China and Uzbekistan are cooperating on dozens of new energy projects
The power sector in Uzbekistan is facing serious problems this winter. The unusual cold showed that the country lacks not only power generation capacity, but also a large-scale modern power grid as well as transform substations. After correcting the mistake, the government approved a plan of special measures to change the situation. One of the directions is to purchase modern equipment and develop alternative sources of power generation. In this regard, China, with its unique capabilities in the construction of solar and wind power plants, as well as in the production of power grid and transformer equipment, can be an important partner for the country.
In recent years, Uzbekistan has given high priority to the construction of wind farms. Today, with the construction of solar power plants, the country has become one of the fastest growing regions in the global energy sector. China is the undisputed leader in this direction.
By 2022, China will add 141 GW of installed renewable energy capacity. This is far more than the European Union and the United States combined, and almost half of the record 295 GW of new capacity installed worldwide last year. Renewable energy sources account for 31.3% of the Chinese power industry's total generation capacity.
In addition, experts point to the trend of reducing the cost of electricity generated by wind farms. As a result, the average cost of such power has fallen by 56% between 2010 and 2020, from 8.9 cents to 3.9 cents per kilowatt hour. This is why the Uzbek authorities are paying such close attention to building new wind power capacity.
It is worth noting that the wind potential indicators for the areas identified for wind farm construction in Uzbekistan are higher than the world average for existing wind farms. That is, when comparing capacity utilization factors, it was found that the country performs 1.5 times better than the world average. For example, wind farms in Uzbekistan have a total of 8,760 hours per year and can operate at full capacity for about 3,900 hours. Chinese partners will help to effectively realize this potential.
At the end of March, the Ministry of Energy of Uzbekistan signed a memorandum of understanding with China Huadian Overseas Investment, China Electric and Sanyi Energy to study the possibility of building a wind farm with a capacity of up to 1,000 kW in the Jizak region. According to the document, China Huadian Overseas Investment will participate in the project as investor, China Electric as general contractor and Sanyi Energy as wind turbine supplier. The project's cost is estimated at one billion dollars.
Li Zhigang, deputy general manager of China Electric, said that Uzbekistan has great potential in the green energy sector and the key is to use it correctly.
"There are three important reasons for Chinese companies to invest in Uzbekistan's energy sector. The most important is that China's Belt and Road Initiative is in line with Uzbekistan's new energy development strategy. Secondly, Uzbekistan has excellent conditions for the development of solar, wind and other renewable energy sources. Thirdly, Chinese enterprises, including us, have rich experience in this area, and we are willing to develop green energy in Uzbekistan together with our partners."
He said that Chinese electricians will not stop at the construction of the Gizak wind farm alone. The issue of building solar stations and energy storage systems in a region of Uzbekistan has already been resolved.
"We intend to attract as many specialists as possible to Uzbekistan to study the energy market and further develop the country's potential in this direction. To this end, a special roadmap for projects in the field of renewable energy will be developed. This will further strengthen Sino-Uzbek cooperation and lay the foundation for the formation of a green, stable and reliable energy system in Uzbekistan." He stressed.
Solar energy partners
Over the past four years, Uzbek authorities have signed 25 investment agreements for commissioning new facilities with a total capacity of 11,954 MW worth $10.1 billion to increase power generation capacity. By the end of 2026, the country will have 25 power plants in operation: nine thermal and solar power plants, and seven wind power plants. This is 60 percent of the current capacity of Uzbekistan's energy system.
Solar energy will play an important role in this process, and China is leading the way in the international market. That is why Uzbekistan immediately signed two major contracts with Chinese companies in this regard.
In particular, on February 15, the Ministry of Energy and China Energy Construction signed a memorandum of understanding on the construction of photovoltaic power plants with a total capacity of 2,000 MW in the Kashkadarya, Bukhara and Samarkand regions. The Chinese side plans to invest $2 billion in these projects. The first capacity is expected to be operational by the end of this year, and the facilities will be fully operational by 2024. It will generate 5.2 billion kWh of electricity and save 1.4 billion cubic meters of natural gas annually.
In addition, on February 20, Uzbekistan signed a cooperation agreement with a consortium of Chinese companies Huaneng New Energy and Poly Technologies to build solar photovoltaic power plants with a total capacity of 2,000 MW in the Jizak and Tashkent regions.
Within the framework of the document, the consortium will make a direct investment of $2 billion. The first phase will start construction by the end of this year and is expected to reach full capacity next year. This will result in the generation of an additional 5 billion kWh of electricity per year, thus saving 1.3 billion cubic meters of natural gas.
Uzbekistan is also focusing heavily on the technological basis of the green project and the possibility of localizing the solar power plant equipment. In this regard, negotiations are underway with the Chinese IT giant Huawei. Huawei Digital Energy focuses on the development of digital energy. 2021, its solutions produced 482.9 billion kWh of green energy for its customers, reducing CO2 emissions by 230 million tons, which is equivalent to planting 320 million trees.
In September 2022, Huawei and the Ministry of Energy of Uzbekistan signed a memorandum of understanding and held a meeting to establish long-term mutually beneficial cooperation. The parties are now discussing the possibility of integrating digital and energy technologies in Uzbekistan based on the decision of a Chinese company, as well as the development of residential energy and electrification of large enterprises through small solar stations. Special attention is being paid to projects for localized production of inverters for solar installations and electric vehicle chargers in Uzbekistan, as well as joint training of personnel in this area.
"The leaders of Uzbekistan have developed plans to increase and rapidly increase the capacity of the energy system through the implementation of projects in the field of renewable energy, providing clean and affordable energy for the population and achieving carbon neutrality. Uzbekistan has already implemented a number of large solar power plant projects, which for the second year in a row have yielded good results. For our part, we will strive to contribute to further strengthening the country's energy system and implementing a green strategy based on our values." said Cyperus Yao, President of Huawei's Digital Energy Business Unit in the Middle East and Central Asia.
Chen Jia Kai, Huawei's director in Uzbekistan, said the company already has experience implementing and participating in large-scale industrial power plants in Uzbekistan's commercial and industrial sectors, as well as domestic solar power plants introducing photovoltaic technology and energy storage projects.
The head of the Tashkent office said, "Considering the firm approach of the country's leadership to increase the use of renewable energy, today we have a great opportunity to leverage Huawei's experience to help Uzbekistan make a rapid transition to green energy." He stressed.