Ministry of Energy of the Republic of Uzbekistan: how is going theindustry reforming and increasing its capacity
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 country's leadership has set a task for the Ministry of Energy to double the production of electricity by 2030. According to experts' forecasts, in less than 10 years, the demand for electricity from the population and sectors of the economy of Uzbekistan will double. That is, the goal is to reach 120.1 billion kWh of electricity by 2030 (the indicator for 2020 is 66.4 billion kWh).
This is confirmed by the annual growth in electricity consumption. This growth is largely responsible for the fact that today there are cases of short-term power outages during periods of peak loads, mainly falling on the days of sharp climatic changes in air temperature. The growing needs of business entities, the use by the population of a significant number of household electrical appliances on such days, including air conditioners, heaters, leads to a sharp increase in the load on the system, including low-voltage power lines and transformer stations, which in turn leads to malfunctions in their operation. Such failures, even during periods of peak loads, can be avoided only due to the quality of the state of the system, which has been intensively worked on for the last 3 years by means of modernization and renewal, as well as the growth of generation (generation).
Let's turn to the numbers.
If in 2016 the average daily electricity consumption in the country amounted to 137.8 million kWh, then this year (as of June 1, 2021) it is already 183.7 million kWh, or 33.4% more.
The number of consumers today is 7 million 268.9 thousand, which is 947.8 thousand more than in 2016. Of these, 336.6 thousand are legal consumers, the number of which increased by 69.1 thousand.
In addition to the growth of electricity generation, for reliable energy supply, as already noted, it is necessary to have a high-quality infrastructure for its delivery to the consumer. Having a large-scale and at the same time very outdated infrastructure, which has practically not been updated for decades, since 2017, the country has dramatically intensified work on the renovation and modernization of electrical networks and transformer stations.
So, if during the period from 1991 to 2016 or over 25 years, 9,300 km of low-voltage power transmission lines were modernized and built, then over the past four years this figure has increased to 25,000 km (almost 2.7 times).
The same picture is observed in the state of transformer stations, most of which were morally and physically obsolete by 2017. Over the past 3 years, 60% of the total number of transformer stations or 9575 units have been modernized and also renewed.
In the current 2021 alone, 26,300 km of low-voltage transmission lines will be repaired (or 13% more than in 2020) and more than 9,000 transformer substations (an increase of 16%).
It goes without saying that 3 years of intensive work is not enough for a complete modernization of the infrastructure and there is still a significant amount of morally and physically obsolete power transmission lines and transformer stations throughout the country, which leads to failures during peak loads. The work on updating the infrastructure continues to go on at an intensive pace, as provided for by the developed plan "On measures for the reconstruction and modernization of 0.4-110 kV networks for 2021-2030."
According to this plan, 130,000 km of transmission lines and more than 40,000 transformers will be gradually modernized.
Increasing the generation (generation) of electricity, taking into account the double growth in consumption by 2030, is the most important task in ensuring a reliable power supply.
Today, the available production capacity of the power system is 14,131 MW. In 2000, this figure was 7750 MW, in 2016 - 10830 MW. That is, in 16 years, almost 3000 MW was commissioned, and the same amount - only in the last three years. Such an increase in production capacity in 2017-2021 was achieved mainly due to the commissioning of new combined-cycle units (CCGT) at Navoi, Talimarjan, Tashkent TPPs. Also in 2019, a new Turakurgan TPP with a capacity of 900 MW was launched.
As a result of the introduction of modern energy-saving technologies and equipment, the conventional fuel consumption at thermal power plants has been reduced from 375.8 g / kWh in 2016 to 333.9 g / kWh in 2020 or by 11% (- 41.9 g / kWh).
The increase in production, including through the construction and commissioning of new power plants, continues, and 2021 can be called an unprecedented year in this direction.
By the end of this year, 10 power plants (including thermal and solar) with a total capacity of 1,800 MW will be commissioned. As a result, the total capacity of the power system will approach 16,000 MW, which is 52% more than in 2016.
The process of modernization of the Syrdarya TPP is also underway, as a result of which its capacity will be increased by 150 MW and the Farhad hydroelectric power plant, the capacity of which will be increased by 13 MW.
