Ministry of Energy of Uzbekistan issues the “Concept Note” for ensuring electricity supply in 2020 – 2030

Last month, the Ministry of Energy of Uzbekistan updated Concept Note (“Concept Note”), setting new targets for solar, hydro, wind and nuclear power generation by 2030. This article provides a summary of the Concept Note to the extent that it deals with thermal, and solar and wind power.

Executive Summary:

The Concept Note sets 5GW and 3GW targets for solar and wind power respectively.

It makes the following key recommendations for the development of Uzbekistan’s power sector by 2030:

Thermal Power:

• In 2020, investment tenders be announced for construction of two new TPPs in Syrdarya Region with total capacity of 2,600-3,000 MW. The projects shall feature the use of modern CCGT with unit capacities of 650-750 MW.
• Expansion of the Navoi TPP
• Third 650MW CCGT to be commissioned in 2023- 2024
• Fourth 650MW CCGT to be commissioned in 2024-2025
• Regulating power plants with a total capacity of around 1,200 MW to be commissioned in 2021 - 2023
• A 150MW coal IPP and modernisation of existing coal power plants.
• CHPPs to be delivered in the next 2 years.

Renewable Energy:

• Competitive bidding processes (tenders and auctions) be implemented together with international financial institutions in 2020-2022 to identify investors under the Build-Own-Operate arrangement and long-term (up to 25 years) Power Purchase Agreements for the supply of solar power shall be signed.
• Special attention be paid in 2020-2030 to the development of renewable source-based generation, especially solar energy. These projects are to be implemented exclusively using financing provided by investors - independent power producers.
• For wind power development, priority to be given to the creation of large-scale wind farms with single site capacities ranging from 100 to 500 MW mostly concentrated in North-Western region.
• Solar PV plants with capacities ranging from 100 to 500MW focused mainly in Central and Southern regions.

The key goal of the Concept Note is stated to be for provision of Republic of Uzbekistan with electricity in 20203-2030 is to satisfy the increasing demand for electrical power at competitive prices as well as dynamic development of power sector in the Republic of Uzbekistan through modernisation and reconstruction of existing power plants, construction of new generating assets using energy efficient power production technologies, improvement of power metering systems, fuel diversification and development of renewable energy sources.

Power demand outlook by 2030

The Concept Note makes reasonably optimistic forecasts for energy generation, demand and potentially storage. Notably, it states that:

• The estimates show that annual power consumption growth rates up to 2030 will be at around 6-7 per cent.
• By 2030, nationwide consumption is estimated to reach 120.8 bln kWh (1.9 times growth compared to 2018).
• Residential population’s power demand is expected to reach 21.9 bln kWh (1.8 times compared to 2018), and that of economic sectors will reach 85.0 bln kWh (2.2 times compared with 2018).
• A 71.4% growth per capita consumption per annum by 2030.
• Overall power load during peak maximum hours in 2030 is expected to reach over 20.9 thousand MW as opposed to 10.4 MW in 2019 winter, meaning that generating capacities must increase by almost 2 times (+10.5 thousand MW) by 2030.

According to the Concept Note, some of the main objectives of the improvements in the supply of electrical power are:

• satisfying the country’s electrical power demand in full through domestic generation without dependence on energy imports and thus ensuring energy security;
• improvement of national economy’s energy efficiency with parallel reductions in energy intensity achieved through, inter alia, creation of economic mechanisms to stimulate rational use of electrical power by consumers;
• increasing energy efficiency of generation, transmission and distribution of electrical power to satisfy the growing demand;
• reduction of power equipment wear through consistent renewal, increasing reserves in generation and transmission assets;
• development and expansion of renewables use and their integration into the unified power system;
• development of efficient basic electricity market model.

What are the key priorities?

• modernisation and construction of new power sector assets required to ensure efficient functioning of domestic market, improvement of power metering generating assets system and despatch controls through introduction of modern information and communication technologies;
• improvement of efficiency and rational use of electricity at all stages of technological processes based on the use of energy saving technologies and optimization of generating assets;
• ensuring diversification in power and heat energy sectors through increased share of renewable energy sources and creation of renewable energy investment project mechanisms utilising PPP approaches, enhancement of government policies related to development of renewable energy sources, demonstration of renewable energy projects;
• development of comfortable, rule of law based, administrative environment for investments and wholesale power sales with a view to attract long term investments, first of all foreign direct investments;
• enhancement of corporate governance, increasing transparency of state-own power enterprises’ financial and economic operations;
• expansion of trans-boundary trade and strengthening of regional cooperation through the reinstatement and modernisation of transmission lines connected to neighbouring countries’ power systems;
• development of market relations through step-by-step liberalisation and reduction of government’s role, creation of a new market model based on clear separation of rights and responsibilities between actors in this sector at each step of market evolution, starting from Single Buyer and all the way to establishment of competitive wholesale and retail markets.

