Page 35 - Uzbekistan rising bne IntelliNews special report

bne December 2021 Special Report: Uzbekistan Rising I 35
infrastructure amounted to 75% of the total investment during the independent period, or 2.5 times more than in the previous 26 years, according to the ministry.
Uzbekistan has enough power for the meantime, but it is already clear that if the pace of growth goes as predicted it will need to double its generating capacity by the middle of the decade.
There are several other elements going into the transformation. One of those is the greenification of the power sector. Another is to repurpose gas from using it as a fuel and repurpose it as the feedstock of a burgeoning petrochemical industry.
In August the energy ministry announced plans to increase its 2030 renewables targets and the EBRD reports that there has been a lot of interest in the proposed projects by international investors.
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.
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.
But the main drive of the programme for the moment is making more use of what Uzbekistan already has.
“The green trend is very fashionable at the moment but it is a chicken and egg situation: we want to invest in renewables but people question the time and the expense of it, as it is complicated. Let's invest in what
we have, they say. There is enough gas,” says Akhmedkhadjaev.
“The president's policy is to invest in green energy and develop more capacity. Uzbekistan is committed to a net-zero carbon future. Now we are working out the best way to get there,” says Akhmedkhadjaev.
The main fuel in Uzbekistan
is coal, which is still used, but Akhmedkhadjaev says the state
each reform programme is hunting
for chances to move up the value chain. The most obvious example
is with cotton production, where
the president simply banned the export of raw cotton and forced the local producers to invest in textile production. The same logic is being applied to energy where it is applicable.
Uzbekistan is currently in talks with Russian petrochemical giant Sibur on a deal to form a joint venture, as
has invested heavily into scrubbing and other technologies to reduce emissions while the green generation is built up that will eventually replace much of the coal.
That also frees up the country’s limited domestic gas production
for other value-added uses. The country’s first petrochemical plant was built in 2001 under former president Islam Karimov but the new administration is investing heavily in expanding this profitable business.
“We are self-sufficient in gas and there is some import and re-export of gas. Plus we have a lot of undiscovered
gas and the exploration is ongoing
in Sukhand and Karakalpakstan,” says Akhmedkhadjaev. “Mirziyoyev has emphasised that we should focus on adding value and creating more jobs so the gas is used in [the] petrochemical industry.”
Money has been poured into the gas separation plant built upon the crest of a cliff of the long-forgotten Aral Sea, which now produces polypropylene, polyethylene and hessian bags for export around
the region and further afield.
“Added value” is the buzzword in Uzbekistan and in each sector part of
the country’s own plant can’t keep up with the demand from just the domestic market. A second plant was launched in 2015 and the third is due to go online in the first quarter of 2022, says Akhmedkhadjaev.
Exports of petrochemical products is also starting to grow with Uzbekistan neighbours. Exports to Afghanistan grew from nothing to $100mn, until the recent regime change there put business on hold. And exports to Kazakhstan have ballooned from $50mn to over $1bn turnover. Trade with the other ‘Stans is also growing fast, says Akhmedkhadjaev.
At the same time, to keep up with demand the country has been mulling its first nuclear power station since 2018 that will be built in co-operation with Russia, which supplies the technology and funding. Russia’s nuclear exports are booming and it has brought several new nuclear power stations (NPPs) online in other countries of emerging Europe such as Belarus and Turkey.
The government’s forecast, as set
out in its power sector development concept for 2020 to 2030, is for the current demand of around 68bn kWh to increase to between 110bn kWh and 115bn kWh by the end of the decade. “This increase is because of two factors:
www.bne.eu
“The president's policy is to invest in green energy and develop more capacity. Uzbekistan is committed to a net-zero carbon future”