This work will be continued, its result should be an increase in the capacity of the country's power system to 25,600 MW by 2025 and up to 29,200 MW by 2030.
In order to implement reforms in the energy sector, its transition to market relations, the Ministry of Energy was established by the Decree of the President of the Republic of Uzbekistan dated February 1, 2019 UP-5646.
The first stage of reforms was the establishing, through the restructuring of Uzbekenergo JSC, enterprises with specific functions: Thermal Power Plants and Uzbekhydroenergo (electricity generation), National Electric Grids of Uzbekistan (transmission of electricity and maintenance of backbone electrical networks, dispatching of power systems, centralized sale electricity and export-import operations at tariffs regulated by the state), "Regional electric networks" (distribution of electricity and maintenance of electric networks, technological connection of consumers and sale of electricity to consumers of the Republic).
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 have been adopted: "On the use of renewable energy sources" (dated May 21, 2019 No.ZRU-539), "On amendments and additions to the Law of the Republic of Uzbekistan" On the rational use of energy "”(dated July 14, 2020 No.ZRU -628), 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 (PVPP), 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 based on a fundamentally new public-private partnership (PPP) basis for the energy sector of Uzbekistan.
PPP-based projects are carried out on a tender basis, 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.
Note that the winner of the tender is responsible for the development of documentation, construction and operation of the new power plant. A long-term power purchase agreement is concluded with him for a significant period (20-25 years). As a rule, one of the main criteria for winning a tender is a price offer favorable to consumers on tariffs for the purchase of electricity. Thus, the market rules that have been intensively introduced over the past 3 years in the power sector of modern Uzbekistan make it possible to create healthy competition in this area, where more and more independent electricity producers are coming, who also have the best international experience.
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 independent energy producers companies are Total Eren SA (France), Abu Dhabi Future Energy Company - Masdar (UAE), Aksa Enerji Üretim A.Ş. (Turkey), ACWA Power (Saudi Arabia) and others.
Thanks 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 No. PP-4249 "On the Strategy for Further Development and Reform of the Electric power Industry of the Republic of Uzbekistan", a Project Office was created under the Ministry, which, among other things, 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 first stage provides for the liberalization of enterprises of electric power industry and the obtaining of licenses by private enterprises wishing to sell electricity. This market-based approach is expected to improve product quality and reduce prices.
During the second phase of the transition to a competitive wholesale electricity market, the electricity distribution system operator will be established, and the functions of selling electricity to consumers will gradually be transferred to suppliers. These suppliers will be entitled to sell electricity to consumers on the basis of a license. Consumers will be able to purchase electricity through an online trading platform or through any supplier. Thus, the suppliers will operate in a competitive environment, which will serve to provide the best electricity supply offers.
The third stage is “Intraday (hourly) sales”. In accordance with it, on a planned basis, online purchase and sale of excess or deficient volumes of hourly production and consumption of electricity will be carried out on the trading floor.
Also, work will continue to improve the regulatory framework of the energy industry. In particular, work is being actively carried out on the examination of the developed projects: the Law of the Republic of Uzbekistan "On Electricity" (work on it was carried out jointly with experts from the European Bank for Reconstruction and Development and the World Bank), the Decree of the President of the country "On Additional Measures to Reform the Electricity Industry", Government Resolutions "On approval of the Code of main electrical networks."
The focus is on the issue of improving the energy efficiency of economic and social sectors. According to calculations, the energy intensity of the national economy is 2-2.5 times higher than the indicators of developed countries.
If in the world 23% of energy consumption falls on the residential sector, then in Uzbekistan - 40%. In particular, energy consumption per 1 square meter in Europe is 120-150 kWh per year, while in Uzbekistan this figure exceeds 390 kWh or 240-270 kWh more.
In 2020, due to the implementation of organizational and technical measures, savings of 1,352.4 million m3 of natural gas and 917.5 million kWh of electricity were ensured in the sectors of the economy.
This once again confirms the presence of a huge potential for the rational use of primary energy resources.
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.
Press Service of the Ministry of Energy
of the Republic of Uzbekistan