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World Small HydropoWer development report 2013
www.smallhydroworld.org
AZERBAIJAN
Published in 2013 by United Nations Industrial Development Organization (UNIDO) and International Center on Small Hydro Power (ICSHP).
2013 © UNIDO and ICSHP
All rights reserved
This report was jointly produced by United Nations Industrial Development Organization (UNIDO) and International Center on Small Hydro Power (ICSHP) to provide information about small hydropower. The document has been produced without formal United Nations editing. The designations employed and the presentations of the material in this document do not imply the expression of any opinion whatsoever on the part of the Secretariat of UNIDO and ICSHP concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries, or its economic system or degree of development. Designations such as “developed”, “industrialized” and “developing” are intended for statistical convenience and do not necessarily express a judgement about the stage reached by a particular country or area in the development process: Mention of firm names or commercial products does not constitute an endorsement by UNIDO or its partners. The opinions, statistical data and estimates contained in the articles are the responsibility of the author(s) and should not necessarily be considered as reflecting the views or bearing the endorsement of UNIDO and its partners.
While every care has been taken to ensure that the content is useful and accurate, UNIDO and ICSHP and any contributing third parties shall have no legal liability or responsibility for the content or the accuracy of the information so provided, or for any loss or damage caused arising directly or indirectly in connection with reliance on the use of such information.
Copyright: Material in this publication may be freely quoted or reprinted, but acknowledgement is requested, together with a copy of the publication containing the quotation or reprint.
Recommended citation: Liu, H., Masera, D. and Esser, L., eds. (2013). World Small Hydropower Development Report 2013. United Nations Industrial Development Organization; International Center on Small Hydro Power. Available from www.smallhydroworld.org.
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3 Asia 3.5 Western Asia
3.5.2 Azerbaijan Ugranath Chakarvarty, International Center on Small Hydro Power
Key facts
Population 9,493,6001
Area 86,660 km2
Climate Dry, semiarid steppe
Topography Large, flat Kur-Araz Ovaligi (Kura-Araks Lowland, much of it below sea level) with Great Caucasus Mountains to the north, Qarabag Yaylasi (Karabakh Upland) in west; Baku lies on Abseron Yasaqligi (Apsheron Peninsula) that cuts into Caspian Sea.
Rain pattern
Varied, the maximum annual precipitation occurs in Lankaran (1,600-1,800 mm) and the minimum in Absheron (200-350 mm).
Electricity sector overview Azerbaijan’s energy sector follows the management system similar to that of the Soviet period, wherein the enormous task of production, transmission and sale of electricity remained as a state monopoly. The electric power system in Azerbaijan is undoubtedly old and yet powerful in the southern Caucasus region. Azerbaijan is self-sufficient in electricity in terms of installed capacity but remains energy-inefficient. Annual generation is less than expected; the overloaded transmission/distribution system leads to acute peak energy shortages. Azerenerji, a state-owned Joint Stock Company is the major electricity producer and it controls the transmission and distribution network of the country, with a few exceptions. The national electricity network is divided into five regional grids: Baku, Nakhichevan, Sumgait, Ali Bayramly and Ganja, which are currently open to foreign investors. The total installed capacity in 2011 was 6,808 MW, of which 5,003 MW constituted of fossil fuels and the remaining 1,805 MW of hydropower.
2 It should be
noted that different sources report varying electricity capacity and generation data (figure 1). Most of the hydropower is generated from six large hydropower stations constructed during the Soviet time.
Figure 1 Electricity generation in Azerbaijan Source: ABC.az
3
Note: Data from 2009.
Small hydropower sector overview and potential Small hydropower plants are those ‘that have a power of 50-10,000 kW, are installed over a regular water flow, and are able to immediately return water to its flow’, according to Sub-section C, Section 1 of Article 3 of the Law on Power and Thermal Plants (Order No. 784-IQ).
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Figure 2 Small hydropower capacities in Azerbaijan
The small hydropower share in the country is relatively small, particularly due to Azerbaijan’s focus on a centralized large electricity system in the past. Some operational small hydropower plants: Sheki, Mughan, Zeykhur, Gusar, Nyugedi, Chinarly, Balakan, Guba and Zurnabad were offered for privatization under the Presidential Decree in 2001 (table 1). The State Property Committee of Azerbaijan views an average rehabilitation expenditure of AZN 20,000 to AZN 30,000 (US$25,600 to US$38,400); hence it wants to privatize the small hydropower units as soon as possible. As of July 2007, six small hydropower stations remained non-privatized. In total, 42 MW of small hydropower plants are operational (figure 2). The table below shows selected small hydropower plants. Installed small hydropower in Azerbaijan Name Location Capacity
(MW) Year of
commission-ing River Region
Sheki Kischay Sheki 1.6 1929 Mughan Araz Mughan 3.8 1962 Zeykhur Samur Gusar 9.0 1964 Gusar Samur Gusar 1.2 1953 Nyugedi Gara Guba 0.8 --- Chinarly Shamkirchay Shamkir 0.8 1957 Balakan Balakanchay Balakan 0.8 1954 Guba Kudialchay Guba 1.2 1936 Zurnabad Ganja Khanlar 2.7 1929 Takhta Korpu
Siyazan Siyazan 2.8 ---
Chichekli Gyandjachai Khanlar 3.0 ---
Total capacity 27.7
Source: United Nations Development Programme5
Note: All plants listed are operational. This list may be incomprehensive.
