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Intermediate Strategy for Renewable Energy Sources Based Integrated Rural Development for Tajikistan is prepared by the UNDP Tajikistan. It contains detailed proposal of policy measures to improve energy use in the country. It is a part of overall efforts to contribute to the economic development and poverty reduction through provision of quality energy services to the people of Tajikistan.
Intermediate Strategy for Renewable Energy Sources Based Integrated Rural Development
Prepared by: Zoran Morvaj- Task Manager, Vesna Bukarica, Nikola Čupin, Dušan Gvozdenac, Ognjen Markovid, Slavica Robid, Farrukh Shoimardonov
Dushanbe -2011
i
Foreword The Republic of Tajikistan has abundant resources of hydro energy, which are still mostly
untapped, particularly when it comes to small hydropower plants. At the same time, Tajikistan,
despite its high electrification rate during the Soviet era, currently has an unreliable and often
nonexistent power supply that compels much of its population to live in poverty stricken
conditions. Because renovations to the power grid and the construction of large-scale hydro
power plants require significant funding and time, it is unlikely that they will provide a solution
to Tajikistan’s energy troubles in the short term. As a result, the strategic focus of Tajikistan in
terms of renewable energy and energy efficiency utilization should be directed towards small,
community based hydropower plants and low cost and implementable energy efficiency
measures. The strategy should create an overall framework for improving conditions,
stimulating economic development, and facilitating poverty reduction in the short term. Due to
the complexities involved, is it imperative to emphasise this strategy as “Intermediate”.
Poverty in Tajikistan is markedly linked to the lack of access to a reliable energy supply, which
in turn limits development opportunities. Thus the main goal of this strategy is to provide
guidance in the creation of conditions that will increase both the reliability and availability of a
power supply in the most poverty afflicted areas (and thus impacting the country as whole).
There is a strong correlation between the potential of hydro resources in the production of
electricity in (micro) hydropower plants, and the availability of such resources in the most
poverty stricken areas. This offers a tremendous opportunity to utilize this vast energy potential
to stimulate integrated rural development, ultimately leading to poverty reduction.
The provision to utilize renewable energy positively impacts the rate of environmental
degradation, an acute and concerning issue in the region.
Therefore, the Strategy has three main objectives:
1) Poverty reduction by improving access to electricity and stimulating integrated rural
development;
2) Provision of an impetus for economic development in the sectors related to renewable
energy sources and energy efficiency by devising support mechanisms for rural
renewable energy sources and energy efficiency schemes.
3) Building environmental resilience by decreasing the loss of the vegetation cover,
occurrences of soil erosion and desertification, CO2 emissions (in the utilization of RES
and EE), and by preserving valuable carbon sinks.
1
Table of Contents Executive Summary .................................................................................................................................................................. 4
1 Introduction ....................................................................................................................................................................... 6
1.1 Overview of the energy situation in Tajikistan ..................................................................................... 6
1.2 Energy statistics data for Tajikistan ............................................................................................................ 8
1.3 Energy prices ........................................................................................................................................................ 14
1.4 Overview of RES potentials ........................................................................................................................... 17
1.5 Overview of potentials for EE improvements ..................................................................................... 20
1.6 Identification of the main barriers for the utilisation of RES and EE improvement in
Tajikistan................................................................................................................................................................................ 21
2 POLICY, LEGAL AND REGULATORY FRAMEWORK .................................................................................... 23
2.1 Policy and legal framework for RES ......................................................................................................... 23
2.2 Regulatory framework for RES ................................................................................................................... 24
2.3 Policy, legal and regulatory framework for EE ................................................................................... 29
3 INSTITUTIONAL FRAMEWORK ............................................................................................................................ 29
3.1 Overview of baseline conditions for the implementation of RES regulation ...................... 29
3.2 Strengthening governance and capacities to implement RES (and EE) policy at national
level 31
3.3 Strengthening governance and capacities to implement RES and EE policy at local level
33
3.4 The role of the National Trust Fund for RES and EE in policy implementation at
national and local levels ................................................................................................................................................. 34
4 FINANCIAL SUPPORT FOR RES AND EE ........................................................................................................... 39
5 TECHNICAL CONDITIONS AND CAPACITIES FOR IMPLEMENTATION OF RES AND EE
POLICY .......................................................................................................................................................................................... 43
6 sHPPs AS A BACKBONE OF INTERMEDIATE RES AND EE STRATEGY ............................................ 46
6.1 sHPP role in poverty reduction and economic development of Tajikistan .......................... 46
6.2 National scaling-up: sHPPs for accelerating progress towards MDGs by stimulating
integrated rural development ..................................................................................................................................... 47
7 EXPECTED RESULTS OF THE INTERMEDIATE STRATEGY FOR RES AND EE ............................. 51
2
List of Tables
Table 1 Consumption of electricity in Tajikistan in urban and rural areas*............................................... 7
Table 2 HPP Classification according to Law on the Use of RES (General classification for all RES)
............................................................................................................................................................................................................. 8
Table 3: Selected 2008 Indicators for Tajikistan ....................................................................................................... 8
Table 4 Energy Balance for Tajikistan in thousand tons of oil equivalents on a net calorific value
basis (2008) .................................................................................................................................................................................. 9
Table 5 Electricity/Heat in Tajikistan in 2008 ........................................................................................................ 10
Table 6 Energy consumption per sector ..................................................................................................................... 14
Table 7 Import prices of liquid fuels in 2008 (based on low calorific values) ........................................ 14
Table 8 Total Import and Cost for Imported Energy ............................................................................................ 15
Table 9 Tariffs for electrical and heat energy (without VAT unless otherwise stated) ..................... 16
Table 10 Prices of the fuels available at the market in Tajikistan ................................................................. 16
Table 11 Energy prices ........................................................................................................................................................ 17
Table 12 List of by-laws as envisaged by the Law on the Use of RES .......................................................... 23
Table 13 Overview of the most important stakeholders in Tajik energy sector ................................... 31
Table 14 Comparative analysis of different financing options for National Trust Fund for RES
and EE ........................................................................................................................................................................................... 40
Table 15 Input data used in the scaling-up exercises .......................................................................................... 48
Table 16 Scaling-up of integrated rural development through provision of electricity from sHPPs
.......................................................................................................................................................................................................... 49
List of Figures
Figure 1 Share of total primary energy supply* in 2008 ................................................................................... 11
Figure 2 Total primary energy supply in 2008 ....................................................................................................... 12
Figure 3 Energy production in 2008............................................................................................................................. 12
Figure 4 Electricity generation by fuel in 2008....................................................................................................... 13
Figure 5 Consumption of oil products in 2008 ...................................................................................................... 13
Figure 6 The percentage of industrial sectors in total production ............................................................... 16
Figure 7 Wind Atlas of Tajikistan ................................................................................................................................... 19
Figure 8 Approach to strengthen capacities and improve cooperation at all levels ........................... 31
Figure 9 The system of guaranteed power purchase price for RES electricity producers ............... 36
Figure 10 Tajik vision: sHPP for local economic development and poverty reduction ..................... 46
Figure 11 Energy and water balance in the Tajik rural household – an illustration ........................... 48
3
List of abbreviations
CFL Compact Fluorescent Lamp
EE Energy Efficiency
GDP Gross Domestic Product
IPP Independent Power Producer
MDG Millennium Development Goal
MEDT Ministry of Economic Development and Trade
MEI Ministry of Energy and Industry
MF Ministry of Finance
OJSC Open Joint Stock Company
PPP Purchasing Power Parity
PRS Poverty Reduction Strategy
RES Renewable Energy Sources
SCI State Committee on Investment
sHPP Small Hydro Power Plant (in the text used equally for micro, mini and small)
TPES Total Primary Energy Supply
4
Executive Summary
Tajikistan has abundant resources of still untapped hydro energy, particularly where it
concerns small hydropower plants (sHPP). There are a number of sHPPs already built and
operated by local communities throughout Tajikistan that were made out of necessity; however,
they are mostly improvised and inefficient. These sHPPs are critically important to local
communities, who bear the entirety of operation costs during the winter months. Typically,
these sHPPs operate off-grid during the winter, and remain idle during the summer seasons
when electricity from the grid is available.
Renewable energy sources (RES) and energy efficiency (EE) cannot solve all of the current
electricity supply problems but they can certainly play an important role in the intermediate
energy crises alleviation strategy. Their positive impacts become even greater when one
considers that more than 70% of the population live in areas abundant in small hydro potential.
Currently, these rural areas consume less than 9% of Tajikistan’s electricity, the supply of which
is consistently unreliable particularly during winters.
Therefore, the Strategy has three main objectives:
1) Poverty reduction by improving access to electricity and stimulating integrated rural
development;
2) Provision of an impetus for economic development by devising support mechanisms
for rural RES and EE schemes.
3) Building environmental resilience by using RES and EE and decreasing the loss of
vegetation cover.
As such, the Strategy focuses on community based micro to small HPPs (up to 1000kW of
installed power), privately or community owned and operated, which will operate off-grid
during winters, supply local communities at mutually agreeable terms and conditions, and in
the cases where it is feasible, work on-grid during summers and sell all of the produced
electricity to the grid. Selling electricity from sHPPs to the grid has already been enabled by an
amendment to the Energy Law (2007), the recently adopted Law on the Use of RES (2010), and
other related regulations to be adopted by the end of 2010.
In the short to medium term, the involvement of non-community based independent power
producers (IPPs) in sHPP development is unlikely. The reasons are as follows:
- The unreliable integrity of the power grid which would affect the annual number of
operating hours (particularly during winters);
- Barki Tojik has excess power during summers, yet a transmission network has yet to be
developed to the point that this power can be easily sold to neighbouring countries;
hence, the question of excess power during the summer remains;
- Financial uncertainties: Lacking an appropriate regulation that guarantees private
investors the ability to buy back produced electricity power at tariffs that will enable
them a return on the investment, it is unlikely to expect sHPP to be a profitable business
in Tajikistan. This matter could be resolved by a regulatory framework for RES based on
the Law on the Use of RES. Yet due to the current lack of experience in this field, a
significant amount of time would be needed to test the applicability of such regulations;
community based sHPPs will serve this purpose as well. Once a regulatory framework is
5
imbedded, private investors will likely perceive RES in Tajikistan to be a profitable
investment opportunity.
Until these structural weaknesses are resolved, RES and EE Strategy should focus on
community based sHPPs supported by basic, low cost EE measures to reduce electricity
requirements, and provide adequate supply capacities that will enable improved standards of
living and support the implementation of poverty reduction measures as stipulated in the
Government’s Poverty Reduction Strategy.
At the same time, the community based schemes that will receive support under this Strategy
will be required to use standardized solutions with inputs from local manufacturers and service
providers, thus contributing to overall economic development.
The cornerstones of the Strategy are as follows:
- Establishing a proper policy framework that will promote the utilisation of RES,
especially community based sHPP and EE projects;
- Developing an adequate regulatory framework which will provide:
o Technical regulations and conditions for the construction of RES power plants,
especially sHPP and their connection to the grid;
o A methodology for calculating costs for electricity from RES power plants,
especially sHPP;
o The ability to contract modalities for buying back electricity from RES power
plants, especially sHPP;
- Establishing a National RES and EE Trust Fund that will financially and institutionally
support development of RES in Tajikistan, place an emphasis on community based
sHPPs, cover the price difference for electricity from these HPPs (i.e. between the
premium price paid and the current average price in the Barki Tojik system) as well as
support all other activities related to the usage of RES and improvement of EE in
Tajikistan;
- Developing local manufacturing, engineering, operation and maintenance
capabilities related to RES and EE;
- Standardizing several common sHPP designs and developing the capacity of local
manufacturing and service companies with an aim to deliver at least 50% of the value
of an sHPP as local goods and services;
- Strengthening capacity of national and local governments to implement, coordinate
specific actions, and monitor the results of RES, EE, and related policies to incur poverty
reduction.
The main goal of the Strategy is to create conditions for accelerated poverty reduction by
providing a solution to the core underlying cause of weak development – the unreliable
access to the electricity.
6
1 Introduction
The population of Tajikistan is approximately 7.3 million, of which over 73% (or 5.3 million
persons) live in rural areas. The country is 93% mountainous. As a signatory to the United
Nations Millennium Declaration, Tajikistan has agreed to put forth efforts towards achieving the
Millennium Development Goals (MDGs). As a result of Tajikistan’s efforts, and with the help of
the international donor community, overall poverty reduced from 81% in 1999 to 53.5% in
2007. Despite significant progress, the poverty rate of 53.5% (2007), of which 17% were in
absolute poverty, remains high. Further, the impact of the current economic crises may have
augmented these figures. A one-third decrease in remittances, which has already occurred in
the first quarter of 2009, is likely to accelerate the poverty rate by 2.5%.
In 2007, the Government of Tajikistan adopted a National Development Strategy for the
period 2006-2015. The objective of the Strategy is to reach the MDGs by strengthening social
and political stability, and providing for economic prosperity and social welfare for the
people of Tajikistan.
The key drivers of economic development were cotton and aluminium export, and remittances
from migrant workers. Together these accounted for 58% of the GDP in 2008. Two-thirds of the
population depend on agriculture for their livelihoods.
