SAFE ENERGY

On 11 March this year, the whole world was shaken by the news of a strong earthquake and tsunami in Japan, which led to an accident at the Fukushima-1 nuclear power station. This accident, which is the most serious since the Chernobyl disaster, casts doubts on prospects for the development of peaceful nuclear energy, while some countries have even decided to 'freeze' a number of obsolete plants and curtail the construction of new ones. If such trends prevail in Europe, there may be a shortage of electricity, which opens up opportunities for energy exports, particularly from Azerbaijan.

Japan syndrome

The accident at the Fukushima-1 plant once again prompts the international community to limit the use of nuclear energy, given the irreparable damage to the environment in the event of natural and manmade disasters at nuclear sites. The history of the mass use of peaceful nuclear energy began in the 1970s - with the onset of an energy crisis caused by the policies of OPEC countries which increased oil prices fourfold. However, despite the relative development of the nuclear industry over the past four decades, even today, nuclear power's share of total energy production is small - just under 7 per cent of heat production and about 17 per cent of global electricity generation. The leaders in nuclear power generation are France, the USA, Japan, Germany, South Korea and Russia. France produces up to 80 per cent of all its electricity at nuclear power plants.

For many years, officials of the IAEA and lobbyists from the nuclear industry have been trying to convince the public that nuclear plants are the most environmentally friendly way of power generation because, as opposed to stations that burn hydrocarbons, they have no effect on global climate change and do not create serious problems for the ozone layer. With regard to nuclear waste disposal, developed methods of handling and disposal, according to some 'nuclear gurus', minimize the threat of environmental pollution. However, the accident at the Chernobyl nuclear power plant and now at Fukushima-1, demonstrated that unforeseen natural disasters or a human error can play a fatal role in the emergence of large-scale disasters, the consequences of which will carry a dire threat to many generations.

Apparently, one of the consequences of the accident at the Japanese nuclear power plant will be a major review of the exploitation of existing facilities and future prospects for nuclear power development. Several countries are calling for a complete ban on nuclear energy, while others call for stricter regulations at nuclear power plants and their gradual replacement with conventional thermal power plants or alternative energy sources. For example, the public in Switzerland and Germany is insisting on the closure of France's old nuclear facility - NPP Fessenheim, located on the banks of the Rhine. In turn, Germany is going to phase out of service two dozen units at its oldest plant over the next seven years, while most members of the Bundestag are against building new nuclear facilities.

In early April this year, the fourth power unit of the Czech nuclear power plant Dukovany, built by the Soviets in 1970-1985, was shut down due to a malfunction. The British government also suspended its plans to build new nuclear power plants, while Switzerland has completely abandoned the idea of building nuclear power plants, even in the distant future. Similar conclusions are likely to be made by Israel and possibly Turkey. "It is extremely unlikely that the contribution of nuclear power to energy production in Europe will grow in the future. Losses from non-use of nuclear energy can be offset by coal, natural gas and some renewable energy", said Carlo Stagnaro, director of the Department of Energy at Italy's Bruno Leoni Institute. By the way, the opposition to nuclear energy emerging in Europe today affects market trends. In particular, the Russian company Atomredmetzoloto recently suspended the takeover of the Australian company MantraResources, which develops uranium deposits. At the same time, the price of enriched uranium ore on world markets fell from $66.5 to $55 per pound.

Traditional energy in Azerbaijan

In general, it should be noted that the importance of traditional non-renewable energy sources - coal, oil and gas - increases again. The importance of Eurasian gas suppliers, such as Russia, Kazakhstan, Azerbaijan and Turkmenistan, will increase as well. At the same time, Europe and, partly, the Middle East will become the largest market for direct supplies of electricity in the near future and, in the medium term, we should expect exports of excess electricity from the Caspian region.

What are Azerbaijan's possibilities in terms of electricity exports abroad? Over the last decade, Azerbaijan has been able to radically upgrade its electricity industry, almost doubling the capacity of its power system, bringing it to almost six and a half thousand megawatts. Today, the electric power system of Azerbaijan is the most powerful in the South Caucasus and is among the leaders in the Caspian region. "Over the past seven years alone, ten new power plants have been built, increasing the potential of the country's generating capacities by an additional 1500 MW, while about 600 megawatts have been developed from the reconstruction of previously constructed facilities," said the president of Azarenerji, Etibar Pirverdiyev. He says that the country's energy system is based on 13 large thermal and six hydropower plants, with a total capacity of 6,400 MW.

