00:00Azerbaijan's carbon dioxide footprint, actually greenhouse gas footprint, is around 60 million tons.
00:06So 2 million tons out of that will be avoided because of this plant.
00:19Hello and a very warm welcome to another episode of Energy Frontiers.
00:24This month we take a closer look at Azerbaijan's newest and most advanced power station,
00:29the 8th November Power Plant, located in Mingushevir, often called the nation's energy capital.
00:35In just a moment we'll hear from Deputy Minister of Energy, Dr Elnor Soltanov,
00:39about what this means for regional gas diplomacy and domestic supply.
00:43But first, here's a quick overview of what's in play.
00:47The 8th November Power Plant is a high efficiency gas facility,
00:52the largest of its kind in the South Caucasus.
00:55Powered by combined cycle technology, it's designed to generate up to 1,880 megawatts of electricity,
01:04whilst cutting emissions by around 50% compared to older infrastructure.
01:10Its hydrogen-ready turbines align with Azerbaijan's long-term low-carbon ambitions,
01:16and by saving more than a billion cubic meters of gas each year,
01:20it has the potential to reshape the country's energy balance, both at home and abroad.
01:26So how will the plant contribute to Azerbaijan's energy transition,
01:31and how will its impact be measured in real terms?
01:34I'm delighted to say that I'm joined in studio now to answer all of these questions and more by
01:39Azerbaijan's Deputy Minister of Energy, Dr Elnor Soltanov. A very warm welcome. It's great to see you again.
01:46Hi, Rebecca.
01:47Thank you for being here today.
01:48My pleasure.
01:49Let me start by asking you about the 8th of November Power Plant. It's now operational.
01:54But how will you measure its impact beyond capacity,
01:58and what does it actually mean to Azerbaijan in terms of the energy transition and your goals there?
02:02Thank you for the question. Capacity matters when we talk about the contribution of this new plant
02:08to Azerbaijani grid system, economy, and overall climate goals. Why?
02:13Because this plant used to be the biggest but least efficient power plant in Azerbaijan.
02:18But now it's the biggest but one of the most efficient power plants in Azerbaijan.
02:22Currently, as we talk, it's producing around 30% of all electricity consumed in Azerbaijan right now.
02:29That means that we are going to be feeling and calculating very clearly how much natural gas
02:37we are going to be saving by relying on this plant at this capacity, at this level.
02:42Second, the earlier plant was boiler plant. The difference is combined cycle plants are very
02:51quick to respond to oscillations in the grid system. We all remember what happened in Spain a couple of months
02:56ago. This is especially valid and important when we talk about renewable energy.
03:01The plant is expected to free up more than a billion cubic meters of gas each year. Talk to me about
03:06how that surplus will be deployed. Is it purely for exports or do you have other plans?
03:10In the best of all possible worlds, the saving could go up to 1.2 BCM of gas, actually. And I believe
03:18that if you look at the amount of carbon dioxide that are reduced, that are avoided, it kind of will
03:25amount up to two million tons. We can definitely talk about save natural gas that are measured in
03:32millions of cubic meters of gas that we have. This is very significant amount. It will be used differently.
03:40It could be used domestically or it could become part of our export mix that we are currently realizing.
03:47Recently, OPEC at their ninth seminar talked about there being no end of demand for oil anytime soon,
03:54certainly not ahead of 2050. And they point to an investment of more than $18 trillion being needed
04:01before that time. Does that mean that you in Azerbaijan and with these plants are continuing
04:07to invest in hydrocarbons, but also in the renewable side of things?
04:10I mean, Azerbaijan currently has the presidency of COP29 as well. And what matters,
04:17and as COP29 presidents who have been pursuing this goal, the scientific community and the best
04:23available science tells us that we need to reach net zero by 2050. That's our best shot, really.
04:31It does not mean that by 2050, all hydrocarbons will be out of the sea. What we have been observing in
04:39Azerbaijan is that it is increasingly becoming a natural gas country. And natural gas is important in
04:46two regards. Natural gas is the least polluting of all fossil fuels out there. And second, natural gas,
04:54and we are back to November 8th power plant, is really important for those responsive power plants,
05:02because those resilient power plants are usually not called fired power plants. So natural gas fired power
05:08plants are really good in terms of integrating more and more renewable energy. So in that sense,
05:14I really commend also as part of the COP29 team that Azerbaijan has pushed for more natural gas,
05:20because especially in European continent, as you know, there are a lot of countries that use coal.
05:25And if our gas is replacing that coal, in fact, in that sense, it's actually contributing to
05:32decarbonization. And in case our gas production will increase considerably, that will happen only if European
05:39commission, with whom we signed a deal in 2022, is going to be supporting this process.
05:45Speaking of November 8th power plant, your turbines are hydrogen ready. But what is the roadmap? What is
05:51the timeline for integration? They will be able to use up to 40% hydrogen. And we already worked the
05:59hydrogen hydrogen strategy with EBRD. But to be honest with you, hydrogen is very expensive, especially green
06:07hydrogen. Clean hydrogen is very expensive. What we think and the way we started to think about hydrogen
06:13is really related to immense offshore wind resources that we have in the Caspian Sea. Because if we want
06:20to develop those wind resources at scale, we are going to need some storage capacity. And I think in several
06:28months time, we will start this implementation plan with EBRD. That way, we will have a clearer picture on how
06:35exactly we are going to be implementing this. In terms of the regulations, the policies and indeed
06:41the infrastructure which you have referenced, what else needs to be put in place to make sure that
06:46hydrogen is firmly integrated into the energy mix? I think the first question is real technology.
06:53We need to have these mature technologies. Because electrolyzers that especially we use
07:00use for green hydrogen, we don't have them at scale. But first and foremost, although I'm saying this last,
07:07it's about economics. It's about the cost of production of green or clean or low carbon hydrogen
07:14and how and who will eventually pay for that. Because when you blend hydrogen for electricity production,
07:21you are increasing the cost of production. Again, back to November, 8th of November power plant,
07:26and our states spend several hundred million dollars for this project. But eventually this
07:35will help our economy, but also help our climate goals. We have to leave our conversation there,
07:40but it's been a pleasure. Thank you so much for your time. The pleasure is mine. Thank you.
07:44Thank you. Well, that's all that we have time for in this episode of Energy Frontiers,
07:49but join me again next time from our studio in Baku, Azerbaijan. I'll see you then.
07:56Thank you.
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