Can a New Power Link Boost the EU’s Energy Independence?

Estimated reading time: 14 minutes

• Azerbaijan’s Pivot From Oil to Solar and Wind
• Azerbaijan’s Energy Transition
• Black Sea Power Link
• Undersea Cable Could Boost E.U. Energy Security
• About The Author

Last November, when Azerbaijan hosted COP29, the United Nations’ annual climate summit, it was a sort of coming-out party for the country. Organizers wanted to showcase how their small nation of nearly 11 million, on the western shore of the Caspian Sea, had evolved over its three decades of independence and was ready to play a role in the world’s energy transition.

Held in Baku’s Olympic Stadium, COP29’s headline talks were largely a flop. The U.N. failed to convince developed countries to commit to giving developing ones over US$1 trillion annually. But in a side room away from media attention, a different climate discussion concluded more auspiciously.

There, delegations from Azerbaijan, Georgia, Hungary, and Romania finalized an ambitious plan: to generate up to 6 gigawatts of clean energy in the Caucasus region, run the electricity through a cable along the bottom of the Black Sea, and deliver it to Europe. The countries hope to finish a first phase of the project, comprising two cables with a capacity of 1.3 GW, by 2030. That would be enough to supply over 2 million European households. This green energy corridor could help shore up energy security in the European Union, replacing the Russian natural gas that Europe used to import. It could help the E.U. meet
its increasingly strict emissions targets. And the corridor could boost economic ties between Europe and its neighbors, supporters of the plan say.

But the ambitious project faces major obstacles. The Black Sea is almost 1,200 kilometers long, and the proposed undersea power cable would need to run the length of it, making it the longest and deepest in the world. At the moment, the Caucasus nations don’t produce enough renewable electricity to export it, so they would have to build at least three times more capacity. Both of these efforts would take a massive, not-yet-secured financial investment.

What’s more, security problems in the Black Sea could endanger the cable and the specialized ships that would lay it down. Floating mines used in the ongoing Ukraine war already pose a risk to ships in those waters. And vital undersea cables elsewhere in Europe have recently been targeted, including a power line under the Baltic Sea that
was severed in December. Western government authorities deemed it an act of sabotage likely arranged by Russia, and called it a new and growing risk for undersea infrastructure.

In short, the architects of the green corridor face significant and varied obstacles. But if they succeed, it will mark a bold feat of engineering to boost clean energy and fight climate.

Azerbaijan’s Pivot From Oil to Solar and Wind

Of the six countries that make up the Caucasus region, Azerbaijan boasts the largest potential for generating exportable renewable energy for Europe, a fact that presents some measure of irony. Azerbaijan built its economy on its abundant fossil fuels. Methane naturally seeps out of the ground in some places, feeding
ever-burning fires that in ancient times stoked Zoroastrian religious beliefs and earned Azerbaijan the nickname “the land of fire.”

In 1846, Baku, the nation’s capital, was the site of the world’s first mechanically drilled oil well, and by the turn of the 20th century, the country supplied more than half of the world’s oil. After the collapse of the Soviet Union, production and export of oil and gas proved instrumental in lifting Azerbaijan out of post-Communist poverty. Fossil fuels still represent
90 percent of Azerbaijan’s exports and up to 50 percent of its GDP, according to the International Energy Agency.

Masdar’s 230-MW Garadagh plant, the first utility-scale solar farm in Azerbaijan, serves as an early sign of the country’s energy transition.Masdar

Over the past decade, though, Azerbaijan has tried to green up its energy sector. In 2016, for example, the country
set a goal of sourcing 20 percent of its energy from renewables by 2020. But it fell far short of that goal, leading observers to wonder whether the petrostate was serious or just engaging in greenwashing.

Azerbaijan’s first significant step toward its clean energy goal was
the completion, in 2023, of the Garadagh solar plant, about an hour’s drive from Baku. The plant sits in a bowl-shaped patch of dry scrubland ringed by hills, empty except for the occasional shepherd passing with his flock. The plant’s solar panels run in long rows over the gently sloped terrain. Every minute or so, the quiet is broken by a mechanical whir, as motors automatically reposition the panels to track the sun’s path across the sky.

The plant supplies up to 230 megawatts of power to Azerbaijan’s grid. Site manager
Kamil Manafov works from a control room that still smells like new building materials, where large wall-mounted screens display the plant’s minute-by-minute performance. “I grew up in the closest village to here, Gobustan,” Manafov told IEEE Spectrum during a visit in November. Now, the village draws power partially from the Garadagh plant, and university groups come to Garadagh almost every week to learn how solar plants work in practice, he says.

Azerbaijan’s Energy Transition

At his welcome-to-COP29 speech, Azerbaijani president Ilham Aliyev proclaimed that
the country would build 6 GW of renewable-energy capacity by 2030, and that it has agreements to build a total of 10 GW—far beyond the 1.7 GW the country currently generates. Some of the added electricity would be used domestically, while much would be sent abroad.

