THROWING MONEY TO THE FOUR WINDS?!

Мany countries are trying to tackle the oil and gas deficit by using natural resources to provide energy and heating. Mankind is facing a great problem today: how to make up for finite fuel reserves.

Clearly the time has come to rethink the laws and precepts of classical physics. Demand for fuel today has increased 100 per cent compared with 1990. Demand is forecast to increase by another 50 per cent by 2010. Therefore, electricity generation is growing rapidly at present and power stations with varying capacities are being built in developed countries. In line with the intractable law of energy conservation, mankind must move to completely different energy sources.

Obvious Advantages

This is understood very well in Azerbaijan, where the geography and climate allow the establishment of a wide-ranging programme of renewable sources of energy. The relevant research centres say that on average 200-250 days in Azerbaijan are windy, that is roughly 6,000 hours. This is a very high figure and even exceeds the international average. It is the same with sunny days. Moreover, the country has impressive reserves of silicon, the main element in solar batteries. And that's not mentioning the water resources.

Taking into account that Azerbaijan's current demand for electricity is around 23bn kilowatt-hours, the advantages of establishing alternative energy sources are obvious. Overall electricity generation capacity is 5,700 megawatts, of which only 4,200 megawatts are used today. Thermal power stations produce 89 per cent of the electricity generated by Azerbaijan's power stations, while hydroelectric power stations account for just 11%. Alternative sources of energy would allow savings on the fuel burnt by thermal power stations. Moreover, this is an ecologically clean way of generating heat and light, which could certainly guarantee the country's energy security, if only partially.

It has to be noted that the use of energy from the sun, wind and water to generate electricity has been studied for quite a long time. Projects for wind farms in Azerbaijan were drawn up back in the 1960s. For the first time in the USSR, a wind power register was drawn up in Azerbaijan, the windiest zones in the republic were specified, the average annual wind speed was calculated and two priority areas were chosen taking account of the country's geography and climate, wind and hydro power.

The Bakuhydroproject organization studied in full the potential of Azerbaijan's small rivers as a resource for mini-hydroelectric power stations in 1980. Solar power was not forgotten either, which can be used to generate heat and light, nor were geothermal waters, the potential of which still needs to be researched.

Despite the fact that quite some time has passed since 1960, Azerbaijan's alternative energy is still taking its first steps. While worldwide 15 per cent of electricity is today generated by alternative sources, in Azerbaijan the figure is just 1 per cent. In November 2003 the Azerbaijani Ministry of Fuel and Energy (now the Ministry of Industry and Energy) did begin work on a national programme to use alternative and renewable sources of energy until 2013. The government approved the programme and on 21 October 2004 the Azerbaijani president signed the relevant decree. The state programme envisages the construction of 200 mini-hydroelectric power stations in the republic, which would generate more than 3bn kilowatt-hours of electricity a year. The state planned that the first wind turbines should appear in Baku and the Absheron peninsula and the Nakhchivan Autonomous Republic. The construction was planned of more than 10 small, varying capacity power stations, solar collectors and small-capacity power stations on the basis of solar power in Absheron, the Mil-Mugan zone and Nakhchivan. One of the programme's priorities is supplying electricity to Nakhchivan, which is under a blockade. It is proposed that by 2014 alternative sources will generate around 2.5-3 per cent of all Azerbaijan's electricity, that is, up to 250 megawatts.

Re-evaluation

So, it might seem that the ideas outlined in these documents should be put into practice. However, experience shows that state organizations with an interest in establishing renewable energy sources in the country are not coordinating their work.

For example, the Azerenerji national energy concern gives a special place to non-traditional sources of energy. It has even set up a special department for potential projects and development which spreads the word about non-traditional energy, draws up projects and establishes partnerships with colleagues abroad. However, this work has produced no visible result to date. Azerenerji President Etibar Pirverdiyev says that constructing at least wind farms in Azerbaijan is not practical at present. "The low cost of electricity in the country does not make this sector attractive for investors. Internationally the cost of producing one kilowatt-hour of electricity at a wind farm is five to six cents. However, the low cost of electricity in Azerbaijan and failure to collect payment for it make wind-generation projects unattractive to investors. Moreover, the technology used today to generate electricity through wind turbines is not fully developed, as it is calculated for specific wind speeds (from seven to 20 metres per second), and the equipment has the reputation of quickly wearing out or breaking down," Etibar Pirverdiyev said.

