Energy
Among Central Asia's energy resources, natural gas and electricity hold particular strategic importance.
Regional integration of energy and transport can deliver substantial economic benefits — chiefly by reducing the need for investment in power generation and lowering fuel costs.
Despite renewed interest in regional cooperation, the potential for interconnection and energy trade remains largely untapped. Key obstacles include the absence of an effective regional trading platform, outdated infrastructure, and institutional fragmentation. Strengthening cooperation on electricity, gas, and other energy resources would enhance the region’s energy security, transparency, and resilience — a necessary condition for sustaining the economic well-being of a rapidly growing population.
Since 2018, surplus gas volumes in the region have been shrinking as production has slowed markedly while domestic consumption grows rapidly. Uzbekistan and Kazakhstan, as the region’s leading exporters, have sought to maintain a positive trade balance in recent years, but preliminary data indicate that Uzbekistan became a net gas importer in 2023 for the first time since independence. Turkmenistan — particularly as it develops the second stage of the Galkynysh gas field — retains substantial untapped export potential, though the fate of the proposed Line D pipeline, with an annual capacity of 30 billion m³, remains uncertain.
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Weak financial performance in the energy sector is slowing the deployment of renewable energy and other technologies. The sector is in transition: market reforms are ongoing, but low price signals are constraining investment.
Private investors face regulatory and market uncertainty, as well as data gaps, which slows the deployment of technologies and the transfer of knowledge.Insufficient infrastructure investment, climate change (seasonal droughts), and the absence of regional coordination could deepen winter gas and electricity shortages in Tajikistan, Kyrgyzstan, and Uzbekistan.
The situation is likely to improve only by the early 2030s, once new hydropower capacity comes online in Tajikistan and Kyrgyzstan and solar and wind generation are developed at scale in Uzbekistan.Air quality is particularly poor in cities, where PM2.5 concentrations are frequently 6 to 12 times higher than the WHO-recommended level of 5 µg/m³. In major cities (Bishkek, Dushanbe, Tashkent, Almaty), PM2.5 levels are twice the WHO interim target of 35 µg/m³. Pollution levels are lower in rural areas owing to lower population density, but ongoing urbanization is intensifying the problem.
Electric vehicles and heat pumps are expected to see widespread adoption: by 2050, the number of electric vehicles could reach 20 million, and the share of households using heat pumps is expected to exceed 50%.Recommendations
- 1 Reducing costs and increasing economic benefits: countries can lower electricity generation costs, import inexpensive electricity during periods of peak demand, and export surplus generation during periods of low demand, thereby making efficient use of differences in timing and seasonal demand. Regional electricity and gas trade is projected to generate economic benefits of up to US$6.4 billion between 2020 and 2030.
- 2 Strengthening energy security: interconnected grids enable diversification of supply sources and reduce dependence on a single fuel type or domestic production, thereby enhancing the resilience of regional energy systems.
- 3 Integrating renewable energy sources: regional trade facilitates the integration of variable renewable sources — including solar power in Uzbekistan and wind power in Kazakhstan — balancing generation and demand across borders.
- 4 Reducing pollution and greenhouse gas emissions: replacing polluting fuels at scale with imports of clean hydro and renewable power, or with gas, reduces air pollution and greenhouse gas emissions.
- 5 Optimizing the efficient use of infrastructure: cross-border trade allows for maximum utilization of existing and new energy assets, reducing the need for additional domestic investment.
- 6 Institutionalizing cooperation through the establishment of a Central Asian Energy Council. To ensure regional energy security, the existing mechanism of consultative meetings among energy ministers should be transformed into a standing Energy Council. This would allow a shift from consultation to practical, systematic cooperation, help form a unified approach to managing regional energy resources, and create an institutional foundation for long-term, binding decisions.
- 7 Developing and implementing long-term national strategies covering energy policy, financing, and incentive mechanisms.
- 8 Establishing and developing competitive electricity markets.