Azerbaijan's renewable energy potential is extremely high, which makes it possible to provide an important competitive advantage, namely, the low cost of producing green hydrogen, managing director and partner in Boston Consulting Group Vladimir Rogov said.
Rogov specifies that according to the Global Solar Atlas, the potential for solar generation in Azerbaijan is comparable to the south of Italy and is almost 1.5 times higher than Germany; the potential for wind energy on the Absheron Peninsula is comparable to the shelf areas of the North Sea.
"In Azerbaijan, we see a unique combination of all the components necessary for the development of the hydrogen sector. There are natural resources, there is infrastructure, and there is a consumer. And all this is in a compact region," he said.
Azerbaijan can receive revenues of about $230-500 million per year, taking icount the expected price of hydrogen in Europe, which is about $5.8/kg., Rogov said.
"Thus, the full cost of green hydrogen delivered through a pipeline can be highly competitive and guarantee a significant margin," he notes.
Azerbaijan will be able to cost-effectively transport hydrogen along the existing gas pipeline routes to Europe, taking into account the planned expansion of their throughput, Rogov said. Moreover, in terms of profitability, supplies from Azerbaijan to the European market will contrast favorably with exports from sub-Saharan Africa or the highly inefficient transportation of liquefied hydrogen from abroad.
"It makes sense to build new pipelines immediately with the expectation of future demand for hydrogen. For example, with a volume of 11 bcm of gas per year through the Trans Adriatic Gas Pipeline, the potential for hydrogen exports from Azerbaijan is 40,000-85,000 tonnes per year, which will be only 2%-4% of the projected demand for hydrogen in Italy in 2030," Rogov noted.
