Uzbekistan Advances Energy Transition and Power Modernization

Tashkent, Uzbekistan (UzDaily.com) — Uzbekistan, a major energy producer in Central Asia, is facing critical challenges in its power supply system that require large-scale modernization of both generation capacity and grid infrastructure, according to a 2026 report by the Eurasian Development Bank.

The country’s installed power generation capacity stands at 21.259 gigawatts, with total electricity production reaching 81.5 billion kilowatt-hours. However, per capita electricity consumption remains twice below the global average — 1,800 kilowatt-hours annually compared to 3,500 globally — and four times lower than in countries such as Russia or France.

Uzbekistan’s energy mix remains heavily dependent on natural gas. As of mid-2025, gas-fired generation accounted for 73.7 percent of total electricity output. Hydropower contributed 8.5 percent, while renewable energy sources — despite recent investments — generated only 11.7 percent. Coal accounted for 6.1 percent.

This structure highlights the growing vulnerability of the national energy system, which became evident during the severe energy crisis of January 2023. Extreme cold triggered a sharp surge in electricity demand, leading to a drop in gas pressure and the shutdown of several power plants.

The resulting widespread blackouts exposed the risks of insufficient diversification of generation capacity and the lack of reserve energy sources.

Reliability issues are further compounded by the deteriorating condition of transmission and distribution infrastructure. According to the report, electricity losses in Uzbekistan’s grid reach 17.8 percent — two to three times higher than in developed countries. More than 33,000 outdated transformers and 122,000 kilometers of power lines require replacement or major overhaul.

Electricity demand in Uzbekistan continues to rise steadily. Consumption increased from 93.5 billion kilowatt-hours in 2014 to 119.9 billion kilowatt-hours in 2024. With an average annual growth rate of 3.2 percent, demand is projected to reach 151.2 billion kilowatt-hours by 2030 — a 37.3 percent increase compared to 2024.

A key driver of the energy transition is the sharp decline in natural gas production. Over the past six years, output has fallen by 27 percent — from 60 billion cubic meters in 2019 to 44 billion cubic meters in 2024 — significantly undermining the country’s energy security and accelerating the need to diversify energy sources.

In response, the government has launched an ambitious renewable energy development program. Initially targeting a 40 percent share of renewables in total electricity generation by 2030 under the “Uzbekistan–2030” strategy, the goal was raised in January 2025 to 54 percent.

To support this objective, authorities have announced more than 50 clean energy projects with a total value exceeding US$26 billion, aimed at adding approximately 25 gigawatts of renewable capacity.

Implementation is already underway. In 2023 and 2024, the first large-scale solar plants were commissioned with strong participation from foreign investors. Wind farms are also under construction near Nukus and in the Jizzakh region. By the first half of 2025, renewables accounted for over 22 percent of electricity production, including around 12 percent from solar and wind sources.

At the same time, Uzbekistan is modernizing its existing thermal power plants. Plans предусматривают реконструкцию мощностей в размере 3 gigawatts. This is particularly important given that many large thermal units have been operating for more than 25 years with efficiency rates of 25–35 percent, compared to over 60 percent for modern facilities.

Nuclear energy is also being considered as part of the diversification strategy. Construction has begun on two types of nuclear power plants: a small-scale facility with two RITM-200N reactors and a large plant with two VVER-1200 reactors. The first small nuclear unit is expected to be commissioned in 2029, with full deployment of both types planned between 2029 and 2035 in cooperation with Russia.

Tariff policy remains a key constraint on sector modernization. Average electricity tariffs for households range between 3.8 and 7.5 cents per kilowatt-hour, significantly below cost-recovery levels. Although gradual tariff adjustments are underway, current prices remain subsidized, leading to chronic underinvestment in the sector.

To mitigate the social impact of rising energy costs, the government has introduced protection mechanisms. A 2022 law on energy efficiency mandates energy audits for large enterprises and public institutions. In parallel, programs offering concessional loans for energy-efficient equipment and subsidies for vulnerable households are being implemented.

Geography adds further complexity. Major consumption centers such as Tashkent and the Fergana Valley are located in the northeast, while new renewable capacity is being developed in the sunny southern and western regions. This requires substantial investment in transmission infrastructure to deliver electricity from generation sites to demand centers.

According to EDB experts, Uzbekistan is gradually improving its energy security and sustainability indicators. The expansion of solar and wind capacity, combined with the modernization of thermal plants and the development of flexible generation, is strengthening both dimensions simultaneously.

However, the success of the energy transition will depend on the country’s ability to build infrastructure capable of integrating variable renewable energy into the existing system.

Carbon intensity in Uzbekistan is estimated at 0.4–0.5 kilograms of CO₂ per US dollar of GDP, above the global average and reflecting the current reliance on fossil fuels.

Against the backdrop of global decarbonization trends and declining gas reserves, Uzbekistan faces the imperative of a comprehensive transformation of its energy sector. This process will require balancing the goals of improving supply reliability, maintaining affordability for households and businesses, and reducing the economy’s carbon footprint.