At the national and sub-national levels, there is a limited capacity to develop and implement
sound public policies. While there is considerable assistance from the donor community for
developing policies, little effort has been expended to strengthen government capacities to
implement such policies. Due to overlapping and often ambiguous legislation, the division of
powers between various levels of government in Tajikistan remains convoluted, leaving policy
implementation difficult to achieve. In addition, budgeting and planning processes conducted by
different levels of government are disconnected and uncoordinated, posing strong barriers to
the achievement of MDGs and overall successful policy implementation.
Consequently, the inefficient and inequitable delivery of public services, infrastructure
bottlenecks, and the slow implementation of reforms in the agricultural sector are the key
obstacles towards poverty reduction. A weak climate for private investment is a significant
constraint for pro-poor growth.
1.1 Overview of the energy situation in Tajikistan 1 Tajikistan's electric power system has traditionally been split into a northern grid (in the
Leninabad region) and a southern grid. Plans to link the two systems via the construction of a
high-voltage 500 kV line “South-North” (Yug-Sever), already underway, and a power
transmission line 220 kV “Lolazor-Khatlon” are being considered. Other relevant projects in the
pipeline are the construction of a high voltage 220 kV line, “Tajikistan-Afghanistan”, and of a
high voltage 500 kV line, “Rogun-Sangtuda-Kunduz-Puli Khumri-Kabul-Peshavar”, which should
further strengthen the security of supply in Tajikistan and better enable electricity exports.
1 Total area: 142,700 sq km; Capital: Dushanbe; Population: 7,320,815; Terrain: The Pamir and Alay Mountains dominate Tajikistan's
landscape. The western Fergana Valley is in the north, and the Kofarnihon and Vakhsh Valleys in the southwest. The country's lowest point
is at Syr Darya (300 m), and its highest point is at Qullai Ismoili Somoni (7,495 m); Energy resources: Hydropower, oil, gas, coal.
7
The Government of Tajikistan has defined two priorities for energy sector development:
reformation of the country’s internal energy sector and export market orientation2. The
former involves reforms in the current pricing policies, financial discipline, the social protection
system, as well as a host of other institutions. A number of steps have already been made to
implement this strategy. With the financial assistance of international organizations, several
projects are being carried out in the form of modernization and reconstruction of the existing
energy system and the mitigation of energy losses.
In spite of the positive steps forward, Barki Tojik, the national electric utility company, is
struggling to maintain the current power system. There is a backlog of maintenance needs,
particularly where they concern the fairly well developed but long since neglected distribution
network. Barki Tojik is owed large sums of money, and in turn, owes others, which presents
additional economic problems for the Government, and stymies the prompt improvement of the
supply of electricity, particularly for rural areas.
Despite the high electrification rate (90%), actual access to electricity (and energy) is
considerably low and unreliable. The situation is exacerbated by unpredictable climatic
conditions, such as those that occurred in 2008 when the extremely harsh winter hastened
further damage to the power system, which resulted in the increased number of planned and
unplanned electricity cut-offs. The lack of reliable energy services lead directly to severe lapses
in school attendance and has caused multiple adverse and critical effects on the economy,
health, and environment of the country.
Further, depleting water level trends in the main water reservoirs caused by the overuse of
power generation and irrigation needs in the downstream countries has serious consequences
for Tajikistan, largely in the form of decreased electricity power generation and industrial
production.
It is important to note that the rural population, accounting for 73% of the total population,
used only 8.58% of the total electricity consumed in Tajikistan in 2008 (see Table 1).
Table 1 Consumption of electricity in Tajikistan in urban and rural areas*
Year 2006 2007 2008
kWh % kWh % kWh %
Urban 1,841,137,710 13,49 1,786,097,913 12,79 1,744,547,432 13,94
Rural 1,473,058,684 10,79 1,258,152,836 9,01 1,073,692,712 8,58
Total population 3,314,196,394 24,28 3,044,250,749 21,80 2,818,240,144 22,52
Total consumed 13,651,676,973 13,966,707,650 12,514,921,593
*Source: Barki Tojik sales department
As a result of the aforementioned conditions, access to reliable energy has become Tajikistan’s
most critical issue. It is estimated that over 1 million Tajikistanis, primarily those in rural
2 http://electricitygovernance.wri.org/files/egi/Tajik%20EGI%20Assessment.pdf
8
areas, have little or no access to adequate electricity/energy supplies, particularly during
the winter, when it is common to have spells of more than 6 weeks without any
electricity. Operation of the power system during the winter is particularly disruptive, with
isolated islands of networks energized, while large swaths of the country are blacked out. One
limited solution to the unreliable and often nonexistent access to the grid is presented in the
form of small, micro and mini hydropower plants (hereafter denoted with the abbreviation
sHPPs, but a clear distinction between small, micro, and mini is determined by legislation, as
shown in Table 2).
Table 2 HPP Classification according to Law on the Use of RES (General classification for all RES)
Class mark Power range
1 micro µHPP < 100 kW
2 mini mHPP 101 -1000 kW
3 small sHPP 1001 kW – 30 000 kW
Although there is a significant number of sHPPs in Tajikistan, they are often improvised and
inefficient and operate in off-grid mode. Such sHPPs in areas with access to the national
electricity grid do not work during the summer months when the electricity supply from the
grid is able to meet the requirements. If one considers that the average costs of generating
electricity from sHPP schemes are greater than those from large scale HPP, the current level of
electricity tariffs, the loss of integrity of the national power grid during winter months, the dire
state of government and Barki Tojik finances, it is difficult to comprehend how independent
power producers (non-community based) would be attracted to invest in sHPPs at the present
time without the establishment of a proper regulatory framework and financial support.
It is important to understand the close correlation between energy and poverty issues in
Tajikistan. The underlying cause of poverty in the country derives from the current energy
conditions, or energy poverty. Energy poverty in this case means the lack of access to and the
inability to afford energy. Providing access to affordable and reliable energy is the key to
alleviating poverty and fostering development in Tajikistan.
1.2 Energy statistics data for Tajikistan The most important indicators and compound indicators for Tajikistan are presented in Table 3.
Table 3: Selected 2008 Indicators for Tajikistan
Population (million) 6.84 TPES/Population (toe/capita) 0.36
GDP (billion 2000 USD) 1.68 TPES/GDP (toe/thousand 2000 USD) 1.49
GDP (PPP)(billion 2000 USD) 8.54 TPES/GDP (PPP)(toe/thousand 2000 USD) 0.29
Energy Production (Mtoe) 1.49 Electricity Consumption / Population (kWh/capita) 2072
Net Imports (Mtoe) 1.01 CO2/TPES(t CO2/toe) 1.22
TPES (Mtoe) 2.49 CO2/Population(t CO2/capita) 0.44
Electricity Consumption*(TWh) 14.17 CO2/GDP (kg CO2/2000 USD) 1.81
CO2 Emissions ** (Mt of CO2) 3.03 CO2/GDP (PPP) (kg CO2/2000 USD) 0.36
Key Indicators Compound Indicators
9
*Gross production + imports - exports - transmission/distribution losses
**CO2 Emissions from fuel combustion only. Emissions are calculated using IEA's energy balances and the Revised
1996 IPCC Guidelines. Source: IEA http://www.iea.org/stats/indicators.asp?COUNTRY_CODE=TJ
Energy balance for Tajikistan is presented in Table 4.
Table 4 Energy Balance for Tajikistan in thousand tons of oil equivalents on a net calorific value basis (2008)
* Totals may not add up due to rounding. ** International marine and aviation bunkers are included in the transport sector for world totals. Source: http://www.iea.org/stats/balancetable.asp?COUNTRY_CODE=TJ
SUPPLY and
CONSUMPTI
ON
Coal and
Peat
Crude Oil Oil
Products
Gas Nuclear Hydro Geotherma
l Solar etc.
Combustible
RES and
Waste
Electricity Heat Total*
Production 86 14 0 24 0 1363 0 0 0 0 1487
Imports 5 0 524 419 0 0 0 0 456 0 1404
Exports -1 -2 -11 0 0 0 0 0 -380 0 -394
International
Marine
Bunkers**
0 0 0 0 0 0 0 0 0 0 0
International
Aviation
Bunkers**
0 0 -4 0 0 0 0 0 0 0 -4
Stock
Changes
0 0 0 0 0 0 0 0 0 0 0
TPES 90 12 510 443 0 1363 0 0 75 0 2493
Transfers 0 0 0 0 0 0 0 0 0 0 0
Statistical
Differences
0 0 0 0 0 0 0 0 21 0 21
Electricity
Plants
0 0 0 0 0 -1363 0 0 1363 0 0
CHP Plants 0 0 0 -225 0 0 0 0 26 86 -113
Heat Plants 0 0 0 0 0 0 0 0 0 0 0
Gas Works 0 0 0 0 0 0 0 0 0 0 0
Oil Refineries 0 -12 11 0 0 0 0 0 0 0 -2
Coal
Transformati
on
0 0 0 0 0 0 0 0 0 0 0
Liquefaction
Plants
0 0 0 0 0 0 0 0 0 0 0
Other
Transformati
on
0 0 0 0 0 0 0 0 0 0 0
Energy
Industry Own
Use
0 0 0 0 0 0 0 0 -14 0 -14
Losses 0 0 0 0 0 0 0 0 -246 0 -246
TFC 90 0 520 219 0 0 0 0 1225 86 2140
Industry 0 0 0 0 0 0 0 0 556 0 556
Transport 0 0 89 11 0 0 0 0 2 0 103
Other 90 0 430 207 0 0 0 0 667 86 1480
Residential 0 0 0 0 0 0 0 0 267 0 267
Commercial
and Public
Services
0 0 0 0 0 0 0 0 26 0 26
Agriculture /
Forestry
0 0 0 0 0 0 0 0 374 0 374
Fishing 0 0 0 0 0 0 0 0 0 0 0
Non-
Specified
90 0 430 207 0 0 0 0 0 86 813
Non-Energy
Use
0 0 1 0 0 0 0 0 0 0 1
- of which 0 0 0 0 0 0 0 0 0 0 0
Petrochemic
al Feedstocks
10
Electricity and heat generation in Tajikistan are reported in Table 5.
Table 5 Electricity/Heat in Tajikistan in 2008
* Includes production from pumped storage plants. ** Transformation sector includes electricity used by heat pumps and electricity used by electric boilers. *** Energy Sector also includes own use by plant and electricity used for pumped storage. Source: http://www.iea.org/stats/electricitydata.asp?COUNTRY_CODE=TJ
The ratio between GDP and GDP (PPP) is much less than 1, a figure indicative of a weak
economy. At the same time, energy intensity (TPES/GDP (PPP)) is quite high, which again
signals a weak economy as energy is not sufficiently used for the creation of GDP.
Electricity Heat
Unit: GWh Unit: TJ
Production from:
- coal 0 0
- oil 0 0
- gas 301 3587
- biomass 0 0
- waste 0 0
- nuclear 0 0
- hydro* 15846
- geothermal 0 0
- solar PV 0
- solar thermal 0 0
- wind 0 0
- tide 0 0
- other sources 0 0
Total Production 16147 3587
Imports 5297 0
Exports -4421 0
Domestic Supply 17023 3587
Statistical
Differences 243 0
Transformation** 0
Electricity Plants 0 0
Heat Plants*** 0 0
Energy Industry
Own Use**** 164 0
Losses 2858 0
Final
Consumption 14244 3587
Industry 6464 0
Transport 23 0
Residential 3105 0
Commercial and
Public Services 305 0
Agriculture /
Forestry 4347 0
Fishing 0 0
Other Non-Specified 0 3587
11
Electricity consumption per capita is lower than the global average which demonstrates high
levels of poverty.
Electricity losses are 18.1%, whereas these losses should normally be between 6-8%; clearly
there is a need for improvements to the transmission and distribution networks.
The CO2/GDP (PPP) indicator is high but this is a consequence of low GDP (PPP) rather than a
consequence of high levels of CO2 emissions according to TPES consumption. CO2 emissions in
Tajikistan are still low compared to those of developed countries largely because the overall
usage of energy is relatively low and there is a high share of hydro power in the energy mix.
The share of Total Primary Energy Supply (TPES) in 2008 is presented in Figure 1.
Figure 1 Share of total primary energy supply* in 2008
In Figures 2-5, the historical changes of energy consumption and production in Tajikistan are
depicted. The decrease of TPES is obvious, a consequence of a weakened economy.
12
Figure 2 Total primary energy supply in 2008
Figure 3 Energy production in 2008
13
Figure 4 Electricity generation by fuel in 2008
Total TPES is much higher than domestic energy production and there is a high level of
dependency on imports. It is evident that the majority of TPES derives from hydro power. Yet
the participation of coal (reserves are proven and much higher than the amount used) is low.
Tajikistan is heavily dependent on hydro power, with about 98 % of the total electricity
generated in Tajikistan originating from hydroelectric sources.
Domestic crude oil and natural gas participation in TPES is modest; research of these potentials
has yet to be completed.
Figure 5 Consumption of oil products in 2008
14
Tajikistan possesses comparatively small amounts of fossil fuel resources. In all, 18 oil and gas
deposits (Kanibadam, Airitan, Niyazbek, Kichikbel, etc.) and 40 coal deposits (Nazarailok,
Shurab, Fan-Yagnob, etc.) have been explored and registered in the country. Coal deposits are
sufficient in Tajikistan and amount to 4 billion tons; however, according to estimates, these
deposits are insufficient for industrial and energy related use in the current conditions.
Until the 1990s, between 400 and 800 thousand tons of coal were mined annually in Tajikistan.
