Uzbekistan economy has achieved sustained high growth averaging 8.5% since 2006. The growth prospects for 2011 and beyond remain within a range of 8%-9%. The Government of Uzbekistan prioritizes industrial modernization, infrastructure development, and private sector development. Reliable and affordable electricity supply is vital in achieving these goals.
Uzbekistan is one of the most energy intensive and one of the highest electricity consumption countries in the world. A high energy intensity and electricity consumption relative to the size of economy mean high potential impacts for energy efficiency improvement. Energy efficiency is a strategic priority for Uzbekistan and ADB . It represents the least-cost and low-carbon solution to sustain energy security. It cuts the high energy intensity and increases energy productivity.
Efficient use of electricity can be promoted by appropriately accounting for every unit of power consumed. Minimizing commercial losses and identifying upgrades that would result in a lower technical loss help address energy efficiency. Uzbekistan suffers from high losses in the transmission and distribution system. State Joint Stock Company Uzbekenergo, the vertically integrated utility owned 100% by the government, estimates total system losses of nearly 20% (transmission losses of 2%-4% and distribution losses of 13%-15%), compared with around 5% in advanced countries. But the actual losses are considered to be higher with commercial losses in the range of 25% to 35%. Given that the total annual power supply in Uzbekistan is about 51,935 gigawatt-hour (GWh), a 1% loss reduction means savings of 520 GWh or $26 million a year.
Uzbekistan electrification rate is almost 100%. All connections are metered, billed according to the tariffs set for respective consumer categories. But the meters are generally old and/or unreliable. This has made it difficult for Uzbekenergo to appropriately account for use of electricity. Further, these electricity meters are easy to tamper. The existing electricity meters are of electromechanical type and were manufactured during 1960-1990. These meters have been in service well beyond their designed economic life and without recalibration, resulting in reduced measurement accuracy.
Not all meters are regularly read due to meter reading personnel shortage. As a result, customers read their meters themselves, but this is subject to under-reporting of consumption. Under-reporting is further compounded by meter readers (controllers) who are not able to effectively read the meters and collect revenue. Most meters are installed inside the house. Controllers can either decide to disconnect the customers immediately for past unpaid consumption or overlook the excess consumption and enter a lower than actual reading into the system.
Uzbekenergo, with an internal budget of $32 million, is installing bulk revenue meters, capable of accurately measuring and reporting interval demand at high/medium voltage large industrial customers and transmission/distribution interfaces (to be completed by the end of 2014). The installation of AEM system that encompasses low voltage residential and small commercial customers will provide the missing link for accurate measurement of losses in various system components, allowing focusing of the loss reduction efforts on feeders with the highest losses.
Uzbekenergo has already undertaken several pilot automated and advanced metering projects in Tashkent for 53,000 consumers. The pilot schemes were generally successful in reducing commercial and collection losses, resulting in substantial revenue increases. It was found that the effective metering functionalities were two-way communication that allows remote connection and disconnection, anti-theft and anti-bypassing. But integration was difficult because of the different and incompatible technologies used. Building on the experience of the pilot projects in Tashkent, Uzbekenergo and the government plan to integrate and expand the AEM system to all 4.5 million customers in phases.
AEM, known as "smart metering", is a technology with digital meters that allows two-way communication between the utility and consumers. AEM enables the utility to remotely monitor, and if necessary, disconnect the supply without sending reading personnel to the site, and the consumers to have access to power usage information more frequently, possibly on real time. It is an effective tool in loss identification and useful in addressing commercial losses, and low tariff collection. The AEM system will incorporate both pre-paid and post-paid modes of payment. Uzbekenergo, thus, expects to use AEM technology to increase energy efficiency through loss reduction, and potentially through demand side management.
The project follows the ADB strategy for Uzbekistan, which includes focus on energy efficiency and reliable power supply. It will be ADB's second intervention in Uzbekistan's power sector.