Uzbekistan launches new measures to support renewable energy to save gas

Uzbekistan launches new measures to support renewable energy to save gas
/ bne IntelliNews
By bne intellinews May 3, 2023

The Uzbek government is looking to resolve the country’s gas supply crunch by making changes to legislation aimed at developing renewable energy sources (RES) and cutting gas consumption, including a ban on issuing technical specifications for gas network connections for some sectors.

According to a presidential decree signed in February, from this month issuing technical conditions for connecting newly created greenhouse farms and producers of cement, brick and lime to gas networks is prohibited, the energy ministry reported on April 28.

Within the programme for saving gas, some existing enterprises in these sectors are planned to be transferred from gas to coal. Thus 1,147 greenhouses, 250 building materials plants and 5,407 social facilities are scheduled to be converted to coal by the end of the year.

To implement this transition, some incentive measures have been announced such as bank loans for buying coal use equipment, the provision of imported coal when there is a shortage, as well as a 50% discount on the rail transport cost of the fuel regardless of the distance.

Also, the decree aims to encourage and support the use of RES. First, from March 1, 2023, it is not mandatory to obtain an additional technical condition for connecting RES installations to the electric grids within certain capacity limits. Secondly, individuals and legal entities that have installed RES can get some tax exemption for a period of 3 or 10 years, depending on the capacity of installations and their capability to store power. This covers property tax from installed devices, land tax on plots occupied by them and income tax from selling electricity produced by RES. Also, all fuel filling stations in the republic are required to cover at least half of their power use with solar panels.

Overall, the plans for 2023 include commissioning of RES with a total capacity of 4,300 MW, the production of an additional 5bn kWh of electricity and the saving of 4.8bn cubic metres of natural gas through constructing RES installations and transferring facilities to alternative energy consumption. The allocated budget and investments for the implementation of these goals amount to $15.4bn in total.

It is not surprising that the Uzbek government is taking the above-mentioned measures, since the country has been experiencing a shortage of natural gas for several years; especially during abnormally cold winter last year when Uzbekistan was forced to stop gas exports, close compressed natural gas (CNG) filling stations and expand gas, coal, and electricity imports from neighbouring countries.

Russia has proposed providing extra gas to both Uzbekistan and Kazakhstan through its so-called Tripartite Gas Union project. Gazprom agreed to co-operate with Uzbek and Kazakh authorities in the gas industry in January. It was reported that the supply of Russian gas to Uzbekistan could begin from March this year; however, the project turned out to require more complex approvals.

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