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More is needed to decarbonise Central Asia’s energy sector

6 July 2023

As the effects of global warming are intensifying, one of the main sectors that has to urgently decarbonise is energy. While Russia’s invasion of Ukraine has further highlighted EU’s need to diversify its energy production, not only by reducing reliance on only one gas supplier, but also switching to green means of production, countries that are rich in natural resources, such as the ones in Central Asia, face different challenges on their decarbonisation pathways.

To address these challenges and put forward solutions to achieving the full renewable energy production potential of Central Asian countries, a conference was held at the Press Club in Brussels, on 4 July, organised by the Brussels Energy Club and the diplomatic missions of Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan.

1. Reliance on fossil fuels

Having abundant resources has left decarbonising the energy sector at the bottom of the priorities list until recently, reliance on fossil fuels is still high, thus contributing to a large share of emissions. “There is no question about energy supply capabilities, but the problem is that fossil fuels dominate the energy sector, in some countries up to 95%”, said Mehmet Ogutcu, Senior Advisor at the Brussels Energy Club.

“Today, the energy sector is responsible for nearly 78% of greenhouse gas emissions in Kazakhstan, primarily due to our heavy dependence on coal for electricity generation (69%) and heating purposes (99%)”, explained H.E. Margulan Baimukhan, Ambassador of Kazakhstan to the EU. “Despite my country’s heavy reliance on natural resources for its economic development, we recognize our shared responsibility for achieving the goals set forth in the Paris Agreement for tackling climate change. In fact, earlier this year, Kazakhstan adopted its strategy for achieving carbon neutrality by 2060, with a specific focus on decarbonizing the energy sector as a top priority”, Baimukhan added.

Moreover, the low energy prices fossil fuels allow for consumers have left producers reluctant to invest at least in modernising power plants to make them more efficient. “I pay 3 eurocents per kilowatt-hour at home”, disclosed Nurlan Kapenov, Chairman of board of directors at Qazaq Green, a non-profit organisation promoting renewable energy in Kazakhstan. The government is afraid that liberalising the market will increase prices too much, Kapenov scrutinised.

Similar issues are faced by all countries in the region. Kyrgyzstan is counting on hydropower for its green energy transition, however the country is currently only producing 10% of its 142.5 billion Kilowatts potential. By developing and upscaling existing hydropower plants as well as identifying strategic locations for building new ones, the country aims to reduce its carbon emissions by 44% by 2030 and reach neutrality by 2050, said Almazbek Tuganbaev, Acting Head of the Department of Energy Efficiency and Development of Renewable Energy Sources of the Ministry of Energy of the Kyrgyz Republic.

“Hydropower is the backbone of decarbonising energy generation”, added Firdavs Usmonov, councillor at the Embassy of Tajikistan in Belgium, explaining that Tajikistan too is building new plants, as well as modernising old ones in its efforts to mitigate the effects of global warming.

2. Investment needs and cooperation

Achieving these decarbonisation goals is not possible without heavy investment, stressed H.E. Dilyor Khakimov, Ambassador of Uzbekistan to the EU, who explained that Uzbekistan is planning to increase renewable energy production to 25,000 Megawatts by 2030, mostly relying on solar energy. This would not only heavily reduce gas usage, but at the same time also prevent 27 million tonnes of carbon emissions.

“I must emphasize that the green transformation of Kazakhstan will require significant investments in low-carbon technologies, estimated at $610 billion before 2060, including new investments of $224 billion”, Baimukhan said. “I believe our Central Asian partners are also facing similar investment requirements for their own green transition. Therefore, access to global climate finance and active support from international financial and development organizations will play a vital role in this regard.”

Green transition is a common global goal, which is why the EU is fully supporting and encourages countries in Central Asia in their green energy transition and decarbonisation processes, by helping them modernise and reduce carbon emitting energy production through projects like the Global Gateway Initiative, said Terhi Hakala, EU Special Representative for Central Asia at the European External Action Service.

The EU has thus allocated €700 million to newly adopted projects and investments in decarbonising the energy sector in Central Asia.

The Hydro4u project is yet another EU project, part of the Horizon 2020 initiative, targeted specifically at hydropower production, explained Dr Thomas Schleker, Policy Officer at the European Commission’s Directorate General for Research and Innovation. The project identifies unexploited hydropower potential and installs advanced technology over existing infrastructure to increase production without building new plants.

While Central Asia’s potential for renewable energy production is undoubtable, the road to decarbonisation is long and strenuous and investment needs are significant. However, Ogutcu advised that the first step to gaining investors’ trust is achieving greater regional integration, as well as “shaking off the Soviet legacy”, referring to the lack of transparency in fund management related to the still many cases of corruption in the region.

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