Uzbekistan’s Ministry of Energy sums up results of activities in 2019 (Exclusive)

Uzbekistan’s Ministry of Energy sums up results of activities in 2019 (Exclusive)

BAKU, Azerbaijan, Dec. 20

By Fakhri Vakilov-Trend:

The year 2019 was a turning point in the process of large-scale reforms aimed at radically improving the efficiency of the fuel and energy complex of Uzbekistan, a representative of the Ministry of Energy told Trend in an interview.

The Ministry of Energy of Uzbekistan, founded in February 2019, became the single coordinator of reforms.

An important part of the process of reforming the fuel and energy sector is the modernization of the country's entire electric power industry. To this end, the ministry is working to implement the tasks outlined in the decree of President Shavkat Mirziyoyev “On the strategy for further development and reform of the electric power industry of Uzbekistan”. The provisions of this document are aimed at dramatically improving the efficiency of management, modernization and updating of generating capacities and electric transmission lines.

In line with the resolution, Uzbekenergo JSC was reorganized with the creation of three joint-stock companies: Thermal Power Plants JSC, National Electric Grids of Uzbekistan JSC and Regional Electric Grids JSC. The optimization of production processes was carried out taking into account the proposal of the World Bank to improve the management system of the electric power industry in Uzbekistan.

“That is, three joint-stock companies have been created, the first of which is responsible for the production of electric energy, the second is for transportation between regions and interaction with neighboring energy systems, and the third is for the sale of electricity to end consumers,” said the representative.

The official added that the electric power industry is the basic sector of the economy of Uzbekistan, which has significant industrial and scientific-technical potential and has a significant impact on the development of the economy and the welfare of the people.

According to the Presidential Decree, with the formation of Thermal Electric Grids JSC, the structure of the company includes 14 enterprises with various forms of ownership: 11 thermal power plants for the production of electric and thermal energy and three system-wide enterprises for the maintenance of power equipment and the supply of material and technical resources.

The bulk of electricity generation in Uzbekistan is produced by Thermal Power Plants (TPP) - 92 percent, while 7 percent and 1 percent are produced by Hydroelectric Power Plants and renewable energy respectively.

To date, the installed capacity of all thermal power plants of Thermal Power Plants​ JSC is 12.1 million kW, or 85.8 percent of the installed capacity of the unified electric power system of Uzbekistan.

For 10 months of 2019, 45 Kw/h billion of electric energy were generated by Thermal Power Plants JSC. In general, in 2019, the generation will be 57.3 billion kWh with a growth rate of 101.8 percent. In 2020, it is planned to increase the volume of electricity production up to 61.4 billion kWh.

This year, 1,787 MW of electricity generation capacities will be launched (12.6 billion kWh per year).

Given the need to ensure stable supplies of electric and thermal energy to the economy and the population of the country, large-scale investment projects are being implemented in the electricity industry, including the introduction of modern combined-cycle and gas turbine units.

In 2017, the construction of two combined cycle plants with a capacity of 230-280 MW at the Takhiatash TPP was started. This investment project is being implemented jointly with the US company General Electric and the South Korean consortium consisting of Hyundai Engineering and Hyundai Engineering and Construction.

With the commissioning of two combined cycle power plants, the station’s capacity will increase from 630 MW to 1,190 MW. The annual power generation of the station will increase from 3 to 4.8 billion kWh. The specific consumption of equivalent fuel for the generation of electric energy will decrease by 164.3 g/kW.h, which will save natural gas by 488.6 million cubic meters per year.

In 2016, the project “Expansion of Navoi TPP with the construction of the second 450 MW combined cycle plant” was launched using a Japan International Cooperation Agency (JICA) loan and a consortium of Mitsubishi Corporation and Mitsubishi Hitachi Power Systems, Ltd. (Japan) as a general contractor. Since the beginning of March 2019, the gas turbine has been operating in commercial operation at a load of 320 MW in a “simple cycle”. The combined cycle gas turbine (CCGT)-2 was put into operation on August 20, 2019, with a capacity of 450 MW. Equipment testing is underway.

In 2016, a contract was signed between Uzbekistan and the International Consortium of Japanese companies “Mitsubishi Corporation” and “Mitsubishi Hitachi Power Systems Ltd” for the construction of a new Turakurgan thermal power plant with the commissioning of two combined cycle plants of 450 MW each. The Turkish company Calik Enerji Sanayi ve Ticaret AS was a partner in the consortium for the construction of a number of components. The project is financed through a loan from the JICA, a loan from the Fund for Reconstruction and Development of Uzbekistan and own funds.

The uniqueness of the Turakurgan power station is that the project started from scratch.