In recent times, these figures have diminished to 15-20 thousand tons, less than 5-10% of the
country’s total energy needs. Increased production and utilization possibilities of these fossil
fuels must be investigated and supported. Positive developments regarding the utilisation of
coal are already being made with the reconstruction of district heating plants in Dushanbe and
other cities to switch from imported gas to domestic coal.
An analysis of consumption per sector reveals that there is a decidedly low consumption of fuels
from the industrial sector, a figure indicative of a weak economy (see Table 6). The share of
energy consumption of the industrial sectors should normally range from 25% to 30% (for
developed countries) and up to 35% for energy intensive developing countries.
Table 6 Energy consumption per sector
Sector Consumption [ktoe] Consumption [%]
Industry 573 17.4
Transport 1348 40.9
Other (residential, services, agriculture/forestry and non-specified) 1378 41.8
1.3 Energy prices In June 2009, the prices of gasoline and diesel fuel at gas stations were on average 3.3 Somoni
per litre of gasoline (0.0832 US$/kWh) and 2.8 Somoni3/lit (0.0638 US$/kWh) for diesel.
Import energy prices of the most significantly used fuels are presented for 2008 in Table 7.
The price of liquid fuels is freely formed by the market. There are a dozen import companies
specializing in liquid petrochemical products which are out of the Government’s direct control.
Table 7 Import prices of liquid fuels in 2008 (based on low calorific values)
Price
US$/kg
LCV
MJ/kg
GCV
MJ/kg
Density
kg/l
Price
US$/kWh
GASOLINE (Benzin) 0.6845 43.45 46.54 0.7447 0.0567
DIESEL (Dizel toplivo) 0.7357 42.79 45.77 0.8366 0.0619
JET FUEL (Toplivo reaktivnoe) 1.1050 43.45 46.54 0.7447 0.0916
BITUMEN (Bitum) 0.4664 39.47 42.21 0.9912 0.0425
OIL (Maslo) 1.5206 42.69 45.54 0.8467 0.1282
KEROSENE (Kerosen) 0.7581 43.45 46.54 0.7447 0.0628
The price of natural gas in Tajikistan is $300 USD per 1000 nm3 of natural gas. The low calorific
value of NG is 8000 kcal/nm3 (9.30 kWh/nm3 or 33.49 MJ/nm3) 4, which results in a price of
$0.0322 USD/kWh (0.0224 EUR/kWh).
3 1 TJS = 0.2300 US$ = 0.1600 EUR (average exchange rate in mid of 2009) 4 Source: OJSC Tajik gas company (June 2009)
15
The price of natural gas is controlled by the Government. OJSC Tajik Gas Company proposed
that the price of natural gas follow the international market, and the Monopoly Commission of
the MEDT, working in close cooperation with the Ministry of Energy and Industry, proposed a
price correction to the Government.
The price of coal is $35.65 USD/ton. Taking into account that the average lower calorific value of
coal is approximately 9.7 MJ/kg (brown coal), the price of coal (in units of energy) amounts to
$0.0132 USD/kWh. The price of coal is freely formed at the market, while the sale of coal is
organized in the districts.
In 2007 the price of electricity was only $0.005 USD/kWh. In 2009 the price rose to
approximately $0.016 USD/kWh. The current plan is to increase gradually the electricity rate to
$0.021 USD/kWh by 2015.
The price of electricity is formed in a similar manner to the price of natural gas. A tariff system
has been proposed to the Monopoly Commission of the MEDT. Currently, there is no high (daily)
and low (nightly) tariff. The tariff system recognizes 6 groups of consumers:
- Industry;
- Population;
- Governmental institutions;
- Water supply systems;
- Irrigation systems;
The price of electricity is unnaturally low compared to the prices of natural gas and liquid fossil
fuels. Although such a relationship is uncommon, it is an outgrowth of a combination of factors,
most notably the fact that most fuels are imported and much of the electricity used derives from
domestic production. Over the medium and long term, electricity prices should be increased to
provide funding for the maintenance of the power system and the construction of new
production facilities. Reliance on electricity as the main source of energy should be maintained
and even increased to provide for the possibility of selling surplus electricity to neighbouring
countries and simultaneously alleviate dependence on fossil fuel imports. Table 8 shows the
participation of energy cost in total imports for 2007 and 2008.
Table 8 Total Import and Cost for Imported Energy
2007 2008
Total IMPORT, million US$ 2,547,192 3,269,803
Total mineral products, million US$ 542,314 21.3% 729,636 22.3%
Electricity 65,790 87,518
Natural gas 64,726 74,348
Petroleum products and coal 411,798 567,770
The percentage of industrial sectors with regard to the total production value ($945.15 million
USD) is presented in Figure 6. The electricity generation industry contributes 15.2%. Data is not
available for 2008.
Assuming that electricity consumption was 15000 GWh in 2008, it can be estimated that the
production price of electricity was $0.0096 USD/kWh.
16
Figure 6 The percentage of industrial sectors in total production
Official electricity and heat energy prices are denoted in Table 9. The table provides the official
prices of electrical energy and heat energy according to the applicable tariff system, and Table
10 outlines the energy prices of other fuels available in Tajikistan.
Table 9 Tariffs for electrical and heat energy (without VAT unless otherwise stated)
Electrical Energy Diram for
1 KWh US$/kWh
1. For industrial and non-industrial consumers 13.68 0.0315
2. For SUE Tajik Aluminum Company (including VAT) 1.5 US
cents 0.0150
3. For consumers of budget (state) and municipal sector 5.44 0.0125
4. For water supply pumps, pump stations of machinery irrigation and electrical
transport (including VAT) 3.64 0.0084
5. For population (including VAT) 6.00 0.0138
6.
For using electrical energy in electrical boilers and electrical settings used for hot
water supply and heating
For non-budget sector
For state bodies and institutions
33.75
10.00
0.0776
0.0230
Heat Energy Diram for
1 Gkal US$/kWh
1. For institutions and administration bodies financed from the state budget 24.37 0.0561
2. For wholesale buyers supplying population with heat energy 3.19 0.0073
3. For all other consumers 93.75 0.2156
1 TJS = 0.2300 US$ = 0.1600 EUR (average exchange rate in mid of 2009)
Table 10 Prices of the fuels available at the market in Tajikistan
US$/un
it
EUR/u
nit
LCV US$/k
Wh
EUR/k
Wh
Coal 155 TJS/t 35.65 24.80 9.7 MJ/kg 0.0132 0.0190
0%
5%
10%
15%
20%
25%
30%
Ele
ctri
city
gen
erat
ion
(Элек
тро
энер
гети
ка)
Fu
el (
То
пли
вная
)
Met
allu
rgy
(мет
аллу
рги
чес
кая)
Ch
emic
al a
nd
pet
roch
emic
al i
nd
ust
ry
(Хи
ми
чес
кая
и
неф
тхи
ми
чес
кая)
Pro
du
ctio
n o
f m
ach
iner
y
and
met
al p
roce
ssin
g
(маш
ин
ост
ро
ени
е и
мет
алло
об
раб
отк
а)
Wo
od
in
du
stry
(лес
ная
и
дер
воо
бр
абат
ыва
ющ
ая)
Mat
eria
ls f
or
ind
ust
rial
con
stru
ctio
n
(пр
ом
стр
ой
мат
ери
алы
)
Lig
ht
ind
ust
ry (
лег
кая)
Fo
od
in
du
stry
(п
иш
евая
)
Mil
l in
du
stry
(му
ком
ольн
о-к
ру
пяа
ная
и к
ом
ико
рм
ова
я)
Pri
nti
ng
in
du
stry
(по
ли
грф
ич
еска
я)
Industry
Ind
ust
ry i
n t
ota
l p
rod
uct
ion
, [%
]
17
Gasoline 3.2 TJS/l 0.7360 0.5120 43.45MJ/kg 0.0819 0.1177
Diesel 2.6 TJS/l 0.5980 0.4160 42.79MJ/kg 0.0601 0.0864
HFO 1523 TJS/t 350.29 243.68 42.79MJ/kg 0.0295 0.0424
Natural Gas
for population 1327 TJS/1000n
m3
305.21 212.32 33.49
MJ/nm3
0.0328 0.0472
for all enterprises and institutions 1327.1
4
TJS/1000n
m3
305.24 212.34 33.49
MJ/nm3
0.0328 0.0472
for cogeneration plant and cement
factory
1230.9 TJS/1000n
m3
283.11 196.94 33.49
MJ/nm3
0.0304 0.0437
The prices of electricity, natural gas, and heat energy are defined and controlled by the
Government, while the prices of petroleum products and coal are freely formed by the market.
The energy allocated for the general population is treated as a social category and thus the
prices set for this group of consumers are low relative to the real market price. Currently there
are no subsidies or incentives for the production of energy from renewable energy sources.
Table 11 Energy prices
Range of price
US$/kWh
Max/Min
Electricity 0.0084 - 0.0776 9.2
Natural gas ≈ 0.0322 -
Heat energy 0.0073 - 0.2156 29.5
Petroleum products 0.0295 - 0.0819 2.8
Coal 0.0132 -
The current parities between energy prices are not financially viable. Moreover, artificially
maintaining the price of heat energy to figures lower than the price of the fuel used for its
production is not sustainable in the long term. Treating energy, and specifically electricity, as a
social commodity is reasonable to some extent, but eventually it is likely to abate and decrease
developmental possibilities for a host of vital sectors.
1.4 Overview of RES potentials In addition, looking into the distribution of shares of TPES and electricity generation, it is
obvious that there is a complete absence of the use of renewable energy sources (except hydro,
primarily large-scale). Despite the absence of RES, preliminary estimates regarding the
potential of renewable energy resources is as follows:
Hydropower 527 TWh/a (45314 ktoe/a)
Solar energy 25 TWh/a (2150 ktoe/a)
Biomass 2 TWh/a (172 ktoe/a)
Wind energy 25-150 TWh/a (2150-12898 ktoe/a)
Geothermal energy 45 TWh/a (3869 ktoe/a)
18
These figures suggest that the total potential of renewable sources is approximately 60000
ktoe/a, a large potential when considering the total annual primary energy supply (TPES) is
approximately 3600 ktoe/a.
Tajikistan is endowed with rich hydropower resources; hydro potential is estimated to be more
than 40,000 MW along the main rivers, of which only 10% is currently utilized. The major HPP
development project (HPP Rogun) is underway, but due to financial difficulties, the date of
completion remains uncertain.
Further, the vast number of irrigation channels augments the potential to utilize sHPP
capabilities.
According to information obtained from Barki Tojik, there are approximately 340 sHPP built in
Tajikistan; however, only one is connected to the grid. Recognizing this huge potential for sHPP,
the Government has adopted the "Long-term Program for Building Small Power Plants for
the Period 2009-2020"(approved by the Government of Tajikistan on February 2, 2009 № 73).
According to this Program, approximately 100 MW will be installed in new sHPP, increasing the
total annual production to 642 TWh/year.
Due to its expected capability and success, the utilisation of hydro potential in sHPPs is the
focus of this Strategy. In the short to medium term, the focus of national policy should be on
community based sHPPs. They will serve multiple purposes, including:
- improving the security of electricity supply;
- stimulating economic development and job creation resulting in overall poverty
reduction;
- they will test the regulatory framework for grid connection and incentivizing RES
electricity production, which will enable improvements in regulation and a stabilization
of the investment climate for RES, resulting in increased interest among private
investors in the RES sector.
Although the most significant potential with the greatest possibility for utilization is the hydro
sector, there remains the possibility to utilise solar potential. Annually, Tajikistan has between
280-330 sunny days, and the intensity of total solar radiation varies within a given year from
280 to 925 MJ/m2 in mountainous regions, and from 360 to 1120 MJ/m2 in highlands. The
utilization of available solar energy in Tajikistan could satiate as much as 10-20% of national
energy demand.
This Strategy considers solar energy as the second most important RES in Tajikistan. The
primary aim in this field is to develop programs for the utilization of solar thermal collectors for
the preparation of hot domestic water. This technology is mature enough and its costs are
constantly decreasing, while its utilization will reduce the consumption of both electricity and
fossil fuels. As well, small-scale PV applications primarily for social institutions shall be
promoted, particularly in very remote areas with low population densities where grid
reinforcements or new connections are not considered feasible.
The potential of biomass is modest, a result of poorly developed agriculture and forestry. The
total equivalent units are slightly over one million, indicating a potential for the production of
19
biogas; however, the technology of biogas production by anaerobic fermentation of manure is
expensive. More important, this technology requires large farms uncommon in Tajikistan.
The “Master Plan of Wind Power Development of the USSR until 2010” published in 1989
included a country-level wind map. The terrain of Tajikistan is 93% mountainous and includes
the foothills of the Himalayas. The Pamir and Alay mountains dominate the landscape; the
western Fergana Valley in the north, the Kofarnihon and Vakhsh Valleys in the southwest. The
complicated alpine relief of the country dictates a diversity of wind regimes. The wind potential
suitable for power utilization (i.e. mountain peaks and slopes) is estimated to be roughly 10-
15% of the territory.
There is no operational wind energy capacity in Tajikistan; however, supplementing the
dominant hydropower with wind energy is justifiable in certain regions. The strongest winds
penetrate the highland regions, such as Fedchenko and Anzob, and where the landscape of the
country favours a convergence of air flows, such as in Khujand or Fayzabad. The average annual
wind speed in these regions are approximately 5-6 m/s. Lower average wind speeds of 3-4 m/s
are found in the open lowlands and wider valleys. In other lowlands, the mean annual wind
speed may not exceed 1-2 m/s, a figure inadequate for the generation of wind energy. The most
promising areas are the Pamirs northward, the Sarez Lake in the Gorno-Badakshan, the
Turkmenistan Ridge in the Zeravshan River headwater, and the region from the Vakhsh Ridge to
the border with Afghanistan. Only in smaller areas do wind speeds reach between 4 and 5 m/s;
only one location generates an average speed in the range 5 and 6 m/s (Figure 7).
