President Ilham Aliyev has attended the foundation-laying ceremony for the second 409-megawatt combined-cycle unit of the Northern power plant in the Shuvelan settlement of the Khazar district. Construction workers warmly welcomed the head of state.

President Ilham Aliyev reviewed the construction project of the new unit.

The president of the Azernergy Open Joint-Stock Company, Etibar Pirverdiyev, informed the head of state about the project, saying that the Northern power plant covers an area of 68 hectares, while the area on which the second combined-cycle unit is to be built is 12 hectares.

It was noted that the construction of the second combined-cycle unit would be funded by the government-guaranteed loan of the Japan International Cooperation Agency (JICA). In August-November 2010, following an international tender process, an agreement was signed between the consortium of Japan’s Toyo Engineering Corporation and Azerbaijan’s Azenco Open Joint-Stock Company, and Azerenergy Open Joint-Stock Company.

The President was informed that components of the unit are gas and steam turbines, the heat-recovery boiler and the generator. In addition, a modern water cooling system, a 220, 110 and 35 kilovolt indoor substation, including a seawater demineralization facility, will be installed. The facility will not only use seawater in the cooling system but will also enable production of technical and drinking water. The single-shaft turbines and the generator will be supplied by Japan’s Mitsubishi Heavy Industries. The project is scheduled for completion in 2013. Some of the essential equipment and the ancillary facilities will be supplied and all construction and assembly work carried out by Azerco OJSC.

The significance of the project is in the fact that the efficiency of the combined-cycle unit will be 56.1 per cent and 220 grams of reference fuel will be spent to produce a kilowatt-hour of electricity. The facility to be built in accordance with the project will be producing 3.2 billion kilowatt-hours of electricity a year.

Then President Ilham Aliyev launched the grouting facility.

Addressing construction workers, President Ilham Aliyev said:

- Dear friends, dear ladies and gentlemen!

Dear Mr. Ambassador, distinguished guests from Japan!

My warm greetings to all of you! It is a wonderful and remarkable day today. We are laying the foundation of a modern power station in Baku. I am sure that the station will soon be built and commissioned and contribute a lot to Azerbaijan’s energy potential.

The construction of the Northern-2 station is a very significant event. On the one hand, because we are embarking on the implementation of another major infrastructure project in Azerbaijan. They have already become traditional for Azerbaijan.

On the other hand, the history of this station is also beautiful. The construction of the Northern-1 power station began 10 years ago. As a result of the talks held at the initiative of great leader Heydar Aliyev in 1998, the government of Japan allocated a loan for the construction of the Northern-1 power station. The foundation of the Northern-1 power station was laid with the participation of the great leader in 2000, and while in 2002 the station was put into operation.

The construction of the Northern-1 station was of exceptional importance for Azerbaijan’s energy security and for the overall development of our country because Azerbaijan did not have enough generating capacity in those years. The resources of the stations built earlier had been practically exhausted, and sometimes there were shortages of electricity in Azerbaijan – in Baku and districts. We remember those years too well. Both in Baku and in our districts there were problems with electricity because we did not have enough generating capacity. But as a result of the construction of the Northern-1 power station and the attention of the government of Japan to these issues, a new phase has begun in Azerbaijan's energy sector. We remember those days very well and are always grateful to the government and people of Japan for helping us in a difficult time.

We can say that the construction of this station will be funded by a loan of the Japanese government even after 10 years. This is an excellent indicator, it shows that there is a great relationship between us. It suggests that the Japanese government pays great attention to the development of Azerbaijan’s economic and industrial potential. At the same time, this is a testament to the Azerbaijani-Japanese friendship.

I would like to take this opportunity to thank the government of Japan for supporting Azerbaijan both in the most difficult times and today. This loan is particularly important because Japan has recently been shocked by a terrible disaster. The government of Japan is currently dealing with the consequences of the disaster and, at the same time, strengthening the friendship with Azerbaijan. The construction of this station is a symbol of our friendship.

I would also like to take this opportunity to pay tribute to all those killed during the calamity. I want to say that the courage and perseverance shown by the Japanese people in the fight against the elements were admired throughout the world.

The construction of this station is a very significant event in the life of Azerbaijan because it will give a new impetus to our development. A lot has been done in this area in Azerbaijan in recent years. A total of 11 power plants have been built in the last five years alone – since 2006, including nine thermal power plants and two hydro power stations.

As a result of the launch of these stations, our electricity grid has received 1,500 megawatts of electricity. This is a very high figure, a very good indicator. If one considers that in all previous years Azerbaijan created around 4,000 megawatts of generating capacity, it is easy to see what a success and achievement the creation of 1,500 megawatts of generating capacity over five years has been.

Over these years, modular power plants were built in all our districts. Thus, we were able to fully solve the problem of power shortages in the districts and, of course, in Baku. I remember setting the task six or seven years ago: we must enable every home and every enterprise to receive electricity 24 hours a day just by pressing a button. Today we have achieved that. Azerbaijan is not only self-sufficient in terms of electricity now, it also exports it to other countries.

Azerbaijan transports electricity to neighboring states, and the volumes of electricity transported to other countries will increase over time. To do that, new transmission lines are under construction. Just as we export our oil, gas and oil products to world markets, we intend to export an even greater amount of electricity. The energy potential created over the years corresponds to the present level of Azerbaijan’s development. The energy we are producing exceeds the required volumes many times, so we export it.

