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Uzbekistan set to nearly triple hydropower potential in ambitious expansion plan

Uzbekistan set to nearly triple hydropower potential in ambitious expansion plan

According to statistics, the average annual volume of electricity production in our country for the period 1991-2016 amounted to 43 billion kWh. By 2021, this figure has reached 72 billion kWh. And last year, 74.3 billion kW/h of electricity was produced, which is 2.3 billion kW/h more than in 2021.

Last year, 62.3 kW/h of electricity was supplied to consumers. This is 3.2 billion kilowatt hours, or 5.5 percent more than in 2021.

In the country, from 1991 to 2016, more than 2,655 megawatts were put into operation, and in 2016-2022 – more than 5,000 megawatts. Industrial development, population and production growth are also increasing the demand for electricity from year to year.

Today, about 85 percent of the electricity produced corresponds to the share of thermal power plants running on gas. The rest is provided by renewable energy sources – hydroelectric power stations and solar photovoltaic stations. It is expected that wind farms will join their ranks by the end of next year.

It is planned that by 2026, green energy sources will account for 30 percent of the country’s electricity. The question arises: what role will hydroelectric power plants play in creating the predicted electrical capacity?

In fact, hydroelectric power plants are an effective means of providing stable daily electricity. Its cost is much cheaper and more environmentally friendly than from other sources.

Hydropower is the main renewable energy source. In this process, the development of “green” energy is becoming increasingly important not only for providing the population with energy, but also for preserving the environment. Therefore, special attention is paid to this area in Uzbekistan. In particular, in accordance with the decree of the President of the country “On measures for further reform of the hydropower sector” dated March 30, 2023, the Program of Additional Measures for the Further Development of Hydropower for 2023-2030 was approved. According to the document, due to promising projects, by 2030 the total hydropower capacity will be increased to five thousand megawatts.

As part of the Investment Program, Uzbekhydroenergo JSC is implementing 11 investment projects with a total cost of 1 billion 363 million dollars, a capacity of 741 megawatts and an annual output of about 2.1 billion kilowatt-hours. As part of these projects, the joint-stock company will launch seven hydroelectric power plants with a total cost of $124 million, an average annual generation volume of 552 million kilowatt-hours and a total capacity of about 200 megawatts.

At a meeting to discuss projects being implemented in the hydropower sector, as well as the tasks of preparing the energy system for the autumn-winter season, held on October 31 of this year under the chairmanship of the President of the country, the results achieved locally and the implementation of promising projects based on the existing potential were analyzed.

It was announced that in 2023, state-owned enterprises will produce seven billion kilowatt-hours of electricity and on this basis, revenues to the state treasury will amount to 714 billion soums, and 1 trillion 423 billion soums will be allocated for the implementation of investment projects. At the same time, information was provided on the creation of thousands of megawatts of electricity in addition to the projects envisaged in the hydropower program.

The President noted the need to develop a five-year program in 2024-2028 to increase the capacity of hydroelectric power plants to six thousand megawatts (2.7 times), the average annual output from seven billion kilowatt-hours to 17 billion kilowatt-hours, and for this it is necessary to attract foreign direct investment to the industry.

According to the updated hydropower strategy, an additional 3,775 megawatts will be created to the current capacity of 2,225 megawatts through the implementation of 37 promising projects, and by 2028 it is necessary to increase the total energy production to six thousand megawatts, thereby increasing the average annual production capacity by 17-19 billion kilowatts. hours, or almost three times.

On the way to these historical goals, a commercial proposal will be received by the end of this year from the French company EDF for an investment project for the construction of the Mullalak hydroelectric power station on the Pskem River with a capacity of 170 megawatts, the cost of which will be $338 million, and the foreign investor will be determined through an open tender in the first quarter of next year .

It is also planned to develop and offer to foreign investors a feasibility study for the construction of three investment projects (Korongitugai hydroelectric power station, Naryn hydroelectric power station cascade and Yukoripskem hydroelectric power station) worth $1 billion 446 million and a capacity of 726 megawatts. In 2024, it is planned to attract foreign funding and move to the active part of the project in subsequent years.

In recent years, in the country there has been a need to create regulatory capacities in the energy system in connection with the large-scale construction of renewable energy sources, including solar power plants. At the same time, solar, wind and other energy sources lead to a decrease in production capacity as a result of operating at certain times. During this period, the deployment of regulatory forces on the part of hydroelectric power plants is an important measure to ensure the stability of electricity demand and the satisfaction of daily peak loads of consumption.