Due to the inadequate opportunity for utilization (as compared to hydro and solar), wind
energy will not be considered within the Intermediate Strategy.
4 – 5 m/s
5 – 6 m/s
Figure 7 Wind Atlas of Tajikistan
Geothermal resources are small and poorly studied in Tajikistan, and to date no assessment of
the overall geothermal potential has been completed. Data accounting for thermal water
sources are generally absent, though Tajikistan has planned to utilize the thermal water located
within the vicinity of Khodja-Obi-Garm. An evaluation of this field’s thermal water resources has
been performed and shows its temperature to be 90 °C, TDS 0.5 g/l; a total flow rate 280 l/s.
20
Geothermal resources are also concentrated in the convective hydrothermal systems of the Tien
Shan foothills.
This Strategy will not deal with RES other then sHPP and solar energy due to the low
possibility to utilise other RES, which is the result of the low potential and high financial
requirements and/or weak possibility to use local goods and services to trigger economic
development.
1.5 Overview of potentials for energy efficiency improvements One of the most commonly used indicators to measure how efficiently a country uses energy is
TPES/GDP (PPP) (expressed in toe/thousand 2000 $USD PPP). As can be ascertained from
Table 6, energy intensity in Tajikistan is almost twice the world average. By comparison, this
figure is three times higher than most developed countries, which actually means that Tajikistan
needs three times more energy to produce one unit of GDP then highly developed countries.
This indicator, however, masks many other problems unrelated to the efficient use of energy, a
weak economy being the most significant. Still, this measure gives an indication that
improvements in energy consumption efficiency in Tajikistan are both possible and necessary,
especially given the country’s insecure and unstable energy supply. It is difficult to quantify the
potentials gained from EE improvements and it would not be justifiable to set exact targets for
reducing energy consumption in the current conditions while the vast majority of people suffer
from energy supply shortages. Yet when providing RES based solutions for Tajikistan’s energy
(electricity) supply, it must be ensured that principles of the efficient use of energy are taken
into account.
Moreover, energy consumption growth in Tajikistan has escalated significantly during this
decade; growth rates for the period 2003-2007 are approximately 7%. During this same period,
the average GDP growth rate was 7.2%, indicating a strong link between economic growth and
increased energy consumption, a common characteristic of developing countries. Measures for
EE improvement should disrupt this linkage and reduce the energy consumption growth rate.
Improving energy efficiency in developing countries requires a different approach than has
become accustomed in the developed world. Further, due to drastically different conditions in
rural and urban areas, EEI programmes must be customized to each environment. In rural
areas, simple EE improvement measures shall be combined with the provision of electricity
from RES (e.g. the use of CFLs, the replacement of single glazed windows with double glazed,
improvements in the efficiency of building exteriors using ample, locally available materials, e.g.
straw and mud, etc.).
Due to the stark differences between the needs for EEI in rural and urban areas, this strategy
shall focus solely on the implementation of intermediate EE measures, primarily in rural areas.
This Strategy considers EE to be an integral component of poverty reduction. Until recently, EE
has had a low priority in Tajikistan (although the Law on Energy Savings has existed since 2002,
but has not been enforced), which does not come as a surprise when considering that a large
share of the population lacks secure and reliable access to energy. EE in Tajikistan should be
primarily considered as a measure to improve the quality of services, as well as living
and working conditions, while at the same time the use of efficient equipment, materials, and
practices will reduce the need for electricity and energy, a positive externality. The Strategy
21
recognizes the need to prepare a comprehensive plan of actions and measures to improve EE.
Therefore, by the end of 2010, the Energy Efficiency Master Plan (EEMP) will be drafted and
proposed for government enactment. The EEMP will clearly distinguish measures to be
implemented in rural areas and those needed in urban areas.
1.6 Identification of the main barriers for the utilisation of RES and EE
improvement in Tajikistan Barriers for the utilisation of RES and EE improvement in Tajikistan can be divided into three
groups:
Legal and institutional barriers:
incomplete legislative and regulatory framework to support RES use; incomplete legislative and regulatory framework to support implementation of
EE improvement measures; incompatibility of energy and environmental policies, i.e. environmental
protection legislation does not promote development of cleaner energy supply options;
unclear division of the roles and responsibilities of national authorities in the promotion of RES and EE, and poor coordination between the main stakeholders;
dearth of governing capacities at all levels (national and local).
Financial barriers:
lack of domestic and foreign investment capital: Tajik companies that are interested in the development of RES have limited financial resources and insufficient access to finance RES investment projects. The participation of foreign capital is constrained due to the unstable business climate and unfavourable economic conditions, as well as the lack of appropriate legal and regulatory frameworks and effective enforcement of legislation requirements;
lack of long-term credits on favourable terms: Commercial banks are reluctant to lend because the return of long-term investments is risky, especially when there are no state guarantees (a tariff system) that all electricity produced will be sold at the appropriate price, which assures the reasonable pay back of investments. In addition, financial institutions have no experience in financial analysis for investments in RES and EE. Foreign long-term loans are expensive due to the high risk perception held by foreign commercial banks;
costs for preparing investment projects must be incurred before funding for the project to be assured, without a guarantee of actually obtaining the necessary funds for a particular project. The lack of projects with proven feasibility and profitability increases the costs associated with their preparation;
special equipment for RES and EE utilisation is costly and mostly imported – high costs remain due to an absence of sufficient demand;
lack of state support financing mechanisms that are necessary to mitigate commercial risks related to RES and EE;
RES electricity production is still uncompetitive in the electricity market and requires state support in the form of guaranteed electricity buy-back prices determined by regulation (tariff system).
Information/knowledge/expertise barriers:
22
lack of information to the general public on technologies and their potential use: there is no information on proven RES and EE technologies;
lack of information to the general public on the benefits of RES (financial, social and environmental);
lack of reliable information that would be useful for potential investors regarding the locations with high and exploitable renewable energy potentials (currently, there are only preliminary estimates of locations with potentially exploitable RES);
insufficient number of specialists to implement RES and EE activities, especially in remote rural areas;
inadequate capacities and capabilities of domestic industries to provide equipment and services related to RES and EE.
As RES and EE are not the end goals, but rather tools for achieving the goals of poverty
reduction and socio-economic development in the country, this Strategy shall be
regarded as a supporting tool for other national strategies, especially the Poverty
Reduction Strategy. The aim of the Strategy is to provide clear guidance for the removal of all
identified barriers for the enhanced utilization of RES and EE improvement in Tajikistan. From
that perspective, the Strategy proposes necessary developments or adjustments in the following
spheres:
Policy, legal and regulatory framework for RES and EE;
Institutional framework and governing capacities for the implementation of RES and EE
policy;
Financial support mechanisms for RES utilization and EE improvements;
Constructing technical capacities and capabilities within the country to provide equipment
and services related to RES and EE.
The main goal of the Strategy is to create conditions to accelerate poverty reduction
primarily by providing a solution to the core underlying cause of paltry economic
development – the unreliable access to electricity.
23
2 POLICY, LEGAL AND REGULATORY FRAMEWORK
2.1 Policy and legal framework for RES The use of RES for electricity generation in Tajikistan is recognized as a national interest and a
means to achieve poverty reduction and economic development goals by ensuring reliable
access to electricity for all citizens. This is confirmed in several policy documents adopted by
the Government:
"Comprehensive target program for widespread use of RES, such as the energy of small
rivers, sun, wind, biomass, energy, underground water sources" (approved by the
Government of Tajikistan on Feb. 2, 2007 № 41);
"Long-term program for building small power plants for the period 2009-2020 years
"(approved by the Government of Tajikistan on February 2, 2009 № 73),
"National Environmental Program of the Republic of Tajikistan for 2009-2010
"(approved by the Government of RT from October 31, 2009 № 602).
Amendments to the Law on Energy were made in 2007, stating that electricity from small RES
power plants should be taken over by natural monopolies (electric power utilities) at the price
determined by the authorized organization for the regulation of natural monopoly activities.
Although this is an important step towards the consolidation of a complete and favourable legal
framework for RES utilization, much more must be enacted to ensure implementation. The most
prosperous way is to enforce the newly adopted Law on Renewable Energy Sources, along with
the appropriate implementation by-laws that will provide transparent terms and conditions for
building and operating RES facilities, as well as garner the necessary financial support to
compensate for the higher electricity production costs from small RES plants (as can be
compared to the current average generation price in the Barki Tojik system).
It is necessary to emphasize that the Law on the Use of Renewable Energy Sources was
adopted in January 2010. Although the Law provides a general framework for RES in
Tajikistan, it is absolutely crucial to adopt a series of by-laws which will enable actual
implementation and the monitoring of RES installations in Tajikistan. The Law envisages a
multitude of by-laws as shown in Table 13.
Table 12 List of by-laws as envisaged by the Law on the Use of RES
№ List of regulatory acts Type of act Indicative deadline for
adoption 1 Wind energy. Terms and definitions.
National standards of RT (category of alternative energy):
December 20, 2010.
2 Small hydro power. Terms and definitions National standards of RT (category of alternative energy):
December 20, 2010.
3 Solar energy. Terms and definitions National standards of RT (category of alternative energy):
December 20, 2010.
4 Solar energy. Solar collector. General technical conditions. Testing methods
National standards of RT (category of alternative energy):
December 20, 2010.
5 Solar photovoltaic modules. Types and basic parameters National standards of RT (category of alternative energy):
December 20, 2010.
6 Informing of consumers about energy efficiency of municipal and domestic productions. General
National standards of RT (category of alternative energy):
December 20, 2010.
24
№ List of regulatory acts Type of act Indicative deadline for
adoption requirements. General provisions
7 Energy efficiency. Structure of components. General provisions
National standards of RT (category of energy conservation):
December 20, 2010.
8 The rules of conducting inspection certification of electrical equipment and electric power
Statutory act December 20, 2010.
9
Instructions on connection order (connection) of facilities for using of renewable sources of energy to general power network.
Board resolution of the Ministry of energy and industry of RT
December 20,
2010. 10 Instruction on communication with the system operator
and energy RES producer Board resolution of the Ministry of energy and industry of RT
December 20, 2010.
11 Power and capacity purchase agreement
«Model contract», by Order of Antimonopoly agency of RT under the Government of RT
December 20, 2010.
12 Regulations on tariff calculation for electricity produced by RES
By Act of Antimonopoly agency of RT under the Government of RT
December 20, 2010.
13 Regulations on the rules of safety engineering and operation of renewable sources of energy on a territory of RT
Board resolution of the Ministry of energy and industry of RT
December 20, 2010.
14 Regulation on the order of definition of economic effect and amount of incentives for using of renewable recourses of energy and releasing them to environment
Board resolution of the Ministry of energy and industry of RT
December 20, 2010.
15 Regulation on Cadastres of renewable recourses of energy on a territory of RT
Board resolution of the Ministry of energy and industry of RT
January 10, 2011
16 Regulation on Catalogues of of renewable recourses of energy on a territory of RT (p.9)
Board resolution of the Ministry of energy and industry of RT
January 10, 2011
17 Draft «Decrees of Government of RT «About introduction of amendments and additions to the Regulation of the Ministry of Energy and Industry of RT»
Draft Resolution of Government of RT
January 10, 2011
18 An order of obtaining a permit for facilities and installation
of RES (hydro power facilities, solar equipment). Board resolution of the Ministry of energy and industry of RT
January 10, 2011
19 A draft Decree of the Government of RT «Оn introduction of amendments and additions to the Law of RT “About power system”
Draft Resolution of Government of RT
January 10, 2011
20 A draft decree of the Government of RT «Оn introduction of
amendments and additions to Water Code of RT» Draft Resolution of Government of RT
January 10, 2011
21 Studying of existing legal acts on the matter of establishment of Foundation for support of development of RES and preparation of appropriate proposals
Proposals on the matter of establishment of Foundation for support of development of RES
January 10, 2011
2.2 Regulatory framework for RES In general, regulation will enable RES project developers sufficient and quality information on
available RES potentials, provide guarantees (not only financial, but also technical) to the RES
producers that their projects are feasible and will be supported. The regulation shall also
prescribe accessible and expedient administrative procedures for the construction of RES
power plants and the installation of other RES equipment.
Although the list of by-laws provided in Table 13 is final, it must be noted that the high number
of regulations may be an additional barrier towards further development of RES; investors will
likely be forced to peruse a large number of documents in order to understand their
responsibilities should they seek to implement their projects and become RES power producers.
The following activities shall be addressed to create and establish fully a regulatory framework
that will enable the higher utilization of RES:
25
1. All by-laws envisaged by the Law shall be adopted and implemented by the end of
2010;
2. The Competency Ministry (MEI), together with all other national authorities involved in the
preparation of the by-laws, shall develop a clear and concise "Guide for construction of
RES power plants" containing all relevant information and the sequence of activities
needed to be undertaken in order to build an RES power plant, connect it to the grid, and
benefit from electricity production;
3. The implementation of regulation shall be regularly monitored by competent authorities,
shortfalls shall be identified and documented, and amendments to the Law and
regulation shall be proposed and adopted. This shall be a continuous process, the
implementation of which could be facilitated by the requirements to the Competency
Ministry (MEI) to report regularly (at least once a year) on the success of regulation
(in terms of new megawatts installed in RES plants) to the Government, Parliament
and President.
