Central Asia has a strong economic history of oil and gas exports, but renewables are increasingly being seen as a way to increase energy capacity and introduce a new export industry to the region.
Oil and gas have been a backbone of the economies of central Asian countries. Exploration projects and pipelines have brought in funding to Kazakhstan and Uzbekistan in particular, in the form of foreign investment and in turn created export industries. These industries also bring in significant tax revenues, accounting for 15% of the highest tax-paying companies in Uzbekistan in 2020.
However, this dependence on fossil fuels has its drawbacks, as a particularly cold winter in Uzbekistan brought into sharp relief. The country struggled to keep up with supply demands of the population, and the ageing infrastructure suffered outages due to the increased pressures. Protests across the country followed as the population struggled to obtain even gas canisters or firewood to keep their homes heated.
Both Uzbekistan and Kazakhstan’s governments have stated ambitious plans to increase their use of renewable energy in the coming years
Renewable energy is emerging as a viable alternative. Both Uzbekistan and Kazakhstan’s governments have publicly stated ambitious plans to increase their use of renewable energy in the coming years. Moving to alternative energy sources could also create a new revenue generation flow. Tajikistan and Kyrgyzstan both have large hydropower resources, and plans are in place to see them export energy to Pakistan. This move would also provide additional revenue in the form of fees to Afghanistan, as the pipeline would pass through its borders.
Renewables would further help increase the energy capacity across the whole region and a shared energy programme could assist in combating seasonal shortages felt within countries. However, this would require a sizeable effort from all countries, with significant improvements to the grid network and increased storage capacity.
Moving to renewables is not a panacea. The fossil fuel space still plays a vital economic role, and helps to fulfil a vital energy need for the residents of central Asia and beyond. Simply pulling the plug on the oil and gas industries across the region could trigger more problems than it solves. But finding a solution to create a tandem approach to energy production could develop a new industry sector and reduce energy insecurity for the population.
