Techno-Economic Assessment of Potential Solar Power Tower in Azerbaijan

This study presents a comprehensive techno-economic assessment of potential Solar Power Tower (SPT) plants in Azerbaijan, focusing on three representative capacities of 50 MW, 200 MW, and 1 GW. The analysis places particular emphasis on capital expenditure (CAPEX), operation and maintenance (O&M) costs, levelized cost of electricity (LCOE), and payback periods under the prevailing tariff structure for renewable electricity in the country. For the smaller configurations of 50 MW and 200 MW, the results indicate an LCOE of approximately 0.0759 USD/kWh, accompanied by a payback period of nearly 19.3 years. These values highlight the financial challenges faced by small- and medium-scale CSP projects, which remain economically constrained when benchmarked against the current regulated electricity tariff of 0.085 AZN/kWh (≈0.05 USD/kWh). By contrast, the 1 GW case demonstrates a clear advantage of economies of scale: the unit investment cost declines significantly, reducing the LCOE to 0.0395 USD/kWh and shortening the payback period to 7.99 years. This substantial improvement illustrates the pivotal role that large-scale projects could play in overcoming cost barriers and achieving financial viability. Ultimately, this study highlights that while small projects represent the realistic entry point for Azerbaijan, long-term cost reductions and supportive policy measures will be crucial to enable the transition toward economically viable large-scale SPT development.