Energy Sector of Uzbekistan: Status and Prospects. "News of Uzbekistan". April 9 2022
Electric power industry is an integral component that ensures the economic well-being of any country. The sphere provides the possibility of consistent development of real sectors of the economy, the comfort of the life of citizens, it creates the conditions for the continuous functioning of such major social spheres as education, social security, medical and communal services. It is enough to look at the structure of electricity consumption by sectors of the economy and the population for 2021 to be convinced of this: industry - 35.9%, population - 27.7%, agriculture -16.6%, utilities - 4%, budgetary organizations - 2.4%, transport - 1.5%, construction - 1%, others - 10.8%.
Current situation and prospects at the macro level
According to the Ministry of Energy, in 2021 electricity production increased by 6.1% compared with last year and reached 70.1 billion kWh (Fig. 1.). According to the "Concept of providing the Republic of Uzbekistan with electric energy for 2020-2030" it is expected that electricity production will rise by 72.3% compared with the last year and will reach 120.8 billion kWh, of which RES (HPPs, WPPs, SPPs) - 31.6 billion kWh (26.1%).
Fig. 1. Power generation information
As for energy consumption, starting from 2019, annual demand began to exceed supply by an average of 3%. Thus, the shortage of electricity in 2021 was compensated by imports from neighboring countries: Turkmenistan - 64%, Tajikistan - 20.3%, Kazakhstan - 11.3% and Kyrgyzstan - 4.4%. Remarkably, due to the favorable pricing environment in the electricity supply market in 2021, when exporting electricity to Afghanistan, the country managed to offset about 31.3% of electricity import costs. According to the "Concept of providing the Republic of Uzbekistan with electric energy for 2020-2030", the annual growth in electricity consumption by 2030 will be 6-7% and will reach values close to 120.8 billion kWh.
At the end of 2021, the installed capacity of the country's power plants increased by 1.2% and amounted to 16,527 MW. For comparison, in Kazakhstan – 23,957 MW, Tajikistan – 6,577 MW, Kyrgyzstan - 932 MW. According to the "Concept for providing the Republic of Uzbekistan with electric energy for 2020-2030", by 2030 the installed capacity of all plants will reach 29,200 MW, of which the share of RES (HPPs, WPPs, SPPs) will be 40.4%.
Current Situation and Prospects at the Micro Level
According to a survey conducted by the CERR throughout the country at the end of 2021, on average, one family of 5 people consumes 327 kW per month, which corresponds to 96.5 thousand UZS (Figure 2). It turned out that consumption also depends on the type of housing of citizens. For example, residents of dwellings ("hovli") and cottages spent an average of 329 kW, apartments - 222 kW.
As for the uninterrupted power supply factor, the residents of the Navoi region are most satisfied with the quality of services provided by local suppliers (Figure 3). Also, the Republic of Karakalpakstan and the Khorezm region entered the top three in terms of the quality of power supply. The worst situation is in Andijan, Namangan, Surkhandarya and Fergana regions. Residents of these regions often complained about frequent power failures with a frequency of 5 or more times a week (44-74% of respondents).
It is worth recognizing that very often the cause of frequent power failures and blackouts is insufficient investment in the sector by private companies in view of the state monopoly in electricity generation and subsidizing electricity for citizens.
In this regard, residents were asked whether they were willing to pay more for electricity if it would improve the continuity of power supply. Among the families surveyed, only 45% agreed to increase their monthly expenses, while 55% did not see it as expedient. As for those households that agreed to pay more, on average they were ready to increase their spending by 77%.
Fig. 3. Power outage information per week
Fig.4. Awareness of government subsidies
Currently, various measures are being taken by the state to encourage citizens to use and install alternative energy sources in order to somehow mitigate the problem of insufficient and stable energy generation. So, for example, the state compensates up to 30% of the costs for the purchase and installation of solar power plants from the budget. The maximum amount of compensation for photovoltaic plants is 3 million UZS.
The purpose of the survey was also to find out how citizens are aware of the existing opportunities for switching to alternative energy sources. According to the results of the survey, it turned out that, on average, 92% of respondents do not have information about state subsidies (Figure 4.). Especially strong information asymmetry was observed in Namangan (95%), Tashkent (95%), Kashkadarya (95%), Navoi (96%), Fergana (97%) and Samarkand (98%) regions. For comparison, the scale of information asymmetry was observed relatively less in the Republic of Karakalpakstan (77%), Bukhara region (82%) and in the city of Tashkent (87%).
What problems exist now in the energy sector?
The service life of a significant part of the electric grid facilities has exceeded 30 years, of which 66% are bulk power networks, 62% are distribution networks, 74% are substations, and 50% are transformer plants. As a result, the average level of technological energy losses in the main networks reaches 2.72%, and in distribution networks 12.5%. At the same time, the existing lack of control capacities leads to additional daily restarts of TPP’s power units, respectively, to excessive fuel consumption and additional wear of process equipment. Based on the goals of the concept, it is expected that with the support of the World Bank, a plan for the development of main and distribution electric networks until 2030 will be developed soon.
The power system of the country is usually divided into 5 territorial nodes: northwestern, southwestern, southern, eastern and central. The central system includes power plants of Jizzakh, Syrdarya, Tashkent regions and the city of Tashkent. Because of a short circuit in the central system, on the power lines of the Syrdarya TPP and the Tashkent substation, a large-scale blackout occurred in January of this year.
How the problems are resolved?
Over the past 5 years, almost 4.5 times more power transmission lines have been built and reconstructed in the country than in the period 1991-2016. Therefore, if from 1991 to 2016 9,300 km of power lines were built and reconstructed, then in 2017-2021, about 40,700 km of power lines were built and reconstructed. As a result, power supply has improved for more than 4.2 million households in more than 7.3 thousand settlements across the country.
To ensure the stability of the energy system in the future, by 2026 it is planned to create a single ring system through the construction of 500-750 kV networks.
Uzbekistan is a sunny country, which makes it possible to generate based on renewable energy sources (RES). The Ministry of Energy, the Asian Development Bank (ADB) and the World Bank (WB), jointly have developed 10-year plan for electricity supply in Uzbekistan, which sets targets and specific measures to create additional electricity capacity, namely 5 GW of solar energy, 1.9 GW of hydropower and up to 3 GW of wind power by 2030. Now, the share of renewable energy in the total electricity production is 10%, and by 2030 it is planned to bring this figure to at least 25%. In 2021, the government of Uzbekistan announced its goal of achieving zero carbon emissions by 2050.
In addition, beginning in 2017, USAID has been helping Uzbekistan conduct assessments and identify next steps to modernize its energy system. Currently, USAID is conducting research on what the country's energy priorities are, what the energy forecast is, what should be done, how much flexible generation is needed, what network upgrades need to be made, what changes are needed in operation, and how much it will cost.