For Uzbekistan, Energy Efficiency is Smart Economics

At the Oil & Fat Factory in Kattakurgan, Kamoliddin Khaitov smiles and expresses delight with the new boilers that were commissioned in 2014. As Head of the Boilers’ Facility at the factory, Kamoliddin certainly doesn’t miss the old boilers that had previously been in use since 1956.  Outdated and inefficient, they initially ran on coal and were manually controlled. The new boilers, however, operate on gas and are fully automated and much easier to run. They also consume much less power and save natural gas.

Uzbekistan is one of the world’s major producers and exporters of natural gas – but it is also one of the world’s most energy-intensive economies. The country uses twice as much energy as its neighbor Kazakhstan to produce a unit of GDP, and six times as much as Germany. To improve its overall energy efficiency, therefore, Uzbekistan’s government has developed a national strategy that includes cutting energy use per unit of GDP in half by 2030.

Mining, chemicals, oil and gas, electric power, and the production of construction materials are among Uzbekistan’s most energy-hungry industries. To help these industries upgrade old and outdated industrial equipment, the World Bank has piloted a new financial approach through its Energy Efficiency Facility for Industrial Enterprises Project. With a view to saving energy and capturing heat, upgrades and improvements will range from replacing old energy-inefficient converters, compressors and boilers to capturing, recovering and re-using thermal energy.

The Energy Efficiency Project, in liaison with three commercial banks, provided financing for 32 strategic enterprises to pilot 81 sub-projects around Uzbekistan. These sub-projects will save more than 539 million kWh of electricity and 252 million m³ of gas every year – an energy saving that is large enough to supply electricity for 850,000 families annually (if one family consumes 3600 kWh).

“As of now, 79 subprojects are being implemented across the country. The total amount of these subprojects is US$160 million and IDA provides financing of US$ 128 million out of the total amount. The rest of the total amount is financed by the three banks – Hamkorbank, Asaka Bank and Uzpromstroybank and by industrial enterprises.”
Ulugbek Abdullaev, Project Coordination Unit Director, Ministry of Economy.

The Almalyk Mining and Metallurgical Plant is moving quickly to improve energy efficiency. Workers installed a new 6-kV frequency converter and retrofitted compressor stations at a zinc- and copper-smelting workshop – improvements which led to savings of 12.5 million kWt/h of electric power last year. Now, managers at the Plant are planning for three new energy efficient sub-projects in the coming years, projects that could save 17 million m³ of gas and 48 million kW/t.

Uzbekistan’s chemical industries are more than ready for energy savings. For example, the joint stock company Maksam-Chirchik, which makes agricultural fertilizers, has introduced a natural-gas fire heater which has reduced the emission of harmful substances and lowered the temperature of flue gasses emitted into the atmosphere.

Individual projects such as these help Uzbekistan to fulfill its commitments to reducing carbon emissions at international level. Although the country is rich in hydrocarbon-based energy, Uzbekistan is moving forward on investing in energy-saving technologies, applying innovative approaches to the sustainable use of energy resources and switching to renewables. This was recently demonstrated by the Uzpakhtasanoat Company, which bought 1,200 street lamps powered by solar batteries for an annual energy of 3.5 million kWt/h of electric power.

Within Uzbekistan’s government and industry there is broad agreement on the importance of reducing energy use by modernizing industry and reducing energy losses. But, there is still much work to be done. In particular, it is highly important to increase awareness about energy conservation beyond the core group of Uzbek business leaders and bankers who are keen on introducing new technology and innovation.

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To achieve greater awareness, the Energy Efficiency for Industrial Enterprises Project works not only with industrial enterprises, design companies and equipment suppliers, but also with the media, academia and the wider public to promote energy savings at home and at work. One such example is a special training course called “Energy Saving and Energy Efficiency” that has been introduced in colleges and schools.

“Media-tours within the Energy Efficiency for Industrial Enterprises Project were very useful. I learned how the energy efficiency sub-projects are being implemented and how they actually help people and economy of Uzbekistan.”
Anvar Umarov, Chief Editor of the UzDaily News Portal.

The Project works with many counterparts and attracts funding from a wide array of sources. The Korean Green Growth Trust Fund, for example, provides support in the implementation of Uzbekistan’s national strategy to improve energy efficiency and introduce energy management systems across enterprises over the next three years.

This important ongoing effort will not only preserve the country’s energy resources for future generations – but will also reduce costs, thereby raising the competitiveness of national enterprises in domestic and foreign markets. It’s just smart economics.