Building a pathway to sustainable energy systems: specifics of transition economies
One way to protect and incentivize RES deployment in a highly volatile (or highly regulated) foreign currency market with an uncertain discount rate policy would be to localize the production of RES components, to stimulate research in this field, and to implement RES-sector-specific financial mechanisms and tools, such as preferential loans, FiTs, or taxation regimes, to support renewables at an early stage of their development.
Recent RES development targets hi Uzbekistan have sent positive signals to the RES industry, academia, and potential investors in this sector. However, it is still unclear how these targets will actually be met considering the experience that previously set targets have never been accomplished. Much greater clarity is needed regarding the next steps that the government will take to support and incentivize RES deployment at different levels and scales and how quickly the emerging obstacles can be addressed. It is clear that much work still needs to be done to address country-specific issues.
First, through the gradual reformation of the energy system, that is, by increasing its efficiency and decreasing technical and commercial losses, the government can ensure a gradual energy transition. These two complementary policies of increasing energy efficiency and promoting and supporting RES developments could help the country develop a more efficient, environmentally friendly, and sustainable energy system in the future.
Second, well-designed and coordinated support is therefore needed to overcome barriers, to strengthen local technological capabilities and capacity building, and to create enabling conditions for deployment, which would allow the country to exploit its RET potential and build its own path to sustainable development. Governments need to synchronize different policy tools and clarify the course they expect renewable deployment to follow. Will the government implement RES-sector-specified financial mechanisms and tools, such as preferential loans, FiTs, or taxation regimes, to support renewables at an early stage of their development? Depending on the answer to these questions, RES deployment can take a large step forward or stagnate, given the present regulatory and policy ambiguities. Thus, it is imperative that a clearer and more thoughtful and comprehensive approach to the entire renewable sector is outlined by the government.
Meanwhile, there is fast-growing interest and dedicated and clearly defined plans of the government regarding nuclear energy development in Uzbekistan. Two nuclear reactors are planned to be built (construction works will start in 2022) in cooperation with RosAtom (Russia; News of Uzbekistan, 2019e). In addition, the Ministry of Energy of Uzbekistan is interested in learning from the experience of South Korea in nuclear energy deployment, with a share of 23.7% in the total energy mix (News of Uzbekistan, 2019f). With technical assistance from the WB. the ADB, and other international consultants, the Ministry of Energy developed the concept of energy sector development until 2030 (UzbekEnergo, 2019a). According to this document, the restructured energy generation portfolio will consist of 31% of RES (10,000-MW increase in installed capacity of wind, solar, and hydropower) and approximately 15% of nuclear power. The question is how those plans are combined and coordinated with longterm targets to increase the RES share in the energy generation mix. Will nuclear energy complement/diversify the energy portfolio or become the major energy source in the future while phasing out both fossil fuels and RES? The answers to these important questions will help to plan and make projections (picturize) on the future energy sector in the country and in the region as a whole.