Azerbaijan is significantly expanding its renewable energy sector as part of a broader shift away from fossil fuel dependence. During the first nine months of this year, renewables accounted for 20 percent of the country’s total electricity production, a substantial increase from 13.4 percent in 2025. The government has established an ambitious target to raise the renewable share of installed electricity generation capacity to 33.3 percent by 2027, supported by an estimated technical potential of 135 gigawatts of onshore wind and 157 gigawatts of offshore wind capacity in the Caspian Sea.
Development efforts are concentrated on solar and wind projects, with 11 facilities totaling 2 gigawatts of capacity planned. Three installations with combined capacity of 570 megawatts have already commenced operations. Additional projects expected to be completed later this year include the 445-megawatt Bilasuvar and 25-megawatt Shams 1 solar plants, while a 200-megawatt wind project led by UAE-based Masdar is underway. The government aims to develop 8 gigawatts of renewable capacity by 2032, with 2 gigawatts targeted for completion by 2027.
The renewable energy expansion has enabled Azerbaijan to avoid consuming approximately 840 million cubic meters of natural gas during the first nine months of this year, reducing carbon emissions from fossil fuel use. Foreign direct investment exceeding $500 million has supported these developments, with companies from the United Arab Emirates, Saudi Arabia, and China operating large-scale projects in the country. The government plans to invest approximately $2.6 billion in renewable energy and grid development through 2027, including grid upgrades and support for battery storage systems.
Beyond renewables, Azerbaijan is considering nuclear energy as part of its diversified energy strategy. Officials have indicated plans to develop domestic manufacturing capabilities for solar panels, wind turbine blades, and towers. The International Atomic Energy Agency conducted a legislative assistance mission in late 2025 to support potential nuclear sector development. Renewable energy auctions are expected to commence in 2028 to accelerate further capacity expansion.
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