Uzbekistan Builds Next-Generation Energy System for Growth

Tashkent, Uzbekistan (UzDaily.com) — Uzbekistan has entered the most complex phase of its energy transition, moving from expanding generation capacity to building a fully flexible energy system capable of integrating large volumes of renewable generation. That was the conclusion of participants at an energy panel session held during the fifth Tashkent International Investment Forum.

Igor Alexeyev, Managing Director at BCG and moderator of the discussion, outlined the key parameters of the transformation. By 2035, domestic electricity consumption is forecast to reach 123 TWh, up from the current 71 TWh — a rise of 73%. Installed capacity must more than double, from 26 to 58 GW, energy storage capacity will grow from 1.2 to 4.4 GW, and the high-voltage grid will expand from 12,000 to 20,000 kilometres. In 2025 alone, solar and wind generation accounted for more than 10% of the country's electricity output — twice the share recorded the previous year.

Umid Mamadaminov, Deputy Minister of Energy of Uzbekistan, identified five systemic priorities for the coming decade.

The first is the development of transmission and distribution infrastructure: the grid, rather than generation, has become the primary constraint on growth.

The second is reserve capacity: the country requires a reserve margin of 25 to 30% to balance intermittent renewable generation, a role to be filled by energy storage systems, fast-start gas turbines, and small hydropower plants with pumped storage.

The third is digitalisation: next-generation grid management systems require advanced forecasting algorithms and the real-time application of artificial intelligence.

The fourth is regional integration: together with partners and with support from the World Bank and the Asian Development Bank, Uzbekistan is developing balancing markets and advancing a subsea cable project across the Caspian Sea to export surplus electricity to Europe.

The fifth is baseload power: several weeks ago the country broke ground on a nuclear power plant comprising two small modular reactors and two large-capacity units. Mamadaminov said the wholesale electricity market reform will be completed by the end of next year.

Abid Malik, President of Acwa Power for Central Asia, said that in the six years since the company entered Uzbekistan in 2020 with no portfolio, its total capacity in the country has exceeded 12 GW, with cumulative investment of US$15 billion.

Already operational are the 1,500 MW Syrdarya combined-cycle gas power plant, Central Asia's largest wind farm at 1,000 MW in Bukhara region, and a number of energy storage projects. Under construction in Samarkand are a 1,000 MW solar plant and a 1,500 MWh storage facility. The company has built approximately 500 kilometres of transmission lines and is laying a further 2,000 kilometres under current projects — an approach described as unique for a private investor.

Acwa Power has also invested in the education of more than 200 students at Shirin Technical College, including 78 from Karakalpakstan. Malik noted that female graduates of the programme are now operating the company's solar and wind facilities from control centres.

Maryam Almazrouei Rashed, Director of Business Development for the CIS at Masdar, said the company was the first to enter the Uzbek market in 2019 and today operates more than 2,000 MW of solar and wind generation, with plans to double its portfolio.

In December last year, the 250 MW Nurabad project came online — the country's first utility-scale solar plant with an integrated storage system. Construction has begun on the 300 MW Guzar solar plant. Together with the government, Masdar is developing Uzbekistan's first 500 MW round-the-clock renewable energy project, for which an agreement was signed with the Ministry of Energy in January.

Masdar also announced the formation of a US$2.2 billion equal-share joint venture with TotalEnergies to develop projects across nine countries, including Uzbekistan.

Takefumi Nishikawa, Executive Director at Sojitz Corporation, described the company's investment strategy spanning both sides of the energy equation: on the supply side, a 1,000 MW wind farm in Baysun district and the 1.6 GW Syrdarya-2 gas-fired combined-cycle power plant; on the demand side, energy efficiency projects and the modernisation of gas compressor stations.

Nishikawa highlighted two factors that make Uzbekistan attractive for long-term investors: political leadership at all levels of government, and what he described as "behavioural reliability" — a culture of dialogue and collaborative problem-solving when difficulties arise.

Shule Kilic, EBRD Director for Energy in Eurasia, said the bank has financed approximately 7 GW of renewable energy projects in Uzbekistan since 2018, including around 5 GW of solar and around 2 GW of wind and storage, and has allocated 500 million euros for transmission infrastructure and substations. She identified the grid as the primary obstacle to further development, noting that transmission is a bottleneck for renewable energy investment in every country accelerating its energy transition, not only Uzbekistan.

To attract private capital into grid infrastructure, Kilic proposed two mechanisms: bond issuance contingent on improving the financial sustainability of the system operator through fully cost-reflective tariffs, and concession structures based on availability payments.

She cited Turkey's experience of fully privatising distribution networks as an additional reference point for Uzbekistan, noting that an Uzbek delegation had already visited relevant Turkish authorities to study the lessons learned. A pilot privatisation project for distribution in Samarkand is considered a promising starting point.

Sama Bilbao y León, Director General of the World Nuclear Association, welcomed the start of construction of Uzbekistan's first nuclear power plant. She said the two 55 MW small modular reactors and two large 1,000 MW units will together generate more than 17 billion kWh per year at an installed capacity of 2.1 GW, with the first unit scheduled to come online in 2029.

She noted that with a capacity factor of 90 to 95%, nuclear generation requires significantly less investment in supporting grid infrastructure compared with intermittent sources.

Nuclear energy is also seen as a source of high-temperature heat for critical minerals processing, petrochemicals, and green hydrogen production — in line with Uzbekistan's broader strategy of increasing industrial value added.

Summarising the discussion, Alexeyev identified three key conclusions: the country's central challenge has shifted from expanding generation to building a balanced energy system with adequate grid infrastructure, storage, and market mechanisms; a diversified energy mix encompassing renewables, conventional generation, nuclear power, and storage is the only sustainable solution for the country; and attracting capital at the scale required demands a stable regulatory environment, institutional reliability, and projects structured to meet the requirements of project finance.