Azerbaijan’s energy infrastructure is designed to do more than supply its domestic market. It connects offshore Caspian resources with customers across the Caucasus, Türkiye, and Europe. Oil terminals, gas-processing facilities, export pipelines, thermal power stations, and regional electricity links have therefore become central to the country’s economic and strategic position.
This network was originally developed around large oil and natural gas projects. It is now entering a broader phase. Azerbaijan is modernizing domestic power generation, rebuilding networks in Karabakh and East Zangazur, adding renewable capacity, and studying new electricity corridors toward Türkiye and Europe. The result is an energy system that remains strongly based on hydrocarbons but is beginning to support a more diverse export model.
Sangachal Connects Offshore Production With International Markets
The Sangachal Terminal, located south of Baku, is the central junction in Azerbaijan’s oil and gas infrastructure. It receives production from offshore fields in the Caspian Sea, processes oil and natural gas, stores hydrocarbons, and directs them into separate export systems. Its working oil storage capacity is approximately 3.2 million barrels.
Crude oil and condensate can leave the terminal through the Baku–Tbilisi–Ceyhan pipeline. BTC runs through Azerbaijan and Georgia before reaching the Turkish Mediterranean port of Ceyhan. The 1,768-kilometre pipeline has a throughput capacity of approximately 1.2 million barrels per day, giving Azerbaijan a direct export route that does not depend on the Turkish Straits or Russian pipeline networks.
Azerbaijan also retains the Western Route Export Pipeline toward Georgia’s Black Sea coast. Although smaller than BTC, it provides another route for moving crude out of the Caspian region. This combination gives producers more than one export option while strengthening Azerbaijan’s role as a transit country for some volumes originating elsewhere in the Caspian basin.
Natural gas follows a different chain. Gas from the Shah Deniz field reaches Sangachal before entering the South Caucasus Pipeline, which crosses Azerbaijan and Georgia to the Türkiye border. From there, the Trans-Anatolian Natural Gas Pipeline carries the gas across Türkiye, while the Trans Adriatic Pipeline continues through Greece, Albania, and the Adriatic Sea to Italy.
Together, these assets form the Southern Gas Corridor, a system stretching about 3,500 kilometres across seven countries. The corridor provides European markets with access to Caspian gas and gives Azerbaijan a long-distance export system that has become increasingly important as European countries diversify their suppliers. TAP passed 50 billion cubic metres of cumulative deliveries to Europe in 2025, and its first expansion level added approximately 1.2 billion cubic metres of annual capacity in 2026.
Gas-Fired Power Stations Anchor the Domestic Electricity System
Azerbaijan’s domestic electricity system is much smaller than its oil and gas export network, but it benefits from access to locally produced natural gas. The country had approximately 9,973 MW of installed generating capacity in early 2026. Thermal power stations represented about 7,903 MW, compared with roughly 1,444 MW of hydropower, 304 MW of wind, 278 MW of solar, and smaller amounts of waste-based and hybrid capacity.
The structure of actual generation remains even more concentrated. Azerbaijan produced about 28.7 billion kWh of electricity in 2025, of which thermal power stations supplied approximately 24.8 billion kWh. Hydropower generated around 2.8 billion kWh, while wind and solar together produced about 770 million kWh.
Gas-fired plants allow Azerbaijan to maintain a high level of electricity self-sufficiency. They also create a direct connection between domestic efficiency and export revenue. Every unit of gas saved through newer power stations, renewable generation, or reduced network losses can potentially be redirected toward industrial use or international sales.
The largest recent addition is the 1,880 MW 8 November Power Station, commissioned in June 2025. Its scale significantly increased the country’s generating reserve and replaced part of the role previously carried by older thermal units. Other important facilities include the 2,400 MW Azerbaijan Thermal Power Plant, the 780 MW Janub plant, the 525 MW Sumgayit plant, and the Gobu Energy Hub, which combines a major substation with a 385 MW power station.
Electricity Links Extend in Every Direction
Azerbaijan’s power system is connected with Georgia, Russia, Iran, and Türkiye. These links support exports, emergency exchanges, seasonal balancing, and electricity supply to the Nakhchivan Autonomous Republic.
