The history of electricity in Azerbaijan started in 1897 when the country was a part of the Russian Empire. Then the Nobel Brothers company built a power station of 550 kilowatt in Baku. Mainly, this station was supplying the local industry with the electricity, whereas a bit of energy generated there was being used for the lighting system.
In 1901, the Bibi-Heybat Power Station of 2000 horsepower started to work. A year later, a power station of 2000 horsepower was exploited for the first time in the Black City (currently, White City). There were 109,8k kilowatt-hour of electricity produced in Baku over the course of 1913. Most of that, about 95% was being used for the oil industry, whereas up to 5% was kept for the lighting system.
After the Russian-Bolshevik intervention all of the power stations were nationalized. The Socialist Revolution caused new challenges. A hydropower plant of 1660 kilowatts was drafted in Shaki to develop the silk weaving industry. Due to the construction of a cannery in Guba, a hydropower station of 1152 kilowatts was built there, which was followed by the Zurnabad and Gusar waterpower plants.
In 1935, the common capacity of the power stations was increased up to 176,6 megawatts, whilst the electricity generation reached 937k kilowatts. In the same year, an energy administration (today's Azerenergy) was established which covered all the existing energy enterprises of the country.
In 1940s of the 20th century the digging of the deep oil wells and its exploitation was planned which led to the rise of demands for the electricity. In this regard, the total capacity of all the existing power stations in the Soviet Socialist Republic of Azerbaijan reached to 250 megawatts, whereas the generation of the electricity rose up to 1,7b kilowatts. Meanwhile, the first thermal power station in Azerbaijan is the Sumgayit Thermal Power Center №1 founded in 1941.
Thanks to the construction of the Mingachevir reservoir, alternative energy sources started to be used widely in Azerbaijan. The Mingachevir Thermal Power Station, built in 1954, was a lower stage of the planned power stations complex to be constructed on the Kura River. Three years later, the Varvara Thermal Power station which was a part of that complex had also been exploited.
The first mainly outdoorsy and largest electric power plant in Europe was built in Ali Bayramli (currently, Shirvan) in 1959. To match growing demands for heating and electricity in the Sumgayit industrial district, the authorities embarked on a project for building the Sumgayit Heating Electricity Center №2.
On the 20th of October, 1981, the national leader Haydar Aliyev initiated and managed a project on construction of the first power unit of the heating electricity station named ‘Azerbaijan’. It was a new page in the field of energy in the country.
A lot of contribution in terms of foreign investments in the field of energy is made in Azerbaijan after the dissolution of the Soviet Union.
As a result, the construction of the Yenikand reservoir and hydropower station was completed within the frames of the Shamkir Hydropower Station suspended in 1984. Thanks to the backbreaking labor of the local power engineers and constructors, the Yenikand Station funded as a credit of $53,2m issued by the European Bank of Reconstruction and Development (EBRD) started operating in December, 2000.
There were urgent steps taken for creating a legal framework and reforming legislative enactments in the energy field. The relevant laws on ‘Energy Resources’, ‘Energy’ and ‘Electricity’ were adopted in 1998, whereas the law ‘On Electricity and Thermal Power Stations’ came into force in 1999. At the same time, in 2005 the new rules ‘On Use of Electricity’ were approved by the Cabinet of Ministers.
Two decisive executive orders like the ‘State Program on development of the fuel and energy complex in the Republic of Azerbaijan from 2005 to 2015’ and the ‘Additional Measures to Improve Electricity Supply in the Republic of Azerbaijan’ signed by the President Ilham Aliyev were milestones for modern development in the field of energy in the country.
The beginning of the new era in the field of energy was marked by exploitation of the first in the CIS area modern turboshaft North Power Station of 400 megawatts, as well as construction of 7 module power stations of 860 megawatts, power cables and substations in the different parts of the country.
Two modern combined cycle gas turbine – the Sumgayit Power Station of 525 megawatts in the Industrial Center and the South Power Station of 780 megawatts started to be exploited in the Sumgayit City in 2009 and 2013, respectively. Thus, the generation power of the Azerbaijani energy system was updated by 40% over the course of the decade.
The outcomes of the energy policy within the twelve years were very impressive: 15 power stations of 3k megawatts started to be exploited; the total number of the stations reached 32 plants (15 of them were electricity power plants, the rest were hydropower stations); the common generation power of the stations rose up to 7,150 megawatts. Being an energy importing country, Azerbaijan became an energy exporting state.
The date of October 20 is being celebrated as the Energy Worker`s Day in Azerbaijan in accordance with the Executive Order №446 signed by the President of the Republic of Azerbaijan on the 13th of October, 2004. It dates back to 1981, when the ‘Azerbaijan’ Electricity Power Station started to be exploited.