Will Uzbekistan have enough electricity in 2030 and 2035?
With a rapidly growing economy and population, Uzbekistan’s electricity demand is projected to substantially increase from 81 TWh in 2023 to 137 TWh in 2035. To be able to meet future demand, Uzbekistan is planning to significantly expand its generation capacity from almost 19 GW in 2024 to 62 GW in 2030. The strongest expansion is foreseen for renewables with an additional 9 GW of solar and 21 GW of wind energy. Using a techno-economic model, the German Economic Team evaluated whether the future power plant park will be able to meet expected demand. The results demonstrate that current deployment plans for generation and transmission are robust and capable of meeting future demand. Additionally, the expansion of renewable energy will lead to a reduction of gas consumption by 85% and CO₂ emissions by 80% in the power sector in 2035 compared to 2024. At the same time the cumulative investment costs are estimated to be as high as USD 74 bn by 2030. This translates to annualised costs of USD 10 bn, including operating costs. In an alternative scenario for power plant and transmission expansion we show that annualised costs can be cut by 30% while maintaining reliability of supply.
Background
Uzbekistan is experiencing a strong increase in electricity demand driven by economic and population growth, industrialisation, and electrification of transport and heating. GET forecasts an increase of electricity consumption from 81 TWh in 2023 to 117 TWh in 2030 and 137 TWh in 2035 indicating an average annual growth of around 4.5%. With an ageing infrastructure, providing reliable electricity supply has become increasingly challenging in recent years.
Currently, natural gas dominates Uzbekistan’s electricity mix. In 2024, from a total installed generation capacity of almost 19 GW, gas-fired plants accounted for 14 GW. The other two major sources of electricity generation are coal (2.5 GW) and hydropower (2.2 GW). However, the country’s natural gas extraction is declining, prompting the government to seek alternatives to curb gas consumption.
To meet future demand while reducing gas use, ambitious investment plans were developed aiming at expanding both electricity generation and transmission capacity. Generation is set to increase until 2030 to 62 GW, with a strong focus on wind (21 GW) and solar (9 GW).
Because electricity systems must match supply and demand at every moment, the question arises as to whether the strong expansion of non-dispatchable renewable energy generation will be able to reliably meet demand in the years to come.
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The Model
GET examined this question for 2030 and 2035, drawing on government investment plans and leveraging a detailed model of the Uzbek power system. Using PyPSA, an open-source modelling framework, we modelled all five electricity regions of Uzbekistan’s grid and included cross-border trade with Tajikistan, Kyrgyzstan, and southern Kazakhstan. Based on a ten-year demand forecast, and generation capacity expansion plans in Uzbekistan and neighbouring countries, we simulated the hourly dispatch of the various power plants.
Modelling results
Modelling results indicate that Uzbekistan’s planned power plant mix will meet future demand, with renewables set to cover most of the country’s energy needs.
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Electricity exports and imports, as well as grid integration with neighbouring countries, will also increase significantly, to the mutual benefit of all parties involved.
Current plans will also succeed in significantly reducing gas usage and attached CO₂ emissions. Results show annual gas savings of 13 bcm in 2035, indicating a decrease of 85% in the power sector compared to 2024. This translates to CO₂ emission reductions of 28 MtCO₂, or a reduction of 80% in power sector’s emissions compared to 2024.
However, the analysis also identifies limitations in regionally matching generation with demand. Despite expansion of transmission, bottlenecks will lead to wind energy curtailment in western regions and a growing reliance on imports to meet winter demand in the East. Further, the planned investments carry a substantial price tag of USD 74 bn until 2030 – translating into annualised costs of USD 10 bn once operative costs are included – prompting consideration of whether they are being allocated in the most efficient way.
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Cost-optimal alternative
Using the model’s full capabilities, we simulated how a cost-optimal generation and transmission capacity would look like. The results ensure complete demand coverage while maintaining benefits consistent with government plans, specifically delivering similar results both in gas savings and CO₂ emission reductions. The analysis demonstrated that regional reallocation of planned thermal generation capacity and increasing solar power to 21 GW by 2035 while reducing planned wind capacity additions from 21 GW to 17 GW would significantly reduce annualised costs by around 30% vis-à-vis government plans. Thus, we see potential to achieve reliable supply at lower costs.
Model limitations
Modelling results should always be treated with caution, as they cannot fully reflect reality. The limitations in our model include the inability to simulate sub-hourly supply and frequency regulation of the grid, which likely leads to an underestimation of storage capacity needs in the cost-optimal alternative scenario. Furthermore, the analysis does not consider Uzbekistan’s so-called take-or-pay contracts which were used to incentivise private sector investments in electricity generation. The contracts oblige the government pay predefined electricity volumes, even if they are not generated. Such agreements alter the economics of power generation, potentially influencing the cost-optimal deployment of power plants and overall costs.
Conclusion and recommendations
Modelling results confirm that the current generation and transmission expansion plans will effectively resolve current and future challenges in Uzbekistan’s power system. They will meet projected demand, ease transmission congestion, and reduce reliance on scarce gas. However, there is space for improvements with substantial potential to lower costs while achieving the same reductions in gas use and CO₂ emissions. To build a resilient power system we recommend developing a 2035 system plan as well as domestic modelling capacities to be able to continuously assess and adapt the planning.
This newsletter is based on the Policy Study Modelling Uzbekistan’s power system in 2030 and 2035