For this purpose, it is planned to build two pumped storage power plants (Khodzhikent and Verkhnepskem) with a total cost of two billion dollars and a capacity of 1,200 megawatts. Considering that large projects of such importance are being implemented in our country for the first time, reputable foreign partners with extensive experience in preparing their feasibility studies are attracted.

In the Tashkent region, a cascade is planned, consisting of large hydroelectric power stations – Mullalak, Pskem, Yukoripskem, Korongitugay and Oygain – on the Pskem River with a total capacity of 1,700 MW; Khodzhikent and Yukoripskem pumped storage power plants, the Naryn cascade of hydroelectric power stations on the Naryn River with a capacity of 224 MW – in Namangan; Mizatskaya and Kshtutskaya hydroelectric power stations on the Tupalang River with a total capacity of 75 megawatts – in the Surkhandarya region. When implementing such large projects and attracting foreign direct investment and loans to the industry, our existing favorable reputation and prestige at the international level are important.

For four years now, Uzbekhydroenergo JSC has maintained an international credit rating of BB – the international rating agency Fitch Ratings, which is part of the leading “troika” rating structure in the world, at a stable level. In addition, in 2023, he increased the independent credit rating by one notch and the long-term issuer rating to B+.

The joint-stock company also plans to receive an international ESG rating for environmental, social and corporate governance in the near future with the involvement of the most prestigious agencies in the world.

Another great achievement for the joint-stock company was the introduction, for the first time in Central Asia, of a “green” energy certificate at enterprises producing energy in accordance with it. According to the relevant presidential decree of May 12, 2023, from July 1 of this year, a system of “green energy” certificates for electricity produced at energy-producing enterprises was introduced for the first time. Today, activities are actively being carried out to acquire this certificate, which are carried out through the country’s national exchange. Its presence, in turn, serves as a kind of guarantee of attracting foreign investment in the industry.

A number of measures are also being taken to attract external gratuitous assistance (grants). In particular, at the international forum “One Belt, One Road” in Beijing (China) in October of this year, an agreement was reached to allocate $28 million in Chinese grant funds for the construction project of the Charvak wind power plant with a capacity of 20 megawatts in the Bostanlyk district of the Tashkent region. As part of this project, four new generation wind power plants will be built, each with an energy capacity of five megawatts. As a result, an average of 43 million kilowatt-hours of additional electricity will be produced annually.

In order to more effectively use the existing hydropower potential, this year the JSC is implementing 23 projects for the construction of micro-hydroelectric power stations with a total capacity of 27 megawatts. Today, two micro-hydroelectric power stations with a total capacity of 0.4 megawatts have been put into operation: the micro-hydroelectric power station “Ispaysoy” – in the Tashkent region and “Zavrok” – in the Andijan region.

This micro-hydropower project is offered as an example to all local governments as the “Andijan Experience”. By the end of this year, another 13 projects with a total capacity of 14.4 megawatts will be successfully launched. In 2024, it is planned to implement 18 microhydroelectric power station projects with a total capacity of 17 megawatts.

Much attention is also paid to the development of the industry and the broad involvement of the private sector in it. All legal and economic conditions have been created for this. As part of the implementation of the Presidential Decree “On additional measures for the introduction of energy-saving technologies and the development of low-power renewable energy sources” dated September 9, 2022, a system of leasing land plots for a period of 20 years was introduced to entrepreneurs wishing to build small and micro hydroelectric power stations, and a state-guaranteed purchase of the electricity they produced was introduced . Having won a micro-hydroelectric power station project at an auction, the entrepreneur gives an order to a design institute for the development of design and estimate documentation. Having received a project that is suitable for the chosen location and meets the specified requirements, he orders equipment and begins construction and installation work.

Entrepreneurs can be guaranteed to sell surplus electricity produced at the established tariff to the state. Moreover, this makes it possible to sell it at a price almost three times higher than the cost of electricity generated by enterprises owned by the joint-stock company.

The joint stock company “Uzbekhydroenergo” has set as its main goal the achievement of enormous heights on the path of prosperity of the people’s well-being and uninterrupted development of industry. I am confident that we will definitely achieve these goals through the efforts of our dedicated and hardworking employees working in the management of the joint-stock company and the composition of its enterprises.