Tashkent, Uzbekistan (UzDaily.com) -- If we sum up the reports of the international specialized press, which is guided only by its own principles of objectivity and impartiality, the state of the energy sector of Uzbekistan has noticeably improved in recent years.

The media around the world will never tire of writing about the economy, and in particular the state of the energy sector. And this is understandable. To paraphrase one of the leading philosophers of the 19th century: "It’s hard to think about the sublime when you have a stone in your shoe." In other words, when you are hungry, you want to eat; when it’s cold, you want to warm up; when it’s dark, you want light - and for all this you need energy! When there is a lot of negative and disturbing information around, you want to remain optimistic and find something positive in order to continue moving forward.

The Western press and analysts have always followed and follow the state of world energy in general, and dozens of international organizations compile annual reports on each individual country. The Republic of Uzbekistan is not deprived of attention. On the contrary, when with the coming to power of the new President Shavkat Mirziyoyev, energy reform became part of the government’s broad package of structural and institutional reforms, which is aimed at modernizing the economy and society of Uzbekistan, attention to the country has only increased.

Perhaps the most respected international organization, whose opinion about energy is heard by the vast majority of state and public structures around the world, is the International Energy Agency (IEA / IEA). Interestingly, seven years ago, in 2015, the IEA noted the deplorable state of the energy sector in Uzbekistan, the fall in energy production, and made a number of recommendations aimed at improving the situation. They included:

1. Focus primarily on electricity and heat networks to avoid energy loss during its transportation.

2. Plan to phase out energy subsidies with a gradual transition to cost-effective tariffs for electricity, heat and natural gas. Improve the investment climate and develop conditions for government investment programs.

3. Continue to develop the huge solar potential of the country; evaluate the development of off-grid solar panels in remote areas.

4. Continue to apply the latest technologies for enhanced oil recovery and gas production, the discovery of new fields for exploration and production of oil and gas; assess the country’s shale oil and gas potential and encourage foreign direct investment in the country’s upstream oil and gas industries.

5. Promote research and development activities on the most relevant aspects of traditional, alternative or non-traditional energy sources in order to encourage prudent investment in the development of both traditional and alternative energy sources in the country.

Much has changed in Uzbekistan since then. Most importantly, a new government has come and taken a radical course of change - in politics, the economy, the social and legal spheres, as well as in international relations. A quote from the IEA Uzbekistan Report 2022 reads: “The broad-based energy sector reform that began in 2019 continues at a steady pace. Its scope and scope is ambitious compared to other countries, and the IEA applauds the government of Uzbekistan for the progress made to date.”

The energy reform is being implemented in stages and is already producing results, and this process will continue over the next few years. It is important to note that many of the IEA recommendations have already been implemented, and the fact that it is impossible to completely change the state of the energy industry in five years should not surprise anyone. It took decades to establish the sector in the 20th century; For decades, the fixed assets created under the Soviet regime wore out. Now the time has come to implement cardinal changes at a new stage in the formation of Uzbekistan. These changes are already taking place and are being widely covered by the world press.

The Power Sector Transformation and Resilient Transmission Project was approved by the World Bank Board of Executive Directors in 2021. The project aims to improve the performance of the National Electric Grid of Uzbekistan (NESU) to ensure reliable power supply to millions of households and businesses across the country.

The project is supported by a US$380 million loan from the International Development Association (IDA) and a US$43 million loan from the Green Climate Fund (GCF) through the Sustainable Renewable Energy Risk Mitigation Initiative. The Government of Uzbekistan will receive this financing at very low interest rates and with the longest repayment period of up to 40 years.

It’s no secret that Uzbekistan’s energy supply is dominated by natural gas. In recent years, about 85% of both the total energy supply and electricity supply have been provided by gas, and this important product is the main source of energy in all sectors. Gas has also been one of the main sources of export income, but now the government has decided to stop exports by 2025 and use gas for value-added petrochemicals and domestic energy.

Russia has plenty of its own gas, and China is using its many supply sources to put pressure on the price. After analyzing the situation, Uzbekistan decided to use its gas domestically to improve energy security and create a petrochemical sector, where it can use it to meet domestic needs for fuel and mass production.

A recent major addition to Uzbekistan’s gas infrastructure is the Liquefied Gas (GTL) plant at Shurtan. The enterprise processes 3.6 billion m3 of natural gas per year to produce 1.5 million tons of high-quality synthetic fuel that meets Euro-5 requirements. Construction began in 2017 and commissioning began in 2022. The GTL complex uses purified natural gas from the Shurtan Gas Chemical Complex. The US$3.7 billion project is the largest in the country’s industrial history and was funded by a consortium of international banks. Its construction was covered by the international specialized press for several years.

