Director of the CASPIA Analytical Center Orkhan Yolchuev presented his views on the prospects for cooperation between Azerbaijan and Uzbekistan in renewable energy at the international conference “Prospects for Transforming Labour Markets in Central Asia in the Era of Green Transition: Challenges and Opportunities,” held in Tashkent.

In his presentation, Yolchuev emphasized that the green transition is becoming not only an environmental priority but also an important geoeconomic factor, capable of reshaping energy markets, investment flows, infrastructure and labour markets across Central Asia and the South Caucasus.

According to him, Azerbaijan and Uzbekistan have complementary advantages that create significant potential for deeper cooperation in renewable energy.

Uzbekistan, with its large domestic market, significant solar and wind potential, growing electricity demand and expanding industrial base, has the potential to become one of the major producers of green energy in Central Asia. Azerbaijan, meanwhile, has a strategic geographic position, developed energy infrastructure, extensive experience in cross-border energy projects and access to regional and European markets.

Yolchuev noted that Azerbaijan is gradually developing a new model of an energy hub state, combining the roles of producer, transit hub, investor and coordinator of cross-border infrastructure.

He pointed to Azerbaijan's existing infrastructure, including the Baku–Tbilisi–Ceyhan pipeline, the Southern Gas Corridor, the Baku–Tbilisi–Kars railway and the Middle Corridor, as examples of how the country has transformed its geographic position into a strategic infrastructure advantage.

According to the CASPIA director, this model is now expanding into renewable energy. Azerbaijan has significant renewable-energy potential, including approximately 23 GW of solar and 3 GW of onshore wind potential, while the technical potential of offshore wind in the Azerbaijani sector of the Caspian Sea is estimated at 157 GW.

He also highlighted the rapid development of renewable generation in the country, pointing to major projects such as the 230 MW Garadagh Solar Power Plant and the 240 MW Khizi–Absheron Wind Power Plant.

The Garadagh project, developed by Masdar with $262 million in foreign investment, is expected to generate approximately 500 million kWh annually, while saving around 110 million cubic metres of natural gas and preventing approximately 200,000 tonnes of CO₂ emissions each year.

The Khizi–Absheron wind farm, developed with Saudi Arabia's ACWA Power, represents another major step in Azerbaijan's renewable-energy development. With an investment of approximately $340 million, the 240 MW facility is expected to generate around 1 billion kWh annually.

Yolchuev stressed that the rapid expansion of renewable generation is changing the structure of Azerbaijan's energy sector. The country aims to increase renewable capacity to 6–8 GW by 2032, gradually moving from individual solar and wind projects toward a more export-oriented green-energy system.

The speaker also highlighted Uzbekistan's progress, noting that the country has already commissioned 21 large renewable-energy facilities with a combined capacity of around 5.6 GW, including approximately 3.93 GW of solar and 1.67 GW of wind capacity.

In Yolchuev's assessment, the differences between the two countries can become a major advantage for bilateral cooperation.

Uzbekistan can provide scale and renewable-energy generation, while Azerbaijan can contribute infrastructure, transit capacity and access to regional and European markets.

A key element of this emerging cooperation is the Strategic Partnership Agreement on the Development and Transmission of Green Energy, signed by the Presidents of Azerbaijan, Kazakhstan and Uzbekistan on the sidelines of COP29 in Baku in November 2024.

The initiative envisages the development of a green-energy route connecting Central Asia with Azerbaijan across the Caspian Sea and subsequently with Europe through Georgia and the Black Sea. The three countries have also established the Green Corridor Alliance, headquartered in Baku, to advance the initiative.

Yolchuev argued that the development of this corridor could give the green transition a broader geoeconomic dimension by connecting Central Asian renewable-energy production with markets in the South Caucasus, Türkiye and Europe.

He identified several priority areas for further Azerbaijan–Uzbekistan cooperation: coordination of renewable-energy and cross-border infrastructure programs, creation of joint investment mechanisms, development of local manufacturing, deployment of large-scale energy storage systems, and the establishment of frameworks for green certificates and carbon credits.

Particular attention was also given to the industrial dimension of the green transition. According to Yolchuev, Azerbaijan and Uzbekistan should focus not only on importing renewable-energy technologies but also on developing regional production chains for cables, transformers, metal structures, grid-management equipment, software and other components.

He stressed that energy storage will become increasingly important as the share of intermittent solar and wind generation grows, while common standards for green certificates and carbon units could increase the attractiveness of regional projects for international investors.

In conclusion, the CASPIA director emphasized that the green transition should be viewed as more than a shift in the energy mix.

“It is becoming a new platform for investment, industrial development, infrastructure connectivity and regional economic cooperation,” Yolchuev noted.