On the sidelines of the first Tashkent International Investment Forum, NE Global sat down with the First Deputy Minister for Energy Azim Akhmedkhadjayev to discuss the strategies and priorities of the Central Asian country as part of the five-year “New Uzbekistan” campaign that was launched by its president, Shavkat Mirziyoyev.
Federico Grandesso (FG): Deputy Minister, can you talk about your future national energy strategy?
Azim Akhmedkhadjayev (AA): We recently adopted a strategy to 2030; by that date our goal is to double our capacity in terms of energy. Nowadays we are talking about 14 GW in the entire country, while our goal is to achieve 30 GW. Apart from this objective, my ministry plans to develop renewable energy by reaching 30%. We are going to support projects on sun, wind and hydrogen as Uzbekistan is pushing to become a very green country. Together with other Central Asian neighbors, we are quite successful. Using a metaphor, my country didn’t invent the bicycle, but just tried to learn from the best experiences developed here. For us, it was important to set up a collaboration with companies like BCG, Mckinsey, etc. in order to build our strategies on oil, gas and electricity. We have a forecast by 2024 that states we will reach, in renewable energies, 3.6 GW and will have up to 4 GW in gas turbines power plants. On March 24th we launched with a ceremony a huge gas turbine power plant in the south of Uzbekistan, in the Surxondar region. Siemens Energy and the French company EDF also took part in the groundbreaking ceremony. Our mission is to attract high-quality investments into our sector, bringing in more European experiences and technology.
FG: About the renewables, in which direction are you going? Are you focusing more on hydrogen or on wind?
AA: First, we gained some experience with our partners from the Gulf countries, entities like Masdar from the UAE and AKWA Power from Saudi Arabia. Bilateral contracts were signed with them and we launched last year our first 100 MW with Masdar. We will implement another 100 MW project with the French company Total. This will most likely be launched in April. We did a groundbreaking ceremony in March with AKWA Power on wind for a 100 MW project in Nukus (in western Uzbekistan). It’s deeply important to develop solar energy, of course, in parallel. It will help with discovering capacities in wind. The first contracts signed were bilateral, but now we’ve switched to bidding. Thanks to this tool, it is possible to do more attractive projects. We are noticing good competition because a lot of companies are coming here and are trying to give the best possible prices. Our average price for solar these days is 2.6 cents and wind is a little bit less than that.
With the support of our president, the National Renewable Energy Institute was founded and funded under the roof of the Ministry of Energy. Within this institution we want, together with AKWA Power and United States Airports, to do R&D on the basis of which we will study hydrogen energy as well as we will issue certification points for all equipment that will be coming into Uzbekistan for the development of renewable energy. It is important to certify all of the equipment that is coming into Uzbekistan. The certification body will be formed together with top consulting companies from Europe, the US, etc. We are quite ambitious and we understand that today’s agenda is on de-carbonization. According to several estimations, Uzbekistan could, by 2050, reach the zero carbon energy system. We will try to be in line with that goal.
We want to reduce our emissions. In our strategy, the goal is to reduce emissions by 10% in the next eight years, but last year during the Glasgow Conference (COP 26), we set another ambitious goal to reach 35% in that timeframe. We don’t want to overcommit, but just be as pragmatic as possible because the world is changing. For us, it is important to be in compliance with all these changes. Deep research has been done by witnessing the capacities and experiences in other countries. We know about the US experience with shale gas and we are thinking about that, even though there are rumors that shale gas has some problems. At the same time, we must admit that the best experiences come from the US. We started our talks with USGS (from the US Department of the Interior) as well.
FG: Can you talk now about the cooperation with Europe?
AA: We recently launched a very important gas turbine project; solar and hydrogen are also interesting for us. We want to cooperate with any state of the art companies. German and French companies are here; the Italians are also approaching us. They (the Italians) are coming around and we talked a lot with Ansaldo. The most interesting thing about Italian companies is that they are coming along with financing that is interesting for us. Uzbekistan is considering a lot of proposals and we have a proverb “we are not that rich enough to buy cheap things“, so it is key to pick the best practices. We are trying now to do more PPPs, because we already have experience with those Our goal is to transform our energy sector.
FG: What is your evaluation of nuclear power?
AA: Taking into account how rapid our industry grows, we do consider that. We didn’t exclude this idea and we are thinking about security issues and every tiny variable that bring negative results, but we’ve never stopped the (nuclear) agenda. In this period we need something that could give us huge energy capacity that can be used. Nuclear power is in our development strategy for 2030, so it is always in consideration.
FG: How do you see the energy relations with the other countries in the region?
AA: Uzbekistan is trying to maintain the best possible relations with our neighboring countries, we are not playing politics, we want to do pure business. Uzbekistan is the most populated country in the region, therefore the government must think of our people. We care about that rather than becoming a superpower in the region.