Smart Grid and Electricity Security: Case of Azerbaijan as a Resource-Rich Country

Abstract

This study focuses and analyzes whether the current traditional electricity system of Azerbaijan is ready to absorb and incorporate a large share of intermittent and non-dispatchable renewable sources, assesses current reforms in country's electricity sector and determines the challenges in the prospect of smart grid development. Azerbaijan has almost 200 GW of technical potential in developing renewable energy sources, however, the penetration of renewables to the current conventional grid will rise another big issue of electricity security. The development of a smart grid system is considered as a solution to renewable energy transition. The study primarily uses interviews with industry experts to gain a comprehensive understanding of the current electricity system. The findings show that the legislative background and grid infrastructure are far behind the vision of the government in the prospect of green energy transition. The current grid may integrate up to 1.5 GW of renewables. However, conventional power facilities may struggle to penetrate the increasing volume of electricity production from solar and wind sources. It will pose additional challenges for policymakers. In this manner, relevant policies are suggested.