The combined cycle of CCGT-1 was put into operation on August 8, it works in test mode. According to CCP-2, the installation of the main and auxiliary equipment is carried out, the gas turbine is scrolled. Commissioning work is underway.

As a result, an annual increase in electricity production by 6.7 billion kWh and a reduction in gas consumption by 480 million cubic meters will be provided for the needs of the Ferghana Valley; 300 people will be provided with work.

“This investment project is of strategic importance, allowing us to further increase the economic potential of the Ferghana region and ensure reliable supply of electricity to the region’s population,” the representative said.

In 2018, Phased modernization of Syrdarya TPP power units was launched (loan from Vnesheconombank, Russia). Within the framework of the project, Syrdarya TPP JSC and Russian Power Machines PJSC concluded a contract to upgrade six units of the Syrdarya TPP on a turnkey basis in three stages. This year, the power unit of No 3 was commissioned and on Sept. 12, it was included in the network, with a capacity of 315 MW. The commissioning of Unit 4 is also planned in 2019.

In 2018, “The introduction of highly efficient cogeneration gas turbine technologies at the Ferghana Thermal Power Plant and the Ferghana Boiler House RK-3” project was launched (direct investment by NEDO). Contractors for the supply and installation of equipment are Japanese companies Kawasaki Heavy Industries Ltd and Marubeni Utility Services Ltd. According to RK-3, all types of main works are completed; before the end of 2019, it is planned to launch a gas turbine with a capacity of 7 MW. The Japanese side completed the supply of equipment by 99 percent at the Ferghana TPP. Construction and installation work is underway, the launch of a gas turbine with a capacity of 17 MW is planned in 2020.

The representative added that in the process of reforming the fuel and energy complex of Uzbekistan, a significant place was given to the oil and gas industry, where the first stage of transformation was completed by the end of 2019.

This is, first of all, expressed in the formation of a new management system and organizational structure of Uzbekneftegaz JSC in accordance with the decree of the President of Uzbekistan dated July 9, 2019 “On measures to ensure stable provision of the economy and the population with energy resources, financial recovery and improvement of the oil and gas industry management system”.

The management of non-economic methods in the oil and gas industry has led to lags in the growth of hydrocarbon reserves and an increase in the deficit in natural gas, especially in private enterprise. The decree was adopted to eliminate these problems.

As a result of the reform, the companies of JSC Uzbekneftegaz, JSC Uzneftegazdobycha, JSC Uznefteprodukt, JSC Uzneftegazmash were merged with JSC Uzbekneftegaz.

Redundant intermediate links in the management system of Uzbekneftegaz JSC were reduced. Oil and gas producing and gas processing entities were also transformed into structural divisions of Uzbekneftegaz JSC.

JSC "Uztransgaz” was withdrawn from the structure of JSC "Uzbekneftegaz". Uztransgaz JSC has been identified as a single operator for the purchase of natural gas from gas producing enterprises for further transportation, including export and import, as well as for sale to consumers connected to gas trunk pipelines.

On the basis of territorial gas supply branches of Uztransgaz JSC, Khududgaztaminot JSC was established to operate gas distribution networks and supply natural and liquefied gas to the population and social facilities.

The restructuring of Uzbekneftegaz JSC are aimed at creating a transparent procurement system and turning the country's oil and gas industry into a financially stable and steadily developing industry. In the industry, measures have been taken to improve mechanisms for the sale of finished products, strengthen financial discipline and optimize pricing at enterprises in the oil and gas industry.

Reform of the oil and gas industry went in parallel with the implementation of current tasks. Following the results of 9 months 1.504 billion cubic meters of natural gas, 7,900 tons of oil and 27,600 tons of gas condensate were produced.

In addition, 356 oil and gas wells were repaired; 182 gas and oil wells increased hydrocarbon production due to repair and insulation works; work on intensification of production was carried out at 159 wells; eight wells were restored and put into operation from the liquidation fund; five wells were restored and put into operation from the conservation fund; 74 new wells were drilled and put into operation; at six technological sites, construction and installation works were completed.

As the official noted, 2019 was also marked by a number of reports on the receipt of industrial gas inflows from existing fields.

In particular, on October 28, 2019, as a result of drilling well No. 12 at the Uchtepa field, an industrial influx of natural gas was obtained with a preliminary flow rate of 150,000-200,000 cubic meters per day. The Uchtepa field is located in the Bulakbashi district of Andijan region. Earlier, industrial gas inflows with a flow rate of up to 385,000 cubic meters per day have already been received there from seven wells.

