Tashkent, Uzbekistan (UzDaily.com) -- The cost of electricity should be acceptable, and at the same time, the electric power industry must come closer to working in a market economy. What are the resources for fulfilling these tasks set by the President of Uzbekistan during the meeting held on 26 October 2020? This was reported by the press service of the Ministry of Energy of the Republic of Uzbekistan.

The Ministry of Energy of the Republic of Uzbekistan, from the first days of its formation in February 2019, has been solving the problem of developing the country’s fuel and energy complex on the basis of market relations adopted throughout the world.

The period of the pandemic has raised new questions in the electricity sector, including in the area of pricing. On the one hand, nobody canceled the processes in the direction of market rules, on the other hand, taking into account the social component of the country’s internal policy, during the quarantine period there were arrears in payment for the same electricity. Thus, underfunding due to arrears, as well as a course towards freezing tariffs, that is, not raising prices, are significant problems for fulfilling the task of maintaining the electric power industry in good condition. Routine and major repairs, modernization of the electric power network, equipment of thermal power plants, hydroelectric power plants and other necessary steps are the guarantor of a stable energy supply to the country, and all this requires funds.

So, what will allow the power industry, on behalf of the head of state, not to raise prices in the coming year and maintain a social focus in pricing in the coming years?

One of the strategic directions for this is to pay, first of all, the greatest attention not only to the commissioning of production facilities, but also to reducing costs due to operation in the most optimal mode. There are reserves for reducing costs in the power industry. Of course, their identification and mobilization requires considerable efforts and changes - through the study of the best international experience and the active adaptation of proven methods, through the constant growth of the professional qualifications of industry specialists, through the continued development of new approaches to industry management.

Even today, given the current tariffs, it is possible to attract sufficient financial resources to the industry - in exchange for cost reduction due to internal reserves. The transformation of electric power enterprises means, first of all, that the growth of their income is directly related to the reduction of costs, the constant search for resources for this.

The strategy of increasing revenues in the electric power industry only by increasing prices is irrevocably a thing of the past. And this is largely the result of the introduction of market relations in the country’s economy. After all, today, unless costs are reduced in the electric power industry, and investment growth is not increased, other sectors of the economy will suffer as a result. And this cannot be allowed, because it is a question of the competitiveness of Uzbek producers.

The pandemic itself has sharply raised issues of access to foreign markets. In addition, logistics in general is one of the most difficult issues in the export of Uzbek products, including due to the country’s geographical location. Domestic products, especially industrial ones, will not be able to compete on the world market if we do not cover our losses in logistics with other aspects, including energy resources, which are relatively cheap.

The transformation of electric power enterprises, as it was emphasized at the meeting, chaired by President Shavkat Mirziyoyev, is a necessary path, which is an important stage for creating a competitive electricity market in the future. There is no other way to sustainably meet the growing demand for electricity.

At the same time, as was emphasized by the head of state, when implementing the transformation, it is necessary to pay attention to such important components as the maximum liberalization of the electric power sector, that is, reducing government interference in work on market principles, on the one hand, and maintaining strong social protection, on the other. 

Following these principles, and this is proved by the best world experience, will allow the constant search for reserves to reduce costs in the power industry, effective management and a high level of specialists in the field. The entire fuel and energy complex of the country is currently engaged in the implementation of these tasks under the coordination of the Ministry of Energy.