UN ESCAP: Central Asian Energy Connectivity Requires Trust and Transparent Rules

Tashkent, Uzbekistan (UzDaily.uz) — The Eurasian Development Bank (EDB) and the United Nations Economic and Social Commission for Asia and the Pacific (UN ESCAP) have announced a joint report on the architecture of Central Asian energy connectivity. Prepared with the participation of the "Energia" Coordinating Dispatch Center, the main findings of the document were presented by UN ESCAP Economic Affairs Officer Sergey Tulinov during the EDB annual meeting. The full version of the report is expected in August of the current year.

Tulinov emphasized that Central Asia does not approach the issue of energy integration from a zero starting point. The region inherited an extensive network infrastructure, decades of experience in the parallel operation of power systems, established seasonal water-energy exchanges, and resource complementarity.

Currently, the power systems of Uzbekistan, Kyrgyzstan, Tajikistan, the southern part of Kazakhstan, and Turkmenistan, as well as the northeastern part of Afghanistan (connected through island schemes), operate in parallel.

As of early 2025, the installed capacity of the Central Asian United Power System stood at approximately 38 GW. In 2024, electricity generation in the region reached 125 billion kWh against a consumption of around 142 billion kWh, while regional trade volume amounted to 12 billion kWh — more than five times higher than the minimum recorded in 2010. Nevertheless, the advisor pointed out that the potential for connectivity is far from exhausted, as the share of cross-border exchanges in total consumption remains lower than in many other integrated power systems globally.

Among the key obstacles to expanding trade, Tulinov cited not only commercial conditions but also technical factors: congestion in interstate cross-sections, hydrological dependence of the system, asset depreciation, insufficient reserves, and unsettled commercial metering issues. In several sections of the United Power System, actual power flows are already closely approaching or exceeding allowable values. In the winter period, this leads to limitations on trade, transit, renewable energy connection permits, and emergency support to neighboring states.

In this regard, the UN advisor focused attention on the principle of systemic effect when evaluating new grid projects. According to him, the mere fact of building a transmission line is insufficient; each project must yield a measurable increase in throughput capacity, reduce bottlenecks, expand opportunities for connecting renewable generation, and improve overall system reliability.

The economic effect of regional integration, according to preliminary estimates, could exceed 1 billion dollars per year. The net effect after factoring in costs will amount to approximately 570 million dollars annually. Tulinov explained that the sources of this effect are diverse: seasonal and daily arbitrage between nodes with different generation costs, shared use of reserves without full duplication in each country, reduction of emergency costs, removal of restrictions on connecting renewable energy, and increased utilization of existing assets.

However, he explicitly warned that if the mechanism for distributing benefits among participants remains undefined, an economically viable project risks becoming politically unfeasible. One country may receive transit revenue, another may see restrictions lifted on renewable energy, and a third may receive compensation for hydropower flexibility, but the rules for such distribution must be understood and established in advance.

The report describes a phased model for developing the regional electricity market:

Phase 1: Clarifying active trade mechanisms.

Phase 2: Launching a pilot day-ahead market based on European models.

Phase 3: Transitioning to a real-time market with system services.

Phase 4: Forming a common capacity market based on a regional assessment of capacity adequacy, recognition of cross-border resource contributions, and transparent payment mechanisms for delivered electricity.

According to Tulinov, this sequence is fundamentally important, as transitioning immediately to a complex market is impossible, and premature decisions could undermine participant trust.

A separate section of the report is dedicated to external energy corridors. Central Asia is viewed as a potential energy hub between several regional systems. Priority directions include the CASA-1000 southern corridor, opening up hydropower exports to Pakistan and further to India through Afghanistan; the northern vector through Russia, significant for maintaining the stability of the United Power System; the Chinese direction as a large potential market; a trans-Caspian green corridor for long-term export of surplus renewable energy; and the Turkmenistan–Iran direction.

At the same time, the UN advisor warned that external corridors do not replace internal integration, and their sustainability directly depends on how integrated and manageable the United Power System is from within. In the absence of internal integration, external directions will compete for the same limited network and production resources.

Summing up, Tulinov formulated the key thesis of the report: energy connectivity in Central Asia already exists, but its future value is determined by the level of management and transparency. The region needs not only new megawatts of generation but also the ability to maintain a coordinated system operation regime, regulate flows, manage deviations, adequately pay for flexibility, and direct investments where they yield a measurable systemic effect.

Regional cooperation, the advisor concluded, is not an addition to energy security but an integral component of it. He named the strengthening of trust between countries as the critical next step — both through concrete regulatory instruments and rules and through political will, without which no document gains real force.