The first initiatives aiming to provide alternative energies to the gas and oil-producing region between the Caucasus and the Caspian Sea are still in the beginning stages. The Azerbaijani government has launched new initiatives for the use of alternative energy sources. These alternative energy sources can be funded with profits generated by the exploitation and sale of the country's oil reserves.
According to estimations, Azerbaijan has a great potential to raise effectiveness of use of the energy resources of the country by involving the renewable energy sources. Legislative base, governmental support and international cooperation intended for development of alternative energy sector allow carrying out the actions necessary to study and apply production capacities of wind, solar, biomass and geothermic energy.
There are opportunities to develop diverse types of renewable energy sources:
Wind power
For its cost, ecological cleanness and inexhaustibility, the wind power is the most effective among the other alternative power sources, such as sun, geothermal and biomass power. The practice shows that application of the wind power installations in some regions of Azerbaijan has great prospect. According to estimations, the Republic of Azerbaijan has the wind power resource with annual capacity of 800 MWt for its geographical conditions and economic infrastructure. The best windy conditions in Azerbaijan are in Absheron peninsular, the Caspian Sea coastal zone and islands in the north-west part of the basin. Average annual speed of wind in Absheron peninsular ranges 5.8-8.0 m/sec. The number of windy days in the peninsular is 245-280 days a year. The import of Wind electric installations is exempted from customs fees and taxes.
Solar power
Azerbaijan is rich of solar power resources. The sunshine period in Azerbaijan is 2200-2400 hours. The amount of solar energy falling on 1 sq. m in a year is 1500-2000 KWt in the USA, 800-1600 KWt in Russia, 1200-1400 KWt in France, 1800-2000 KWt in China and 1500-2000 KWt in Azerbaijan. As seen, the amount of sun beams falling in the territory of Azerbaijan is more in comparison with other countries and this may be evaluated as one of the effectiveness criteria of involvement of investments in application of use of solar energy.
Small hydropower stations
There are about 1100-1200 rivers with different length in Azerbaijan. Hydro energy potential of the rivers in Azerbaijan has been assessed to be 40 billion KWt, and its technically possible and cost effective potential 16 billion KWT, of which 5 billion KWt belongs to small hydro plant. The legislation of Azerbaijan determines small hydro power plants as those with the capacity of 50 KWt - 10000 KWt, locating in the stable water flow and providing immediate return of the used water to its course.
Thermal waters
The territory of the Republic of Azerbaijan is rich of thermal waters. These cover a large area including the Great and Small Caucasus mountains, Absheron peninsular, Talish Mountain - slope zone, Kur lowland and Caspian-Guba area. Total resources of the thermal waters have been determined over 400 million cubic meter/day of between 35-100ºC in the Republic and their use directions and technical-economic indicators have been studied.
Biomass power
Fast development of the industrial, agricultural and social service fields in the Republic opens new opportunities for energy production by using biomass. More than 2 million tons of solid domestic and production wastes are emitted to the polygon of neutralization of the wastes in Azerbaijan per year.