But we must look to the future. Our country is rapidly developing, new businesses, industrial areas, large industrial parks are being created. Major investment is being made in Azerbaijan’s aluminum industry. A large aluminum plant will be put into operation in the near future. Of course, these areas also require large amounts of energy. There are specific plans to develop the metallurgy industry, factories are under construction. A modern petrochemical complex is being built. So the demand for energy will continuously increase. Therefore, we should and we do build our policies in line with the overall development strategy of our country.

Although we do have enough power stations, the construction of new stations is of great importance. Thanks to the new stations that will be put into operation in Azerbaijan in the next two years, we will get an additional 1,300 megawatts of electricity. Of this, 400 megawatts will come from Northern-2 and about 800 megawatts from the Southern power plant currently under construction. The construction of other plants, including hydro power stations, will provide an additional 1,300 megawatts of electricity. Thus, the capacities to be created in Azerbaijan over 2006-2013 will make up approximately 3,000 megawatts. I want to say again that this will be a historic achievement, because in just seven years we will create generating capacities equal to those of all prior periods.

At the same time, new substations and transmission lines are being built in all our regions, including Baku.

Transmission lines 30,000 kilometers in length have been laid. Now we are seriously engaged in the production of renewable energy. The geography of all our water resources has been determined. Maps have been drawn, the foundations of power plants were laid on small rivers this year and last year. This process has also assumed large proportions, and we are paying great attention to these matters. Even bigger hydro power plants are under construction.

For example, in Nakhchivan we have commissioned the Bilyav and Vaykhir hydro power stations. Now work should be under way at the Arpachay. The Ordubad, Fizuli, Takhtakorpu, Shamkirchay hydro power stations. So the approximate capacity of these stations is between 20-30 megawatts. This will enable us to develop renewable energy.

Azerbaijan has large reserves of oil and gas. These reserves will last our people for decades, possibly even for more than one hundred years. Therefore, if we consider that now we have upgraded our entire energy system, there will be no shortages of electricity in Azerbaijan in the future. All the issues relating to energy security in Azerbaijan have already been resolved. But we must pay great attention to modern technologies, and the creation of renewable energy plays an important role in this.

Not very long ago we celebrated the opening of the first hybrid solar-wind power station in Gobustan District. The productive capacity of this plant is not too high, but it is not supposed to be very high – 5 megawatts. But this is the first serious step. It means modernity, innovation, new technologies, environmentally friendly technologies. This is our look into the future. As far as environmental issues are concerned, I must note that there are no power stations in Azerbaijan working on fuel oil now. Just a few years ago most of our stations worked on fuel oil. This required a lot of money. Now we are processing this fuel oil, which means it is refined, and we export oil and light products. Besides, damage was caused to our environment. Now these stations operate on gas, which is a very safe mode from an environmental point of view. But, of course, the power stations working on renewable energy will be more cost efficient from an environmental standpoint.

It is a wonderful day today. The foundation-laying of this station is an excellent indicator, it is a testament to Azerbaijan’s steady development. Our country is developing. Our country is implementing major infrastructure projects. The projects funded both from the state budget and by foreign partners are strengthening our country. The pace of our development will grow rapidly. Today, this pace has gone down in history as being the highest in the world. I am sure that we will have great successes in all areas, including energy, in the future too.

Let me congratulate you on this wonderful occasion again. I am sure that the station will be built with high quality in the near future, and we will participate in its opening together. Thank you.

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Japan’s Ambassador to Azerbaijan Shusuke Watanabe described the ceremony as an important stage in Japanese-Azerbaijani friendship and cooperation and said:

- Your Excellency President of the Republic of Azerbaijan Mr. Ilham Aliyev!

Ladies and gentlemen!

Distinguished guests!

Let me welcome you to the foundation-laying ceremony of the second stage in the construction of the combined-cycle Northern power plant. Today's event is an important stage of Azerbaijani-Japanese friendship and cooperation. I am honored to be here with you today.

But first I would like to take this opportunity to extend my deep appreciation to the government and people of Azerbaijan led by His Excellency Mr. President Aliyev for the support and solidarity with Japan in the wake of the horrific earthquake and tsunami in Tohoku.

Today we are facing the task of rebuilding our economy and society as a whole. The conclusion we drew after the terrible tragedy is that despite the geographical distance, we are all “in the same boat”. And this means that globally important issues should be dealt with only in concert. In order to ensure our own welfare and the welfare of future generations, we must help each other.

We have already implemented two projects relating to electricity in Azerbaijan. This is the third example of our cooperation in this sphere. I am sure that this project will also be successful, and eventually the electricity supply to the population of Baku and the Absheron peninsula will be even better.

Nationwide leader Heydar Aliyev said that the electricity sector would play a special role in Azerbaijan. We are very pleased that through our cooperation in this field the daily lives of people will further improve.

In conclusion, I would like to emphasize that we are proud to be a friend and partner of Azerbaijan during its rapid development.

Thank you.

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President Ilham Aliyev gave instructions and recommendations regarding timely and quality completion of construction operations.

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In conclusion, a picture was taken.