Azernews.Az

By Sara Rajabova

Azerbaijani official has said Baku and Tehran are in talks on the implementation of two projects in the field of alternative energy in Iran.

Jamil Melikov, deputy head of the Azerbaijani State Agency on alternative and renewable energy sources said the state agency is currently negotiating on this issue with the Iranian Energy Ministry.

“We’ve already signed a memorandum between our state agency and Iran’s Energy Ministry on starting the implementation of two projects. One is related to the creation of wind farms near Khaf city in the Khorasan province and the second will be the construction of geothermal power plants in East Azerbaijan province not far from Tabriz, where there are quite significant geothermal resources,” Melikov told Trend.

He said the Iranian side is currently implementing a pilot project in the field of alternative energy.

“The financing of this pilot project will be carried out by the International Agency for Renewable Energies, which Azerbaijan is a member of. We hope that the positive experience and results obtained in the framework of this pilot project will give us the opportunity to begin a cost effective implementation of the project related to the construction of a geothermal power plant. Its essence lies in the fact that we, using the hot spring water, can transform it into electricity and thus reduce the cost of electric power,” Melikov said.

He said the planned capacity of the geothermal power plant is up to 250 megawatts, adding that in the first phase, they plan to start the project at 50 megawatts, then to increase the capacity of power station.

He believes it is more profitable to sell electricity on the domestic market of Iran, because this country has enough high tariffs on it.

“On the other hand, by selling electricity on the domestic market, it is possible to acquire its equivalent of gas at competitive prices, which then can be exported to Nakhchivan, other regions of Azerbaijan, or even global markets. In any case, it is important that electricity has a gas equivalent and that the Iranian side gives assurances that we will be able to either sell electricity at special rates or purchase gas and petroleum products within two years,” Melikov said.

He added that a full assessment of the project cost has not yet been defined.

Melikov said the International Agency for Renewable Energy will fund only part of the project (five megawatts), adding that the expansion of the project will require further investments from other sources.

Iran and Azerbaijan have had diplomatic relations since 1918. Iran recognized Azerbaijan's independence in 1991, and diplomatic relations between the two countries were established in 1992.

Currently, the two countries are focused on expanding their economic ties, developing cooperation in various fields -- industry, agriculture, energy, alternative energy and transportation.

Tehran has in recent years focused seriously on developing its ties with neighboring countries, including Azerbaijan which enjoys various commonalities with Iran -- religious, historical and cultural.

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Sara Rajabova is AzerNews’ staff journalist, follow her on Twitter: @SaraRajabova

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