In a significant move towards the modernization and liberalization of its energy sector, Uzbekistan is poised to launch a free, wholesale electricity market by 2026. The announcement came during a presentation held on October 26, with the presence of President Shavkat Mirziyoyev, outlining measures to effectively organize the activities of the energy market regulator.
Uzbekistan's energy sector has undergone a series of reforms in recent years, beginning with a change in the management system. The country has made considerable investments in power generation, with 22 power plants, including new facilities in previously underserved regions, being brought into operation. Most notably, private capital is now actively participating in the power generation system for the first time, marking a significant shift in the industry.
The total capacity of the country's energy production has now reached 85 bn kilowatt hours, and there are ambitious plans to add another 20 gigawatts of capacity in the coming years, with private investments of $7bn. This growth is aimed at meeting the increasing demand of the rapidly developing economy and growing population. The ultimate goal is to produce at least 120 bn kilowatt hours of electricity, requiring an estimated $52bn in investments to commission new capacities and modernize the existing networks.
Such large-scale investments necessitate private sector participation, and to make the industry more attractive to private investors, Uzbekistan is looking to create an energy market with an open competitive environment, in line with international practices.
These objectives are clearly outlined in the Decree of the President of Uzbekistan issued on September 28, on measures to implement the next stage of energy sector reform. This decree sets the ambitious target of launching a free wholesale energy market based on demand and supply by 2026. It also mandates the creation of a legal framework, the development of market infrastructure, the digitization of the energy system at every level, and the implementation of an intelligent real-time control system (SCADA) with minimal human intervention.
Notably, while many countries have taken up to 15 years to implement such reforms, Uzbekistan aims to complete the process in just three stages by 2030.
To facilitate this transformation, the Energy Market Development and Regulation Agency has been established, and it has been tasked with overseeing energy regulation. During the presentation, Minister of Energy Jurabek Mirzamahmudov provided details on the implementation timeline and plans outlined in the decree.
President Mirziyoyev emphasized the importance of creating sufficient generation capacity to fully meet the country's electricity demand as a primary condition for transitioning to a free energy market. He also instructed the establishment of a unified electricity trading platform, which is set to be tested and operational by the end of 2024.
In order to ensure the energy market liberalization proceeds effectively, it was stressed that three key areas require special attention: personnel training, integration of the network with scientific advancements, and digitalization. Implementation of these processes is expected to extend from the central administration down to the regional level.
To address these challenges, the agency is actively recruiting knowledgeable specialists and foreign consultants, and employees are being sent abroad to countries like Spain, China, Turkey, and Germany for training. Drawing from international experience, the agency is organizing training courses for engineers, dispatchers, SCADA operators, and other specialists within Uzbekistan.
The presentation concluded with the assignment of numerous tasks to sector managers, signaling Uzbekistan's firm commitment to achieving a fully functional and efficient free wholesale electricity market by 2026. These measures are seen as a major step toward modernizing the energy sector, attracting private investment, and meeting the growing electricity demand of the country's burgeoning economy and population.
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