To expand its renewable energy generation, Azerbaijan is mostly banking on wind power, which won’t surprise anyone who’s spent time in Baku and felt the fierce wind that often blows through it.
A 2022 road map from the World Bank, the International Finance Corp., and Azerbaijan’s Ministry of Energy estimated that the country could realistically install 7 GW of offshore wind power in the Caspian Sea by 2040.

On shore, Azerbaijan’s first major wind-power project, a 240-MW plant in the eastern regions of Khizi and Absheron, is under construction and expected to be operational by next year. Three more solar and wind plants, totaling 1 GW, are also under development.

Much of the money and expertise for these projects comes from abroad. Masdar, a United Arab Emirates state-owned company that develops green-energy projects, secured the funding for and continues to operate the Garadagh plant. Acwa Power, an energy-development company based in Saudi Arabia, holds the same role in the Khizi–Absheron wind plant. So far, the two have announced they will invest over $6 billion total in Azerbaijan’s green-energy projects.

Masdar alone could ensure that the president’s promises are kept: The company aims to develop 10 GW of clean energy by 2030, including the projects in progress. “In this region we have lots of potential that’s untapped,” says Maryam Al Mazrouei, Masdar’s head of business development for much of the former Soviet Union, who spoke with IEEE Spectrum at the U.A.E.’s pavilion at COP29. “The resources and infrastructure are available, and there is the will to do it.”

Some of the projects represent more than just clean power. The energy giant BP and the Azerbaijani government hosted a signing ceremony at COP29 for the 240-MW Shafag solar plant, which will be built near Jabrayil, about 350 km southwest of Baku. The town was destroyed and abandoned during Azerbaijan’s recent war with the Armenia-backed breakaway region of Nagorno-Karabakh. During fighting in 2020, Azerbaijan retook the land, and in 2021 the government declared that the region would be developed as a carbon-neutral “green energy zone.”

Areas razed by war are like a “a blank white paper,” says Orkhan Huseynov, a spokesman for SOCAR, the State Oil Company of the Republic of Azerbaijan. “We can write whatever we want.” The plant’s name, Shafag, means “sunrise” in Azerbaijani—the plant will produce solar power, yes, but it’s also a new start for the region.

The Flame Towers in Baku symbolize the country’s energy resources and ancient history of fire worship. In November, Baku hosted the 29th annual United Nations Climate Change Conference. Emad Aljumah/Getty Images

The Yanar Dağ, a natural-gas fire, continuously blazes on a hillside on the Absheron Peninsula on the Caspian Sea, near Baku. It stoked fire worship in ancient times.Stephen Anthony Rohan/Getty Images

Because the Caucasus green-energy corridor promises greater grid stability by diversifying electricity sources, better trade connections, and help with the energy transition, Azerbaijan’s neighbors are vying to be included. Bulgaria wants in, as does Armenia.

Tensions between Armenia and Azerbaijan remain high, however. The E.U. would like to include Armenia in the Black Sea energy project but Azerbaijani officials have reportedly said they will admit Armenia only if it signs a peace treaty affirming the status of Nagorno-Karabakh. This would amount to Armenia accepting defeat and result in the departure of ethnic Armenians from the disputed territory.

Meanwhile, Azerbaijan and its neighbors to the east—Kazakhstan and Uzbekistan—are planning a
cross-border electricity trade that involves laying a transmission cable hundreds of kilometers across the Caspian Sea. Uzbekistan has built solar and wind plants totaling 3.5 GW and is developing 24 GW more, with plans to export much of it to Europe. This would effectively make a green-energy megagrid running all the way from the center of Asia to Europe’s Atlantic coast.

Black Sea Power Link

Even if all of this new power generation gets built, organizers of the Caucasus green-energy corridor will still have to move the electricity across a huge body of water into Europe. The
longest existing undersea power cable carries 1.4 GW across a 720-km stretch of the North Sea between England and Norway, at depths of up to 700 meters. The Black Sea power link, by contrast, would traverse over 1,100 km of water, at depths up to 2,200 meters, which would make it slightly deeper than any existing subsea electricity cable in the world.

A first phase of the Black Sea project could carry 1.3 GW, less than a quarter of the project’s aspirational 6 GW.
A feasibility study finalized at COP29 and conducted by CESI, an Italian engineering consultancy, concluded the first phase of the project was doable and would cost $3.1 to 3.7 billion. The line would run from Anaklia, Georgia, at the east end of the Black Sea, to Constanța, Romania, at the west end, and would require some new infrastructure to connect it to the existing grid there. The electricity delivered would flow into Hungary and the rest of Europe from there. A potential second phase would expand the undersea line to between 4 and 6 GW.

Laying the Black Sea line presents a formidable engineering challenge. Only two companies in the world—
Prysmian, based in Milan, and Nexans in Paris—have installed this kind of deep-sea electrical cable. They both use special ships that carry up to 13,000 tonnes of cable in segments up to 200-km long and wrapped around giant spools up to 30 meters in diameter.

