Uzbeks turn to green power

May 13, 2013 by  
Filed under Green Energy News

May 13 2013

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Uzbekistan’s energy shortages and power blackouts have inspired a new push towards renewable energy.
In March, president Islam Karimov announced initiatives to develop Uzbekistan’s solar and wind energy capabilities and construct photovoltaic (PV) facilities. The International Solar Energy Institute, with the help of the Asian Development Bank (ADB), aims to “bring innovation, promote technology transfer and spur efficient and economic solar technology use.”
The ADB also pledged to help develop, finance and commission 3,000 megawatts (MW) of solar power generation capacity in developing Asian nations by 2013.
“Harnessing solar energy to fuel development is no longer simply an option – it is a necessity,” ADB president Haruhiko Kuroda said at the time. “ADB supports Uzbekistan’s commitment to building expertise, research, innovation and manufacturing capacity, and to making cost-effective investments in clean energy infrastructure, technologies and practices.”
In February, China solar giant Suntech Power and Uzbekistan’s state-owned energy company said they will build a solar panel manufacturing facility at a cost of USD 10 million, with capacity of 50MW by this year and 100MW by 2015.
There might be a big question mark on the project as Suntech was forced into bankruptcy in March after defaulting on a USD 541 million bond payment.
Other companies are also circling around the opportunity, especially after state-owned Uzbekenergo announced it will hold a tender to build a USD 240 million, 100MW solar power station in the country.

Alstom, the French multinational with interests in power generation, recently hosted a conference in Tashkent to discuss the country’s power sector.

Making the case for solar power

According to the country’s Economic Research Center, natural gas stock in Uzbekistan will last for 20-30 years provided that the current output is retained. By contrast, oil reserves have been virtually depleted. Both these sources are non-renewable and account for 99.3% in the energy generation structure.
Alstom notes that the country has around 300 sunny days a year and mountain rivers that could enable transition to renewables.
“Thus, solar energy potential in the country amounts to some 50,973 [billion tons] in oil equivalent… Alstom has expressed its willingness to provide Uzbekistan with an integrated solution for the provision of services, products and systems for ‘clean’ energy production and transmission,” the company said.
Indeed, Uzbekistan has been unable to fully exploit its oil reserves of 549 million barrels. The country’s production has hovered around 60,000 barrels per day, a 60% drop from the 2,000 levels, which is far short of the 139,000 barrels per day consumption levels.
Uzbekistan also sits on the fourth largest gas reserves in Central Asia, and is the thirteenth largest gas-producing country in the world.
“Uzbekistan attracts less foreign direct investment (FDI) than other Caspian nations, and investment in the hydrocarbon industry is currently insufficient to raise oil and condensate production,” said the US Department of Energy. “However, Uzbekistan recently began easing legislation to attract foreign capital.”
The government reported foreign investment inflows of USD 2.5 billion, mainly into oil and gas, petrochemicals and automobile manufacturing last year.
The country is also looking to reduce its oil imports by converting some of its abundant natural gas reserves to oil products using gas-to-liquids (GTL).

In 2011 state-owned Uzbekneftegaz (44.5%), Sasol of South Africa (44.5%), and Malaysia’s Petronas Bhd (11%) completed the feasibility study for a GTL plant that aims to convert 120 billion cubic feet of natural gas per year to 35,000 barrels per day of oil production. The plant is expected to come on line by 2017.
The ongoing USD 4 billion Surgil Natural Gas Chemicals Project is sponsored by Korea Gas Corp., Honam Petrochemical Corporation, STX Energy Co. Ltd and Uzbekneftegaz.

Driving a green economy
The European Bank for Reconstruction and Development notes that climate conditions in the country are quite favorable for solar energy.
The recent focus on solar and renewable energy is part of Uzbekistan’s efforts to diversify and liberalize its economy. The country suffers from a terrible reputation in the international business community as it is ranked as the world’s least desirable country to conduct business in, according to the World Bank.
To alter this image, the country is in the midst of a USD 47.3 billion industrial modernization and infrastructure development program during 2011-2015, which it hopes will be funded through external financing, domestic investment, and the country’s Fund for Reconstruction and Development (FRD).
Uzbekistan is also looking to improve energy efficiency and is investing USD 170 million over the next 10 years to reduce industrial electricity consumption by 15% over the next decade.
“This latest round of investment brings Uzbekistan much closer to this investment goal and is expected to have impressive impacts by 2018 – including energy savings of more than 200,000 MWhs and reductions in the country’s CO2 emissions of as much as 400,000 tons,” said the World Bank.
But internal divisions are already apparent and show the country is failing to develop a transparent process to attract the private sector and the international community.
Eurasianet.org recently reported that the president’s daughter Gulnara Karimova criticized the work on the solar plant and lambasted the lack of transparency surrounding the government’s tenders for clean-energy projects.
Once again, Uzbekistan is struggling to gain credibility in the international business community, which is hampering its efforts to attract investments.

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