Untapping potential

Earlier this year, Vostock Capital Consultancy hosted a webinar devoted to untapping hydropower potential in the Central Asia and Caspian region.

With an installed hydropower capacity exceeding 75GW across the region, the majority of the region’s potential is still untapped. For example, 75% of Georgia‘s hydropower resources are still unharnessed; Tajikistan is 91%; Kyrgyzstan 90% and Uzbekistan over 76%. Furthermore, as existing hydropower assets were predominately brought online in the Soviet era, they now require modernisation. 

Modernisation and retrofitting hydropower projects were seen by the majority of the webinar audience as being the most relevant engineering goals for the hydropower industry across the Central Asia and Caspian region

Discussions at the webinar focused on how further development of hydropower, plus the modernisation and rehabilitation of existing dams and plants, are priorities for the region. 

Vasily Savin is the Partner and Director for Attracting Investment in Kazakhstan and Caspian Asia at KPMG. He spoke about hydropower investment opportunities in the Commonwealth of Independent States (CIS) and particularly in Caucasian countries - as the opportunities there are the most obvious.

Savin explained how over the last decades hydropower development has been slow despite there being large potential. He believes that key drivers of change will include:

• Population growth and life quality improvement aspirations.
• Risk of natural gas deficit for the internal market due to flat productions and export obligations.
• Eurasian Economic Union economic integration and political will for a common electricity market.
• Climate agenda and requisites for clean energy from exporters.
• Need for more regional interconnections and flexibility cause by variable renewable energy and nuclear power integration.

Speaking about the challenges the companies faced during the Covid-19 pandemic, Savin noted that the electricity supply sector had suffered a lot due to behavioural patterns of the population in times of uncertainties which adversely affected the entire power supply chain. He said that the industry is recovering but national support measures are required. As for the future of hydropower in the region, he admitted that there is a potential for further growth as a series of projects are in the pipeline, but the opportunities are limited due to the ‘non-cooperative environment’ of the region. If the problem is not resolved, he says that future generations will have to cope with this challenge.

Khasan Khasanov, a director from Uzbekgidroenergo spoke about the status of hydropower and its development prospects in Uzbekistan. To date, hydropower provides about 10% of electricity generated in the country. It has 42 hydro projects with an overall capacity exceeding 1900MW and average annual power generation of 6.5 billion kWh. 

A small hydro project is planned for the Akhangaran River in Uzbekistan

Estimates suggest that Uzbek hydropower potential is in the region of 27.5 billion kWh. However, this was calculated about 30 years ago and needs to be reconsidered and include new potential sites which have been explored recently. The long-term development goal of the republic is to tap this hydropower potential and double hydro generating capacities by 2030. It aims to achieve this through:

• The construction of technically feasible hydro schemes which have undergone thorough assessment.
• Safe and stable operating regime of existing projects.
• Timely modernisation and replacement of obsolete equipment.

Arif Gashimov is the Director of Energy Institute at Azerenerji, the largest electrical power producer in the Republic of Azerbaijan. He spoke about hydropower in Azerbaijan where the average theoretical hydropower potential is 40 billion kWh and technical hydropower potential is 16 billion kWh. Current overall installed hydropower capacity stands at 1184MW, including those under construction it rises to 1365MW.

According to Azerenerji, in 2009-2019, about 10.1% of Azerbaijan’s energy mix relied on hydropower. It is believed that this should be about 30% (1770MW). In this case, safe and efficient power system management can be ensured, so the necessity of building new hydropower plants is obvious.

Hydro opinions

During the webinar a poll was taken to collect opinions regarding the future of hydropower in the region. When asked about what changes will help support hydropower development in the region, the majority of respondents (48%) said greater investment flow would help. Legislative changes, commissioning of innovative equipment and development of infrastructure were evenly split with 16% each.

A third of respondents also believe that the construction of new large and medium-capacity HPPs will determine the development of hydropower in the mid- and long-run perspective. This was followed by modernisation of existing HPPs (25%) and construction of small hydro (23%). Digitalisation of existing hydro plants and hybrid projects each had 8% 

Nikolay Georgievsky is the General Director from the Centre of Construction and Technological Innovations. He thinks that construction of new large and medium-sized hydro schemes, coupled with modernisation of existing ones, will determine future development of regional hydropower. Although Khasan Khasanov from Uzbekgidroenergo added that the role of micro and small hydropower project construction cannot be underestimated here. In some remote and mountainous regions people live without electricity and so mini hydro there is an option. 

In addition, modernisation and retrofitting hydropower projects were seen by the majority of the webinar audience (67%) as being the most relevant engineering goals for the hydropower industry across the region. 

Eugenia Georgievskaya said that the improvement of facility diagnostics and automation strategy should not be underestimated. It could address some of the core challenges as equipment modernisation is usually a very costly option. But she agreed that equipment modernisation and retrofit undoubtedly takes the first place as a key goal to reach.

International Congress and Exhibition

The International Congress and Exhibition on Hydropower in Central Asia and Caspian will be held on 17-18 February 2021 in Tashkent, Uzbekistan. It will discuss investment opportunities of hydropower development in the region and give more information about hydropower projects in the pipeline. The event is held under the auspices of the Ministry of Energy of the Republic of Uzbekistan. 

A special hybrid (offline and online) approach to the conference is being offered to help delegates plan participation in times of a pandemic. The event programme includes:

• Strategic Opening Session: development of hydropower in the Central Asia and the Caspian region: anti-crisis strategies, cross-border cooperation in the region, projections of governments, initiators, and operators;
• Presentation of Greenfield and Brownfield projects in hydropower of the region for 2021-2025;
• Special focus on Uzbekistan’s hydro: presentation of investment programmes and their development programmes; industry roadmap, ways for successful business running in the country;
• Case-studies from companies which successfully complete the projects for construction and modernisation of hydroelectric plants in the region;
• A meeting with managers and HPP operating companies to discuss issues related to effective operation of existing HPPs and risk management;
• Exclusive exhibition and showcase of innovative technologies, solutions and equipment: construction, modernisation, operation, efficiency growth;
• Investment strategies – the most effective practices and mechanisms to channel funds to regional hydropower projects.

For more details see https://hydropowercongress.com/en/