Expert: Azerbaijan Is Building Europe’s Energy Future
For years Azerbaijan's role in Europe was measured in gas volumes; the Niš investment marks a shift to owning the infrastructure that produces electricity and heat for European households.
Azerbaijan's plan to build a €600 million gas-fired combined heat and power plant in the Serbian city of Niš is drawing growing international attention as a milestone in the country's energy diplomacy.
AZERTAC spoke with Fatima Tuz Zehra, President of The Gulf Observer Research Forum and Editor-in-Chief of The Gulf Observer, https://thegulfobserver.com about the project's significance for Serbia, for SOCAR, and for Azerbaijan's expanding role in Europe.
- Ms. Zehra, how do you assess the significance of the power plant Azerbaijan plans to build in Niš?
- I see it as one of the most meaningful steps in Azerbaijan's energy relationship with Europe in recent years. The plant will have a total capacity of 500 megawatts, 350 megawatts of electricity and 150 megawatts of heat, with an investment of around €600 million. But its importance goes far beyond these figures. For a long time, Azerbaijan's contribution to Europe was measured in the volume of gas it delivered. With Niš, Azerbaijan is investing directly in the infrastructure that produces electricity and heat for European citizens. That is a qualitative change. It shows a country that thinks in terms of decades, not transactions.
- The governments of Azerbaijan and Serbia signed an agreement in February, and SOCAR and EPS have since agreed on key principles. How do you view the pace and approach of this cooperation?
- The approach has been careful, structured and serious, which is exactly what large infrastructure requires. First came the intergovernmental agreement, then SOCAR and Serbia's state electricity company EPS agreed on the principles for construction, development and operation, and now the final agreement is being prepared. This step-by-step process builds confidence on both sides. It also reflects the trust that has developed between Baku and Belgrade. Serbia is one of Azerbaijan's most important partners in the Balkans, and this project turns that political goodwill into something concrete and lasting.
- What will the plant mean for Serbia's energy security?
- The benefits are very tangible. At full capacity, the plant could produce about 3.1 terawatt-hours of electricity a year. Serbia consumes roughly 30 terawatt-hours annually, so this single facility could cover around 10 percent of the country's needs. That is a remarkable contribution from one project.
Equally important is efficiency. Because it is a combined heat and power plant, the heat produced during electricity generation will not be wasted. It will be supplied to homes and businesses, around 1.3 terawatt-hours of thermal energy a year, which can benefit thousands of households and enterprises. And gas-fired generation adds flexibility to the grid, because it can respond quickly to changes in demand. At a time when Serbia is working to diversify its energy sources and reduce vulnerabilities in supply, this is precisely the kind of investment it needs.
- SOCAR is best known as an oil and gas company. What does its entry into electricity generation in Europe tell us?
- It tells us that SOCAR has become a truly integrated energy company. Today it operates across every segment of the oil and gas value chain where value can be added. Moving into power generation is a logical and confident next step. Instead of exporting gas only as a raw commodity, SOCAR will convert Azerbaijani gas into electricity and heat within the partner country. That creates more value for Azerbaijan and more direct benefits for Serbia.
It is also worth emphasising that SOCAR is not starting from zero. The company has already developed the Central Anatolia Combined-Cycle Gas Turbine Power Plant in Türkiye and the Petkim renewable energy project, and Azerbaijan has been building significant energy infrastructure in its liberated territories. So Niš is not a leap into the unknown. It is the continuation of a clear and well-executed strategy.
- How do you evaluate Azerbaijan's broader role as an energy partner for Europe?
- Azerbaijan has earned a reputation as a reliable and predictable supplier, and that reputation matters enormously today. As Europe has sharply reduced its dependence on Russian gas, and as tensions in the Middle East continue to create uncertainty in global markets, Europe needs partners it can count on. Azerbaijan now exports gas to 16 countries, 13 of them in Europe, and that number has been growing year by year.
What makes the Niš project special is that it takes this partnership to a deeper level. Baku increasingly views Europe as a premium and strategic market, and it is responding not only with supply but with long-term investment. Pipelines connect markets, but power plants anchor relationships for generations. That is the difference between being a supplier and being a partner.
- Could the Niš plant become a model for similar projects elsewhere in Europe?
- I believe it very likely will. If completed as planned, this would be SOCAR's first power-generation project in Europe, and first projects often become templates. Once the model is proven in Serbia, supplying gas and also generating electricity and heat locally, other countries in the Balkans and beyond may well look at similar arrangements. In that sense, Niš is an entry point. Its real significance is not only its 500 megawatts or its €600 million value, but the door it opens for Azerbaijan in Europe's power sector.
Azerbaijan's broader energy diplomacy
- As a research forum and media platform based in this region, how do you view Azerbaijan's energy diplomacy more generally?
- Azerbaijan offers an instructive example of how a resource-rich country can use its strengths wisely. It has turned natural resources into long-term partnerships, political trust and a respected international voice. Rather than relying on energy as a short-term source of revenue, it is building value chains, infrastructure and relationships that will serve its people and its partners for decades. At The Gulf Observer Research Forum, we follow these developments closely, and we see Azerbaijan's energy diplomacy as visionary, pragmatic and constructive. Countries across our region, including Pakistan, which shares warm and brotherly ties with Azerbaijan, can draw valuable lessons from this approach.
Fatima Tuz Zehra
Contributing writer at EUReflect.
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