Hydropower resource in Azerbaijan is located alongside rivers such as Kura and its tributaries, Araz, small streams terminating at Caspian Sea and irrigation canals. According to Azerenergi, the country is endowed with a theoretical small hydropower
87.63%
12.37%
0% 20% 40% 60% 80% 100%
Thermal
Hydro
42 MW
392 MW
0 100 200 300 400 500
SHP potential
SHP installed
capacity
2
potential of 28,000 GWh, of which 5,000 GWh is the technically feasible potential. Another boost to the small hydropower sector in Azerbaijan was given when the Asian Development Bank (ADB) and Government of Finland funded and technically assisted in the preparation of the Renewable Energy Development Project (December 2005). It confirmed 21 sites as technically feasible (16 sites are under 10 MW equaling to 40.59 MW), 4 of which were most attractive having a total of 10 MW installed capacity.
6 These four sites have been
considered by ADB for financing at about US$25 million, the construction time of the sites remains unconfirmed. However, it was the institutional structure and administrative barriers that were discouraging investment into this sector. The Ministry of Industry and Energy looks forward to constructing 61 small hydropower units with a total installed capacity of 350 MW until 2020.
2 The Islamic
Development Bank has also expressed its interest in hydropower investment of around US$50 million- US$150 million in Azerbaijan.
2
Renewable energy policy Renewable energy policy in Azerbaijan is reflected in The State Program on Use of Alternative and Renewable Energy Sources (2005-2013) which focuses on diversifying the sources of primary energy and ensuring energy security, particularly with reference to small hydropower and wind power potential, in order to improve access of energy to rural and remote areas. Azerbaijan’s 2020 target includes a 20-per cent share of renewable-generated electricity. The main objectives of the programme include:
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Determination of potential of renewable/alternative energy sources.
Increase of energy efficiency.
Creation of new employment opportunities.
The Ministry of Economic Development developed The State Program on Poverty Reduction and Economic Development (SPPRED) in 2003-2005 that recognizes development of renewable energy as a means to fulfill its pursuit of sustainable development.
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Legislation on small hydropower There are no customized laws for renewable energy. The legal framework is built on regulations concerning the energy sector. Small hydropower effectively falls under Law on Utilization of Energy Resources (1996), Law on Electric Energy (1998), Law on Energy (1998) and Law on Electrical Power and Heating Stations (1999). These laws invoke a subsidy for the construction of small hydropower plants having capacity from 50 kW to 10 MW with a guaranteed ‘unlimited purchase of energy produced at these (small) plants’ (Article 3).
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Barriers to small hydropower development
Lack of environmental priority.
Legislative gaps and statistical problems.
Weak institutional coordination.
Resource curse- too narrow foreign direct investment, crude dependence, lack of operative decision making, clashes of interest.
Sluggish technological transfer.
Inadequate relationship with relevant regional and global institutions.
References 1. Central Intelligence Agency (2012). The World Factbook. Washington, D.C. Available from www.cia.gov/library/publications/the-world-factbook/. 2. Economist Intelligence Unit (2012). Azerbaijan: Energy Report 2012. London. Available from https://store.eiu.com/product.aspx?pubid=1177114917&pid=1187096918&gid=1177114917. 3. Azerbaijan’s power generation at hydroelectric power stations has grown (2011), ABC.az, 9 June. Available from http://abc.az/eng/news/54902.html. 4. Huseynov, Firudin (2010). Guidebook on legislation regulating small hydropower in Azerbaijan. Ministry of Industry and Energy of Azerbaijan; United Nations Development Programme. 5. United Nations Development Programme (2009). United Nations Development Programme and Ministry of Industry and Energy of Azerbaijan Republic Report: Small Hydropower Potential in Azerbaijan. 6. United Nations Development Programme (2012). Azerbaijan. Baku. Available from www.un-az.org/undp/sehife.php?lang=eng&page=021101. Accessed 27 March 2012. 7. Aliyev, F. G. (2010). Renewable Energy Sources Development in Azerbaijan: Policy to Barriers and Regional Cooperation. Presentation at the International Energy Efficiency Forum. 28-30 September. Astana. 8. Asian Development Bank (2005). Country Environmental Analysis. Azerbaijan. Metro Manila. Available from www.adb.org/documents/country-environmental-analysis-azerbaijan.
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