The governments of Azerbaijan, Hungary, Georgia and Romania signed an agreement in Bucharest in December 2022 on a strategic partnership on developing and delivering green energy.
The project envisages installing an underwater electric cable in the Black Sea. AzVision.az asked Matyas Kohan, Hungarian political analyst, and foreign policy commentator at Mandiner, a Hungarian weekly magazine, to comment on the prospects of the project. The expert says this ambitious project will facilitate transmitting electricity from renewable sources to the EU through Hungary and Romania and enhance supply security.
‘The EU is looking for alternative energy routes. This project will assist to solve the issue of ensuring the stability of the energy supply to Europe. Green energy is gaining popularity both in the West and the East. Renewable energy sources are increasing in share, replacing traditional ways of oil, gas, and coal. A number of countries are planning to completely forego fossil fuels and switch to a no-carbon supply by 2030-2050.
The European Union started transitioning to alternative energy in the 2010s. The number of coal-fired thermal power plants is gradually decreasing, and countries are growing their investments in green energy. Germany, the driver of the EU economy, intends to stop operating NPPs altogether,’ Kohan explains.
The analyst notes that there is great potential for producing renewable electricity, but the quantity of such energy depends on the weather: ‘Europe’s biggest task is to solve the issue of dynamic regulation of electricity production. The classical solution to this problem is dynamically controlled and coal-fired thermal power plants, except their share in the EU, is plummeting due to vigorous ‘green growth’. In the 2010s, hydropower plants played a key role in regulating electricity production in Europe. If the European economy wishes to remain competitive, they require dynamically managed energy sources despite all. These circumstances condition the profitability of the high-voltage cable from Azerbaijan to Hungary.’
The expert says both Turkmenistan and Azerbaijan have great potential to produce energy from their natural gas or wind power plants on the Caspian shores, which lays the foundation for mutually beneficial projects on supplying electricity from Azerbaijan to the EU. This energy will turn out to be cheaper than the cost of electricity produced using imported natural gas in Europe. The amount of electricity imported from Azerbaijan could be dynamically adjusted based on the demand in Europe.
Kohan notes that Hungary has always been in favour of developing economic relations between the EU and other states: ‘Hungary had established a close rapport with Azerbaijan long before the EU understood the prospects of these relations. Such support from Azerbaijan will allow the country to reduce its dependence on Russian gas. Hungary has built ties not only in Asia Minor but also in the Western Balkans. The close relations with Serbia and Turkey were the foundation of Hungary’s stable gas supply during the war, which ensures an uninterrupted supply of Russian gas to Hungary via the TurkStream. Hungarian Prime Minister Viktor Orban sees the Balkans as the gateway of cheap energy to Europe during these difficult times when traditional energy sources are unavailable. This strategy also includes projects such as installing a high-voltage line from Azerbaijan.’