In the next few years, Azarenerji plans to increase its capacity by at least a quarter. For example, in the near future, the company plans to open the 780-megawatt Canub station, a derivational hydroelectric power station with a capacity of 25 MW in Fizuli District, and to complete work on the Azerbaijan power station, which will increase the capacity of the station to 2,600 MW. Preparations have begun for the reconstruction of the Mingacevir and Varvara hydroelectric power stations: the modernization of the Varvara hydroelectric power plant alone will provide an additional 90 MW of capacity. The company also plans to build a 400-megawatt hydropower plant on the Kura River in Tovuz District and modernize the construction of four dozen small derivational hydroelectric power plants.

Thus, by 2015 the country's energy capacity is expected to reach 8,000-9,000 megawatts, with about 10 per cent of the total volume being provided by small-scale hydropower and other renewable sources. The implementation of these plans brings our country extensive opportunities to export at least 4-5 billion kilowatt hours of electricity annually, which means the transition of national power generation to a new level of development.

In fact, in 2008, Azerbaijan stopped importing electricity and became a net exporter to neighbouring countries. Last year, the country's power plants generated 18.4 billion kilowatt hours of electricity. For comparison, two years ago 20.1 billion kilowatt hours were produced. The reduction in production is due to the decline in domestic demand following the radical modernization of the country's energy facilities, which helped reduce technical losses in the networks and stimulated customers to conserve electricity. Over the past three years, nearly two dozen 110-kilovolt substations have been constructed and reconstructed, 600 new transformers with a capacity of 2500 MVA have been installed and over 30,000 km of various transmission lines have been laid. Customers on all the country's grids have been equipped with modern electricity meters, which resulted in significant energy savings at home, as well as industrial organizations adopting energy-saving technologies. Thanks to the measures taken by Azarenerji, the excess power of the country's generating system exceeds 1,000 MW and, in five years, reserves in the energy system will increase nearly threefold.

Export product

Thus, having fully satisfied domestic needs, our country focuses the further development of power generation on exports to Georgia, Iran, Turkey and Russia. To accomplish this task, the country is carrying out a large-scale programme to strengthen the transmission infrastructure - power lines and substations. More than two years ago, Azarenerji began to implement a state programme for the reconstruction of Azerbaijan's internal grids from 2008-2015. Among the objects for priority upgrading are power lines that connect large power stations located in Mingacevir and Sirvan with substations throughout the country. Radical reconstruction is under way on 220-kilovolt transmission lines connecting the Mingacevir hydroelectric power station and the Sirvan thermal power plant to the capital - these networks have been in service for more than forty years. Reconstruction has also affected the lines connecting the region's largest Azerbaijan power station to the Abseron power centre.

The basic guideline for drafting a project on the modernization of the republic's transmission infrastructure is joint power transit plans with neighbouring states. The most promising here is the western direction - a project to create an electricity corridor to link Azerbaijan with Georgia and Turkey (Russian participation is also possible in the future). In February 2008, the presidents of Azerbaijan and Georgia and Turkey's prime minister signed a declaration on the construction of a new 500-kilovolt power line that will connect the three neighbouring states. Our country has already embarked on this project, and a segment of the power line from Mingacevir to Samux and then to the border with Georgia will be completely constructed by the end of the year. The construction work is being funded from the budget and provides for the reconstruction of high-voltage lines originating in Mingacevir and laid in the Qazax-Agstafa direction. Since last year, a modernized 330-kilovolt transmission line has been laid in the same direction. And in the near future, Baku and Tbilisi will sign a contract to build a 500-kilovolt Gardabani-Samux line, with a budget estimated at $150 million, according to the GeoTimes news agency.

Preparations for this project began in September last year, when the Georgian state electrical system (GSE) and Azarenerji signed a memorandum involving our country in the building of a new 400-kilovolt Georgian power line Akhaltsikhe-Borchha, which will connect the energy systems of Georgia and Turkey. In turn, the GSE promises to complete the rehabilitation of power lines in the territory of Georgia within 18 months of the signing of the agreement. Among other projects, the 330-kilovolt power line Gardabani, which carries electricity between Georgia and Azerbaijan, will be reconstructed as well. In general, on the territory of Georgia, it is planned to build three new power lines and one major substation with access to Turkey's Kars, in order to support an energy flow of least 1,000 MW.

"Thus, by May 2012, it will be technically possible to export our surplus electricity to Turkey," the president of Azarenerji, Etibar Pirverdiyev, said recently. By this time, the Azerbaijani energy system, whose capacity will be no less than 7,500 MW by then, will be able to export about five billion kilowatt hours to the eastern regions of Turkey. And when Russia joins these projects, the volume of deliveries and their geography may cover the Middle East and Southern Europe. The possibility of exporting electricity from the South Caucasus was also confirmed by European Commissioner for Energy Guenther Oettinger, who recently visited Georgia.

Thus, global conflicts over nuclear power will encourage a number of countries to buy the missing volumes of electricity abroad in the foreseeable future, which opens up very good prospects for increasing exports from our country.