Azerenerji is planning to carry out initial pilot projects in Sanqachal and Gobustan. It is also working on projects to build small hydroelectric power stations on mountain rivers. "We are also studying the possibility of using solar power," Pirverdiyev said.

Of course, Azerenerji is counting on investors. For example, on the Asian Development Bank to which the national energy concern suggested preparing the rationale for financing the development of the small hydroelectric power station systems, while the Ministry of Ecology has expressed its support for solar power and biomass. It is pointed out that the new generating capacity must be integrated with the country's overall energy system and not interfere with it.

Azerbaijan's Ministry of Industry and Energy is acting as the customer for technical assistance. A consultant is working for 900,000 dollars of which the Asian Development Bank has allocated a grant of 500,000  dollars and 200,000 dollars is provided by the Finnish and Azerbaijani governments. The grant project is to be completed in a year. The Asian Development Bank is expected to provide credits of around 30m dollars for these purposes.

It has to be said that the Asian Development Bank has made many potential investors look afresh at Azerbaijan's potential for renewable energy sources. For example, the German Brannic Group, which intends to develop wind power in Azerbaijan, is planning to create a farm of 50 turbines, each of which will produce more than one megawatt of electricity. They will be erected 100m apart between Devichi and Khachmaz and linked into one grid. Some of the first turbines are being brought in from Germany, but in the future there is a plan to produce them locally which will give the country at least 500 new jobs. The equipment could also be exported in future. A credit of over 119m euros for this project has been provided by the Berlin Bank for 12 years.

Alternative is more profitable!

Two projects were recently signed in Azerbaijan's Industry and Energy Ministry with the UN Development Programme. They are aimed at supporting the extension of the use of renewable sources of energy. The Norwegian government has allocated a credit of 1.5m dollars for a project entitled "Technical assistance to support the development of small hydroelectric power applications in Azerbaijan". "We are trying to increase the proportion of renewable energy resources. When the project has been implemented, 11-12 per cent of overall energy production will be met by small hydroelectric power stations. Potentially small hydroelectric power stations in Azerbaijan could generate 4-5bn kilowatt-hours of electricity a year," said Industry and Energy Minister Natiq Aliyev. The project is to be carried out within two years.

A second project, "Technical assistance to overcome obstacles to the sustainable, commercial development of wind power", is being financed by the Global Environmental Facility and the UN Development Programme. The project has a budget of one million and aims to study the problems of using wind power in Azerbaijan and to create an action plan, including steps to remove juridical and institutional obstacles.

The well-known international programme WindPRO is planning to build 40 wind turbines with a capacity of 2 megawatts each. Experts calculate that in local conditions 40 stations can produce 240m kilowatt-hours of electricity, which would of course make a tangible contribution to the republic's energy system.

But all this is in the future. Only programmes carried out by Azerbaijan's Ministry of Ecology and Natural Resources can be considered entirely realistic. The ministry has funded the import to Azerbaijan from Turkey of five Kiskatech-Ecogaz-15 units, capable of producing biogas from solar power. The units are now operating in Ismailli, Lerik and Quba districts in Azerbaijan, fully meeting the gas and heating demands of several families. "This is not even 5 per cent of the population of Azerbaijan, because there are no state subsidies. So, despite the enormous potential, alternative and renewable sources of energy are not yet widespread in Azerbaijan," the Ecology Ministry said.

To be fair, there are no state subsidies for developing this sector at present and none are envisaged in the near future. But there are serious plans to attract foreign investors who are sure that if the turbines to produce alternative energy sources are manufactured in Azerbaijan, then the cost of one kilowatt-hour of electricity will not be six cents, as many local officials say. Four cents for one kilowatt-hour will be enough for the system to work efficiently and profitably. At the same time investors warn that projects in this sphere take years to be implemented. Optimistic calculations put the timeframe for planning at two years at least. The implementation process will take another two years. But sooner or later, wind, solar and hydro power will have their due application in Azerbaijan.