Live Webinar: RE-Talk Uzbekistan

Towards Renewable Energy

Excellence in Uzbekistan

PRESENTER

Bernard Atlan

Principal Investment Officer

IFC

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Veronika Krakovich

Senior Banker, Regional Head Energy, Energy Eurasia

EBRD

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HOST

Jay Hsu

Project Producer

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RE-Talk Uzbekistan:

Towards Renewable Energy Excellence in Uzbekistan

Background of Uzbekistan:

 

Energy mix: The total installed generation capacity approximates 12,500 MW, and is dominated by thermal power plants (TPPs), 90% of which use gas as primary fuel.

 

Aging of the TPPs: 75% of existing assets are more than 30 years old and 40% are, to date, nearing retirement age, resulting in increasing loss in capacity (currently approximately 22%), while poor efficiency is also depleting natural gas resources.

 

Target of Renewable Energy: Development of RE by tapping into the solar potential (the current plan is to reach approx. 5GW of PV and 3 GW of wind capacity by 2030).

 

  • The capacity-mix in 2030 under the LCP is dominated by gas and would comprise: gas (13.27GW, 50%), PV (4.95 GW, 19%), wind (3.2 GW, 12%), hydro (2.59 GW, 10%), and coal (2.63 GW, 10%).

Opportunities for Renewable Energy in Uzbekistan:

 

  1. Solar resource: Among the best solar resource available in Central Asia (2 million GW/Hr /year), vastly untapped;

  2. High growth in electricity demand: By 2030, nationwide consumption is estimated to reach 120.8 billion kWh (1.9 times compared to 2018).

  3. Large investment in Energy sector: The least cost generation expansion plan (LCP) suggests that the system should add approximately 15,000 MW installed capacity (approx. US$15,7 billion) by 2030 (or US$1.2 billion per year on average). Including provisional estimates for transmission network expansion and rehabilitation increases the investment amount to approx. US$17.8 billion.

  4. Policy supporting: GOU has recently implemented critical energy reforms, including the unbundling of Uzbekenergo (the state electricity utility in Uzbekistan) and tariff reform with an aim of cost recovery in the sector.

  5. Bank is supporting the wind auction in Uzbekistan

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  • The Bank is supporting the first “turnkey” energy auction for a wind farm in Karakalpakstan region

 

(a) Technical cooperation assignment: assistance with site selection, environmental assessment, auction design and implementation support. JSC National Electric Grid Company of Uzbekistan (NEGU), as signatory to the PPA for the term of 25years.

(b) 70 companies expressed interest to participate;

(c) Financing package offer: EBRD loan financing, B loan financing.

 

  • Uzbekistan is planning to auction 1000 MW wind projects with the support of the EBRD.

Challenges for Renewable Energy in Uzbekistan:

 

  • Need for reconstruction and further development of the grid and distribution networks to ensure reliable and flexible power transmission;

  • Need for sector reforms aimed at achieving cost reflectiveness, focused on tariff structure;

  • Need for financial sustainability to be achieved through cost reflective tariff and institutional capacity;

  • Need for overall energy sector reforms (market model, regulation, governance).

Hot Issues:

 

Energy storage: It is a bit premature to stop actively working on storage. The Uzbekistan’s share of variable renewable energy sources is still small and it will take some time to reach the point where above all the capacity aware the impact of intermittent energy at grid stability required to consider storage and other alternatives to improve the systems. In the long term, storage will become a mainstream technology to enable reaching full decarbonization (including pump hydropower and battery storage).

 

Logistic challenges with turbine delivery to the country.

Uzbekistan is a double landlocked country. To Find developers were financed quite a number of wind projects worldwide including in remote areas such as Mongolia. Developers will trust developers and experienced developers will be able to implement the logistics in the best way given the experience.

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