THIS YEAR WE WILL BE GROWING ENERGY SECURITY OF THE COUNTRY - PRESIDENT OF AZERENERJI JSC
Caspian Energy (CE): Mr. Pirverdiyev, how would you evaluate the current condition of the energy economy in Azerbaijan? What is the history of the independent power grid of the country?
Etibar Pirverdiyev, President, Azerenerjy JSC: Progressing of the Azerbaijan power industry is inseparably connected to the name of national leader of Azerbaijan Heydar Aliyev. The rational use of the available energy potential and creation of new capacities were always of high priority after his return to power. Such approach and care resulted in overcoming the power grid's crisis along with its upgrade and improved material and technical basis. The large-scale creative works implemented by national leader Heydar Aliyev are successfully continued by President Ilham Aliyev. In his statements honourable Mister President Ilham Aliyev said as following: "Power generation and energy supply to consumers are the core factor in economy of any country as it cannot progress without these two important components". "Social-economic development of regions in 2004-2008'' and "Development of fuel-energy complex in 2005-2015" State Programmes have been approved as this development is a primary goal of the state. The strategy aimed at establishing of mutually beneficial contacts with leading countries around the world created possibilities to attract foreign investments and credits in this sector. Completion of the Yenikand hydropower station's construction, reconstruction of the Shimal electric power station and the Baku thermoelectric power station that is in charge major energy supply to Baku, upgrading of the Mingachevir hydropower station, construction of a number of substations along with improvement of energy supply to the Nakhchivan Autonomous Republic being in the blockade for a long time were initiated and implemented under direct supervision of Heydar Aliyev.
At the moment, by starting up additional capacities we are outlining future directions of the Azerbaijan economy.
CE: What works does the Company implement within the framework of the State Programme on development of the fuel-energy complex of the country in 2005-2015?
Etibar Pirverdiyev: The implementation of the state programme along with the decree of the president regarding additional measures on improvement of energy supply for the population yields results. The independent power grid of Azerbaijan is getting stronger due to new generating capacities. Generating units with the capacity of up to 700 MW have been set into operation in the country over the last three years. On the whole, by 2010 we are going to create capacities exceeding 4,000 MW.
In this regard, the previous year was especially fruitful and was registered in the energy history of Azerbaijan as the year of important achievements. In 2006 we started up new power stations in four regions of the country and completely upgraded the fifth unit of the Azerbaijan hydropower station. Due to shifting the 500-megawatt gas turbine power plant from diesel to gas operation mode and starting up the 4.5-megawatt Vaykhyr hydropower station, the Nakhchivan power supply system received new capacities. The obtained result was magnificent as the total generation reached 23.8 billion kilowatt per hour a year, which is 1.5 billion higher vs. 2005.
Having highly appreciated the achievements of Azerenerjy, President Ilham Aliyev laid emphasis on the high available potential of the country. During the ceremony dedicated to the start up of the Baku modular power station he said: "If we launched 5 stations within a year, we will be able to solve any task. I hope in 2007-2008 our energy industry will be raised to an impressive height. We have to do our best to remove all energy problems in Azerbaijan".
CE: Why did the Tariff Board decide to enhance energy tariffs? What influence will this process exert on the future activity of Azerenerjy?
Etibar Pirverdiyev: For many years the power grid of the country has been dependent upon state subsidies, which limited its adaptation to the requirements of free market economy. During the period of growing economic potential of the country, low tariffs set within the system turned to be a major factor that hampered progressing of the power industry and negatively impacted its operation. The recent decision of the Tariff Board will exert positive influence on the financial restoration of the power sector, make it more attractive for crediting and create favourable conditions to solve the problem with non-payments lasting for over 15 years. Following personal instructions of the head of state in the near future we are going to remove all existing energy problems, improve the financial condition of entities and ensure timely and full payment for supplied energy.
CE: How did the situation change when Azerenerjy regained control over the power grid? What is scope of works carried out to improve the energy supply system?
Etibar Pirverdiyev: As is known, following the decree of the president the power grids of 46 Azerbaijan regions were handed back to the Azerenerjy's structure. We implemented much work in these regions so as to upgrade and improve the energy supply system and solve problems with non-payments. Within a short period we achieved goods results regarding installation of meters for all consumers, regained control over energy consumption, and as a result uninterrupted and high quality energy supply. This process exerted positive influence on collection of payments for consumed energy. We plan to complete installation of meters in the first quarter of the current year. I would like to note that due to installed meters energy consumption undergoes considerable changes. In the regions provided with meters energy consumption went down 2-3 times vs. previous years. We have positive changes regarding collections of payments for the consumed energy. As a result of implemented works, the amount of complaints related to insufficient energy supply along with accidents on energy grids occurring due to overloads decreased.
CE: Does Azerbaijan plan to become an energy exporter? How feasible is it in the near future?
Etibar Pirverdiyev: It seems quite feasible. President Ilham Aliyev many times highlighted that in future Azerbaijan would be able to export energy along with oil and gas. We are working on these issues. But, first of all we have to meet our growing needs. Stations are constructed upon demand of the Azerbaijan economy. The increased population of the country, improved living conditions, appearance of new entities and tremendous scope of construction demand additional energy volumes.
CE: How will Azerbaijan ramp up energy capacities with regard to growing economic potential of the country? What projects does Azerenerjy plan to implement to improve energy supply in the country?
Etibar Pirverdiyev: Upgrading processes in both the energy generation system and distribution networks will be carried out much more actively this year. Rapid development rates of the local economy along with enhanced financial potential of the state will give a powerful push to developed energy projects. The projected state programmes are being successfully implemented. As I said above, the other day we started up a new power station in Baku. The construction of the 517-megawatt power station in Sumgayit is approaching its completion. The works on Shimal-2 power station are going to be started soon, whereas operations in Mingachevir are underway now. The Sumgayit thermoelectric power station will significantly improve the energy supply of the city and the Absheron Peninsula on the whole. The construction of a new 300-megawatt power station in Sumgayit is under projection. The uniqueness of this station is that it will work on both gas and black oil. This station will contribute much to ensuring energy security of Baku and whole Absheron as well.
We also view the projects regarding alternative energy. We study possibilities of construction of hydropower stations in several regions of the country and wind energy generating units in Absheron.
In short, in 2007 we will improve our positions from the point of view of energy security. We will continue constructing power stations as the growing potential of the Azerbaijan economy demands it. I can say for sure that the Azerbaijan energy specialists will make their contribution to the rapid economic growth of Azerbaijan with full commitment to their work and set objectives.