Global energy markets have undergone significant disruptions in recent years, driven by geopolitical conflicts and shifting economic priorities. The ongoing war in Ukraine has exacerbated supply chain challenges and increased energy prices, prompting nations to rethink their dependence on fossil fuels. However, this crisis has also accelerated the transition to renewable energy, as countries seek more secure, affordable and sustainable energy sources.
Experts estimate that by 2050, sustainable energy could fully power the world. In regions with abundant solar energy, such as Saudi Arabia, transitioning to a 100% renewable energy system is projected to be possible as early as 2040 (WEF).
However, achieving this vision will require sustained commitment and collaboration between governments, industries and individuals.
Azerbaijan’s energy sector: navigating global crises
Azerbaijan, a historically oil-dependent economy, has faced multiple shocks in recent years. The Covid-19 pandemic triggered a collapse in oil prices, leading to production cuts under the OPEC+ agreement. Shortly after, the war in Ukraine reshaped global energy markets, creating a surge in demand for alternative energy suppliers. With EU sanctions reducing reliance on Russian energy, Azerbaijan emerged as a key supplier through the Southern Gas Corridor. In response to this opportunity, the country signed agreements in 2023 and 2024 to double its gas exports to the EU by 2027, strengthening its role in Europe’s energy diversification strategy.
Transitioning to renewable energy
While Azerbaijan’s oil and gas sector remains a cornerstone of its economy, the global shift toward sustainability has accelerated the country’s renewable energy ambitions. The government has set a target for renewables to account for 35% of its electricity generation by 2030. This aligns with global trends, as evidenced by the European Union reaching a milestone in 2024 where solar power generated more electricity than coal, contributing 11% to the electricity mix compared to coal’s 10% (The Guardian).
Strategic partnerships are playing a key role in Azerbaijan’s energy transition. In November 2024, the country collaborated with the International Renewable Energy Agency (IRENA) to promote renewable energy adoption and green industrialization in Central Asia (IRENA).
Additionally, during COP29 in Baku, the Asian Infrastructure Investment Bank (AIIB) signed a $160 million financing agreement for its first private-sector renewable energy project in Azerbaijan, marking a crucial investment in the country’s green infrastructure (AIIB).
Beyond policy commitments, Azerbaijan is making tangible progress in renewable energy development. Large-scale investments in solar and wind power are underway, including offshore wind projects and solar farms in partnership with global energy firms. Furthermore, advanced technologies are being implemented in oil and gas extraction to enhance efficiency and reduce emissions, reinforcing Azerbaijan’s role in the evolving global energy landscape.
A sustainable future for Azerbaijan
Despite ongoing challenges, such as volatile energy prices and the urgent need for a sustainable economic model, Azerbaijan’s proactive strategy and international collaborations position it as a key player in the energy transition. By balancing its traditional strengths in oil and gas with ambitious renewable energy goals, the country is paving the way for long-term stability and growth.
I am confident that our strong leadership, combined with prudent resource management and a forward-looking strategy, will drive Azerbaijan toward a better and brighter future.
