Electricity tariffs in Uzbekistan “may” increase

Abu Dhabi Future Energy Company PJSC, which operates under the Masdar brand, has won two tenders for the construction of photovoltaic power plants in Uzbekistan, the press service of the Ministry of Investments and Foreign Trade reported last week. One of the plants is to be built in the Kattakurgan district of the Samarkand region, while the second will be located in the Gallaaral district of the Jizzakh region. Both plants would have a combined capacity of 440 MW. 

Masdar’s offer was considered as most reasonable. It has offered a tariff of 1.823 cents per kWh for the project in Jizzakh, and 1.791 cents for Samarkand plant", the ministry said in a statement.

Both projects, worth nearly $400mn, are set to be commissioned by the end of 2022.

The investor is also committed to building a solar power plant, as well as a new 220 kV substation.

As part of these projects, Uzbekistan intends to deploy up to 1 GW of cost-effective and environmentally friendly solar generation. By 2030 this figure is expected to reach 5 GW.

According to Bakhrom Umarbekov, Deputy Director of the Project office of Uzbekistan’s ministry of energy, in general, the tariffs are expected to stay at the same level in the republic, and no decrease is projected, as the tariff formula has many variables resulting the final costs based on transporting and delivery of power to the final consumer.

“The efficiency levels at most of the gas turbine fleet that we have are very low. We expect the decommissioning of all those turbines in the next several years and replace them with CCGT turbines which are very efficient and which utilize twice less gas. Depending on higher operational costs and high fuel usage we expect the tariffs to remain at the same level. Structurally there may be some changes. Currently, the household tariffs are very low and possibly in the future they may go up because there are higher costs associated with the distribution of power to the final consumer so that cost should be worn by households”, - he said.

Masdar has already been running several alternative energy projects in Uzbekistan. The company is building a 100 MW photovoltaic plant in Navoi, a 500 MW plant in Zarafshan, a 40 kW small solar plant in the Tashkent region, and more.