Azeri, Iranian Ministers Make Public Plans to Create Unified Power Grid

Jul 1, 2008 - BBC Monitoring Central Asia

Azerbaijan, Turkey, Georgia, Iran and Russia are in talks to join their power grids, the Azerbaijani energy minister announced after meeting his Iranian counterpart, Ekho reports. Armenia, which has been technically at war with Azerbaijan for about 20 years over Nagornyy Karabakh, will not be allowed to join the project. The project that involves the five states will further improve electricity supplies and may open the way for the sale of electricity to Europe. Once this project is completed, the Azerbaijani exclave of Naxcivan will also join the unified system, which will help meet its acute need for electricity in winter. The following is the text of R. Orucov's report in Azerbaijani newspaper Ekho on 19 June headlined "Armenia will find itself in the centre of a power circuit but out of it" and subheaded "Otherwise, Azerbaijan will refuse to participate in the project"; subheadings have been inserted editorially:

Azerbaijan, Turkey, Georgia, Iran and Russia are in talks to unify their power grids. Turkmenistan is also showing interest in this project, Azerbaijani Industry and Energy Minister Natiq Aliyev has told reporters after a meeting with Iranian Energy Minister Parviz Fattah. He believes that Azerbaijan and Iran have already started negotiations on establishing regional ring power circuit.

"We, together with Iran, are establishing a new conception which envisages the presence of the ring power circuit inclusive Russia, Azerbaijan, including the Naxcivan Autonomous Republic, Iran, Turkey and Georgia. I believe that this project is very important for our countries since the establishment of such a power circuit will give us a possibility of supplying electricity to Europe," Natiq Aliyev has said.

The minister said that Turkmenistan also wants to join this system enabling conditions for electricity export to Europe. "We have had a chance to discuss mutual relations. The target is to unify the power grids of Azerbaijan and Iran and set up a ring of power circuit. Russia, Iran, Turkey, Georgia and Azerbaijan intend to establish such a circular.

"This is extremely important for our country. On the one hand, we get an access to Turkey from Azerbaijan via Iran, at the same time, we want to join Naxcivan the unified power grid. If this idea is realized, we shall also be able to supply electricity to Europe. Turkmenistan also intends to join the project. The establishment of a regional unified and powerful energy system would be advantageous to all players in this project," N. Aliyev said.

Iran and Azerbaijan set to expand energy cooperation

In his turn, Parviz Fattah said that the positions of Azerbaijan and Iran to expand energy cooperation coincide. "Azerbaijan and Iran have always cooperated in the electricity sector. In the first six months of this year, power exchange was carried out between the two countries and we shall try that this activity be continued in the second half of the year.

"The Iranian side has satisfied demands of Naxcivan's energy needs for many years and is ready to further supply the autonomous republic both with electricity and natural gas. We are in preparations for the July commissioning of the second Imisli- Parsabad power line, which will enable us to increase the level of electricity exchange between the two countries from 250 MW to 700 MW", Fattah said.

Once this joint project is completed, we shall be able to supply Naxcivan Autonomous Republic with 150 MW electricity and as a whole, the Azerbaijani power grid with 400 MW in winter.

The project is being realized jointly with the Iranian Sunir company and incorporates the construction of 330 kilowatt power line Ali Bayramli Imisli power plant, the second line of Imisli- Parsabad, 220 kW power line of Ali BayramliSalyan power plant, Salyan-Masalli, Masalli-Astara as well as the Salyan substation and the expansion of another four substations. The overall extension of the power line is 350 km. This project is also being implemented within the framework of synchronizing the power grids of Russia, Azerbaijan and Iran.

Working group to further study widening cooperation

The Iranian minister also said that at the meeting with Natiq Aliyev, an agreement was reached to set up a working group at the level of deputy ministers of energy for issues of establishing an energy corridor between Azerbaijan, Iran and Russia, transit of energy from Azerbaijan to Turkey through Iran and mutual investments in the power sectors of Azerbaijan and Iran.

Fattah also expressed his hope that relevant documents on achieved agreements would soon be signed.

In October 2008, a protocol will be signed between Azerbaijan, Iran and Russia on the project of unifying power grids, for his part, Natiq Aliyev added. In his words, the draft protocol was developed by Russia and could be signed in two-three months.

"We shall again consider this document after which a signing ceremony will be held. We have already received an invitation from Russia for a repeat meeting and signing of the document." Natiq Aliyev also noted that Azerbaijan and Iran see eye to eye with Iran in this issue.

Moreover, one should underline that the document on the construction of 500-KW power line was signed in the course of a meeting between Presidents of Azerbaijan and Georgia Ilham Aliyev and Mikheil Saakashvili as well as Turkish Prime Minister Recep Tayyip Erdogan in Tbilisi on 7 February 2007.

Turkmenistan joining projects

The project envisages exchange of electricity between the countries. Earlier Azerbaijan and Turkmenistan discussed the issue of laying a cable along the seabed of the Caspian Sea for the mutual exchange of electricity.

Thus, the expected establishment of such a system will enable not only carry out electricity exchange between the six countries but also export electricity to Europe. Moreover, Azerbaijan will get an access to the Turkish market.

It is extremely remarkable that Armenia was not mentioned during all the previous relevant negotiations, although it is geographically between all future lines of this project.

It turned out that they are not planning to invite Armenia to this project, otherwise, one of the key players Azerbaijan will automatically drop out of this and is not ruled out that Turkey will also act likewise.

As Alakbar Baxsaliyev, the spokesman for Azarenerji power company, told Ekho yesterday, "the project of ring power exchange might be implemented without problems, since, for example, we have operational lines along which electricity was supplied to Georgia and Iran from Azerbaijan and the other way round.

The issue of electricity exchange was also raised at sittings of the CIS [the Commonwealth of Independent States], but Azerbaijan rejected this proposal to participate in this project along with Armenia. So it is clear that Armenia's accession to the new regional project cannot happen as far as we are part to it".

For his part, the head of the centre for economic researches, Fuad Rasulov, said that no doubt Armenia would be glad to be involved in the power exchange in the pipeline. "This country cannot secure own needs for electricity fully despite the existence of the Metsamor nuclear power station. Both Iran and Russia supply extra electricity to Armenia. Remember the period of the [Soviet] Union when all the republics were interconnected within the single power system.

So, in principle, this is fully normal and justified when neighbouring countries unify their power grids. This enables to carry our cross-flow of superfluous electricity where there it is not enough. Following this, mutual financial settlements of accounts are made both in monetary or commodity forms, depending on how the sides agree. But Armenia is not attending this international project in the pipeline. At the same time, we have our own mutual contracts with Iran and Russia.

On many issues, starting from food aid programmes to energy resources, Armenia has always received subsides from various countries, first of all, certainly from the two above-said states. This is their mutual affairs. However, in this project, Armenia will not be involved along with us. If it was said somewhere officially that Armenia would somehow be involved in it, Azerbaijan would not in no way joined it."

Originally published by Ekho, Baku, in Russian 19 Jun 08 pp 1,3.