Abu Dhabi renewable energy group Masdar plans to develop up to 10GW of projects in Azerbaijan – including multi-gigawatt Caspian Sea offshore wind linked to green hydrogen production – under what were hailed as historic agreements for the Central Asian nation.
Masdar and oil & gas-rich Azerbaijan’s energy ministry signed “implementation agreements” covering 1GW each of onshore wind and solar PV, plus 2GW of “integrated offshore wind and green hydrogen projects”, said a statement from the developer.
Masdar, which is backed by Abu Dhabi’s sovereign wealth fund Mubadala, also flagged “an exclusive concession” with the right to develop another 6GW, making the total “the largest such signing in Azerbaijan’s history”.
Azerbaijan’s energy minister Parviz Shahbazov said the “mega projects” underline the nation’s ambitions as “a green growth country, green energy producer and exporter, as well as allow for involving multibillion-dollar green investment.
The offshore wind-to-hydrogen agreement comes just days after a landmark study by the World Bank Group said Azerbaijan could have 7GW of Caspian Sea wind plant in place by 2040 if underpinned by the “right long-term vision” by government and industry that balances decarbonisation and sustainable economic growth.
Azerbaijan is among the front-running 'second wave' offshore wind plays now emerging as the cost of power production using the technology continues to drop.
The statement announcing the agreements specifically mentions evaluation of export opportunities for offshore wind power and green hydrogen. However, Azerbaijan’s geographical location makes export of hydrogen to likely key demand centres in Europe and Asia challenging both on technical and financial grounds.
Although Azerbaijan is the starting point for the 3,500km Southern Gas Corridor linking the fossil gas fields of the Caspian with Turkey, Greece and Italy, hydrogen experts cautioned that represents far from a straightforward route for renewable H2, given the additional complexities and infrastructure requirements of pumping hydrogen.
Masdar, which already has renewables projects under construction in Azerbaijan, signed a separate clean energy co-operation deal with Azeri national oil company SOCAR – which itself dipped its toe in floating wind’s waters in 2021 by linking with global player Technip Energies to study offshore oil and gas decarbonisation.