Identifier
Created
Classification
Origin
08TASHKENT8
2008-01-03 14:39:00
CONFIDENTIAL
Embassy Tashkent
Cable title:  

UZBEK ELECTRICAL GENERATION AND EXPORT PROSPECTS,

Tags:  ENRG ECON EPET EAID PGOV PREL ZK AF UZ 
pdf how-to read a cable
VZCZCXYZ0011
PP RUEHWEB

DE RUEHNT #0008/01 0031439
ZNY CCCCC ZZH
P 031439Z JAN 08
FM AMEMBASSY TASHKENT
TO RUEHC/SECSTATE WASHDC PRIORITY 8994
INFO RUEHTA/AMEMBASSY ASTANA 9803
RUEHEK/AMEMBASSY BISHKEK 4206
RUEHDBU/AMEMBASSY DUSHANBE 0082
RUEHAH/AMEMBASSY ASHGABAT 3590
RUEHBUL/AMEMBASSY KABUL 2085
RUEHMO/AMEMBASSY MOSCOW 7261
RUEHNE/AMEMBASSY NEW DELHI 0754
RUEHIL/AMEMBASSY ISLAMABAD 3809
RUEHLM/AMEMBASSY COLOMBO 0094
RUEHKA/AMEMBASSY DHAKA 0137
RUEHKT/AMEMBASSY KATHMANDU 0182
RUEKJCS/SECDEF WASHINGTON DC
RHEHNSC/NSC WASHINGTON DC
RHEFDIA/DIA WASHDC
RUEAIIA/CIA WASHDC
RHMFISS/DEPT OF ENERGY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEHVEN/USMISSION USOSCE 2229
RUEHNO/USMISSION USNATO 1706
RUEHBS/USEU BRUSSELS
C O N F I D E N T I A L TASHKENT 000008 

SIPDIS

SIPDIS

E.O. 12958: DECL: 01/03/2018
TAGS: ENRG ECON EPET EAID PGOV PREL ZK AF UZ
SUBJECT: UZBEK ELECTRICAL GENERATION AND EXPORT PROSPECTS,
AND NATURAL GAS SALES

Classified By: P/E Chief Ted Burkhalter; reasons 1.4 (b, d).

C O N F I D E N T I A L TASHKENT 000008

SIPDIS

SIPDIS

E.O. 12958: DECL: 01/03/2018
TAGS: ENRG ECON EPET EAID PGOV PREL ZK AF UZ
SUBJECT: UZBEK ELECTRICAL GENERATION AND EXPORT PROSPECTS,
AND NATURAL GAS SALES

Classified By: P/E Chief Ted Burkhalter; reasons 1.4 (b, d).


1. (SBU) Summary: Emboffs met with Botir Teshaboev, the
Chairman of state-owned Uzbekenergo, on December 21, to
discuss domestic electricity generation, infrastructure and
export. Uzbekenergo is modernizing many of its generation
facilities, most of which are natural gas fired, increasing
efficiency and slightly increasing the percentage of coal
fired generation. Natural gas exports are more profitable
than exports of electricity, and for this reason, among
others, Uzbekistan has a tempered interest in increased
electricity exports to Afghanistan. End summary.


2. (U) Uzbekistan is expected to export natural gas in 2008
for USD 150-180 per 1,000 cubic meters (pricing deals have
been reached but details remain close held). Natural gas is
one of Uzbekistan's largest revenue-generating resources and
Uzbekenergo is undertaking programs to cut natural gas usage
in order to increase gas exports. Teshaboev said the company
is modernizing the two coal plants that supply electricity to
Tashkent (both located in the vicinity of Angren) and
investing in new combines that will cut natural gas use by
half "but produce 50 percent more energy." Uzbekenergo also
intends in the near term to increase coal usage from 5 to 12
percent of total energy consumption.


3. (SBU) Teshaboev told Econoff and P/E Chief that 85 percent
of Uzbekistan's electricity is thermal generated (natural gas
and some coal). Uzbekistan exports excess electricity to
neighboring countries, including the Afghan province of
Balakh, which includes Mazar-i Sharif. Exports to
neighboring countries are primarily during winter and are
governed by annual, bilateral agreements. (Most bilateral
talks for 2008 have concluded.) The Chairman stated Uzbek
electricity is the costliest in the region and is often
prohibitively expensive to its neighbors. He said hydro
projects in Kyrgyzstan and Tajikistan will eventually produce
electricity for less, likely causing a decrease in
Uzbekenergo exports to Afghanistan. Additionally, he added,
existing Afghan grids are incapable of delivering substantial
flows of Uzbek power from Balakh to Kabul, and this also acts
as a limiting factor on the amount of energy sold to
Afghanistan.


4. (SBU) Teshaboev told emboffs there are five main
electricity projects to build transformers, substations, or
higher-voltage lines. Three are financed by Uzbekistan, one
by the European Bank for Reconstruction and Development
(EBRD) and the fifth, in the south of the country, by the
Islamic Development Bank (IDB). Uzbekenergo intends to
partially privatize its thermal power plants, but not its
hydropower plants, as the latter are directly linked to
Uzbekistan's agricultural fecundity.


5. (SBU) Uzbekistan is increasingly voicing its interest in
carbon credits and renewable energy projects financed by
foreign capital. The government likely believes it can
maximize profits by increasing its already low coal
consumption, selling carbon credits, and exporting unused
natural gas.

Comment on electricity exports to Afghanistan
--------------


6. (C) Teshaboev clearly downplayed prospects for Uzbek sales
of electricity to Afghanistan. In large part, this is a
reflection of market realities. Uzbekistan can make more
money exporting natural gas than exporting electricity
generated by natural gas. It is probably also a reflection
of Russia,s continued dominance of the Uzbek natural gas
industry. Russia has less interest than we in securing

electricity for Afghanistan and is instead focused on
maximizing northbound natural gas exports. Despite Uzbek
attempts to develop attractive alternative markets for its
gas, and despite pricing and control hurdles in the
Uzbek-Russian relationship, Russian money talks.


7. (C) On the other hand, increased delivery of electricity
to Afghanistan is not out of the question. Uzbekistan is
investing in transmission and generation projects that would
increase delivery capacity to Afghanistan within a year to
two. The Uzbeks also recently agreed to allow the Afghans to
reconstruct a main section of the electrical line in
Uzbekistan supplying power to Afghanistan. The World Bank,
meanwhile, has funded upgrades that are supposed to increase
transmission capacity from northern Afghanistan to Kabul by

2010. This is a long list of ifs, and Uzbekistan has an even
longer record of leading suitors by the nose. Still, success
is by no means impossible.
NORLAND