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By Trend

Azerbaijan may hold first renewable energy auctions at the end of 2021 or early 2022, the country’s energy ministry told Trend.

"Azerbaijan’s President Ilham Aliyev approved the Law On Use of Renewable Energy Sources on July 12, 2021. The law envisages selection of electricity producer from renewables via auctions or by direct involvement. The rules for selecting electricity producers from renewables, as well as contract forms, qualification request, bid request, field selection report are being prepared. After adopting the rules for selecting electricity producers from renewables, the first alternative energy auctions may be held in Azerbaijan at the end of 2021 or early 2022.

The auction mechanism, which is widely use in the world and is based on competition, facilitates flow of private investments in the development of renewable energy sphere and ensures lower prices. Auctions help to select the company offering the best or affordable price taking into account various technical and commercial parameters. The best price is often the lowest price for the sale of electricity to be produced.

The International Renewable Energy Agency (IRENA) says that auctions facilitate integration of renewables into the power grid, ensure timely completion of alternative energy projects, thereby paving way for speedy energy transition," the ministry said.

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