How to get there?

Thermal Power Development

The Concept Note states that the use of combined-cycle technologies with generator efficiency over 60% would be the preferred approach. In addition, it is envisaged that 13 projects will be implemented in 2020-2030 including:

• Six projects for construction of new TPPs with aggregate capacity of 3.8 thousand MW;
• Six projects for expansion of existing TPPs increasing their capacity by 4.1 thousand MW through construction of CCGTs, GTs and a coal generator; and
• One project for modernisation of generators 1-5 at the Novo-Angren TPP increasing capacity by 330 MW.
• Tenders are expected to be announced in 2020 for construction of two new TPPs in Syrdarya Region with total capacity of 2,600-3,000 MW. The projects is expected to feature the use of modern CCGT with unit capacities of 650-750 MW; commissioning of plants is expected in 2023-2024. Projects will also be implemented to expand the Navoi TPP with a construction of the third 650MW CCGT to be commissioned in 2023-2024, and the fourth CCGT of the same capacity to be commissioned in 2024-2025.
• Projects are also to be implemented to expand the Navoi TPP with a construction of the third 650MW CCGT to be commissioned in 2023-2024, and the fourth CCGT of the same capacity to be commissioned in 2024-2025.
• Expansion of Talimarjan TPP with construction of the third and the fourth CCGTs with total capacity of at least 900MW is planned for 2023-2024.
• Construction of a 1300MW TPP utilizing CCGT technology is planned in Kashkadarya or Surkhandarya regions to be commissioned in 2025-2026.
• Construction of regulating power plants to compensate peak loads in the power system, with total capacity of around 1,200MW, will be accomplished using gas turbine (50-100MW) and gas piston engines. It is expected that investors shall be identified in 2020 for construction of two regulating power plants with capacity of 200-300MW. The said power plants shall be commissioned in 2021-2023.
• Development of coal generation shall involve construction of a new 150MW coal generator at Angren TPP (Phase 2) as well as phased modernisation of existing generators at Novo-Angren TPP with year-round combustion of coal as well as reduction of harmful atmospheric emissions.
• Development of co-generation units for heat and hot water supply in cities shall be accomplished mainly through integration of medium capacity GT units. In particular, a 17MW GT shall be commissioned at Ferghana CHPP in 2020 and two GTs with total capacity of 54MW shall be delivered in 2022 at Tashkent CHPP.

Renewable Energy (Solar and Wind)

The Concept Note recommends that:

• Special attention be paid in 2020-2030 to the development of renewable source-based generation, especially solar energy. These projects are to be implemented exclusively using financing provided by investors - independent power producers.
• Targets indicators for annual capacity introduction in 2020-2030 have been approved in order to achieve renewable energy goals envisaging construction of 3GW wind and 5GW solar power capacities.
• For wind power development, priority to be given to the creation of large-scale wind farms with single site capacities ranging from 100 to 500 MW mostly concentrated in North-Western region (Republic of Karakalpakstan and Navoi region).
• Solar PV plants with capacities ranging from 100 to 500MW focused mainly in Central and Southern regions (Djizzak, Samarkand, Bukhara, Kashkadarya and Surkhandarya regions). However, 50-200MW solar PV plants to be constructed in other regions of the country. To this end, large solar PV plants (with overall capacity of over 300MW) will be gradually equipped with industrial scale power storage systems to ensure stabilisation of intermittent generation and regulate peak loads.
• competitive bidding processes (tenders and auctions) be implemented together with international financial institutions in 2020-2022 to identify investors under the Build-Own-Operate arrangement and long-term (up to 25 years) Power Purchase Agreements for the supply of solar power shall be signed.
• Thus, competitive bidding for construction of solar PV plants in Djizzak, Samarkand and Surkhandarya regions with total capacity of 600MW shall be conducted in 2020 with a support of international financial institutions (Asian Development Bank, World Bank Group, European Bank for Reconstruction and Development), and bidding announced for construction of additional 800MW solar PV in other regions of the country as well as construction of WPPs.
• Small scale solar PV plants (not connected to the integrated power grid) be created in remote settlements of the country as well as regions where development of eco-tourism is planned.
• Medium-scale solar PV (1-20MW) plants to be developed for generation of electric power to cover own needs of industrial enterprises and industrial parks.