This is how the well-known international publication TXF (Trade and Export Finance) commented on the GTL project: “This is one of the most ambitious energy projects in the world, which will be a high-tech plant producing more than 1.5 million tons of high-quality, environmentally friendly synthetic liquid fuel year. The products will be produced under the brand name Oltin Yo’l GTL, which translates as "Golden Road" and symbolizes the path leading Uzbekistan to a future with more environmentally friendly and sustainable processes. The resulting GTL products will be used in the transport, agricultural, aviation and petrochemical sectors of the economy of Uzbekistan.”

Moreover, Oltin Yo’l GTL has won one of the world’s most prestigious awards in the energy sector, the Platts Global Energy Transition Award 2022.

Achievements and plans in the oil industry do not lag behind the gas industry. This is where Saneg’s success is particularly noticeable. According to a journalist from BNE Intellinews:

“While SANEG openly declares its intention to “return the ancestral wealth” of Uzbekistan to its people, it is also open to the use of foreign technologies, in particular American well exploration technology, and is the first country in Central Asia to apply such technology. The technology of the American company Downhole Vision allows to reduce costs and increase safety when inspecting the wellbore. According to Sergey Ryabov, Chief Power Engineer of Sanega, the introduction of new well technology helps to "reduce the risk of accidents at wells by up to 95%." Uzbekistan is also now in the process of establishing a new research institute for its oil industry. […] All countries of the world strive to provide themselves with food and energy, and SANEG hopes to become the core of Tashkent’s efforts in this direction.”

Another important specialized publication, Upstream, headquartered in Norway, closely follows the developments in the oil and gas sector of Uzbekistan and regularly publishes its observations and analysis of what is happening. “The assets formerly owned by Uzbekneftegaz are located in the three main production regions of Uzbekistan — Mubarek, Karshi and Andijan — where SANEG is trying to improve production by drilling more wells and applying the latest enhanced oil recovery technologies. […] The Uzbek private oil company Sanoat Energetika Guruhi is stepping up exploration work at its licensed areas on the Ustyurt Plateau in the northwestern part of the country.” Saneg’s efforts have also been frequently reported in a positive light by publications such as Argus Media and Energy Intelligence, without whose analysis no energy deal is made.

In addition to developing its own hydrocarbon deposits, the international press also praises Uzbekistan’s desire to develop the renewable energy sector. As noted in an article in the international edition of Euronews, Uzbekistan has set an ambitious goal - by 2030 to produce 30% of its electricity from renewable energy sources. The use of solar energy is one of the factors in the implementation of this plan. Uzbekistan has an average of 330 sunny days a year and the potential for solar energy is huge.

For example, the French company Total Eren has developed one of the first solar power plants in Uzbekistan. Launched in July 2022, the Tutli solar farm is located about a hundred kilometers west of the city of Samarkand. Operating at 131 MW, it generates around 270,000 kWh per year, enough to meet the needs of 140,000 households.

Eureporter in a recent publication noted that in Uzbekistan, as in many countries, the energy sector is an important part of the economy, which in 2021 will account for 17% of GDP. Uzbekistan has committed to generating 25% of its electricity from renewable energy sources by 2026 and has set itself the ambitious goal of achieving zero carbon emissions by 2050. The publication also quoted Clive Turton, Chief Investment Officer of ACWA Power, who hailed the government of Uzbekistan’s long-term approach to public-private partnerships (PPPs) and the stability of regulation in the sector: US$10 billion with the government to develop wind, water, solar and clean hydrogen projects."

Pierre-Paul Antenissens, director of the French EDF in Uzbekistan, echoed these sentiments and described how the country’s innovative approach to PPPs has made Uzbekistan a preferred partner in the region, as EDF looks to play its part in efforts to stimulate clean energy production, transmission and distribution .

If we sum up the reports of the international specialized press, which is guided only by its own principles of objectivity and impartiality, the state of the energy sector of Uzbekistan has improved markedly in recent years. If the already outlined plans for the development of new oil wells, the use of modern production methods, the expansion and modernization of oil refining capacities are implemented, then in the next few years, domestic production will once again exceed imports of petroleum products.

However, this does not mean that it is already possible to rest on our laurels - reforms are ongoing and much remains to be done so that the young and rapidly growing society of the Republic always has enough warmth, light and energy, and new generations of Uzbeks grow up in prosperity and well-being.