Powering the Future… How Uzbekistan Is Turning Energy Reform into Economic and Green Gains

Ashraf AboArafe reports

Uzbekistan is rapidly transforming its energy sector—modernizing infrastructure, embracing renewables, and introducing market-driven pricing mechanisms. Since 2017, the country has added over 11,000 MW of new capacity, improved supply quality in thousands of settlements, and empowered households to adopt energy-saving technologies. Green energy, solar adoption, and tariff liberalization are not only improving efficiency but also cutting emissions and generating economic returns. These bold reforms are shaping a sustainable, future-ready energy model for Central Asia’s most populous nation.

Since 2017, Uzbekistan has embarked on sweeping energy sector reforms aimed at improving efficiency, modernizing aging infrastructure, and introducing market-based systems. Between 2017 and 2024, eight new laws and over 90 presidential and cabinet resolutions laid the legal and regulatory foundation for a major energy transformation.

Electricity production rose by 38%, from 59 billion kWh in 2016 to 81.5 billion kWh in 2024. Per capita generation also increased by 18%, reaching 2,200 kWh. During this period, Uzbekistan commissioned 11,000 MW of new generation capacity—three times the volume added over the previous 25 years.

Despite robust economic growth, energy use per unit of GDP fell. From 2017 to 2024, Uzbekistan’s GDP expanded by 55%, while energy intensity declined by 7.4%. The country is producing more value with less energy—current usage stands at 56.8 kWh per 1 million sums of added value—reflecting growing efficiency across industries, services, and agriculture.

Infrastructure upgrades matched this progress. Over 54,800 kilometers of distribution networks and 17,200 transformer substations were modernized, vastly improving supply to more than 8,000 settlements. By contrast, only 9,300 km of lines and 4,800 transformers were upgraded between 1991 and 2016.

Scaling Up Renewable Energy

Renewables have become a central pillar of the country’s energy future. By the end of 2024, Uzbekistan launched 14 solar and 3 wind power plants in 10 regions, reaching a total installed capacity of 4,100 MW. Green electricity output hit 4.9 billion kWh that year.

Tariff Reform and Rational Energy Use

A key milestone was the 2024 liberalization of tariffs and the introduction of a social consumption norm to support market mechanisms and attract investment. A comprehensive study by the Center for Economic Research and Reforms (CERR) surveyed 3,516 households and analyzed data from 3.5 million gas and 8 million electricity subscribers to assess impacts.

From May to December 2024, electricity consumption dropped by 10.6% compared to the same period in 2023—equivalent to 1.3 billion kWh saved. Households consuming more than 10,000 kWh per month decreased sharply, from 80,000 in 2023 to just 15,000 in 2024.

The majority of households maintained usage within existing habits. Those consuming up to 200 kWh/month held steady—71% in 2023 and 72% in 2024. Similar trends were seen in gas consumption, with 58% of subscribers using up to 500 m³ in 2024, up from 54% in 2023.

Regions with historically high energy use—Samarkand, Tashkent, Andijan, and Namangan—showed the largest reductions, suggesting a widespread shift toward efficient use.

Improved Energy Supply and Public Satisfaction

Service quality improved significantly. Nearly half of respondents reported better access to electricity, gas, and liquefied gas. In particular:

• Electricity: 47% of households noted improvements, with highest satisfaction in Surkhandarya (78%), Syrdarya (70%), and Namangan (67%).
• Natural gas: 39% reported improved access, led by Khorezm and Surkhandarya (both 68%), and Jizzakh (60%).
• Liquefied gas: 45% saw improvements, with Syrdarya (73%), Surkhandarya (62%), and Namangan (59%) leading.

Household Efficiency and Renewable Adoption

Over 90% of households took at least one measure to cut energy costs. Most common:

• LED lighting: Adopted by 87%, exceeding 90% in regions like Karakalpakstan, Khorezm, Navoi, and Tashkent.
• Window/door insulation: Installed by 44%, especially in Kashkadarya (84%), Bukhara (69%), and Khorezm (54%).
• Efficient appliances: Purchased by 31%, highest in Jizzakh (60%), Navoi (59%), and Karakalpakstan (54%).

The shift toward solar energy is also growing. Around 64,000 households have installed solar panels, with a total capacity of 223.4 MW. Annual output reaches 313 million kWh—equal to saving 104 million m³ of natural gas. Over half of these households expressed interest in expanding capacity. The untapped potential stands at 1.9 million households, representing a domestic solar market worth more than $2.3 billion.

Yet, challenges remain: many still rely on outdated gas boilers and solid-fuel stoves. Residential infrastructure upgrades and technology incentives are needed to accelerate the transition.

Green Buildings, Lower Emissions, and Economic Value

There’s growing potential to improve energy efficiency in residential and public buildings. Thermal insulation, heating system upgrades, and window replacements in apartment buildings could save over $60 million annually.

The World Bank estimates that similar upgrades in schools, hospitals, and government buildings could reduce energy use by 20%–50% and save up to 7.1 billion kWh per year.

Environmentally, such reforms could cut greenhouse gas emissions by up to 780,000 tons of CO₂ annually. Uzbekistan already participates in international carbon markets, successfully trading surplus emission quotas. Expanded energy efficiency could increase revenues from carbon trading to $50 million annually.

Conclusion: A Market-Driven, Sustainable Energy Future

Uzbekistan’s energy transformation is not only technical—it’s strategic and economic. Through infrastructure modernization, green innovation, and market-based reform, the country is building an energy system that is efficient, sustainable, and responsive to future challenges. As reforms deepen, Uzbekistan positions itself as a regional leader in balancing growth with environmental responsibility.