In the process of preparing the by-laws defined in Table 13, general recommendations based on
best world practices shall be respected. These recommendations are divided into several main
areas and provided hereafter. They aim to address the main regulatory issues that need to
be undertaken, and not simply define the content of every specific by-law listed in Table
12; this would significantly exceed the scope of the Strategy. Moreover, future
recommendations on the content of RES regulation could be used to amend the existing by-laws
and potentially mitigate their number.
The by-laws on RES shall primarily define and regulate the following issues:
- procedures and principles for the construction of RES facilities, including the
establishment of a cadastre of RES projects and facilities in Tajikistan to enable
monitoring;
- connection of RES power plants to the electric power grid with all relevant technical
conditions for the integration of RES in the electric power system (voltage, reactive
power, frequency and power flow control );
- procedures on monitoring and verifying electricity production from RES (system to
guarantee the origin of electricity);
- rights and obligations of state bodies (ministries), investors (local communities and
private IPPs), the national electric power utility, and consumers related to RES
electricity production and use;
- a financial support framework for RES, particularly where it concerns a tariff system
methodology and the establishment of a dedicated National Fund for RES and EE to
manage and administer the scheme for electricity buy-back as a support to community
based projects.
Terms and conditions for construction of RES plants
Regarding the procedures and principles for the construction of RES plants, the by-laws should
regulate the use of state-owned land for building RES power plants and/or heating stations.
26
Investors must be sanctioned to use this land under favourable conditions (with limited or no
rent due). In cases where investors are local communities, the use of such land should be
permitted without financial compensation. The procedures for obtaining all permits should
be defined; this process should be clear, simple and preferably performed as a "one-stop-shop"
(one state body nominated as the focal point for obtaining all permits and licenses should be
established to ease and expedite the process). For smaller installations (micro and mini plants),
the procedures should be swift, simple, and straightforward. It is also important to establish a
system capable of monitoring development of RES projects in Tajikistan via the establishment of
a dedicated Cadastre of RES plants. The Cadastre could be led by the MEI Department that
currently holds a jurisdiction to award a license.
In order to prevent the installation of inefficient equipment (such cases have already occurred
in practice), it is also important to prepare technical standards for equipment used in RES
plants. In the process of preparing these standards, it should be noted that RES utilization in
Tajikistan will play an extremely valuable role in poverty reduction and economic development.
The aim is to enable local manufacturers to begin their own production of RES installation
components, especially sHPPs.
Certification of RES plants and RES electricity
In order to eliminate abuse of the incentive system and maintain the ability to monitor whether
eligible producers comply with regulatory and technical standards, it is necessary to establish a
system of certifying RES plants and RES electricity produced; a system widely known as a
guarantee of origin. The system could be run by the MEI. The established system will obligate
certificate holders to provide the appropriate information to all relevant stakeholders (MEI,
Fund, Barki Tojik).
Grid access and connection issues
Grid (transmission and distribution) operators, i.e. the electric power utility, shall be obligated
to prescribe clear and transparent technical conditions in a specific regulation for the
connection of RES power plants on their grids depending on the voltage level of the connection
point. The utility companies shall also enable investors to connect to the grid and provide them
with a clear estimation of grid connection costs, which shall be borne by the investor. The
Ministry responsible for energy, however, may decide that the utility should bear the costs of
grid connection when the RES power plant investor is a local authority or when it is considered
to be of high national interest. The possible criteria might be the following:
- If the connection of sHPP is standardized (i.e. in line with the prescribed regulations and
recommendations of the system operator) and if the capacity of the sHPP is less than
300 kW, the distributor shall cover the actual costs of the connection to the distribution
network from the connection site and the actual costs of the changes made to the
existing network.
27
- If the connection of sHPP is non-standardized, the investor shall cover the actual costs of
the non-standard connection to the distribution network from the connection site and
the actual costs of the changes made to the existing network.
- If the investor in sHPP is a local community, all of the costs related to grid connection
shall be covered by the Trust Fund for RES and EE.
The utilities shall be forbidden to decline the right of grid connection in cases when grid
reinforcements are needed. The investor shall not bear any costs for possible grid
reinforcements needed for the grid connection of their RES power plant. Finally, the utility
companies shall be obligated to give priority to RES power plants in dispatching. As far as
technical conditions of the national electricity system operation permit are concerned, the
following issues shall be taken into account:
- The eligible electricity producer with an installed capacity of less than 10 MW has a
dispatch priority in accordance with the daily schedule reported to the operator (Barki
Tojik) of the network to which the power plant is connected to;
- The eligible electricity producer with an installed capacity of less than 300 kW has a
priority of access to the network without having to report the daily schedule to the
operator of the network to which the power plant is connected to;
- The eligible electricity producer does not pay the balancing costs.
The regulation shall also address the off-grid mode of RES plants operation, which is
particularly important for sHPP.
In addition to grid connection rules, other technical issues should also be covered by regulation,
in particular the quality of electricity produced from RES (voltage, frequency, reactive power,
harmonics, etc.)
Status of Eligible Electricity Producer
Electricity producers from RES plants shall be awarded a special status guaranteeing them
certain rights (based on the certification process). This regulation shall recognize two types of
RES: community based, and privately built and owned plants, which is of particular importance
for the development of sHPP.
The legal or physical entity engaged in the activity of electricity generation may obtain the
status of eligible producer should the following conditions be met:
- The generation facility stated in the application should posses a licence for executing
electricity generation activities if such a licence is prescribed by law;
- Renewable energy sources are used in the facility for electricity generation;
- All environmental related provisions (including water use) in accordance with the
appropriate administrative rules shall be met;
- Each generation facility shall have the necessary metering devices that measure the
energy input and output in accordance with the appropriate rules;
- Each generation facility shall meet the technical and organizational requirements
determined for the efficient and secure functioning of the generation facility in
accordance with the technical regulations;
28
- Each generation facility shall meet any other condition or requirement in order to meet
the necessary conditions for the secure functioning of the network.
The regulation shall also prescribe the procedure for acquiring the status of eligible producer as
well as the terms, conditions, and duration of status validity.
Tariff system for RES electricity
First, eligible producers shall be guaranteed that all electricity produced during the grid-
connected mode of operation is to be taken over by the electricity supplier (utility).
Second, for the amount of electricity taken over, the producer shall be paid an incentive price
calculated according to the justified costs of operation, construction, replacement,
reconstruction, and maintenance of plants using RES and on the reasonable return rate of the
investment. A tariff system should be enforced for this purpose.
The criteria for determining the tariffs, i.e. electricity buy-back prices shall factor in the
following issues:
- The electro-energy policy goals concerning electric power derived from renewable
energy sources;
- An assessment on primary source availability, potentials, and possible annual
generation;
- The required investments, and functioning, maintenance, and fuelling costs;
- An accepted pay-back period and rate of return on the investment;
- Size of the plant;
- Hours of plant utilisation;
- A period where the buy-back electricity price s guaranteed buy-back
The existing RES plants, especially sHHPs, shall not be forgotten, i.e. they shall be given the right
to benefit from the new regulation and guaranteed electricity price; however, they shall comply
with the technical requirements and standards established for equipment and plants.
Organization of electricity buy-back form electricity producers - role of
National Trust Fund for RES and EE
The incentive price determined in the tariff system shall be paid to eligible producers by the
recently established National Trust Fund for RES and EE. Roles and responsibilities of the Fund
shall be prescribed by a special regulation. A detailed description of the Fund's operations is
provided in Chapter 3.4.
Other regulatory issues
The by-laws on RES should also cover RES installations for thermal energy production.
Namely, Tajikistan has august solar potential. Currently, solar energy is considered the most
29
cost-effective for water and space heating purposes. For such applications, investment subsidies
should also be ensured from the Trust Fund for RES and EE.
Third, the by-laws on RES shall also provide a framework for stimulating and financially
supporting research and development activities, pilot projects and their scaling-up, and
the production and procurement of domestically manufactured electromechanical
systems for RES use. These issues shall be addressed in the regulation establishing the Fund
for RES and EE, which shall provide financial support for the above-mentioned activities.
National expertise, it can be concluded, will be ensured and industrial production stimulated.
2.3 Policy, legal and regulatory framework for EE Tajikistan has recognized the importance of the efficient use of energy in the form of its 2002
promulgation of the Law on Energy Saving.
Due to the specificities related to EE in Tajikistan, this Strategy will not discuss the EE
framework in details. Instead, these shall be provided in the Energy Efficiency Master Plan as
an official national strategy for the improvement of EE, complete with an elaboration of
programs and projects to improve EE in both urban and rural areas.
3 INSTITUTIONAL FRAMEWORK
3.1 Overview of baseline conditions for the implementation of RES
regulation Using the Electricity Governance Toolkit as its foundation, the Report on Regulatory Processes
in Tajikistan, outlines the following:
- Energy Law of the Republic of Tajikistan provides a description of authorities but does
not clearly define the jurisdiction of regulatory bodies (ministries and departments)
with regard to RES (and the power sector in general);
- Though the Ministry of Economic Development and Trade has been assigned to be the
regulatory body under the indirect law, "On natural monopolies", a clear definition for
how the ministry conducts regulation is not defined;
- The Ministry of Energy and Industry (MEI) lacks experience in licensing sHPPs. The
document, a rationale for licensing sHPPs, is abridged and it does not provide licensing
procedural guidelines. Further, it is difficult to assess the capacity and capability of the
Licensing Department to award licenses for sHPPs.
- Although the Antimonopoly Committee has been designated the body to perform tariff
proceedings and determine tariffs for sHPPs, legal and regulatory documents that define
rules and regulations do not exist. Further, it is difficult to assess the capacity and
capability of the Antimonopoly Committee to set tariffs and other relevant procedures
for sHPPs and other RES.
For the purposes of successful policymaking and, in particular the implementation of RES, the
following aspects shall be considered:
Institutional setting for implementation of the regulatory framework
Independent regulatory bodies or departments, as part of the ministerial structure, must exist
to administer RES and EE issues. Their existence must be clearly denoted in both laws and
30
regulations. Since different departments within the Ministry for Energy and Industry and the
Ministry for Economy, Development, and Trade act as independent regulatory commissions, it is
imperative to define the divisions of regulatory authority for these two ministries through
either law, or government rules and regulations.
Authority of the regulatory bodies
It is essential that the regulatory body (departments) has sufficient legal authority. Therefore,
the respective law and regulations must determine their full legal authority. If the regulatory
bodies or departments which play the role of the regulatory commission do not have sufficient
legal authority, they will not be able to determine relevant decisions; as well, stakeholders will
likely not comply with the rules and decisions made by these departments.
Jurisdiction of the MEDT and MEI departments
Regulatory documents for RES (and EE) must define jurisdiction and the function of these
departments. These functions may include, but are not limited to: (i) approval of tariffs; (ii)
setting service, equipment, and building standards; (iii) protecting the interest of consumers
and community based producers; (iv) awarding and revoking licensees; etc.
Trained regulatory personnel
Training of regulatory bodies’ personnel is necessary. The implementation of RES policy
requires new regulatory knowledge and an adequate overall understanding of RES and
policymaking. Thus, it is important to provide training and the transfer of knowledge from more
experienced parties, perhaps with the aid of international cooperation.
Capacities for implementation of RES (and EE) policy at the local level
It is a fact that policies are being implemented locally and that local authorities play a pivotal
role in enabling the implementation of RES and EE projects within their territories. This fact is
increasingly more important in Tajikistan, as the majority of RES projects would be
implemented in remote rural areas and would likely be community based.
It is critical that local authorities understand the problems of electricity supply and embrace
RES, and in particular sHPPs, via the implementation of basic EE measures based on locally
available technologies and materials as the most feasible solution. Therefore, it is necessary to
work with local communities, understand their needs, and provide them information on the
31
most beneficial solutions for their problems.
Figure 8 Approach to strengthen capacities and improve cooperation at all levels
Institutional capacities for the implementation of RES and EE policy must be
strengthened in Tajikistan (Figure 8). In this process, all levels of jurisdictions must be
included, i.e. actions at both the national and local level are required. Capacities and capabilities
shall be strengthened at all levels and cooperation and communication between them shall be
improved.
3.2 Strengthening governance and capacities to implement RES (and EE)
policy at national level The key stakeholders in the Tajik energy sector are presented in Table 14.
