This year Azerbaijan will host the 29th session of the Conference of the Parties to the UN Framework Convention on Climate Change (COP29). The Azerbaijan government interviewed CEO of Neosun Energy ILYA LIKHOV for about his vision on the development of renewable energy in the country, as well as his expectations from the upcoming conference.  

  • What do you expect from the upcoming COP29?

– Events like COP29 , which draw attention to climate change, are undoubtedly very beneficial. However, I believe it makes sense to focus entrepreneurs’ attention on the benefits they can derive from transitioning to renewable energy sources or other methods to combat climate change.

The concept of “climate change” itself can sound abstract. Paradoxically, its real significance will be realized when business understands why it is beneficial for it.

If we emphasize the benefits to businesses and vividly demonstrate this to them, it will be easier for businesses to embrace new technologies. These technologies not only enable companies to save money but also genuinely make our planet cleaner and better.

In other words, it seems important to move away from abstract discussions about climate change and improving our lives and instead discuss concrete actions that are financially understandable and undoubtedly bring about positive changes. For businesses transitioning, for example, to solar energy, such a transition allows them not only to care for our climate, reduce their carbon footprint, but also to save money – this approach is more understandable for businesses. Therefore from COP29 I expect precisely this kind of dialogue – about things that are understandable for business.

  • What further steps should be taken to accelerate the adoption of clean hydrogen, sustainable use of biomass and renewable energy?

Creating clean hydrogen requires a large amount of cheap energy. Currently, solar or wind power are the best options for obtaining cheap energy.

I believe attention should be drawn to this issue by investors willing to invest in such projects, including in regions where it is inexpensive. For example, in the United Arab Emirates or Mexico, where there are plenty of sunny days and where low-cost energy per kWh can be obtained for electrolysis.

  • What contribution can Azerbaijan make to the implementation of the global “green” agenda, and how do you assess the measures being implemented in this regard to develop “green” energy in Azerbaijan?

Azerbaijan was a pioneer in transitioning to new forms of energy even 100 years ago, when the oil and gas industry was actively developing. Today, like once as a pioneer in oil production, Azerbaijan can also set an example in transitioning to renewable energy sources.

In the Caspian region, strong winds are observed, which can be utilized for wind energy. Additionally, Azerbaijan ranks among the world leaders in terms of solar insolation. All this contributes to the creation of solar and wind generation projects in the country.

Moreover, besides constructing such projects domestically, Azerbaijani entrepreneurs can also invest in the development of international companies that provide similar solutions worldwide. In this regard, Azerbaijan, with its business-oriented approach and a large number of enterprises supporting modern technologies, can demonstrate by its example how to build solar power plants not only in its own country but also beyond Azerbaijan’s borders. Independently or through direct investments in companies implementing such projects.

  • As you know, by order of Azerbaijani President Ilham Aliyev, 2024 was declared the “Green World Solidarity Year”. How do you assess Azerbaijan’s efforts to develop the alternative energy sector, as well as the country’s potential in this area?

– Today, we live in a remarkable time, perhaps occurring once in a hundred years, when we have the opportunity to create new industries. Investments in solar energy now exceed investments in the oil and gas sector.

And just as a hundred years ago, when Azerbaijan was a pioneer in oil production, today Azerbaijan can “strike oil” anew by taking leading positions in wind and solar energy. Companies that are at the forefront of renewable energy development, solar generation today, can become the companies that lead the rankings in the energy sector. I am confident that companies from Azerbaijan absolutely have such potential.

  • How do you think SMEs (small and medium enterprises) can benefit from alternative energy resources?

-For small and medium-sized businesses, solar generation is primarily an opportunity for savings, as solar generation is currently the cheapest form of energy generation.

The payback period for such projects in most regions of the world does not exceed 2 years. Especially in regions with a sunny climate, such as Azerbaijan. Small and medium-sized enterprises can directly benefit from investing in such installations by saving on electricity bills and recouping the cost of these installations in just 1.5-2.5 years. Subsequently, by the third year, they can start earning pure profit.

Thus, for small and medium-sized enterprises, this is an opportunity to further increase their profitability and investment attractiveness

Ilya Likhov & Tamilla Mammedova