Perspectives for Electricity Generation from Renewable Energy Sources in the South Caucasus Region

Abstract

Renewable energy sources are sustainable, domestic and allow for diversification of resources. Given their availability and economic feasibility, they could contribute toward a reliable electricity supply for the South Caucasus region. Based on annual generation time series derived from weather data for the period 2000-2012, we analyse the availability and economic feasibility of wind power and solar photovoltaics in Armenia, Azerbaijan and Georgia. Our analysis demonstrates that electricity generation from wind and solar power is currently not economically feasible in any of the three countries. However, we demonstrate that the attractiveness of renewable energy sources improves significantly in the future if investment costs and the cost of capital can be reduced. We conclude by discussing possible benefits of an early introduction of renewable energy sources in the electricity supply of the South Caucasus region.