Table 13 Overview of the most important stakeholders in Tajik energy sector
POLITICAL INSTITUTIONS /AGENCIES:
MAJLISI OLI OF RT
PRESIDENT OF RT
GOVERNMENT OF RT
MINISTRY OF ENERGY AND INDUSTRY OF RT
MINISTRY OF ECONOMIC DEVELOPMENT AND TRADE OF
RT
REGULATORY AUTHORITIES:
GOVERNMENT OF RT
MINISTRY OF ENERGY AND INDUSTRY OF RT (LICENSING)
ANTIMONOPOLY DEPARTMENT AFFILIATED TO THE
GOVERNMENT OF RT (TARIFFS)
GOSSTANDART(STANDARDS)
PUBLIC UTILITIES:
OPEN JOINT-STOCK HOLDING COMPANY «BARKI TOJIK»
ENERGY COMPANY «PAMIR-ENERGY»
OJSC «SANGTUDA HPP-1»
PRIVATE AND PUBLIC OWNERS OF MICRO, MINI AND SMALL HPPS
PLANTS FOR PROCESSING AND PRODUCTION OF
ELECTRICITY/ENERGY Structural divisions: OJSHC «Barki Tojik» EC «Pamir-Energy» OJSC «Sangtuda HPP-1» private and public owners of
micro, mini and small HPPs
ENERGY DISTRIBUTION ENTERPRISES
Structural divisions: OJSHC «Barki Tojik» EC «Pamir-Energy» Power distribution networks of
wholesale customers
ENERGY TRANSMISSION ENTERPRISES
Structural divisions: OJSHC «Barki Tojik» EC «Pamir-Energy» Governmental power
distribution network
Evidently, the Ministry of Energy and Industry (MEI) and the Ministry of Economic
Development and Trade (MEDT) are responsible for most facets of the energy sector in
Tajikistan. While the MEI is responsible for both RES and EE in general, an energy department
exists within the MEDT which handles issues related to planning and statistics (e.g. statistics are
also covered by the Office for Statistics under the Presidential Office). In addition, other
ministries and institutions hold key jurisdictions for the energy sector. These include the Tajik
Geological Survey and the Ministry for Nature. These institutions manage mineral resources;
determine the terms and technological parameters of mining; issue mining lease documents and
supervise deposit conservation; and monitor all terms of natural resource management.
32
The Ministry for Nature Protection regulates the sustainable management of energy resources
and monitors the observance of nature-use regulations (emissions, pollution, and waste
formation). On the question of financial aid provision for RES and EE projects, the Ministry of
Finance, which plays the pivotal role in providing financial aid for RES and EE projects, is
another key institution involved in the decision-making process. The State Committee for
Investments is tasked with creating a favourable climate for and attracting investments, inter
alia in the energy sector. The issue of energy pricings and tariff establishment falls within the
jurisdiction of the Antimonopoly Commission. Moreover, with the established EE policy (EE
Master Plan) and legislative framework, it is evident that EE is an acutely interdisciplinary area
of labour and will include other institutions as well, especially those responsible for
construction, transport, and standardisation. Therefore, competent capacities and coordination
of activities will only become more important over time.
In this sense, it is important to emphasise that an Inter-Ministerial Task Force Group has
recently been established, which coordinates the activities of the various ministries related to
the implementation of integrated rural development projects. This Task Force, as officially
appointed by the various ministries, should also serve as the core coordination body for
all activities in the field of RES and EE as part of the Poverty Reduction Strategy
implementation process. The existence of the Task Force is a particularly valuable asset for
elevating the status of RES and EE issues in the political agenda. The Task Force should also
assume responsibility for monitoring the policy implementation progress and report all findings
to the Parliament and President.
Capacity building activities shall be performed in the MEDT, the MEI, the Antimonopoly
Commission, the State Committee for Investments, and Barki Tojik. The first step is to
analyse the current situation (how many people are working on RES and EE issues, what is their
professional background, responsibilities, etc.); identify roles and responsibilities and areas of
overlap; and propose cooperation mechanisms, changes in the internal structures and training
programmes to ensure the necessary competences needed to perform all of the required tasks.
In the field of RES, training programs shall cover the following issues: (i) Technology for RES;
(ii) Building RES; (iii) Environmental issue related to RES use; (iv) Investment and O&M costs
for RES; (v) Tariff methodologies and calculation of feed-in tariffs; (vi) Incentives for the
building of RES plants; (vi) Registration of RES plants; (vii) Management of the incentive fund
for RES; (vii) Procedure to grant the eligible status for RES electricity producers; (ix) Technical
requirements to connect RES plant to the distribution network; (x) Technical and commercial
requirements when RES plant works off-grid. Training programmes shall be based on the
best world practices and employees of state institutions would also benefit from the
transfer of knowledge derived from international cooperation programs.
In the field of EE, it shall be noted that the existing Law on Energy Savings stipulates the
establishment of the State Energy Supervision Body that will supervise the implementation of
the Law and coordinate EE activities. Energy efficiency is a complex and multidisciplinary area
that requires dedicated personnel. Since the above mentioned Law was prepared by the MEI, it
is recommended that a special department/unit is established within the MEI and that it
acts as an EE agency with powers prescribed by the Law.
Finally, the institutional framework will not be possible without educated and competent
administrators. Therefore, it is strongly recommended that changes be initiated in higher
33
education systems. Curriculums shall be updated with courses that deal specifically with RES
utilization and energy efficient technologies and practices.
In summary, the primary activities that must be enacted in the short term to create a favourable
and indispensable institutional framework for RES and EE policy definition and implementation
are as follows:
define and document clearly the roles and responsibilities of the MEI and the MEDT,
identify areas of overlap, and propose solutions for improving cooperation and the
coordination of activities;
analyse existing organisational structures and establish departments within the MEDT
and the MEI that deal with RES and with EE;
analyse the capacities and capabilities of employees in the MEI and the MEDT and propose
training programmes to qualify them for their performance of the defined tasks;
analyse roles and responsibilities, and the capacities and capabilities of other stakeholders
at the national level relevant for the implementation of RES and EE policy and proposals;
analyse the capacities of the state owned electric power utility (Barki Tojik) for the
implementation of RES and EE policy and propose training programmes to qualify them for
performance of the defined tasks;
strengthen the role of the Inter-Ministerial Task Force, require it to monitor progress, and
report to the Parliament and President on the results of RES and EE policy implementation.
Capacity and capability building in state institutions and electric power utility shall be
supported by international cooperation and transfer of knowledge programmes.
Moreover, to ensure the placement of sufficiently competent experts in the field of RES and EE
in the long term, changes in the higher education system shall be initiated to emphasise
RES and EE issues in educational programmes.
3.3 Strengthening governance and capacities to implement RES and EE
policy at local level As noted above, policies implementation occurs at the local level; therefore it is crucial to raise
awareness within the local communities on energy issues, and in particular the benefits that
RES projects would provide to the local community. Although there exists no formal structures
dedicated to local energy problems in both districts and jamoats, evidence shows that local
authorities are well aware that the origin of the problems lies in the lack of a reliable electricity
supply. Therefore, and as a result of necessity, the level of awareness among local authorities on
energy issues is remarkably high and they support the construction of RES power plants,
especially sHPPs.
This momentum shall be utilised to further strengthen the capacities of local communities to
initiate on their own, implement, and operate RES projects. It would be advisable that at the
district and jamoat level, training courses for employees should be organised that cover the
following issues: (i) Technology for RES and EE; (ii) Benefits of using RES (iii) Environmental
issue related to RES use; (iv) Investment and O&M costs for RES; (v) Operation of RES power
plants; (vi) Regulatory framework for RES (rights and obligations of local communities as RES
34
electricity producers); (vii) State support for RES and EE (role of the National Trust Fund for
RES and EE).
It is important that local authorities and communities are able to recognise the benefits
accumulated from RES and be able to identify direct opportunities for economic activities (the
production of equipment for RES plants, construction and instalment works, operation and
maintenance of RES plants) as well as indirect opportunities (establishment of small processing
factories related to agricultural activities, greenhouses, etc.) and the consequence of RES and EE
utilisation opportunities.
To ensure the creation of a competent domestic workforce able to implement RES and EE
projects in the future, it is fundamental to introduce new programmes in vocational (high
school) education.
In summary, institutional capacity building activities at the local level shall have two main
focuses:
1. Provide local authorities sufficient information on the economic possibilities and the
regulatory framework to enable them the ability to initiate construction of RES power
plants themselves, especially sHPPs, in combination with the enforcement of EE
measures as part of the overall integrated rural development mechanisms.
a. This shall be accomplished by the workshops and training courses organised for
district and jamoat representatives. At least at the level of district, it shall be insisted
that there is a person or even department in charge for energy issues (Barki Tojik's
electricity departments could be used for this purpose).
2. Investigate possibilities for starting up RES and EE related jobs at the local level and
provide appropriate training and qualification courses for local inhabitants (e.g.
revitalise existing manufacturing facilities to produce equipment needed for sHPPs, educate
future installers of solar equipment, etc.)
a. The conditions are not the same in every district and jaomat, thus the programmes
shall be customized to best suit the respective local communities’ requirements and
potentials.
3.4 The role of the National Trust Fund for RES and EE in policy
implementation at national and local levels Establishment of the National Trust Fund for RES and EE is considered to be an important step
towards the full development of the capacities required for policy implementation. Since RES
and EE policies in Tajikistan are in place to reach the goals of poverty reduction and economic
development, it is fundamental to establish the Fund as a non-profit organisation created by the
Government of Tajikistan and funded by them wholly, or at least partially. It should be governed
by the Administrative Council, and composed of representatives of relevant state institutions as
well as representatives of the civil society sector. The members of the Fund's Administrative
Council shall be determined by the following criteria:
- One representative of the Ministry of Energy and Industry (MEI),
- One representative of the Ministry of Economic Development and Trade (MEDT),
- One representative of the Ministry of Finance (MF),
35
- One representative of the State Committee on Investment (SCI)
- One representative of the State Environment Agency
- One representative of the Majlisi Oli of RT;
- One representative of the OJSHC “Barki Tojik”
- Two representatives of an NGO.
The Fund shall have the crucial role of creating incentives for community-based RES electricity
production (see Figure 9)—it shall act as an intermediary institution between producers and
the utility company (Barki Tojik) – and with competence given by regulation, it should ensure
the regular payments and transfers of money. The employees of the Fund shall be technical
experts, with knowledge of RES and EE to be used in the evaluation of projects and operation of
the RES electricity incentive system. An administrative staff made up of persons holding a
financial background will be in charge of managing capital flows and accounting procedures.
The Fund will act as a body with the following responsibilities:
Collecting fees for incentivizing RES and EE from sources defined in the legislation of RT
(for details please see Chapter 5);
Managing the mechanisms that control the incentive electricity buy-back price for grid
connected RES power plants (entering into contracts for the purchase of electricity with
Barki Tojik on behalf of the independent power producer (community based, but if
required, this service shall be provided to private investors as well. This will be based on
the special agreement signed previously between the Fund and independent power
producer). Managing the scheme includes the following responsibilities:
finalize contracts on obligatory purchases with eligible electricity producers;
manage the accounting and execute the fee payment to the eligible electricity
producers;
manage the accounting of the planned and actual generation, by means of
invoicing and charging Barki Tojik for the electric power produced by the
eligible producers;
compile and process the data on electric power from the IPPs submitted by Barki
Tojik.
Allocation of financing to RES and EE projects not covered by the mechanism of the
electricity incentive buy-back price - the following activities shall also be eligible for co-
financing from the Fund:
Research and development studies on RES and EE (in full amount);
Promotional campaigns for the use of RES and the more efficient use of energy
(in full amount);
Education programmes for professionals performing tasks related to RES
installations and EE improvements (in full amount);
Financial aid for the preparation of RES/EE project documentation, including
investment studies (up to 40% of the total costs);
Financial aid for thermal and off-grid RES installations, e.g. solar thermal
collectors as well as for EE improvement projects (up to 40% of the total
investment; in remote rural areas and in the public sector, up to 100%)
Fund raising for RES and EE projects in Tajikistan and mediation related to the funding
of RES and EE projects from monetary contributions provided by other states,
36
international financial institutions and bodies, and domestic and foreign legal and
physical persons;
Cooperation with national and international financial institutions (banks) to ensure
funding for RES and EE projects in Tajikistan;
Initiation for and support from international cooperation in the field of RES and EE;
Establishment and maintenance of a database on all RES and EE projects in Tajikistan,
financed by the Fund, including the supervision of the financial means spent for this
purpose.
The payment principle and relations between stakeholders is shown in Figure 9. It must be
noted that the difference between the incentive price, as stated in the tariff system, and the
average electricity price in the system will be compensated by the Fund (i.e. the State, as this is a
national interest), since electricity suppliers shall pay to the Fund the average system price for
all electricity taken over. A detailed explanation of the scheme is provided in Box 1.
Figure 9 The system of guaranteed power purchase price for RES electricity producers
Box 1. Explanation of the Fund’s role in the incentive scheme for RES power production
The scheme of incentive electricity buy-back price for grid connected RES power plants – how does it
work?
Due to the lack of capacities (a common situation with local community based sHPP) or due to the desire
to mitigate risk as much as possible, an RES power producer acquires assistance from the Fund to act as
an intermediary between them and the system operator. A contract between an RES power producer and
the Fund is then concluded which defines the terms and conditions on which the Fund will pay the
incentive price to the RES power producer. The incentive price shall be in accordance with the regulation
of RT.
The Fund will then conclude the Energy Purchase Agreement with the System Operator in accordance
with the regulation of RT,
National Fund for RES and EE
Administrative CouncilExecutive Committee
EE projects –
investment
subsidies
EE Foundation RES Foundation
RES projects
– investment
subsidies
System
Operator
Incentive price
RES power
producer
Sources of financing
Electricity
delivered to
the grid
Consumers
Sells electricity at price
determined by tariff system
Pays for electricity taken over from
RES power producer at average
el.production price
Grid connected RES
power plant
Consumers
Electricity
delivered to
the local
consumers
Pays
electricity at
price
determined
by tariff
system
Off- grid RES power
plant
37
Based on the amount of electricity that RES power producer delivers to the System Operator, the System
Operator pays the amount to the Fund. The price the System Operator pays should be the average
electricity generation price determined by the State Department of Power System Control. This price is
lower than the retail price at which electricity is sold to the final consumers, hence the System Operator is
guaranteed to cover their operation costs and participate in the system without any loses.
