Home > Tajikistan > WB Estimates at $3.4 bln the Needs of Tajikistan to Reduce its Electricity (...)

WB Estimates at $3.4 bln the Needs of Tajikistan to Reduce its Electricity Shortages

Tuesday 4 December 2012

In a new study published last week, the World Bank focuses on the investments and policy reforms needed between now and 2020 to strengthen the financial, technical and institutional capacity of the Tajik power sector and prepare the Government of Tajikistan for undertaking a major expansion of power supply capacity. The study explores a range of supply and demand alternatives, excluding large hydropower plants with storage.

JPEG - 7.7 kb
Tajikistan’s Winter Energy Crisis: Electricity Supply and Demand Alternatives (PDF)
Approximately 70% of the Tajik people suffer from extensive shortages of electricity during the winter. These shortages, estimated at about 2,700 GWh, about a quarter of winter electricity demand, impose economic losses estimated at over $200 mln per annum or 3% of GDP. In addition to the financial costs of inadequate electricity, the Tajik people suffer the social costs as well, including indoor air pollution from burning wood and coal in homes and health impacts from extreme winters. The electricity shortages increased considerably in 2009 when Tajikistan’s energy trade with neighbouring countries through the Central Asia Power System (CAPS) stopped; combined with continued aging of Tajikistan’s power generation assets, the situation has become worse. The electricity shortages have not been addressed because investments have not been made in new electricity supply capacity and maintenance of existing assets has not improved. The financial incentive for electricity consumers to reduce their consumption is inadequate as electricity prices are among the lowest in the world.
 

In Tajikistan, the winter electricity shortages are caused by a combination of low hydropower output during winter when river flows are low and high demand driven by heating needs. Most of the run-of-river hydropower projects, as currently designed, are expensive sources of energy and provide limited winter energy. Originally part of an operating regime for Central Asia without national borders, the existing set of projects are designed with installed capacity in excess of the available winter flows. Within the context of Tajikistan’s current operating regime, this increases the cost of winter supply and exacerbates the problem of summer surplus. Designs of the identified projects (in particular non-storage projects) need to be revised to better focus on domestic needs and current regional opportunities and constraints. Projects that are situated on the Panj River (پنج رود) will require coordination with Afghanistan, which adds an element of uncertainty about timing for these projects. New run-of-river hydropower capacity, therefore, is not expected to play an important role in meeting the power system needs before 2020.

The World Bank undertook this study to assist the Government of Tajikistan in finding ways to overcome the current electricity shortages and establish a sound basis for meeting the growing electricity demand in Tajikistan. The study focuses on the investments and policy reforms needed between now and 2020 to strengthen the financial, technical and institutional capacity of the Tajik power sector and prepare the Government of Tajikistan for undertaking a major expansion of power supply capacity.

The study explores a range of supply and demand alternatives (e.g., thermal, run-of-river hydro, other renewables, energy efficiency, demand management). The study excludes large hydropower plants with storage given their complexity and global experience that such projects are subject to delays. The study does not include the proposed Rogun hydropower project, which is currently the subject of comprehensive studies to determine costs and economic, technical, environmental and social viability. However, the World Bank estimates the study recommendations are relevant regardless and present actions of highest urgency in the next 4-5 years to address the country’s winter energy crisis and establish a base for long term energy security.

The study focuses on 3 main measures:

  1. Reduce domestic demand
  2. Increase domestic supply
  3. Increase regional electricity trade

The proposed plan by the World Bank would require US $3.4 bln over the next 8 years, roughly $380 mln/year or about 5% of GDP. With the current low electricity prices in Tajikistan, this plan to address electricity crisis is not financially viable; electricity prices would need to increase by roughly 50% in the short term. A targeted social safety net should be developed to address the needs of the poor and economically vulnerable electricity consumers.

The increase in pollution and associated health from new coal-fired power as well as imported natural gas-fired power plants would need to be minimized.

Furthermore, the World thinks removing political barriers to electricity trade would benefit all Central Asian countries. More immediately, reducing trade barriers to facilitate transit of electricity through Uzbekistan through swap or other arrangements should also be pursued to enable existing import agreements between Turkmenistan and Tajikistan.

Any message or comments?

pre-moderation

This forum is moderated before publication: your contribution will only appear after being validated by an administrator.

Who are you?
Your post
  • To create paragraphs, just leave blank lines.