This article was originally published on IMPACT magazine (#43, 2023), issued by American Chamber of Commerce in Azerbaijan. 

As the world faces the urgent need to address energy trilemma, energy companies find themselves at a crossroads – balancing the increasing demand for energy, mitigating the environmental impact, and ensuring affordability and accessibility. Amidst this complex challenge, renewable energy sources have emerged to offer viable solutions effectively manage and balance the trilemma and pave the way towards a sustainable future.

As more and more players of the energy ecosystem strive to transition towards a greener and more resilient future, this complex dilemma has become a central focus, demanding innovative solutions and collaborative efforts from governments, industries, and societies.

Renewable energy, developed from sources such as solar, wind, and geothermal power, possesses unique characteristics that align with the objectives of the energy trilemma. It has been systematically proved that transition to renewable energy choices can effectively address each dimension of the trilemma and lay the groundwork for a sustainable and prosperous energy sector.

Efficient transition

While the transition to clean energy sources is crucial for a sustainable future, it is important to acknowledge the ongoing need for fossil fuels during this transitional phase. Fossil fuels have long been the backbone of our global energy infrastructure, providing reliable and affordable power to support economic growth and meet the energy demands of our society.

Fossil fuels continue to play a vital role in ensuring energy security and stability, and offer a consistent and reliable energy supply. This stability is especially critical in times of high energy demand and geopolitical tensions and conflicts (e.g. conflicts in Syria, Ukraine and their tough consequences) or when renewable energy sources may be insufficient, such as during extreme weather events or in regions with limited renewable resources.

Moreover, fossil fuels possess the advantage of established infrastructure and distribution networks. Decades of investment and development in the domain have resulted in a robust system that efficiently extracts, transports, and utilizes fossil fuels. Shifting entirely to clean energy sources requires significant investment in new infrastructure, which takes time and resources. During the transition period, relying on fossil fuels ensures uninterrupted energy supply and avoids potential disruptions that may occur during the transition.

Environmental sustainability

However, it is important to note that the need for fossil fuels during the transition to clean energy should not undermine the urgent necessity to reduce our reliance on them. One of the most pressing challenges of our time is mitigating the impact of climate change and preserving the world’s ecosystems. Renewable energy sources offer a compelling solution by emitting little to no greenhouse gases during operation. Gradually, shifting away from fossil fuels and embracing renewables reduces carbon emissions, curbing climate change and contributing to a cleaner environment.

Moreover, the deployment of renewable energy technologies facilitates the transition towards a circular economy, minimizing waste and promoting resource efficiency. By harnessing the power of the sun, wind, and water, we can break free from the destructive cycle of extraction, combustion, and pollution that characterizes traditional energy sources. Unquestionably, to ensure more balanced approach, collaboration of governments, businesses, and research institutions to allocate resources to advance technologies like solar, wind, energy storage, and grid integration solutions is key. Investments to research and development can lead to cost reductions, improved efficiency, and new breakthroughs in clean energy.

Ensuring energy security

Renewable energy plays a vital role in enhancing energy security by diversifying the energy mix. It is no secret that, unlike fossil fuels, which are subject to price fluctuations and geopolitical tensions, renewable sources are abundant, widely distributed, and domestically available in many regions. By reducing reliance on finite and imported resources, countries can strengthen their energy security, achieving a more stable and self-sufficient energy supply. Furthermore, the modular and decentralized nature of renewable energy systems empowers communities to generate their own electricity, fostering energy independence and resilience. From solar panels on rooftops to small-scale wind turbines, individuals and businesses can contribute to a more robust and secure energy network, reducing vulnerability to disruptions and power outages.

Economic affordability

One common misconception about renewable energy is its perceived high cost. However, ongoing technological advancements and economies of scale have significantly reduced the cost of renewable energy generation. Solar and wind power, in particular, have witnessed substantial price declines in recent years, making them increasingly competitive with conventional energy sources.

Moreover, governments have been committed to create a conducive environment for renewable energy. In Azerbaijan, for instance, over the last few years, the government has implemented supportive policies and incentives to promote renewable energy development, including solar power across the country. These initiatives aim to encourage investment and facilitate the growth of solar energy projects. Supportive policies, such as feed-in tariffs and tax incentives, create a conducive environment for solar energy production in the region.

As a result, both local and foreign energy companies have started to display more and more interest in investing in renewable energy development. The recent MoUs and cooperation agreement between the government of Azerbaijan and energy companies like Nobel Energy, TotalEnergies, and China International Energy Sources Group are just few examples.

This follows the government’s systematic efforts in promoting clean energy and reducing carbon emissions by establishing ‘green energy zones’ across the country, and signifies an important milestone in advancing sustainable energy solutions and fostering environmental stewardship.

Fostering social equity

Investments in renewable energy create jobs and drive economic growth, offering opportunities for innovation, research, and manufacturing. By embracing renewable energy choices, businesses, jointly with the governments, can stimulate local economies, reduce energy poverty, and foster social equity. Moreover, the decentralized nature of renewable energy systems empowers communities and individuals to become active participants in the energy sector, generating income and reducing energy expenses.

While renewable energy presents a set of advantages, it is essential to acknowledge the challenges that must be overcome to fully harness its potential. Issues such as intermittency, grid integration, and energy storage require innovative solutions and robust infrastructure investments. Policy support, market incentives, and international cooperation are crucial to accelerating the adoption of renewable energy technologies and addressing these challenges effectively.