On the other hand, the Fund pays the incentive-guaranteed price to the RES power producer as specified
in the contract and in line with the price for that type of RES power plant determined in the regulation. As
this price is higher than the average electricity generation price, the difference shall be covered by the
sources of the Fund.
Vision
The overall concept presented above is based on the assumption that all RES power plants shall be grid
connected. This is by all means the desired situation. The grid connection of RES power plants, especially
community based ones, is extremely important since local communities could benefit from the sales of
electricity to the grid and use the collected money for local economic development. Moreover, the
constant and secure supply of electricity is the main precondition for enabling new business
opportunities (e.g. small processing factories) in rural areas. Therefore, the stable and reliable electricity
supply from the grid is the main postulate in the paradigm “RES for poverty reduction”.
Problem issues
The current situation is far from desired. There are a multitude of sHPPs in Tajikistan operating only
during the winter months that provide electricity during shortages from the grid. They are not
operational in the summer when there are surpluses of electricity in the system due to the current
inability to transfer electricity to neighbouring power systems.
As sHPPs and other RES power plants are the primarily tool for poverty reduction in Tajikistan, it shall be
required that all existing sHPPs are connected to the grid, operational throughout the year, and included
in the incentive scheme led by the Fund.
During the period of transition many applications will be operating only in the off-grid mode and only
during winters. In such cases, the Fund shall be included as an intermediary between the RES producer
and final customers. The consumers should again pay the price as defined in the tariff system (consumers
shall always pay the same price) to the Fund, while the RES producer will obtain the incentive price for
electricity delivered as stated in the contract with the Fund and in line with the regulation.
Where it regards the Fund, special attention shall be given to the community based RES plants. The
Fund shall develop a framework “takeoff” agreement that will address the following issues:
- Community based RES plants when working in both “on-grid” and "off-grid" mode will sell
their electricity at the guaranteed price which will be paid by the Fund ;
- Local customers will always pay the same price regardless of the working mode of an RES
plant; the price will be equal to the regulated tariff established by the regulation;
- The price difference between the regulated tariffs and the incentive price shall be covered by
the Fund;
- The methods of measurement, billing, and payment will be determined in the framework
arrangement;
- The obligation of all involved parties will be clearly determined in the document.
All these matters shall be specified in the Regulation establishing the Fund.
38
The Fund will represent not only the financial, but also the strong institutional support for the
implementation of RES and EE policy. In particular, the Fund will support rural, community
based RES projects. Therefore, one of the most important goals set in this Strategy is to
establish the National Trust Fund for RES and EE. For this purpose, a special Regulation on
the Fund shall be developed as well as other documents needed for its operation, specifically:
Statutes of the Fund;
A work programme for the first four years of operation;
A financial plan for the four three years of operation.
39
4 FINANCIAL SUPPORT FOR RES AND EE
Given the complex economic situation in the country, as well as the abject conditions of poverty
and the limited access to electricity, a system for ensuring financial means for incentivizing the
use of RES and improvements of EE must be customized for Tajikistan.
In order to support financially RES and EE in Tajikistan, it is proposed by this Strategy to
establish a dedicated National Trust Fund for RES and EE (as shown in Figure 9). The
organization of the Fund and the rules of its operation shall be determined by a special
legislation/regulation. In the short to medium term, however, the Fund should focus on
providing financial support to electricity produced from community-based sHPPs, i.e. the Fund
should act as an intermediary between utility and RES producer to ensure that in on-grid mode
of work, the producer is paid for electricity delivered into the grid (see Box 1.). As well, the
Fund, as a state body with legally prescribed competences, should be able to ensure payments of
utilities for electricity taken over from RES producers. Depending on the funding available, the
Fund should also provide financial support in the form of investment subsidies for other RES
applications, especially solar thermal systems, and for EE activities according to the priorities
defined in the EE Master Plan.
The crucial issue for the Fund's operation is how to ensure a continuous inflow of
financial means, while respecting the country’s meagre economic situation, and without
burdening citizens or the industrial sector. Various examples of funding sources for RES and
EE purposes can be found worldwide. Most funding sources attempt to burden energy
consumers and polluters, as such similar mechanisms outlined below are the most widely
applied:
- Environmental charges for large polluters charged per tonne of pollutant (e.g. CO2)
emission;
- Special charges for motor vehicles, paid yearly by vehicle owners according to the type
and age of vehicle;
- Special charge for imported vehicles. Though it is not a wide spread mechanism, it is
identified as a potentially suitable solution for Tajikistan;
- Petroleum products levy, paid by all consumers per litre of product bought;
- Electricity fee, paid by all consumers per kWh of consumed electricity;
- Direct state budget allocations.
Table 14 shows the results of a detailed comparative analysis of the above mentioned financing
options performed in order to ascertain the best possible solutions for Tajikistan.
Apart from state contributions to the Fund, it should be proactive in fund raising from other
sources, especially from international financial institutions and donors.
40
Table 14 Comparative analysis of different financing options for National Trust Fund for RES and EE
Alternative Approx. possible annual
incomes to the Fund (USD)
Pro Contra Note/Recommendation
Environmental
charges for
pollutant
emissions
Not available - the measure was not considered at all since it would heavily burden Tajik industry
Fairness - cost borne by those who caused pollution;
Effectiveness - large amount of money could be collected;
Stimulant for cleaner and more efficient technologies;
In line with Kyoto Protocol
Strong institutional framework for administration needed
Strong and efficient control mechanisms needed;
Additional burden to weak industry
Not applicable in Tajikistan for
the time being due to economic
situation and poor industrial
conditions
Special charge
for motor
vehicles
875,000 from newly introduced charge
If new charge is not introduced, but the existing ecological fee is allocated to the Fund - $1.75 M USD
Fairness - cost borne by polluters (vehicles)
Collecting system already established because of ecological fee
Additional burden to car owners, since there is already a significant ecological fee imposed
The means collected will not
suffice for incentivizing
desired RES electricity
production; however it is
recommended to allocate the
money collected from the
existing ecological fee to the
Fund
Special charge
for imported
vehicles
$17 M USD with the unit charge amounting only 1% of a vehicle selling price
Fairness - cost borne by polluters
Does not contribute to poverty progression
Very small increase in the selling price of a car
Vast amounts of money might be collected
Requires good functioning of customs control and financial inspection
Recommended for
implementation in Tajikistan
at the moment - coordination
with Ministry of Finance
necessary
Petroleum
products levy
$4.6 M USD with levy amounting 0.01 Somoni / liter up to
$13.8 M USD with levy amounting 0.03 Somoni / liter
Easy to implement Does not require complicated
institutional support Polluter pays Burdens only those who can
afford it (owners of vehicles) Effectiveness - possible to collect
large amounts by very small fee
Increases costs of petroleum products;
Possible (probable) increase in prices of transportation services and in prices of all other goods and products → could cause progression of poverty (since petroleum products are almost
Possible for future
implementation in Tajikistan–
easy to implement; significant
amount of money could be
collected and invested in RES
and EE projects
41
100% imported and prices vary significantly, causing changes in prices of other products and services)
Prohibited new taxes due to economic crisis
Electricity fee $102.000 USD if the fee is imposed only to public sector
$4.8 m USD if the fee is imposed to all electricity consumers
Fairness - RES electricity stimulated by electricity consumers;
Effectiveness - possible to collect large amounts by very small fee
Strong institutional framework for administration needed
Requires reorganization of energy sector - stronger control of monopoly in payments
Increases electricity price to final consumers
Can’t be imposed to population with limited access to electricity
Not applicable in Tajikistan
for the time being due to
existent energy poverty of more
than half of the population
State budget
allocations
Depends on tightness of the budget - allocations of existing petroleum taxes and ecological fees for vehicles could be made
Easiest to implement if there is political will
Not sustainable measure in the long term
Needed in any amount as a
starter of RES and EE activities
42
Recommendations for ensuring funding are as follows:
Funding shall be provided from the state budget allocations, international donations,
and chosen dedicated sources (from Table 15);
Funding will be primarily used for supporting rural, community based RES power
plants (sHPPs) according to programmes adopted by the Government;
The Fund shall also provide investment subsidies for RES and EE projects if there are
adequate resources;
Investment subsidies shall be provided to both physical and legal entities according to the
determined transparent rules and priorities defined in government programs related to
RES and EE Master Plan to be adopted;
Training, public awareness, energy management and monitoring as well as research
and development activities shall be financed by the Fund in the whole amount.
43
5 TECHNICAL CONDITIONS AND CAPACITIES FOR IMPLEMENTATION
OF RES AND EE POLICY
There are two main issues in the realm of technical barriers for the implementation of RES and
EE policy in Tajikistan:
1. Conditions of electric power network;
2. Lack of technical knowledge and capacities to provide equipment and services related to
the use of RES and the implementation of EE improvement measures.
Although the electrification rate in Tajikistan is remarkably high, the lack of financing and
regular maintenance in the previous period has rendered the grid in bad shape. It requires an
enormous and comprehensive revitalisation on both its distribution and transmission levels.
Stable grid conditions are one of the main preconditions for the development of RES as grid
connection would provide RES power producers' the opportunity to sell electricity at the
incentive price that would guarantee a return on investment. Moreover, regarding Tajik-specific
conditions, the grid connection of RES power plants, and in particular community based sHPPs,
would provide additional incomes to the local communities from the sales of electricity to the
grid, which in turn would be used for economic development purposes. It is expected that the
new regulation would solve this matter; however much effort and funding shall be put towards
the improvement of the technical state of the distribution grid as it is, to a large extent,
unattended. Refurbishment of lines and substations shall be on the priority list of actions
of the distribution system operators. An additional problem derives from the practically
island mode of the overall Tajik power system operation resulting from the weak or non-
existent connection with neighbouring systems. This significantly disrupts the security of
electricity supply due to the inability to import electricity when needed (winter) and export
when there are vast surpluses of production (summer). This problem shall be solved with the
construction of new high voltage lines, but this is a extenuating process and exceeds the scope of
this intermediate strategy.
The second technical barrier – the lack of technical knowledge and capacities - is the
focus of the Strategy. Developing local manufacturing, engineering, operation, and
maintenance capabilities related to RES and EE would contribute to the economic development
in the form of job creation. The aim is to mobilise local manufactures and service providers
related to RES and EE, and especially sHPPs, and to upgrade their capacity for delivering
turnkey solutions for sHPPs with at least 50% of the value provided by locally made goods
and services. For that purpose, it is recommended that typical sHPP designs be standardised
in the rated capacities range of 33 - 500 kW to be applied in rural Tajik communities and to
develop the capacity of local manufacturing and service companies to deliver equipment and
services needed for the construction and operation of sHPPs.
Manufacturing turbines and other mechanical equipment shall be promoted, while generators
and electric equipment will primarily (but not exclusively) be imported. Manufacturing shall be
promoted through the standardization of technology in order to achieve a reduction of costs and
increase of domestic technologies and services.
44
Services related to the construction, operation and maintenance of sHPPs and other RES plants
as well as the installation of other RES equipment (e.g. solar thermal collectors or photovoltaic
panels) shall be provided by local companies. For that purpose transfer of knowledge training
courses shall be organised for local companies. In the field of EE, technical capacities are
needed the most in the field of building construction. Construction workers shall be trained to
install thermal insulation on new and existing buildings as this will be the basis of the urban EE
improvement programme.
Currently, two domestic companies are identified as having the necessary technical capacity and
competence building - Energoremont and Tajiktekstilmash. Energoremont is a private company
with approximately 100 employees and can deliver HPP up to 1 MW on a turnkey basis.
Tajiktekstilmash, a state owned company with 500 employees, manufactures pelton turbine
with an installed power of 33, 75 and 100 kW. These companies have in place expertise in the
field of sHPP; however, they should be provided with additional training and knowledge to
improve the quality of their work (therefore, the Strategy insists on standardisation).
Apart from strengthening the capacities of existing companies, a start-up of new small craft
workshops in local communities shall be promoted and local persons appropriately trained.
In these endeavours there are no universal solutions, i.e. the solutions shall be customized
according to the conditions and possibilities of each local community as well as the preferences
and base skills of the people.
Finally, financial mechanisms shall be used to stimulate domestic involvement in RES and
EE. For example, the National Trust Fund for RES and EE can operate on the principle that it
provides financing for community based sHPPs, but only under the condition that at least 50%
of the value of sHPP is locally sourced. Such a provision would support the development of a
supply chain and the market for RES products and services.
In building technical capacities, design engineers of all professional backgrounds (electrical,
mechanical and civil engineering, architects) should not be overlooked. They should also be
educated in how to design RES plants and have particular knowledge of the EE requirements of
residential and service buildings to ensure the adoption of best practice solutions in the early
stage of RES and EE projects.
Finally, all these needs shall be recognised in educational programmes. RES and EE should be
integrated in higher education engineering programmes as well as in vocational education
programmes to ensure the regeneration of a new and qualified workforce for the
implementation of RES and EE policy.
