"Energy Efficiency Fund" established in Azerbaijan by renewed decree

The "Energy Efficiency Fund" has been established and "Rules for Formation and Use of Fund's Resources" approved by a decree of President Ilham Aliyev.

According to the text of the decree, the Fund has been established to stimulate and promote energy efficiency and efficient use of energy resources, and the financial resources of the Fund will be under the jurisdiction of the Ministry of Energy as the Energy Regulatory Agency.

The Ministry will exercise general control over the formation and management of the Fund's resources.

Within 6 months, the Cabinet of Ministers should submit to the President the proposals on the formation of finances to be transferred to the Fund from the sale of energy resources, the prices of which are not subject to state regulation, as well as solve other issues arising from the decree.

Strange as it may seem, the President already signed a similar document on 20 August 2021, when he approved the Law on the Use of Energy Resources and Energy Efficiency. It came into force on 1 July 2022.

The Law provides for the establishment of an "Energy Efficiency Fund". The Fund's resources will be formed from deductions from tariffs from the sale of energy resources; loans, grants and voluntary donations from legal and physical entities; income from international organisations and other donors; income from the management of the Fund's resources and other sources not prohibited by the legislation of Azerbaijan.

The President of Azerbaijan also signed a decree on the application of this Law.

According to the Decree, the Cabinet of Ministers was instructed to prepare and submit to the President of Azerbaijan within six months proposals on the establishment of the "Energy Efficiency Fund" based on the proposals of the Ministry of Energy.

The Government was also instructed to prepare and submit to the President within 9 months: a draft order of formation and use of the "Energy Efficiency Fund"; draft rules on state control in the field of efficient use of energy resources and energy efficiency.

In addition, the Cabinet of Ministers has been instructed to prepare and submit to the President within five months the proposals to expand the staff of the Ministry of Energy to ensure the implementation of measures provided for by the Law.

But it appears that the decree has not been implemented for unknown reasons.

The Law also provides for installation of smart meters that determine the amount of energy consumed and its cost, installation of meters in the field of heating and gas consumption. However, SOCAR, opposing the Law, replaces smart gas meters with mechanical ones, ostensibly for the convenience of the population.  Also, state-owned companies "Azerisu" and "Azerishig" are in no hurry to switch to smart meters.   

Besides, the document provides for energy efficiency passportisation of buildings, energy audits, including mandatory audits every three years. However, it has also not been conducted.

It remains to be hoped that in the light of the new approach to green energy, the situation will be different.