The Nexans cable-laying vessel can carry up to 13,000 tonnes of cable on spool-like turntables. Nexans, based in Paris, is one of only two companies in the world that have installed deep-sea power cables.Nexans

Ship crews can lay around 10 km of cable per day; when they get to the end of a segment, workers called jointers connect one segment to the next by manually welding together each of the cables’ many layers. While telecommunications cables have been laid in
trenches 8-km deep, power cables are much thicker and heavier, so placing and even transporting them is more challenging. Only 1,200 km of this kind of cable are manufactured each year globally, and with customer demand from other projects, it will take three to four years just to produce enough for the Black Sea project.

As if all of that isn’t difficult enough, the Black Sea
is littered with floating mines placed by both Ukraine and Russia during their ongoing war. Some of the mines circulate around the sea, ending up in unpredictable places, including Romanian beaches. The mines are sparse enough that trade in the Black Sea has almost returned to prewar levels, but ships are still at risk.

Intentional sabotage of undersea cables—a new kind of threat—also hangs over the project. This past Christmas, an undersea power cable connecting Finland and Estonia was partially severed, and
Finnish investigators said the damage likely resulted from an oil tanker dragging its anchor. The E.U.’s head of foreign affairs said the ship was part of Russia’s “shadow fleet,” a group of hundreds of vessels that are officially independent but allegedly take orders from the Kremlin.

That wasn’t the only incident of sabotage. Two fiber-optic communications cables running under the Baltic Sea
were severed in November, and Western governments suggested that Moscow directed the attack. Russia allegedly has been gathering information and building such capabilities for at least a couple of years.

Energy-industry observers say they’re concerned that the Black Sea green-energy cable, which effectively sidelines Russia by providing an alternative to its natural gas, could stoke a targeted attack. If insurers are spooked by this possibility, they may refuse to cover the cable, which could scotch the project before it starts.

Undersea Cable Could Boost E.U. Energy Security

The idea for the Black Sea cable emerged about a decade ago among grid operators and consultants in the Black Sea region. It piqued interest in energy-policy circles, and in 2020, the World Bank published a study finding that the cable could be financially productive. The next year, USAID and the
United States Energy Association found that it made technical sense. But the ambitious idea didn’t garner strong political or financial support. “Usually, these projects require some political backing,” says
Agha Bayramov, an energy geopolitics researcher at the University of Groningen, in the Netherlands. “What great power will support it?”

The project inadvertently found that great power with the start of the Ukraine war. When Russia invaded in February 2022, the E.U. severely sanctioned the country, which responded by
cutting the amount of natural gas it sends to Europe by 55 percent in 2022 and by 81 percent in 2023. At the same time, the E.U. had set demanding new targets for decreasing greenhouse gas emissions. The result: Europe needed alternative sources of energy.

Azerbaijan hopes to generate gigawatts of renewable electricity and send it across the Black Sea to Europe.

The E.U. compensated by
increasing gas imports from other countries, such as Norway and the United States, and by decreasing its gas consumption overall. But over the longer term, to meet its climate goals, the continent will need access to much more clean energy, making the idea of the Black Sea cable project a lot more appealing.

In December 2022, leaders from Azerbaijan, Georgia, Hungary, and Romania signed a memorandum of understanding on developing the green corridor. At the signing ceremony, Ursula von der Leyen, the president of the European Commission,
voiced strong support for the project. An E.U. commissioner tweeted the same month that the union expected to contribute an estimated €2.3 billion ($2.5 billion) for the cable.

But that money is not yet guaranteed, and more will be needed. To that end, Georgia and Romania aim to get the cable designated a
Project of Mutual Interest, making it a priority for the E.U. and potentially unlocking billions in funding. “Psychologically it’s very, very good to get that status,” says Zviad Gachechiladze, one of the plan’s architects and a director at Georgian State Electrosystem, the country’s grid operator. Transmission lines connecting Azerbaijan to the Black Sea will run through Georgia.

Another key gatekeeper is
SOCAR, which oversees the country’s energy infrastructure and serves as a contractor for its renewable-energy projects. The company’s Baku headquarters sit in a modern, curving, 42-story tower built to withstand wind speeds up to 190 kilometers per hour.

At the end of 2023, SOCAR created a subsidiary, SOCAR Green, to implement the country’s renewable-energy plans. But clearly, Azerbaijan’s big green-energy goals remain subordinate to fossil fuels for the foreseeable future.
Spectrum met with SOCAR spokesman Orkhan Huseynov in the SOCAR Tower, its steel exterior gleaming on a cool, yet not uncomfortably windy day. “We do feel climate change. The level of the Caspian is falling. The rivers have less water,” says Huseynov. But “making the change to green energy in 30 years is not easy,” he says. “Oil and gas are the cornerstone of our economy. Every family has someone working in this industry. We’re trying to keep the balance.”

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