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Economy 12/10/2024 Uzbekistan to complete transition to wholesale electricity and gas markets by 2027-2028

Uzbekistan to complete transition to wholesale electricity and gas markets by 2027-2028

Tashkent, Uzbekistan (UzDaily.com) —  Uzbekistan plans to complete its transition to wholesale electricity and gas markets by 2027-2028, Deputy Prime Minister and Minister of Economy and Finance Jamshid Kuchkarov announced at the St. Petersburg International Gas Forum.

Kuchkarov emphasized that the government must ensure reliable supplies of natural gas to households and businesses. He noted that while Uzbekistan has its own gas production, the country also imports gas. "It is important to consider both economic growth and the expected benefits from improved energy efficiency," he added.

The transition to a wholesale electricity market is scheduled for completion in 2027, with the gas market transition to follow in 2028. Kuchkarov also mentioned that gas production in Uzbekistan involves both local companies and foreign firms under production-sharing agreements (PSAs).

“We are seeing new small companies entering the gas production market, and we aim to increase the number of market participants,” he said.

As part of energy sector reforms focused on efficiency and reducing gas losses, a program has been developed to transfer gas distribution networks to the private sector through public-private partnerships (PPPs).

“We are preparing such a project in the Bukhara region, which we believe will help reduce gas losses. For comparison, Turkey consumes 63 billion cubic meters of gas, while our consumption is slightly lower, despite our population and economy being about half the size. This shows that improvements are needed,” Kuchkarov stressed.

In April 2020, President Shavkat Mirziyoyev announced plans to create wholesale electricity and gas markets based on exchange trading, ensuring equal access for all participants and a transparent pricing mechanism. In 2023, a presidential decree "On Measures for the Next Stage of Energy Sector Reform" was adopted to create an energy market with open competition.

During an October 2023 meeting, President Mirziyoyev reiterated plans to introduce a free wholesale electricity market by 2026, which will be driven by supply and demand. He stressed the importance of developing the legal framework, market infrastructure, and digitizing the energy system down to the grassroots level, including the implementation of a real-time smart management system (SCADA) to eliminate human error.

According to a presidential resolution on public-private partnership development for 2024-2030, distribution networks for electricity and gas across all regions will be transferred to private operators. A tender in the Samarkand region will begin in October 2024.

The wholesale gas market will facilitate large-scale trading of natural gas among various participants, including gas producers, importers, network operators, and major industrial consumers.

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