The Energy Industry Is the Locomotive of Economic Development of Uzbekistan
The Energy Industry Is the Locomotive of Economic Development of Uzbekistan
Uzbekistan is one of the few countries that fully meet their needs at the expense of their own energy resources. The republic owns about 50% of the installed capacity of the unified energy system of Central Asia.

TEHRAN (Iran News) – Natural gas and petroleum products form the basis of energy resources for power generation. Gas provides more than 80% of the total electricity generated in the country.”The Energy Industry Is the Locomotive of Economic Development of Uzbekistan”

In the energy sector of Uzbekistan, the stages of reform are continuing and, at the same time, the modernization and expansion of generating capacities. The purpose of this work is to transfer the industry to market relations, to update the infrastructure, the state of which has not received due attention in recent decades, to ensure the growing demand for energy resources of consumers in the Republic.

The ongoing successive reforms under the leadership of President Shavkat Mirziyoyev have raised the development of the country’s fuel and energy industry to a fundamentally new level. The creation in February 2019 of the Ministry of Energy, responsible for the management and development of the profile industry, contributed to the start of the process of pursuing a single coordinated and balanced energy policy of the country.

At a new stage in the development of the sector and in order to manage the industry, increase its competitiveness and investment attractiveness, the Ministry of Energy is taking measures to meet the need for energy resources, improve the mechanisms of public-private partnership, develop market mechanisms for the implementation of tariff policy, create conditions for attracting investments, reduce energy intensity economy, stimulating the introduction of energy-saving technologies and others.

As part of the ongoing reforms in the fuel and energy industry, a transition was also made to modern methods of organizing the production, transportation, distribution and sale of electricity by restructuring the activities of “Uzbekenergo” and revised the oil and gas system by restructuring the activities of “Uzbekneftegaz”.

In recent years, significant indicators of production growth and localization of products and exports have been achieved in the fuel and energy industry.

The process of forming a legal framework to ensure the country’s energy security and energy development based on a market economy is underway. The laws developed by the Ministry of Energy were adopted: “On the use of renewable energy sources”, “On amendments and additions to the Law of the Republic of Uzbekistan” On the rational use of energy, as well as the Concept of providing the Republic of Uzbekistan with electric energy for 2020-2030.

The work on the creation of normative legal acts ensuring the transition of the energy sector to market rails continues.

The commissioning of new power plants, including thermal (TPP), solar or photovoltaic, wind (WPP), is in many ways an example of the market changes that are taking place in the energy sector of the country. Almost all new capacities to be commissioned are built on a fundamentally new public-private partnership (PPP) basis for the energy sector of Uzbekistan.

PPP-based projects are carried out on a tender, that is, a competitive market basis, while technical assistance to bring the best international experience in tendering is provided by the International Finance Corporation, a member of the World Bank Group.

To date, a total of 13 power purchase agreements have been signed, which is a significant milestone in creating a competitive environment in the energy sector. Among the company’s independent energy producers are Total Eren SA (France), Abu Dhabi Future Energy Company – Masdar (UAE), Aksa Enerji Üretim A.Ş. (Turkey), ACWA Power (Saudi Arabia) and others.

Due to the increased attractiveness of the investment climate in Uzbekistan, there is no need to attract loans from foreign banks to large projects in the energy sector of the republic, under the guarantee of the government.

In accordance with the decree of the President of the Republic of Uzbekistan dated March 27, 2019 “On the strategy for the further development and reform of the electric power industry of the Republic of Uzbekistan”, a Project Office was created under the Ministry of Energy, which, inter alia, works with international financial institutions, including the European Bank for Reconstruction and Development, World Bank and Asian Development Bank. International experts with extensive experience in reforming the energy sectors of various countries were involved.

The Project Office experts have developed a Concept that includes a sequence of transition to the wholesale competitive electricity market, with the passage of three stages, in the period 2021-2025.

The transition to market relations in the energy sector with a radical reduction in the state’s share in it will serve to improve the management system of the electric power industry. As a result, the energy security of the country, the reliability and stability of the energy supply of the Republic of Uzbekistan will be ensured. The main thing is to improve the quality of life of the population.

On measures to stimulate the development of renewable energy sources in Uzbekistan:

Favorable geographic and climatic conditions of Uzbekistan make it possible to actively use the energy of the sun to obtain electric and thermal energy on an industrial scale. It is not only a promising source of renewable energy in terms of practical application, but also very convenient and easy to use.

It should be noted that the President of the Republic of Uzbekistan Shavkat Mirziyoyev signed a decree on the development of renewable and hydrogen energy in Uzbekistan on April 9, 2021.

The resolution is aimed at “creating the infrastructure of the republic’s hydrogen energy, increasing the effectiveness of scientific and practical research in the fields of renewable and hydrogen energy, the widespread introduction of innovative technologies into production, as well as ensuring the transition of the Republic of Uzbekistan to a green economy.”

In addition, during his speech on May 30, 2021 at the second international summit “Partnership for Green Growth and Global Goals – 2030”, held in Seoul, President Shavkat Mirziyoyev shared his vision of the prospects for international cooperation in the field of “green” recovery and outlined a number of new topical initiatives

One of the main topics that President Shavkat Mirziyoyev touched upon during his speech was the widespread use and development of renewable energy sources (RES) and the transition to decarbonization of the energy industry. In particular, it was stated that the implementation of projects in the field of “green” energy in Uzbekistan will allow in the next ten years to increase more than 3 times, that is, up to 25%, the share of electricity production using renewable energy sources.

President Shavkat Mirziyoyev also put forward an initiative to hold an international conference “Green Energy for Developing Countries” in Uzbekistan in 2022, as well as launch a special program to attract young people to create a “green” economy to form a culture of green consumption.

In order to expand practical cooperation in this important area, the President declared Uzbekistan’s readiness to join the P4G Partnership and become its full-fledged participant.

Meanwhile, the Government of Uzbekistan has already launched a number of projects in the field of “green” energy.

In particular, on June 1, 2021, President Shavkat Mirziyoyev launched the construction of a solar photovoltaic station in the Surkhandarya region of Uzbekistan bordering Afghanistan.

The tender for the construction of a 457 MW plant was won by Masdar (UAE), which offered the lowest tariff. The tender was carried out with technical and financial assistance from the Asian Development Bank. As part of the project, Masdar will also build a new 220 kW substation and a 52-kilometer transmission line.

A plot of 601 hectares has been selected for the station. Masdar will attract US$260 million in direct investment. The station will have an annual production capacity of 1.04 billion kWh.

The implementation of the project will save 340 million cubic meters of natural gas per year, and 300,000 households will be supplied with electricity.

It is planned to build solar stations with a capacity of 200 megawatts in the Samarkand and Jizzakh regions, wind farms for 100 megawatts in the Beruniy and Karauzyak districts of Karakalpakstan, as well as 3 wind farms with a total capacity of 1,500 megawatts in Bukhara and Navoi.

Uzbekistan has set a goal to bring the capacity of solar power plants to 5,000, wind power plants to 3,000, and hydroelectric power plants to 4,000 megawatts by 2030.

Due to the availability of renewable energy sources in Uzbekistan, which do not have a negative impact on the environment, interest in the use of these types of energy will only grow in the near future. An increase in the use of renewable energy sources in all sectors of the economy will help, in the face of growth in the country’s GDP and population, to reduce the growing demand for fossil fuel and energy resources, reduce the country’s dependence on imported energy resources, and provide energy resources for new sectors of the economy.