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Energy sector of Uzbekistan

Uzbekistan is one of the few countries that fully meets its needs through its own energy resources.

Today, proven energy reserves are more than:

– 3 billion tons of coal;

– 1.1 trillion cubic meters of natural gas;

– 590 million barrels of oil.

The total length of gas transmission network is more than 13 thousand km and the high-voltage electricity network is more than 230 thousand km, which creates additional opportunities for organizing various types of production in all areas within the Republic of Uzbekistan.

The Republic of Karakalpakstan, Kashkadarya, Bukhara, Navoi, Surkhandarya and Fergana regions have an important place for implementation of large-scale projects on production of high value-added products and complex technological process in the oil and gas, chemical industries in view of availability of convenient production infrastructure, communications and logistics.

For projects in the field of renewable energy sources the most promising are:

– Bukhara, Kashkadarya, Surkhandarya and the southern part of Navoi region for solar power plants;

– Republic of Karakalpakstan, Khorezm, Bukhara, Navoi, Jizzakh, Samarkand and Tashkent regions for wind power plants.

Today, in accordance with the Resolution of the Cabinet of Ministers of the Republic of Uzbekistan of July 12, 2018 No.534 “On measures of attracting authoritative international experts in development and implementation of long-term programs of reforming key sectors of the economy”, the Boston Consulting Group, the World Bank, ADB and EBRD are working on the study and development of a concept for development of the oil and gas, petrochemical and energy sectors of the Republic of Uzbekistan until 2030.

According to the results of the developed document, portfolios of new promising investment projects of industry companies of fuel and energy sector of the Republic of Uzbekistan will be formed for presentation to potential foreign investors.

Electric power

Uzbekistan owns about 50% of the installed capacity of the united power system of Central Asian countries. The total installed capacity of the electric power sector of the country is 14,300 MW. There are 45 electric power plants in the country with an aggregate installed capacity of 12,400 MW, with a potential production capacity of 64 million MW/h.

The basis of energy sources for generating electricity is natural gas and petroleum products. More than 80% of the total generated electricity is provided at the expense of gas.

The country has an extensive electrical network of local and high-voltage power lines with a total length of 231.3 thousand km, with a voltage of 0.4-500 kV. Program for Development and Reconstruction of Generating Capacities under Uzbekenergo JSC system was adopted in order to ensure the uninterrupted supply of electricity in the country, to create favorable conditions for stable and effective development of the country’s electric power industry.

Hydropower

The country has 32 hydropower plants with a total installed capacity of 1,900 MW (15% of the total capacity of the power system), with a potential production capacity of 9 million MW/h.

Uzbekgidronergo JSC, a specialized company in the field of operating, modernization, reconstruction and construction of hydroelectric power stations was established in terms of hydropower development in Uzbekistan.

Uzbekgidroenergo JSC plans to implement projects for construction of new 42 and modernization of the existing 32 units of hydropower stations in the country.

In accordance with the resolution of the President of the Republic of Uzbekistan of May 2, 2017 No. RP-2947, main measures for development of hydropower potential of the Republic of Uzbekistan in 2017-2021 are defined in order to bring the level of electricity generation from hydroelectric power plants to 20% of the total balance.

The program envisages the implementation of 22 projects for a total capacity of 1,765 MW in the amount of 2.23 billion USD, which will allow to increase in generation by an additional of 5.6 billion kW/hour of electricity per year.

Solar power

The gross potential of solar energy of Uzbekistan is estimated at 50973 million tons of oil equivalent, which is 99.7% of the total gross potential of all renewable energy sources investigated to date in the country, the technical potential is 176.8 million toe (98.6% of the total technical potential of renewable energy).

The annual energy of solar radiation, coming to the territory of Uzbekistan, in absolute value exceeds the energy potential of the explored reserves of carbon raw materials of the country. Currently, only 0.6 million toe. solar energy (0.3% of the technical potential) is mastered. The use of solar energy is very promising in terms of its use, resource, simplicity.

The most promising areas for implementation of projects on construction of solar power plants are Bukhara, Kashkadarya, Surkhandarya and the southern part of Navoi regions with an average global titled irradiance (GTI) of 2028 kW/hour per year per square meter.

In accordance with the Resolution of the Cabinet of Ministers of the Republic of Uzbekistan of July 12, 2018 No. 534 “On measures of attracting authoritative international experts in development and implementation of long-term programs of reforming key sectors of the economy”,  the World Bank, EBRD and ADB are jointly developing a normative-legal framework for regulating relations, tariffing methodologies for generating, transportation and distribution of electricity, types of guarantees by the State for investors, principles for conducting tenders and making a list of future projects. Completion of work in this area is expected until May 1, 2019.

Wind power

The gross potential of wind energy in Uzbekistan is estimated at 2.2 million toe.

The potential of promising areas in the Republic of Karakalpakstan, Khorezm, Bukhara, Navoi, Jizzakh, Samarkand and Tashkent regions averages 70 GW or 551 W of power per square meter for wind towers 100 m high.

Development of wind energy is very promising for agriculture in remote areas. Many farmers and villagers can immediately feel the improvement of the quality of life, since the additional irrigation opportunities and energy supply will positively affect the growth of wellbeing.

In accordance with the Resolution of the Cabinet of Ministers of the Republic of Uzbekistan of July 12, 2018 No.534 “On measures of attracting authoritative international experts in development and implementation of long-term programs of reforming key sectors of the economy”, the World Bank, EBRD and ADB are jointly developing a normative-legal framework for regulating relations, tariffing methodologies for generating, transportation and distribution of electricity, types of guarantees by the State for investors, principles for conducting tenders and making a list of future projects. Completion of work in this area is expected until May 1, 2019.

