Azernews.Az

Qabil Ashirov

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Due to its strategic location and future prospects, the importance of Azerbaijan in the international political and economic arena has been gaining momentum year by year. It is no coincidence that, due to all these qualities, the country has turned into a key player in the Middle Corridor, and currently, it is putting significant efforts to repeat the same success in the North-South Corridor.

Current events in the region prove that all efforts are not in vain. Take an example the last statement of the Iranian Energy Minister Abbas Aliabad in connection with the energy systems of Iran and Russia through Azerbaijan.

It is worth noting that the issue has been on the agenda for long. In this regard, Iran sees Azerbaijan as the most convenient means to create energy exchange. Obviously, with the realization of this, the power grids of the two countries can connect and synchronize. As is known, the two countries have large power systems, and interconnecting these power lines could create a giant hub for power in the region which can prevent energy losses.

It should be emphasized that the project coincides with Azerbaijan’s current vision and the country can unquestionably get benefits through the realization of the project. Obviously, the main export items of Azerbaijan are oil and gas. The country is keen to diversify its export and export regions. Here the export of electricity steps forward, because the country has a big potential for this. Today, Azerbaijan is fully self-sufficient in electricity and even exports surplus to the neighboring countries. In 2023, the export of electricity ranked in the third place after oil and gas. The share of electricity in the export of non-oil and gas items amounted to 12 percent in 2023. However, Baku is not happy with the current situation and is working on boosting electricity generation and exportation. To this end, Hungary, Romania, Georgia, and Azerbaijan signed an agreement to build an underwater electric cable under the Black Sea. The project could become a new power source for Europe.

Besides, Baku has another initiative to export its electricity to the European Market via Turkiye as well. In general, Azerbaijan set a target to start exporting 4 GW of energy generated from renewable sources to the European countries in 2030.

However, Azerbaijan's energy potential is not limited to all these - it is bigger than it is imagined. According to the estimation, the economic potential of renewable energy sources is 27 GW. It means that Baku can provide not only Europe with electricity but other regions as well and here interconnecting the Russia-Iran Power System can give Azerbaijan other options. Through this system, Azerbaijan can export its electricity not only to Iran but other Middle East countries, such as Saudi Arabia, the UAE, and Iraq as well. It is worth noting that the industry of the aforementioned Middle Eastern countries is developing rapidly and they have a great demand for energy.

In a nutshell, Azerbaijan can play an important role in meeting this demand, on the one hand, and on the other hand, Azerbaijan will have a chance not only to diversify its export items but also its export markets.

As is known, roughly 60 percent of Azerbaijan’s exports head to Europe which makes the country vulnerable. Any crisis in Europe could be a big blow to Azerbaijan's economy. That is why, diversifying the export market will make Azerbaijan's economy much sounder.