Russia Proposes to Build Nuclear Power Plant in Azerbaijan

Signing ceremony of Protocol of Intent between Azerbaijan and Russia in 2019 (Source: Report Agency)
Signing ceremony of Protocol of Intent between Azerbaijan and Russia in 2019 (Source: Report Agency)
Publication: Eurasia Daily Monitor Volume: 16 Issue: 146

On October 3, Azerbaijani President Ilham Aliyev paid an official visit to Russia to attend the 16th annual meeting of the Valdai International Discussion Club, in Sochi (President.az, October 3). Aliyev’s speech at the high-level event touched on multiple topics, including Azerbaijan’s partnership with Russia, the unresolved issue of Karabakh, and regional security in the South Caucasus region, to name a few. Notably, during his remarks, Aliyev declared, “Nagorno-Karabakh is Azerbaijan—exclamation point!” which sparked heated discussions in both Azerbaijani and Armenian mass media and online (Turan Agency, October 4). But Russian officials kept conspicuously silent regarding President Aliyev’s statement, leading some local observers to claim that this signified the Russian-Azerbaijani strategic partnership had entered a new phase. Allegedly, the muted reaction reflected Russia’s pursuit of a more pro-Azerbaijani policy in light of deteriorating relations with its long-time partner, Armenia.

A much more tangible sign of Baku and Moscow’s developing relationship could be seen following a face-to-face meeting on the sidelines of the Valdai forum between Aliyev and his Russian counterpart, Vladimir Putin. Specifically, just after the two heads of state concluded their talks, the chief of Russia’s state-owned corporation Rosatom, Alexei Likhachev, told journalists that Moscow had proposed to build a nuclear power plant in Azerbaijan (RIA Novosti, October 3). According to Likhachev, Azerbaijan will save on natural gas consumption and be able to increase its gas exports. Although Baku has so far offered no official response regarding the proposal, Azerbaijani Energy Minister Parviz Shahbazov confirmed, on October 9, that Azerbaijan is considering the Russian offer, but he declined to offer any additional details (AzerNews, October 10). Internal debate surrounding the construction of a nuclear power plant in Azerbaijan is far from a new phenomenon.

In 2008, the government revealed its plans to build a power plant 15 kilometers north of Baku and even conducted some opening negotiations with the International Atomic Energy Agency (IAEA). Additionally, to train nuclear specialists and produce medical isotopes, Azerbaijan planned to build a 10–15 megawatt electrical (MWe) research reactor, estimated to cost $119 million. However, the project stalled until 2015, when the IAEA approved Azerbaijan’s new strategic plan for a research reactor. Azerbaijan designed and submitted this plan with the help of the French company Areva (Nti.org, April 2018). The next phase of nuclear plans was unveiled in 2014, with the government’s decision to establish a National Nuclear Research Center under the auspices of the Ministry of Transport and High Technologies. Baku simultaneously put forward plans to begin construction of a nuclear plant by year’s end. Again, however, no real action followed (EurasiaNet, May 30, 2014; Mincom.gov.az, accessed October 22, 2019).

Energy-rich Azerbaijan’s desire to pursue nuclear power has raised questions among some experts, but Russia’s stated willingness to participate in nuclear construction in Azerbaijan has attracted even further attention. Certainly, Rosatom is actively expanding its presence in different regions around the world. In 2018 alone, the company reportedly signed $132.2 billion in new contracts to build nuclear power plants over the next decade (1prime.ru, May 31). Regarding Azerbaijan, the Russian nuclear energy giant claims it wants to help the host country develop clean and safe energy resources. Azerbaijan is, in fact, working to develop alternative power generation capacities that can increase the country’s role as a major natural gas and net electricity exporter.

Traditionally, Azerbaijan has produced most of its electricity from natural gas, with 13 operating plants, while approximately 10 percent of its power comes from hydroelectric turbines. Azerbaijani officials have stated that Baku wants to source 20 percent of electricity generation from renewables in the coming years (Energycharter.org, July 28, 2016; Export.gov, July 2, 2019). Azerbaijan’s electricity consumption reached 21.67 million kilowatt hours (kWh) in 2018, compared to 20.86 million kWh in 2017 (Ceicdata.com, October 10, 2019). The growing domestic demand is the main driver behind the country’s motivation to develop alternative energy sources—while also freeing more of its locally pumped natural gas for export. The construction of a nuclear power plant will cost Azerbaijan about $10 billion. But in addition to the financial burdens, Rosatom’s growing footprint in the development of the country’s nascent nuclear program could increase Baku’s dependence on Russia. At the same time, leading countries in Europe, including Germany, Austria, Italy, Spain and others, intend to abandon nuclear energy by 2022 (Haqqin.az, October 6). This fact raises further concerns about where Baku will be able to turn to—aside from Moscow—when it comes to procuring necessary equipment to service the station over its lifespan.