Brussels Energy Club Addresses Clean Energy Transition in Central Asia

LONDON – Brussels Energy Club (BREC) held a first-ever conference on energy security and sustainability in Central Asia on July 4 in the Belgian capital. Four panel sessions explored regional and interregional collaboration in delivering the energy transition in Central Asia, a fast-growing region.

Mehmet Ogutcu (online), Pierre Tardieu, Marat Terterov, Nurlan Kapenov, Thomas Schleker (from left to right). Photo credit: The Astana Times.

The event was organized in partnership with the diplomatic missions of Kazakhstan, Uzbekistan, the Kyrgyz Republic, Tajikistan, and Turkmenistan to the European Union (EU) and was moderated by BREC Principal Representative Marat Terterov and BREC Director Nadezda Kokotovic.

In his welcoming remarks, Terterov emphasized that energy is a key driver fueling regional growth. He noted Central Asia has “embarked upon a road of alternative ways of developing its energy economies to make it more green, sustainable, and attractive for the investment community.”

High-level plenary addresses from ambassadors of Central Asian states outlined the key priorities of their governments and expressed readiness for closer cooperation between the countries.

Kazakh Ambassador to the EU Margulan Baimukhan. Photo credit: BREC website.

“Despite Kazakhstan’s heavy reliance on natural resources, we recognize our shared responsibility to combat climate change. Today, the energy sector is responsible for nearly 78 percent of greenhouse gas emissions in Kazakhstan. Earlier this year, our country adopted a strategy for achieving carbon neutrality by 2060 with a specific focus on decarbonizing the energy sector,” said Kazakh Ambassador to the EU Margulan Baimukhan.

In October 2022, the EU and Kazakhstan concluded a strategic partnership on raw materials, batteries, and renewable hydrogen, which are critical for a green transition. The parties have also committed to developing a roadmap for 2023-2024 aimed at expanding bilateral cooperation in capacity-building, research and innovations.

Turkmenistan has also approved a roadmap for the development of international cooperation in the field of hydrogen energy for 2022-2023. “This area, which has not been fully disclosed, offers great opportunities for foreign investments,” said Turkmen Ambassador to the EU Sapar Palvanov.

Uzbekistan is the most populous nation in Central Asia, with 37 million people. By 2030, its demand for electricity will reach 120 billion kilowatts.

“Experts believe that additional 13.7 cubic meters of gas will be required by that time. However, the transition to green electricity supplies will save us from additional volumes of gas and prevent the emissions growth,” said Uzbek Ambassador to the EU Dilyor Khakimov.

Ambassador of Kyrgyzstan to the EU Aidit Erkin highlighted the Central Asian region’s huge potential in the renewable energy sector, including solar and wind power. He noted Central Asia is home to numerous rivers, including the Amu Darya and Syr Darya, which provide ample opportunities for hydroelectric power generation.

According to Chargé d’Affaires of the Tajik Embassy in Belgium Firdavs Usmonov, Tajikistan, in its turn, plans to install the capacity of electricity generation from solar and wind energy up to 700 megawatts by 2030.

In a rapidly changing geopolitical landscape, the relocation of EU businesses from Russia to Central Asian countries serves as an opportunity for European countries to increase investments in the region.

“The relocation and investment can improve our businesses and increase the population of the region. However, there are many challenges. I believe that international partners of Central Asia and Mongolia, including the European Investment Bank (EIB), should help the countries to reduce CO2 emissions,” said European Parliament’s Delegation for Cooperation with Central Asia and Mongolia (DCAS) Chair Tomas Zdechovsky, a co-host of the conference.

According to EU Special Representative for Central Asia Terhi Hakala, the EU sees climate change as a global threat and the green transition as an economic opportunity.

“We must look at the climate effects of the energy industry and address them simultaneously and parallelly. In this context, let me also mention methane, which is the second biggest contributor to climate change after carbon dioxide, and the EU is strongly engaged to curb its effects,” she said.

In terms of challenges on the way towards a clean energy future for Central Asia, BREC Senior Advisor Mehmet Ogutcu spoke about the conflict between fossil fuels, which have competitive strength, and renewables, which require huge investments.

“The problem is that fossil fuel dominates. Renewables chances are not great for a number of reasons, although there is a potential for solar, wind power, and hydropower, especially in the Kyrgyz Republic and Tajikistan. Only in case of the right policy and efficient financial resources, there can be prospects for renewables to take a larger share in the energy sector,” said Ogutcu.

In his opinion, the regulatory system also needs to be more transparent. “The corruption is huge in many countries of the region. This problem is not limited only to Central Asia. We all face similar problems. However, it is important to mobilize regional and interregional cooperation on better terms,” he noted.

Today, Kazakhstan has 130 renewable energy stations, including 46 wind, 44 solar, 37 hydropower, and three bio-power stations.

Nurlan Kapenov, the chairman of the Qazaq Green Association, a single platform for national and international stakeholders in renewable energy, raised the key problem in the energy transition – the shortage of flexible capacity in Kazakhstan.

“Historically, Kazakhstan has had a coal generation. Today, 70 percent of all generation is coal generation. Gas power plants and big hydropower plants are the flexible generation and we don’t have it. Kazakhstan has a problem with balancing energy, and, therefore, we are completely dependent on Russia in balancing energy,” he said.

“The biggest problem for Kazakhstan is having [some of] the cheapest energy in the world,” he added.

The best solution, in his opinion, is the development of a transnational grid between all Central Asian countries.

The major Central Asian electricity producer is Uzbekistan, generating more than 75 terawatts of electrical power per year.

Aziz Khamidov, the head of the energy and chemicals department at the Uzbek Ministry of Investments, Industry and Trade, agreed on the need to address common challenges regarding balancing electricity supplies. “We are actively working with the World Bank to facilitate the first Central Asian regional electricity market and enhance our interconnectivity,” he said.

Pierre Tardieu, the chief policy officer of the WindEurope association, and Stefano Signore, director-general for international partnership and head of the unit on climate change at the European Commission, shared European experience in greening economies.

“Wind in Europe is no longer an alternative form of energy. It is part of the mainstream. How did we get here? The right regulatory framework with the combination of three things – clear targets, which drove clear national plans. Second element is a clear investment signal in the form of feed-in tariffs [a policy tool designed to promote investment in renewable energy sources by offering long-term contracts to renewable energy producers]. The third point is a priority dispatch,” said Tardieu.

Signore highlighted the importance of the two initiatives – the Global Gateway, which the European Commission adopted at the end of 2021, and REPowerEU, the EU’s plan to accelerate the clean energy transition.

“Global Gateway is important because the EU reaffirmed its commitment to support sustainable infrastructure worldwide, and the REPowerEU initiative has the objectives that are very relevant for our cooperation with Central Asian countries,” he said.

Calling for greater regional cooperation in developing clean energy resources and ensuring the energy transition, the BREC panel sessions considered opportunities for building new partnerships between Central Asian countries, as well as for intensifying interregional cooperation for experience exchange and increasing the attractiveness of the investment climate of the region.

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