Energy China: Green hydrogen, ammonia exports to create significant opportunities for Azerbaijan

Green hydrogen is becoming a key element in the global strategy to reduce carbon emissions and transition to sustainable energy. It has significant potential to replace fossil fuels in industries such as industry, transport and energy. Azerbaijan is also actively involved in the development of this sector and is seeking to expand its capabilities in the production and export of green hydrogen.

China Energy International Group Co, a company engaged in advanced energy solutions, has the technology and experience necessary for the implementation of green hydrogen production and transportation projects. Their expertise in the development and implementation of infrastructure and innovative technologies can significantly accelerate the development of green hydrogen in Azerbaijan, facilitating its integration into the global energy network.

Report presents an interview with China Energy International Group Co. Ltd. Country Manager Shanxiang Wu, who spoke about the development of renewable energy in Azerbaijan, cooperation in the export of green hydrogen and ammonia, expectations from COP29, etc.

- How do you assess the current level of development of renewable energy sources (RES) in Azerbaijan? What steps do you think are necessary for further growth in this area?

- Azerbaijan has increasingly focused on the development of renewable energy sources as part of its long-term strategy to diversify its energy sector and reduce its carbon footprint. The implementation of several solar and wind projects and the recent solar auction have positioned Azerbaijan well for renewable energy development. The level of development is almost intermediate compared to many other countries with similar potential. Specifically, the renewable energy ratio has reached a medium level, but there is still a lot of space for improvement in the related electricity market, industrial chain and financing. Regulatory framework and market reform, grid modernization and infrastructure development, and green financing are the three most important steps to maintain sustainable growth in the renewable energy sector.

- Is China Energy Engineering Group considering expanding its presence in Azerbaijan, particularly in the context of renewable energy and sustainable infrastructure projects?

- Energy China, through its subsidiary companies, has been expanding its presence in Azerbaijan, particularly in the renewable energy sector. In June 2023, a Memorandum of Understanding was signed between the Ministry of Energy and CGGCOIC. This will continue to focuses on the development of utility-scale renewable energy projects such as solar, wind, energy storage, and green hydrogen in Azerbaijan. Meanwhile, Energy China are strengthening cooperation and partnership with local companies such as SOCAR Green and Nobel Energy in the renewable energy.

- What forms of collaboration between your company and Azerbaijan do you see as the most promising? Are there any specific projects or initiatives that could serve as a foundation for joint work?

- Chinese President Xi Jinping meets with Azerbaijani President Ilham Aliyev on the Shanghai Cooperation Organization summit in Astana on July 3, 2024. The presidents emphasized the importance of broader efforts in the field of green energy and regional interconnection, which are also highlighted in the joint statement on the establishment of the Azerbaijan-China strategic partnership. Under such a strategic framework, Energy China is cooperating on Green Energy Zone and Green Energy Corridor initiatives, which will bring long-term strategic benefits to both sides. In addition, the deep integration between energy and transportation, digital, water, ecological, industrial and cultural networks of the industry chain advocated by Energy China is also a promising aspect.

- What significance does the upcoming COP29 conference hold for your company? What are your expectations for this conference?

- The upcoming COP29 conference holds significant importance for companies involved in renewable energy, sustainable infrastructure, and climate action, including Energy China. This is an excellent opportunity for Azerbaijan to demonstrate its great ambitions and actions for green energy to the world. The negotiations, targets, policies and financing at COP29 will dominate and shape the development of renewable energy in the next period. We expect to see more positive actions on the global transition to clean energy systems, carbon reduction strategies, and increased financial commitments for climate adaptation and mitigation efforts. Energy China is a member of the Chinese delegation and will hold a side event in the COP29 China Pavilion.

- What prospects and opportunities does China Energy Engineering Group see in Azerbaijan's energy sector amidst the global shift to clean energy, especially in terms of reducing carbon emissions? What initiatives, in your opinion, could contribute to achieving these goals?

- This process of global transition to clean energy will create significant opportunities in Azerbaijan's energy sector. The first opportunity is that the dual carbon target will greatly facilitate the development of renewable energy and related infrastructure sectors in Azerbaijan. The second opportunity comes from the green policy, which encourages the restructuring of the existing energy industry and the development of a green and low-carbon upstream and downstream industry and supply chain. The third opportunity is that the development of renewable energy will reduce domestic consumption of oil and gas and increase export capacity. Therefore, low-carbon, efficient and environmentally friendly exploration, development, production and utilization in the oil and gas sector remains a promising direction. Technological innovation, industrial chain development and ESG financing support will be the key measures to achieve the above goals.

- What specific opportunities for collaboration does China Energy Engineering Group see in the creation of green energy corridors and the transportation of green hydrogen and ammonia from Azerbaijan?

- Green energy corridors and green hydrogen exports will create substantial opportunities for both sides. These opportunities align with Azerbaijan's growing ambition to become a key player in the regional and global energy supply chain. The green energy corridor aims to balance the production of renewable energy in the Caspian Sea with the huge consumption demand in the European market. The collaboration will focus on the development of renewable energy sources and energy storage projects, low-loss power transmission and submarine cables, integration with the EU and regional energy system, and green financing. The main concern for green hydrogen and ammonia is the economic feasibility of the projects. At this stage, we are collaborating in the investigation of economic feasibility, technologies and transport and commercial mode.