Azerbaijan has one of the highest energy self-sufficiency ratios in the world as a major crude oil and natural gas producer. While the renewable sector has not seen as much attention, the government is now looking to stimulate investment and accelerate deployment, allowing for diversification of domestic energy consumption. In addition, the government is working on a new energy strategy that will set the stage for further policy shifts. Azerbaijan is part of the EU4Energy Progamme, an initiative focused on evidence-based policymaking for the energy sector.


Key energy statistics

Key recommendations, 2020

  • Develop an integrated long-term strategic plan for energy and climate change

    Build on existing policy work and plans to develop strategic plans for energy and climate change, ensuring effective coordination between all relevant Government Ministries and agencies, and effective consultation with the private sector, higher education bodies and other stakeholders.

  • Develop the legislative framework for energy efficiency, renewables CHP and combined cooling

    Finalise the draft laws and plans for energy efficiency, renewables, CHP and combined cooling, heat and power (CCHP) and then ensure effective implementation on the basis of clearly set out responsibilities, accountability, and adequate resources.

  • Support the development of a fair and competitive energy market

    Put in place further structural energy reforms on a phased basis to develop competitive markets based on market prices that reflect the full cost of energy supply, and ensure transparent and non-discriminatory access to the grid, supported by measures to ensure the independence and capacity of the energy regulator and to provide support for the most vulnerable in society.

  • Build capacities and raise awareness of the benefits of the ongoing energy-policy reforms

    Take steps to assess and build the capabilities and skills that will be needed in the future, including through education and training, and to improve public awareness of the reasons for energy policy changes and the benefits of future reforms.

  • Diversify the energy mix

    Gradually move away from heavy economic and energy dependence on the oil & gas sector. Consider how SOFAZ’s investment strategy can be a tool to achieve this goal.