In-Depth Review of the Energy Efficiency Policy in Azerbaijan |Ministry of Energy of Azerbaijan

Energy efficiency policy of the Republic of Azerbaijan

The energy efficiency policy of our country started to be implemented in 1996 with the adoption of the Law of the Republic of Azerbaijan on the Use of Energy Resources. In the development concept Azerbaijan 2020: Look into the Future, the formation of a competitive and export-oriented economy based on energy efficiency is defined as a priority. Energy efficiency issues are also reflected in the Strategic Roadmap for the Development of Public Utilities.

In accordance with the decree of the president of the Republic of Azerbaijan dated 17 November 1996 No. 512 and the Regulations of the Ministry, the state policy in the field of energy efficiency is carried out by the Ministry of Energy.

Efficiency in production and consumption

In parallel, important measures are being taken in both the production and consumption sectors to ensure energy efficiency.

Examples of measures implemented in the production sector include reconstruction works in the oil refining industry, the construction of new power plants that meet modern standards, modernization of existing plants, reduction of losses in the energy system, and bringing the specific consumption of power stations in line with contemporary norms.

An important part of the measures taken in the consumer sector is the expansion of propaganda in order to raise the awareness of population and attract consumers to energy efficiency measures. The use of devices and equipment that effectively uses energy resources, compliance with energy efficiency norms in construction and repair activities, expansion of the application of modern standards, compliance with the norms and rules of effectiveness constitute the main part of ensuring efficiency in consumption.

Relations arising in the areas of energy production, storage, transmission, transportation, distribution, sale, and consumption are regulated by the Law of the Republic of Azerbaijan No. 359-VIQ on the Efficient Use of Energy Resources and Energy Efficiency, dated July 9, 2021.

In connection with the implementation of this law, a number of regulatory legal acts have been prepared, and the government has approved acts covering issues such as energy audits, the application of the ISO 50001 energy management system standard, and the labeling of products related to energy consumption, among others.

Energy Efficiency Among National Priorities

In the document Azerbaijan 2030: National Priorities for Socio-Economic Development, one of the five national priorities of the country is defined as a Clean Environment and Green Growth Country. Within this priority, increasing energy efficiency, expanding the use of renewable energy, and promoting environmentally friendly transport are envisaged.

According to the Socio-Economic Development Strategy of the Republic of Azerbaijan for 2022–2026, the Ministry of Energy has been tasked with implementing the following measures under the activity area of ensuring energy efficiency:

1. Ensuring energy efficiency in various sectors of the economy and in households;

2. Ensuring energy efficiency in energy production and supply (transportation, transmission, distribution);

3. Preparing and implementing the National Program for the renovation of individual (residential, commercial, office) and public buildings;

4. Developing normative and technical acts on energy efficiency, and introducing monitoring and reporting systems.

Green Energy Zone and the Great Return

Among the objectives of the First State Program on the Great Return to the Liberated Territories of the Republic of Azerbaijan are the efficient and effective use of natural resources, and the promotion of concepts such as smart city, smart village, and green energy zone.

The Action Plan for the Establishment of a Green Energy Zone in the Liberated Territories of the Republic of Azerbaijan for 2022–2026 envisions the following measures to ensure energy efficiency and apply green technologies:

- Defining energy efficiency requirements in construction;

- Preparing proposals to ensure energy efficiency in the selection of energy-consuming and energy-influencing devices, equipment, and materials;

- Promoting measures to ensure energy efficiency across various sectors of the economy;

- Establishing requirements for the installation of rooftop solar energy systems;

- Setting requirements for the application of energy-efficient green technologies in street and road lighting;

- Defining requirements for the use of energy-efficient green technologies in construction facilities;

- Implementing pilot projects for the application of green technologies;

- Establishing a Green Energy Zone Demonstration Pavilion;

- Supporting the installation of electric vehicle charging stations.

Legal regulation of energy efficiency

The existence of a legislative framework, programs and targets, standards and norms, the application of modern management principles, and incentive mechanisms are considered key factors in ensuring energy efficiency.

For this purpose, the Ministry of Energy has primarily implemented measures aimed at forming the legislative base. In 2016, with the support of the Energy Charter under the EU4Energy Programme financed by the European Union, a draft law on energy efficiency was prepared. Subsequently, the Law of the Republic of Azerbaijan No. 359-VIQ on the Efficient Use of Energy Resources and Energy Efficiency was approved on July 9, 2021, and came into force on 1 July 2022.

Based on the instructions outlined in the Order No. 529s of the Cabinet of Ministers of the Republic of Azerbaijan dated 31 August 2021, issued to ensure the implementation of the Decree of the President of the Republic of Azerbaijan No. 1433 dated 20 August 2021, on the Implementation of the Law, a number of regulatory acts (on energy audit, energy efficiency services, energy management systems, building certification, labeling, appointment of energy managers, etc.) have been developed.

1. The form of qualification certificate for the implementation of the energy audit, the procedure for its issuance, suspension and cancellation of its validity period, as well as the procedure for maintaining the register of energy auditors and organizing energy audit and monitoring their activities

2. Conducting an energy audit, as well as submitting a report on the results of an energy audit

3. Criterias for determining economic entities and non-residential buildings subject to mandatory energy audit

4. Requirements for the Energy Manager, as well as the procedure for their certification

5. Requirements for the energy management system

6. Exemplary form and terms of the energy efficiency agreement, as well as the procedure for the implementation of energy efficiency services

7. Rules for labeling products related to energy consumption

8. Environmental design requirements for products that consume energy or affect energy consumption

9. The procedure for the implementation of state control in the field of efficient use of energy resources and energy efficiency

10. Efficient use of energy resources and energy efficiency

11. The procedure and evaluation criteria for assessing the effectiveness potential for the production of electricity and thermal energy and the processing of natural gas

12. Minimum energy efficiency norms for buildings