standards and be used for more efficient lighting and improving power supplies to residential buildings, streets, bridges, squares, trade and catering facilities and social institutions," ABEMDA director Akim Badalov said. He said solar panels will be used in the project "A thousand houses - a thousand power plants", which aims to provide residential houses with clean and safe small solar power stations. At the first stage, this project will be used for compact low-rise villages, where the energy generated by solar panels will be converted into alternating current and supplied to residents. Surplus energy will be transferred to the Azerenerji network and withdrawn from it at night.

It is noteworthy that plants of solar panels and LED-lamps will be the first facilities at a new high-tech industrial park in Sumqayit. In the future, ABEMDA and its partners are planning to build about 15 factories producing equipment for the areas of alternative and renewable energy and energy-saving technologies. In the industrial park, it is planned to produce optical lenses, glass and basalt fibre, high-capacity batteries, etc. All this will make it possible to produce equipment used in alternative energy inside the country, significantly lowering the price of the finished product and ultimately facilitating its wide dissemination in Azerbaijan.

It is encouraging that in recent years, the production of equipment for the use of renewable energy sources has interested not only public but also private entities. For example, about two years ago, the STP Solar private enterprise launched the production of two types of solar collectors - SPL and SPS - in the Sumqayit Technopark, using light energy to heat water. Accessories for collectors also come from Germany.

In the future, STP Solar plans to build another plant in Sumqayit to produce photoelectric batteries directly converting sunlight into electricity. Apparently, such panels will be widely used - in the Abseron Peninsula alone, it is planned to create several more power plants working on solar batteries.

European companies also support the development of another promising sphere - wind power. In the middle of last year, the Caspian Technology company purchased two wind turbines with a capacity of 850 kW each from Germany and Denmark and installed them at the Surabad testing ground in the settlement of Yasma in Xizi District. A wind turbine with a capacity of 550 kW was also built here, which is intended for training specialists of the State Agency for Alternative and Renewable Energy. Soon, a park of 16 wind turbines manufactured by Vestas with a total capacity of 48 MW will be created.

A useful hybrid

And this is not everything. Every year Azerbaijan increases the amount of public and donor funding for alternative energy projects, making our market very attractive - especially for our European partners. And therefore, it is no accident that the ambassadors of Romania, UK, Austria, Latvia, Germany, Lithuania, Czech Republic, Greece and Italy showed an interest in the Qobustan experimental alternative energy testing ground in the middle of May. There is something to show here - the testing ground is home to the first hybrid station not only in our country, but also in the South Caucasus, operating in parallel with the Azerenergy power grid. According to research, the construction of so-called hybrid plants in Azerbaijan is considered the best option for the development of alternative energy. With the simultaneous use of solar, wind, water or biomass energy, they can ensure uninterrupted electricity and heat generation regardless of changing weather conditions, seasons and other circumstances. The Qobustan station, which has become a platform for various kinds of tests and studies, will help train professional personnel for the continued operation of such facilities.

"The total capacity of the first hybrid power plant is 5.5 MW. Energy is generated by three wind turbines with a capacity of 2.7 MW, solar panels generating 1.8 MW and a biogas power plant with a capacity of 1 MW," the deputy head of the State Committee for Alternative Energy, Camil Malikov, said. According to him, the testing ground fully supplies electricity to the settlement of Qobustan. And during the second phase of the project, another wind turbine with a capacity of 2.5 MW will be built here. As a result, the total capacity of the hybrid plant will be increased to 8 MW, and it will be able to provide excess electricity to the entire Qobustan District, where 46,000 people are living.

Thus, built as an experimental plant, the Qobustan hybrid station is already becoming an indispensable part of the energy complex in the south of the capital. This project inspired the State Committee for Alternative Energy to implement another project in the north-west of the country. In November, the construction of an industrial plant running on biogas will begin in Samux District. It is expected that this facility will be commissioned in two years, and a large cattle-breeding complex will be created nearby, providing the station with the necessary biological raw material.