Market Trends of Uzbekistan Power EPC Industry
This section covers the major market trends shaping the Uzbekistan Power EPC Market according to our research experts:
Thermal Power Generation Sector to Dominate the Market
- in 2018, Uzbekistan power generation mix involves thermal power plants with a total capacity of 10.6 GW producing up to 85% of the total production of electricity. In the structure of primary energy used in thermal power plants for the production of electricity and heat, the share of gaseous fuels accounts for 94 %, fuel oil 2%, and coal accounts for 4%.
- Furthermore, according to the ministry of energy, the increasing demand of electricity would require the government to at least double the existing power generation capacity till 2030, since 80% of the current generating units are outdated and obsolete, with an average age of more than 30 years, so most of the existing power plant would require decommissioning.
- The government in a bid to reduce the burden on the government budget for the construction of new power plants is promoting private investment in the power sector.
- A majority of the new capacity is expected to come up from the thermal power plants which is expected to drive the Uzbekistan power market during the forecast period.
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Increasing Industrialization to Drive the Market
- The growth in the economy has fostered the number of new industries entering the processing, textiles, agriculture, manufacturing, and metallurgy markets. Due to the high rate of industrialization and a growth in the population, the demand for electricity is set to increase rapidly over the forecast period. The increasing demand of electricity is expected to drive the market over the forecast period
- According to the official report from the Ministry of Energy, over the next five years, more than USD 2.8 billion will be required to upgrade the existing infrastructure, and to further add to the power generation capacity, it will expectedly cost as much as USD 14.4 billion.
- The government, in a bid to reduce the pressure on the state budget, has been emphasizing on reforming the power sector. Furthermore, to enhance the flow of technology and know-how into the country, the government is looking forward to attract foreign investment in the power sector, which is expected to provide significant growth opportunities.
- Additionally, the country has been a major supplier of electricity to Afghanistan and, in a bid to strengthen the ties and remove the vulnerability of price fluctuations, officials from Afghanistan and Uzbekistan signed an agreement in September 2019.
- With this agreement, the demand for electricity is expected to rise further, creating an additional demand for power generation and transmission infrastructure and is expected to drive the Uzbekistan power market EPC over the forecast period.