Coal industry

The coal industry of Uzbekistan, which has explored coal reserves in the amount of 1,537.0 million tons – brown, 45.9 million tons – stone. Predicted resources amount to over 5.7 billion tons of coal.

Coal production in Uzbekistan is carried out by “Uzbekkumir” JSC, “Shargunkumir” JSC and “Apartac” JSC.

“Uzbekkumir” JSC, consisting of 7 coal-mining and auxiliary branches, produces and supplies coal to consumers of the country – the Angren mine, a geological exploration expedition, Mining and Transport Equipment Repair Plant RGTO, Kumirqurilish, Kumirenergo, Belazkumir, Aloqakumir.

Each year, Uzbekkumir JSC extracts an average of 4.5 million tons of coal. The main consumer of coal fuel is the electric power sector, which accounts for over 85% of total coal consumption. The demand for solid fuels is also formed by industrial, social and municipal enterprises, and the population.

In order to increase the production and sale of coal, large production facilities have now been put into operation at Uzbekkumir JSC. Among them are a cycle-flow technology complex for loading and transporting overburden rocks and a complex for loading and sorting coal with a capacity of more than 6.5 million tons per year.

Programs of modernization, technical and technological re-equipment of coal industry enterprises and its balanced development are planned with the implementation of the following investment projects:

– “Construction of “Apartak” mine in order to increase the coal production capacity to 1.0 million tons per year;

– “Modernization of JSC “Shargunkumir” for bringing the production capacity of coal to 900 thousand tons per year;

– “Updating (replacement) of morally and physically obsolete equipment”. The aim of the project is the acquisition of the main technological and auxiliary equipment to replace the old worn-out mining transport equipment, for eliminating the lagging overburden operations and execution of the established parameters for coal mining at Angren mine, etc.

For qualitative and uninterrupted supply of coal to consumers in the regions of the country, territorial distribution centers for coal sales have been established. Today, such centers are successfully operating in the Republic of Karakalpakstan, Andijan, Bukhara, Namangan, Fergana, Khorezm and other regions. At distribution centers, enterprises for production of coal briquettes, which are an economical, convenient to use high-calorie product, are organized everywhere.

Stable and uninterrupted supply of industries and the population with solid fuels is the most important factor for successful implementation of economic and social transformations in the country.

To increase the reserves of solid hydrocarbon resources, a program on increasing production in accordance with the Resolution of the President of the Republic of Uzbekistan No. RP-3054 of June 13, 2017 “On the program for further development and modernization of the coal industry for 2017–2021” is being implemented, aimed at execution of 9 projects for overburden management with an increase of an additional 128.9 million cubic meters coal production in addition to 4.0 million tons, in addition to the extracted kaolin additionally up to 320.5 thousand tons.

Oil and gas industry

To date, there are 252 oil, gas and gas condensate fields, with explored hydrocarbon reserves in the amount of more than 2.5 billion tons of standard fuel.

The capacity of transit and export gas transmission systems for supplying gas to Central Asian countries, Russia, Europe and China is more than 120 billion cubic meters, of which 50 billion cubic meters per year through Uzbekistan – China gas pipeline and 70 billion cubic meters per year through the Central Asia – Center gas pipeline.

The existing oil refining capacity is 2.5 million tons per year in Bukhara oil refinery plant and 8.7 million tons in Fergana oil refinery plant. Fergana oil refinery plant has great opportunities for providing tolling services to various companies in order to process imported raw materials and export to neighboring countries, mainly to Kyrgyzstan and Tajikistan.

To increase hydrocarbon resources, a program is being implemented on increasing production in accordance with the resolution of the President of the Republic of Uzbekistan No. RP-2822 of March 9, 2017 “On approval of a program for increasing hydrocarbon production for 2017–2021” aimed at improving the efficiency of conducting service and drilling operations.

Meanwhile, in a number of investment blocks with involvement of international oil and gas companies, a number of activities have been carried out with such companies as Lukoil Overseas, Gazprom (Russia), CNPC International (China), CNODC, Korea National Oil Corporation, Daewoo International and Kogas to detect promising hydrocarbon reserves.

Such large complexes as Mubarek GPP with a capacity of 30 billion cubic meters per year, Shurtan gas processing plant with a capacity of 20 billion cubic meters per year and Kandym GPP with a processing capacity of 8 billion cubic meters per year are successfully operating in the country. The presence of a large amount of lump sulfur production in these plants may become of great interest for private entrepreneurs for organizing production of granulated or capsular sulfur for export.

Capacities of the existing gas chemical complexes, such as the Ustyurt Gas Chemical Complex with a production capacity of 383 thousand tons of polyethylene and 83 thousand tons of polypropylene, Shurtan Gas Chemical Complex with a capacity of 125 thousand tons of polyethylene allow expanding the export of raw materials and increasing production of plastic products of small and medium enterprises.

Taking into account the growing demand, projects are currently being developed to expand the production capacity of Shurtan Gas Chemical Plant by an additional 500 thousand tons of various types of gas-chemical products.

The Republic of Karakalpakstan, Kashkadarya, Bukhara, Navoi, Surkhandarya and Fergana regions are important for implementation of large-scale projects for production of high value-added products and complex technological process in the oil and gas industry, in view of availability of convenient production infrastructure, communications and logistics.

In accordance with the Resolution of the Cabinet of Ministers of the Republic of Uzbekistan of July 12, 2018 No. 534 “On measures of attracting authoritative international experts in development and implementation of long-term programs of reforming key sectors of the economy”, the Boston Consulting Group conducts a detailed study of the oil and gas industry for defining priority directions of development of a list of promising projects for the long term, as well as the DeGolyer and MacNaughton company audit of hydrocarbon reserves. Completion of activities in these areas is expected until April 1, 2019.