As a result of drilling well No. 12 in Cretaceous deposits, the industrial inflow of natural gas was obtained in the intervals of 1087-1080 m (XIX layer) and 1063-1054 m (XVIII layer).

Moreover, on October 28, 2019, an industrial inflow of natural gas was received at the Yormok field with a preliminary flow rate of 250,000-300,000 cubic meters per day. The structure is located on the territory of the Guzar district of the Kashkadarya region of Uzbekistan.

Another gas well was launched by Andijonneft JSC at the oil and gas field in the village of Uchtepa, Bulakbashi district. It was discovered in 2017 in connection with the production of natural gas of industrial importance from a 3rd exploration well. In November-December 2019, in the Uchtepa oil and gas field, drilling was carried out in gas well No. 12 and industrial gas was obtained.

At present, work is underway on laying gas pipelines to operate this gas well. It is expected that the volume of gas produced per day will be 50,000-60,000 cubic meters. On December 4, 2019, well No. 12 was activated. As a result, another 5,000 households in the Bulakbashi district were provided with natural gas.

The representative emphasized that this year can also be called a turning point for the development of the energy saving process. On August 22, 2019, the President’s decree “On Accelerated Measures to Improve Energy Efficiency in Economic and Social Spheres, Implementation of Energy-Saving Technologies and Development of Renewable Energy Sources” was adopted.

The target parameters of the commissioned capacities of renewable energy facilities in the period 2020-2030 have been developed, providing for an increase in the specific share of renewable energy sources in the total generation to 20 percent by 2025 and more than 25 percent by 2030. To achieve these parameters, a draft Concept for the country's fuel and energy support for 2020–2030 has been developed with the technical assistance of the World Bank and the Asian Development Bank. It envisages the construction of 10.9 GW of new renewable energy facilities, including 6 GW of solar energy, 3GW of wind and 1.9 GW of hydroelectric power plants under PPP conditions.

On October 15, Uzbekistan’s Commission on Energy Efficiency and Development of Renewable Energy Sources adopted a protocol decision which approved:

- A list of objects of state and economic bodies to be equipped with renewable energy sources in 2020, other energy-efficient and energy-saving equipment, as well as work to improve thermal protection. The list includes 1092 events, the annual effect (savings) from the implementation of which is predicted to be 66,900 tons of equivalent fuel;

- Methodology for determining indicators of improving energy efficiency and saving fuel and energy resources, the use of which in 2020-2022 provides for the achievement of savings of at least 2.4 billion kWh electricity, 2.4 billion cubic meters. natural gas and 20,000 tons of oil products;

- A list of economic sectors for evaluating their energy efficiency and saving fuel and energy resources, consisting of 30 energy-intensive enterprises.

Reforming the fuel and energy complex implies the most serious attention to the diversification of energy sources. In this regard, nuclear power appears in the country's electricity mix; a decision was made to build the first nuclear power station in Uzbekistan. Following the phased implementation of this project in July 2018, the Atomic Energy Agency of Uzbekistan, Uzatom, was created. A decision was made to choose a Russian design for the future nuclear power plant, which would consist of two modern 3+ reactors with a capacity of 1200 MW each.

At present, a site has been selected for the construction of nuclear power plants, the process of preparing a regulatory framework for its design and operation is underway, the world experience in the operation of nuclear power plants is being actively studied, including in countries such as Russia, the USA, Japan, the Czech Republic, Hungary, Belarus and others. In September of this year, the law on the peaceful uses of atomic energy was adopted.

An important step in the reform of the fuel and energy complex was the adoption in May 2019 of the laws of Uzbekistan “On the use of renewable energy sources” and “On public-private partnerships”. They created the regulatory framework for implementing renewable energy projects, as well as attracting investments on the principles of public-private partnerships in the energy sector.

This year, the Concept for the Development of Renewable Energy Sources in Uzbekistan for the period 2019-2023 was developed, the implementation of which provides for the attraction of private capital in renewable energy projects. Within the framework of this Concept, it is planned to create new capacities of solar energy of 5000 MW and wind energy of 1700 MW.

As a preliminary analysis of the work done over the year shows, the reform process today affects the entire fuel and energy complex of the country, the management of which is part of the mandate of the Ministry of Energy.

The Ministry of Energy directly includes Uzatom Agency, Uzneftegazinspektsiya, Uzenergoinspektsiya, and Agreement Implementation Group, which coordinates projects under production sharing agreements.

The Ministry of Energy also coordinates the activities of Thermal Power Plants JSC, National Electric Grids of Uzbekistan JSC and Regional Electric Grids JSC, as well as organizations of Uzbekneftegaz and Uztransgaz joint-stock companies.

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Follow author on Twitter:@vakilovfaxri

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