Georgia provides the most important route toward Türkiye and wider regional electricity markets. The 500 kV Samukh–Gardabani transmission line has a transfer capacity of approximately 650 MW, while an additional 330 kV connection also links the two systems. Azerbaijan exported about 1.15 billion kWh of electricity in 2025 and imported roughly 177 million kWh, confirming its position as a net exporter.
Connections toward Russia include 330 kV and 110 kV lines with an estimated transfer capacity of around 350 MW. Five operational lines connect Azerbaijan with Iran, providing a combined exchange capacity of approximately 600 MW. Nakhchivan is connected directly with Türkiye through two 154 kV lines and a smaller 34.5 kV link.
These interconnections give Azerbaijan several regional options, but they do not yet create a single large-capacity route for exporting renewable electricity directly to European markets. Building that type of corridor would require new high-voltage lines, converter stations, submarine cables, and closer technical coordination with neighboring transmission operators.
Karabakh and East Zangazur Become a New Grid-Building Zone
One of Azerbaijan’s most distinctive infrastructure programs is taking place in Karabakh and East Zangazur. Since 2020, the government has rebuilt or newly constructed power stations, substations, control centers, and transmission lines across the area.
More than 1,000 kilometres of high-voltage lines were built between 2020 and 2025. Twelve new 110 kV substations were connected through a ring-shaped network, reducing dependence on a single supply route. This system was linked with a 330 kV ring through the Jabrayil Energy Hub, while major substations at Imishli, Aghjabadi, and Ganja were expanded or reconstructed.
The generation program has focused heavily on small hydropower. By early 2026, 38 plants with a combined capacity of approximately 307 MW had been commissioned across the reconstructed territories. Their output is integrated into the wider national grid rather than operating as isolated local systems.
The infrastructure also supports new settlements, transport routes, public facilities, agriculture, and industrial zones. Digital control centers and SCADA systems are being introduced to manage the network remotely. This makes the region a test area for a more automated form of electricity distribution than exists in some older parts of the national system.
Renewable Projects Require a New Transmission Strategy
Azerbaijan’s first large privately financed renewable project, the 230 MW Garadagh Solar Power Plant, began operating in 2023. Larger projects are now under development, including planned Masdar facilities with 445 MW of solar capacity in Bilasuvar, 315 MW of solar capacity in Neftchala, and 240 MW of wind capacity in Absheron and Garadagh.
This expansion will require transmission infrastructure that was not originally designed around variable renewable generation. Solar projects are concentrated in areas where electricity demand may be limited, while Azerbaijan’s strongest offshore wind potential lies in the Caspian Sea. New substations and long-distance transmission lines will be needed to move this power toward Baku, industrial customers, or export routes.
The proposed Caspian–Black Sea–European Green Energy Corridor could eventually connect Azerbaijan with Georgia, Romania, and Hungary. Bulgaria has also expressed interest in joining the initiative. The project is being studied alongside a proposed Black Sea submarine electricity cable and has entered the assessment process for the European transmission network development plan.
A separate corridor is being examined between Central Asia and Azerbaijan. This could allow renewable electricity generated in Kazakhstan and Uzbekistan to cross the Caspian Sea before continuing west. Both concepts remain development projects rather than operating export systems, but they show how Azerbaijan is attempting to use its existing position as a hydrocarbon corridor to enter the electricity trade.
Azerbaijan’s Next Infrastructure Test
Azerbaijan already possesses one of the most complete hydrocarbon export systems in the wider Caspian region. Its next task is different: integrating new renewable generation, improving domestic efficiency, maintaining aging assets, and building electricity routes large enough to support exports.
Oil and gas pipelines will remain the most commercially important infrastructure for the foreseeable future. However, the country’s longer-term position will depend on whether planned green corridors move beyond feasibility studies and attract sufficient financing. Azerbaijan has already shown that geography can be converted into energy influence. The next stage will determine whether that model can extend from pipelines to high-voltage electricity networks.