All in all, while fossil fuels have served as the primary energy source for many decades, the urgent need to address climate change and transition to cleaner energy cannot be ignored. Acknowledging the continued need for fossil fuels during this transitional phase is essential, considering their role in ensuring energy security, stability, and affordability. However, it is important that we prioritize the rapid development and adoption of renewable energy sources to minimize the environmental impact of fossil fuels and pave the way for a sustainable future.

This article was originally published on IMPACT magazine (#39, 2022), issued by American Chamber of Commerce in Azerbaijan. 

The world has entered into a new phase that is going to reshape the way of doing business. The reality is working safely and efficiently is not just enough – it needs to be done sustainably. Businesses need to make sure that while pursuing their objectives they don’t compromise the opportunities of the future generations to follow their goals. In other words, while doing business, on top of economic interests, businesses should also meet environmental and social requirements.

Given the importance of sustainability for the world, all major players, governments and businesses have been increasingly joining the forces to tackle one of the biggest threats the world has ever faced – climate change. 

While this huge threat to the world is chiefly caused by the excessive amounts of greenhouse gases into the atmosphere, another big reason is overexploitation of resources.  

The challenge here is that the world needs more energy to support continued global economic growth and increasing prosperity, while considerably reduce carbon emissions. In order to address this dual challenge, energy companies, as well as many other big businesses are transforming.

Sustainability-focused business

Nobel Energy wants to help businesses turn their ambition into action, as well as be part of the solutions. For that reason, the company is transforming to help all its stakeholders get affordable and reliable energy, while reducing environmental impacts.

Nobel Energy is laying out a new strategy that will support the business transform from an Oil and Gas Services company to an Integrated Energy Production, Development and Services company, concentrated on delivering safe, agile, efficient and sustainable solutions for customers. 

Nobel Energy wants to be a catalyst for meeting the changing energy needs of the world and customers by increasing its focus on people, technology, and innovation. The good news is that the company has many years of multi-segment experience and the right ingredients – visionary approach, proven expertise, and integrated solutions – to meet the needs of all stakeholders. 

In order to support the company’s enhanced approach to sustainability, the new strategy is built around three key areas of activity: add sustainable energy line, become diversified, and keep innovating. 

Nobel Energy is confident that in addition to reducing the climate change risks, renewable energy sources will offer some tangible economic benefits too, by providing energy security (through reliable power supplies and fuel diversification) and economic development (via injecting new capital investments and creating new jobs).

As part of its new sustainable energy line, Nobel Energy is set to develop renewables business to help its customers and the world achieve safe and cleaner energy solutions.

Nobel Energy is planning to further diversify its business by setting up new services and products in targeted markets. Providing advisory services in the energy transition context will be among them. 

It is expected that the diversification will generate values both for customers and societies, as well as expand Nobel Energy’s business horizons to scale revenues.  

Nobel Energy is well aware that to achieve substantial results on sustainability we are highly dependent on innovative digital and computer technologies. The company is also assured that technology alone will not be enough to achieve the desired outcomes and it is therefore will be placing even greater importance on people development – the driving force behind all possible technological breakthroughs.   

To support these activities, Nobel Energy will count on two of its key enablers – integrated systems and strategic partnerships. 

For many years, the company’s established integrated services model has helped Nobel Energy to optimise end-to-end service delivery, and provide effective and efficient solutions to its customers. To achieve its transformation objectives and deliver overarching and agile solutions for customers, Nobel Energy will build on this successful business model and pull together all the Group resources and expertise.

Needless to say that partnering with technology companies is highly beneficial in many ways, offering more cost effective solutions and helping further develop organization’s technical expertise on top of other proven benefits. To this end, Nobel Energy will partner with tech giants who can help the company drive progress, provide skills it may not have to deliver agile and sustainable results.

Plans vs actions

Nobel Energy is on its way to building innovative and sustainable energy business over the next 10 years with a goal to achieve 5GW of installed mix of thermal and renewable energy generation capacities. The company aims to put these into action through investments, partnerships and Build-Own-Operate / Build-Operate-Transfer models starting geographically in Azerbaijan and expanding to Eastern Europe and Americas regions.

Nobel Energy has started stepping into the renewable and alternative energy pathway by looking at its own group-wide operations through increase of the sustainability in its own business operations and improving the business model through an innovative approach. The next step is to work across its Group of companies by developing and where possible introduce electrification, waste reduction and decarbonisation initiatives. 

These various scale projects will demonstrate the ability of Nobel Energy to exercise and demonstrate what can be done with the built-in strengths.

Nobel Energy also committed to several initiatives announced by the government of Azerbaijan, such as participating in the auction for wind power plant installation in the liberated Kalbajar and Lachin regions announced by the Ministry of Energy and a gas powered thermal power station under build-own-transfer model. The company is ready to use its competitive advantages but importantly has established necessary partnerships to bring the knowhow and technical capability for these projects. 

At the same time, there is a conceptual study under the development for a Renewable Energy Hub in partnership with foreign co-investors. This is expected to service industrial customers in the Absheron region resulting in the increase of sustainability of operations and supporting our country in achieving the Paris Climate Agreement and COP26 goals. This major study will be completed by the end of 2023 and will be a major contributor driving Azerbaijan’s energy transition.

Nobel Energy’s network allows the company to build a robust energy projects’ pipeline that goes beyond borders and gain access to the markets of Georgia, Ukraine, UK, Kazakhstan, USA, and Turkey where we have had presence, and other geographies through the strong relationships with Nobel Energy’s local and globally operating business partners.

Currently there are up to 1GW of project capacities under review for feasibility and investment with a goal to reach and wherever possible exceed targets.

All in all, starting 2021, Nobel Energy has been actively seeking and developing partnerships inside and outside of the country, jointly with the governments and private corporations, to unlock their potential for energy transition and will continue to do so.'