Page 59 - bne magazine September 2021_20210901

bne September 2021 Eurasia I 59
Investors target renewables
Uzbekistan has potential for renewable energy investment especially, given
its sunny climate, for solar power, but also for wind and hydro energy. “The government’s strategy is to diversify power sources and increase power output by bringing in solar PV and wind, and replacing old gas turbines that have low efficiency,” said Umarbekov.
On August 10, the energy ministry announced plans to increase its 2030 renewables targets. The original concept note on ensuring electricity supply in Uzbekistan for 2020-2030, published in last year, set out plans to develop power capacity by rebuilding existing power plants, inviting private power developers to take part in power sector development and deepening reforms in the energy sector. It also said that PV and wind power will account for a significant share of generation capacity.
“Despite the COVID-related economic slowdown of 2020, the demand for power continued to grow and the ministry has decided to reconsider its initial 2030 power capacity targets
by increasing the share of renewables in the energy mix of Uzbekistan,” the Energy Ministry said in an emailed statement on August 10. “Low tariffs, obtained through the competitive process in the latest PV tenders have brought optimism to the Ministry of Energy on the cost structure of ultimate tariffs for businesses and households. Thus, the PV solar plant capacity may be increased from the current forecast of 5 GW to 7 GW and wind power generation from 3 GW to 5 GW.”
Energy Minister Alisher Sultanov said, as quoted by the ministry statement that “recent tenders showed some previously hidden potential in the renewables sector, and we are confident that exploiting this potential will be successful.”
Among the deals signed so far, in 2019, Uzbekistan picked Masdar Clean Energy of the United Arab Emirates as the winner of its first ever competitively tendered solar power public-private partnership (PPP) to develop a utility-
scale solar plant located in Navoi Region. Since then, several other solar and wind agreements have been signed with Masdar and other firms.
While Uzbekistan works to boost renewable generation capacity, most of the remaining capacity will be from natural gas, and the old inefficient gas turbines would be replaced by combined cycle gas turbine (CCGT) power plants that can be ramped up or down depending on demand and the amount of energy from renewable sources entering the grid. By 2030 the government aims to have a minimum of 25% of power generation from renewables, no more than 2-3% coal and the remainder to be natural gas.
A new culture
But it's not all down to the government and investors. To stop demand spiralling, there needs to be a change of culture
to persuade people to start treating energy as a valuable resource, stressed Narmatov.
He cited data showing that people in Uzbekistan are using four times more
“Unfortunately [reducing consumption] is dependent on the cost [of energy]. When it comes cheap nobody cares; cheap things are not valued,” he said, stressing that a change in culture and attitudes is essential. “Of course it’s
not gong to come easy, but we need to preserve the environment for future generations.”
He calculates Uzbekistan could save as much as 6bn cubic metres of gas a year – 2bn from energy efficient heating through the country, 3bn from a shift to renewables, and 1bn from modernising the gas transmission system and reducing losses. The government has already introduced new norms for energy efficiency in housing that must be met if apartment complex projects are to get the go ahead.
“I personally believe that energy efficiency is the key for sustainability in Uzbekistan,” said Narmatov, who has redesigned his own house to make it energy efficient by redoing the insulation and installing a solar heating system,
and often answers questions about the technologies he used from interested passersby. There are also plans to educate
“Despite the COVID-related economic slowdown
of 2020, the demand for power continued to grow and the ministry has decided to increase the share of renewables in the energy mix of Uzbekistan”
energy units to heat one cubic metre of space compared to Europe, where higher energy prices (unlike the subsidised prices in Uzbekistan) and environmental awareness encourage people to conserve energy in their homes.
Narmatov believes that only removing subsidies for consumers – while keeping them in place for socially vulnerable households – can make people value the energy they consume. Respect for bread and other foods is part of Uzbek culture, where past famines have taught people to value food highly. By contrast, low prices have led to lavish use of energy for heating and lighting.
children about the environment and the need to conserve energy to create an attitude shift in the next generation.
The government hopes that as market liberalisation brings power prices
closer to the market price, individual homeowners will start to invest into their own solar installations. Not only will this reduce their bills for power
and heating, they will also be able to
put excess power back into the grid once the infrastructure is in place.
The government has set up an energy efficiency fund that will compensate 30% of the costs for homeowners who invest into energy efficient technologies.
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