One of the key goals of the Strategy is to provide opportunities for economic development
through the creation of new workplaces related to RES and EE. In order to achieve this goal the
following actions are required:
standardise several common sHPP designs in the rated capacities range of 33 - 500 kW
to be applied in rural communities;
create transfer of knowledge programmes for local companies to enable them to
produce quality equipment and provide quality services related to RES and EE;
45
initiate the establishment of small craft workshops according to the possibilities and
needs of the local communities;
provide additional state support from the Fund to ensure a high share of domestic
contributions in RES and EE projects;
integrate RES and EE in the national higher and vocational education programmes.
46
6 sHPPs AS A BACKBONE OF INTERMEDIATE RES AND EE STRATEGY
This Strategy rests on the following vision: RES and EE will enable local economic
development and poverty reduction. In achieving this vision, hydro potentials particularly for
the construction and utilization of sHPP play a pivotal role. The provision of electricity from
sHPP will facilitate the development of economic activities in local communities and would also
improve standards of living and environmental conditions. Grid connection of sHPPs is
particularly important, as the surpluses of electricity produced can be sold to the grid at an
incentive price and become an additional source of income for local communities. The
provision of electricity form sHPP shall be combined with basic EE improvement
measures in rural areas, e.g. the use of CFL lighting and efficient electric appliances that would
replace fire wood for heating and cooking purposes.
Figure 10 Tajik vision: sHPP for local economic development and poverty reduction
To demonstrate the importance of RES, and in particular sHPP development, and their role in
reaching poverty reduction, economic development goals and environmental protection, a
simple calculation is provided below.
6.1 sHPP role in poverty reduction and economic development of
Tajikistan First, it must be emphasized that according to experiences seen around the globe, the
development of sHPP projects (less than 10 MW) has a very high potential to generate new
workplaces, up to 40 direct and indirect workplaces per MW. This fact must be considered
in the decision making process, particularly how it relates to the creation of a favourable
financial framework that supports local communities’ investment in sHPP.
Apart from creating workplaces through every installed MW of sHPPs, many other positive
impacts result from the utilisation of hydro resources for energy production in Tajikistan. The
provision of basic amounts of available energy positively impacts society by improving living
standards (indoor lighting) and health conditions (heating). As most of rural households in
Tajikistan still rely on traditional biomass resources (fuel wood and dung) for cooking and
heating, the abatement of this reliance will preserve local biodiversity and reduce the effects
of climate change.
~~
Private investors in Private investors in
small HPP:small HPP:
•Clear procedures and
regulation;
•Methodology for setting
tariffs
•Conditions for connection
to Barki Tajik network
Local communitiesLocal communities – model
for integrated development
MEDT
MoEI
SCI
Dep. Of
Statistics
MoEd, MoAg&Env, MoH
Jamoat Resource Center, …
IPP
Coordination mechanismsCoordination mechanisms
for PRS stakeholdersfor PRS stakeholders
Financial incentives!!!Financial incentives!!!
Law on the Use of RESLaw on the Use of RES
article 9. & article 14. obliges article 9. & article 14. obliges
Government to provide Government to provide
financial support financial support to RESto RES
47
Deforestation, a burgeoning issue in Tajikistan, leads to other adverse consequences such as
desertification and salinization, which can eventually result in the contamination of water
aquifers and the sterility of agricultural land. Providing basic amounts of energy for the most
vulnerable rural households in the form of electricity produced from sHPPs can alleviate all of
these concerns.
In addition to the adverse environmental impacts resulting from biomass resource dependency,
it also contributes to global climate change. Deforestation and the loss of carbon sinks, as well as
the over-reliance on non-sustainable fuels results in increased carbon emissions, the main
driver of climate change. Climate change already impacts Tajikistan; its most pronounced visible
effect is the loss of glaciers, a crucial source of water flows.
Given the concerns noted above, it is of crucial importance to emphasise the use of locally
available renewable energy sources, especially sHPPs as part of the overall strategy to increase
both the availability and reliability of energy. Rural areas, those that need reliable energy
sources the most, represent the greatest potential for sHPPs and must be taken into account
during the decision making processes. Further, solar energy, particularly the energy generated
from solar-thermal installations, must also be considered, especially for larger municipal
institutions such as schools and hospitals.
Based on the complimenting the legal, institutional, and technical platforms established, the
experience amassed from the pilot projects, a national scaling-up program shall be proposed.
The National Scaling-up Program shall define scenarios for integrated rural development
through the provision of energy produced from RES and the implementation of basic,
affordable EE improvement measures. The program shall define the following:
- target groups (beginning with most vulnerable 1 million of citizens);
- methodology for defining the scaling-up scope (starting with the 1 million most
vulnerable and increasing) and measures used (starting with the provision of 1 kW per
household and increasing);
- assessment of the financial costs and benefits;
- technology recommendations (with a focus on the use of intermediate technologies
rather than the state of the art; the use of intermediate technologies enables local
production and maintenance rather than imports);
- assessment of the societal benefits in terms of finances and new workplaces, health and
quality of life, and environmental aspects; recommendations for the implementation
timeframe.
6.2 National scaling-up: sHPPs for accelerating progress towards MDGs by
stimulating integrated rural development In addition to supporting an RES strategy for Tajikistan, the primary purpose of this
Intermediate Strategy is to decrease poverty and accelerate progress towards the achievement
of MDGs. For this purpose, the potential for a national scaling-up of the existing pilot sHPP
projects shall be assessed and the National Program for RES based Integrated Rural
Development (National Scaling-up Program) shall be developed. The National Scaling-up
Program shall assess the costs and benefits of providing 1 to 3 kW of electricity to the most
poverty stricken households.
48
As has been shown throughout history, attempting to solve only one issue where there are
many occurring simultaneously is likely to induce adverse impacts. Thus when seeking to
eradicate energy poverty issues (and poverty) in Tajikistan, it is necessary to utilise the full
breadth of early recovery principles and examine the whole of society and environment and
their mutual dependence. The current dependency on traditional biomass and dung results in
increased deforestation and land degradation triggering detrimental natural processes such as
soil erosion, salinization, and desertification. Most of these processes result in increased water
contamination. In addition, using dung for heating and cooking purposes decreases its
availability for fertilizing crops, which subsequently have lower yields.
Poor insulation
No sanitation
High moisture levels
Indoor smoke
Forest biomass
Dung
Water
(from open streams)
Electricity
Implementation of EE measures would:
- reduce the overall energy requirements
- increase the health and comfort standards
Improvements in indoor technologies and santiation would:
- decrease the energy requirements while preserving the level
of comfort (use of intermetiate technologies for i.e. cooking
stowes)
- improve the health conditions (sanitation)
RES would:
- reduce the deforestation
- increase the availiabity of dung for fertilization
- provide electricity for water pumps and purification
- increase the overall avalibability and affordability of
electricity in rural areas
Cooking
Heating
Lighting
Drinking/Washing
Responsibility for women
Responsibility for children
Figure 11 Energy and water balance in the Tajik rural household – an illustration
Some illustrative scenarios are shown in a preliminary scaling-up exercise below. In the
immediate future, more detailed scaling-up scenarios shall be developed and more reliable data
shall be used for inputs. It is strongly advisable that field estimates of fuel wood consumption
per household are completed such that comprehensive national statistics (on the rates of
deforestation, fuel wood consumption, and dung consumption) are developed.
For the purpose of creating a scaling-up assessment, the following assumptions and data listed
in Table 15 were taken into account.
Table 15 Input data used in the scaling-up exercises
Population of Tajikistan 7.500.000
Living in rural areas 70%
49
Living in poverty 50%
Average number of household members 10
Number of most vulnerable population 1.000.000
Number of households 100.000
Average size of sHPP [kW] 100
Estimated investment costs for the average sHPP of 100 kW [US$]* 100.000
Share of local goods and services related to HPP construction* 50%
Jobs created per 1 MW of HPP installed* 40
On-grid time [h/a] 3500
On-grid price [US$] 0,03
Incentive for on-grid production [US$] 0,01
On-grid power [share of the nominal HPP power] 50%
Estimated per capita annual consumption of fuelwood for cooking [m3] 0,5
Estimated per capita total annual consumption of fuelwood [m3] 1,0
Estimated absorption of CO2 in trees [tCO2/m3] 1,8
*based on the existing pilot project
In the initial phase provision of 1 kW per household to the most vulnerable group (1 million of
citizens most afflicted by poverty) should be the aim. As it is shown in Table 16, if the average
size of 100 kW for sHPP installation is considered, approximately 1000 of such facilities should
be constructed. Providing such a basic amount of energy per household would enable most
inhabitants to have indoor lighting (with the possibility of some other minor services) which
would improve their overall quality of life as they would be able to partake in more evening
social activities; children would have improved conditions for studying.
More significant benefits manifest when 2 kW or 3 kW of installed power per household is
provided. Providing these amounts enables a reduced need for cooking and heating fuel wood.
Table 16 Scaling-up of integrated rural development through provision of electricity from sHPPs
Electricity provided [kW/household]
1 2 3
Total energy production required [MW] 100 200 300
Total number of sHPPs needed 1.000 2.000 3.000
Total investment required [million US$] 100 200 300
Financial return to the local economy [million US$] 50 100 150
Total jobs created 4.000 8.000 12.000
Annual amount of for incentives [million US$] 1.750 3.500 5.250
Annual decrease of fuelwood consumption [m3] n/a 500.000 1.000.000
Emissions saved [tCO2] n/a 900.000 1.800.000
As it can be seen in Table 16 the decreased reliance on fuel wood could result in significant CO2
emission reductions, which traditionally stem from deforestation. The preservation of forests
means preservation of valuable carbon sinks, which positively impacts the overall emissions of
the country.
50
Decreased levels of deforestation (and dung usage for cooking and heating) also allow for soil
preservation; the processes of soil erosion, salinization (and eventually desertification) are less
likely to occur if the natural forest cover is preserved. All of these normally have adverse
impacts on the fertility of the land, which is of essential value for agricultural areas, and may
cause water contamination.
The positive economic impacts, both local and national, are perhaps of even greater value as
such a strategy will create jobs, utilize local industries and manpower, and incur significant
transfers of capital to local communities (in the form of incentives and jobs). As has been
outlined above, significant flows of money to local communities would be possible if the
installed sHPPs would work on-grid during the summer months. Thus it is important to
consider and establish adequate financing mechanisms (a tariff system and the National Trust
Fund for RES and EE) and to improve the current state of the power grid.
The provision of energy to rural households and the simultaneous stimulation of integrated
rural development has positive impacts on all aspects of society, and in addition to the
aforementioned, they have particular significance for the overall quality of life for women and
children. Women and children are primarily responsible for collecting firewood (and/or dung),
which is both physically demanding and time consuming. Access to reliable energy would
alleviate much of these burdens. Women could spend more time on profit raising activities, and
could acquire some of the jobs created by the implementation of RES.
Taking into account the above mentioned benefits, the establishment of the Trust Fund
for RES and EE shall be initiated and all the relevant legislation and regulations shall be
developed together with the aforementioned National Scaling-up Program as proposed
by this Strategy.
51
7 EXPECTED RESULTS OF THE INTERMEDIATE STRATEGY FOR RES
AND EE
The Intermediate Strategy envisages both a "top-down" and "bottom-up" approach in
stimulating development of RES and EE in Tajikistan.
The "top-down" approach depicts the activities focused on creating RES and EE policies and
related legislative, regulatory, and institutional frameworks. Even in the most developed
countries, RES and EE are governed by laws that regulate the stimulation measures needed for
their implementation, i.e. measures aimed at achieving energy efficiency improvements in all
energy sectors and the large scale use of renewable energies. Globally, the introduction of
guaranteed prices for energy produced from RES has been shown as a good practice for
increasing the share of RES; hence, it is recommended as the main regulatory measure for
Tajikistan. Another critical issue that will ensure the financial capabilities and policy support for
the implementation of RES and EE policy in Tajikistan is the establishment of National Trust
Fund for RES and EE.
The main expected results of the "top-down" activities are as follows:
Completed and implemented legal and regulatory framework for RES (by-laws
envisaged by the Law on the Use of RES adopted and tested in practice);
Developed EE Master Plan for Tajikistan and initiated changes and additions to the
existing legislation (amendments to Law on Energy Saving) and a regulatory
framework for EE;
Established and operational National Trust Fund for RES and EE.
The Strategy's "bottom-up" approach takes into account the fact that policy implementation
occurs primarily in local communities, the areas most afflicted by the lack of a reliable
electricity supply, which subsequently obstructs economic and social development, endangers
living conditions, and destroys the natural environment. Every local community must be
approached individually to identify its needs and possibilities for integrated development. The
components of an integrated development concept are as follows:
Provision of electricity to local communities from RES, predominantly sHPP;
Implementation of basic EE and fuel-switch measures to reduce the need for electricity,
consumption of fuel wood and dung, improving living, health, and environment conditions;
Grid connection of sHPP to benefit from the sales of electricity surpluses at the incentive
price determined by regulation;
Education of local people and companies to manufacture RES and EE related equipment and
provide construction, instalment, operation and maintenance services;
Establishment of small processing factories related to agricultural activites in rural areas to
create new work places in local community.
52
In achieving the integrated rural development goals, the National Scaling-up Program based
on the experiences of the already implemented pilot projects will be developed and
implemented in the short-term.
The Strategy clearly offers a win-win approach that will benefit the entire Tajik society:
rural communities will be able to secure electricity supplies at an affordable cost;
local companies will enhance their capacity to provide goods and services for the development and implementation of RES and EE projects;
the most vulnerable population of Tajikistan (local communities in rural areas) will gain raised standards of living, impulses for local economic development, increased self-sufficiency, and preserved environmental conditions.
