TOPIC OF THE WEEK: Energy independence is a key limitation to Uzbekistan's ambitious growth objectives
Unfortunately, this week brought painful memories from last winter, when severe cold spells caused electricity blackouts and temporary closures of key enterprises. Low temperatures led to a drop in gas pressure in Uzbekistan’s main gas pipelines, which, in turn, brought about a number of key accidents in power transmission lines and, ultimately, to a decline in electricity production. The Ministry of Energy had to introduce limits on electricity consumption and close all gas stations in the country.
These cyclical hardships have been overlaid by structural impediments related to Uzbekistan’s transition to a net gas importer status by 2023, a year or two earlier than expected. The switch to a net energy importer transpired even earlier, in 2021.
We discuss the reasons behind the structural transition to importing natural gas and the ambitious energy security measures and reforms that the government aims to implement over the first half of this year. These initiatives must deliver to meet strong expected growth of electricity consumption (total and per capita) in the years to come if Uzbekistan is to be successful at being able to enjoy brisk economic growth in the medium term.
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