Uzbekistan’s energy sector still heavily depends on natural gas. As domestic reserves are depleting and the demand for electricity is increasing, the Uzbek government wants to diversify the country’s energy supply. The large-scale expansion of wind and photovoltaic (PV) electricity generation, the construction of the country’s first nuclear power plant and the replacement of the old power plant fleet with more efficient gas-fired plants are at the core of the government’s 2030 investment plan. Using an electricity system model, we show that the plan’s strong focus on inflexible baseload generation implies excessive system costs. We find that a higher deployment of flexible generators and renewables would reduce system costs. In 2019, a first PV tender had promising results.
Increased regional electricity trade could provide another option to keep electricity costs in check.
The high investments ahead reinforce the need to reform Uzbekistan’s low electricity tariffs in order to achieve cost-recovering electricity generation and incentives for energy efficiency.