Uzbekistan Renewable Energy Market - Growth, Trends, and Forecasts (2023 - 2028)

Uzbekistan's renewable market is projected to register a CAGR of over 4.5% during the forecast period.

The market was negatively impacted by COVID-19. Presently, the market has reached pre-pandemic levels.

Key Highlights

• Government policies emphasizing switching its electricity generation from natural gas to renewable fuels are expected to drive the market over the medium term.
• On the other hand, due to its abundance of energy, renewable energy development is not a high priority for the Uzbekistan government, except for hydropower, which is expected to hinder the market growth during the forecast period.
• Nevertheless, Uzbekistan's electricity generation mostly depends on fossil fuels. But the country has a potential for wind energy generation of around 15.27-775.72 kWh/m2. Places like Nukus, Kungrad, Ak Bajtal, and Bukhara are expected to be the best sites for wind energy development in Uzbekistan. The estimated wind speed and power density of the sites are around 0.61-3.98 m/s and 1.74-88.55 W/m2, respectively. Thus, the country's wind energy holds an opportunity for market growth in the future.

Uzbekistan Renewable Energy Market Trends

Hydropower to Dominate the Market

• As of 2021, Uzbekistan's renewable energy primarily consisted of hydropower. The segment dominated the renewable sector with nearly 95% of the total renewable installed capacity. Solar and wind power had almost 5% of the total renewable installed capacity.
• With more than 45 hydroelectric stations, the country had a total installed capacity of around 2005 megawatts (MW) in 2019, which increased to 2043 MW in 2020.
• In December 2021, the resolution of President No. PP-44 'On Additional Measures for the Further Development of Hydropower' was adopted. The plan included accelerating the construction of new hydroelectric power plants and the gradual modernization of existing ones through using environmentally friendly energy sources to increase the capacity of the country's hydroelectric power plants to 3,416 MW by 2030.
• In February 2022, Uzbekistan's Ministry of Energy announced that in accordance with its development strategy for the period of 2022-2026, 15 new hydroelectric power plants (HPPs) with a total capacity of 868 MW would be constructed in the country in addition to the modernization of five more existing HPPs. Therefore, an additional 868 MW of generating capacity will be generated annually from 2026, including seven additional HPPs with a capacity of 173 MW, which will be constructed in Samarkand, Surkhandarya, and Tashkent.
• In June 2022, Tajikistan and Uzbekistan started building two hydropower plants on the Zarafshan River. The first stage was the construction of the 140 MW Yavan hydroelectric station, estimated at USD 282 million, designed to generate 700-800 million kWh annually. In the next stage of discussions, the parties examined the possibility of constructing a 135 MW hydroelectric plant on the Fandarya River, which was estimated to cost USD 270 million, with a capacity to generate 500-600 million kWh per year.
• Given these factors, the country's ongoing investments and developments in the hydopower sector in the country is expected to dominate the market during the forecast period.

Upcoming Solar and Wind Energy Projects to Drive the Market

• The Ministry of Energy published its plans for developing power capacity in Uzbekistan between 2020 and 2030 in a 2020 document titled “Concept note for Ensuring Electricity Supply in Uzbekistan between 2020 and 2030'. In the document, Uzbekistan discussed in detail its plans to rebuild existing power plants, invited private energy developers to participate in the development of the power sector, outlined the reform plans, etc. In accordance with the document, the PV and wind renewable energy sources will also be allocated a significant share of the electricity generation.
• During 2021, Uzbekistan produced more than 71 billion kilowatt-hours of electricity, up from 66 billion kilowatt-hours the previous year. The production has increased each year under consideration.
• Consequently, Uzbekistan intends to increase the share of renewable energy in its long-term energy mix by increasing its share of renewable energy. During the recent competitive PV tender process, the Ministry of Energy discovered low tariffs that have given the Ministry of Energy optimism regarding the ultimate tariff structure for businesses and households. The capacity of PV solar plants may be increased from 5 GW to 7 GW, and the capacity of wind farms from 3 GW to 5 GW.
• In August 2022, Saudi energy company ACWA Power entered an agreement with Uzbekistan's Ministry of Energy to develop an onshore wind project of 1.5 GW in Karakalpakstan. The project is expected to reach a financial close by the end of 2023 and will involve a USD 2.4 billion investment.
• In April 2022, Uzbekistan signed an agreement with the IFC to develop a series of utility-scale wind farms, helping the country meet its growing electricity needs. In order to mobilize private sector experience and capital to construct and operate up to 500 megawatts of wind power plants across Uzbekistan, IFC will advise Uzbekistan in structuring a public-private partnership (PPP). As part of Uzbekistan's aim to generate 25 % of its electricity from renewable sources by 2026, the project will contribute to this goal.
• In September 2022, Shamol Zarafshan Energy Foreign Enterprise Limited Liability Company (SZE), a wholly owned subsidiary of Abu Dhabi Future Energy Company Private Joint Stock Company (Masdar) and the Asian Development Bank (ADB), signed a USD 52 million loan agreement to finance the country's first wind power plant. This 500-megawatt (MW) wind energy plant will be built in the Tamdy District of the Navoi Region in Uzbekistan, east of Zarafshan City. It will include 111 wind turbine generators, each with a capacity of 4.5 megawatts.
• In January 2022, the Uzbekistan government issued a Request for Qualified (RFQ) in preparation for a tender seeking up to the 300-megawatt solar project in Kashkadarya, its southeastern region. The selected developer will sign a 25-year contract and be responsible for the design, construction, financing, operation, and maintenance of the photovoltaic (PV) park.
• In July 2022, Total Eren commissioned its first 131MWp solar project using exclusively bifacial modules. For the Tully project in the Samarkand region of Uzbekistan, Total Eren signed a framework agreement with the state-owned Uzbek utility National Electric Networks of Uzbekistan to procure power generated over 25 years.
• The above-mentioned factors are expected to drive the renewable energy market over the study period.

Uzbekistan Renewable Energy Market Competitor Analysis

Uzbekistan renewable energy market is consolidated. Some of the major players in the market (in no particular order) include JSC Uzbekgidroenergo, SkyPower Ltd, Masdar, Total Eren SA, and Voltalia SA, among others.

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• The market estimate (ME) sheet in Excel format
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