Azerbaijan, known as a major power in oil and gas, has recently shifted towards renewable energy and is rapidly increasing its capacity. As the host of COP29, the Azerbaijani government has announced ambitious climate goals and encouraged other governments to take similar actions.
Significant Growth in Electricity Production
In the first nine months of this year, renewable energy accounted for 20 percent of Azerbaijan's total electricity production, a significant increase from 13.4 percent in 2025. Azerbaijan produced 21.2 billion kilowatt-hours of electricity from January to September 2026, while total electricity production in 2025 was 28.7 billion kilowatt-hours. The Azerbaijani government plans to increase the share of renewable energy in total installed electricity production capacity to 33.3 percent by 2027.
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High Potential for Renewable Energy
Azerbaijan has an estimated technical potential of 135 gigawatts of renewable energy on land and 157 gigawatts of wind capacity in the Caspian Sea, providing significant opportunities for solar and wind energy development. The government aims to increase renewable energy production capacity to 8 gigawatts by 2032, with 2 gigawatts expected to be operational by 2027.
Some regions of the country are rapidly transitioning to green energy, with the Nakhchivan Autonomous Republic meeting all its electricity needs from renewable sources between April 21 and July 2. This growth in renewable energy capacity is largely attributed to the expansion of solar and wind projects, allowing Azerbaijan to avoid the consumption of approximately 840 million cubic meters of natural gas in the first nine months of the year.
The Azerbaijani government is accelerating the development of solar and wind farms to achieve its ambitious clean energy goals and has plans to launch 11 solar and wind power plants with a total capacity of 2 gigawatts. Three facilities, with a combined capacity of 570 megawatts, are already operational. The Bilasuvar solar power plant, with a capacity of 445 megawatts, and the Shams 1 solar power plant, with a capacity of 25 megawatts, are expected to be operational by the end of this year.
The 200-megawatt wind project by Master from the United Arab Emirates is also underway. Additionally, several other renewable energy projects are expected to be completed next year, including the Neftechala solar power plant with a capacity of 315 megawatts, Shafaq with a capacity of 240 megawatts, Shams with a capacity of 50 megawatts, Ofogh with a capacity of 50 megawatts, and Ofogh West with a capacity of 25 megawatts. These planned projects are expected to generate a total of 5 billion kilowatt-hours of electricity annually, which could reduce gas consumption by over 1.1 billion cubic meters per year and decrease carbon pollutants by 2.4 million metric tons.
The rapid development of renewable energy in Azerbaijan is primarily driven by a high level of foreign direct investment, which has exceeded $500 million. Companies from the United Arab Emirates, Saudi Arabia, and China are involved in large-scale green energy projects in Azerbaijan. Azerbaijan's Energy Minister, Parviz Shahbazov, announced that renewable energy auctions are expected to begin in 2028 to stimulate further development.
The government also intends to make significant investments in battery energy storage systems and upgrade Azerbaijan's electricity grid, including the AZURE project, the Navi substation, and new 500-kilovolt transmission lines. Azerbaijan plans to invest approximately $2.6 billion in renewable energy projects and grid development by 2027.
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