This is Part Five (last part) of the chapter on Turkmenistan of the recently issued CAREC Energy Outlook 2030 report.
The complete report is available at this link: https://www.adb.org/sites/default/files/publication/850111/carec-energy-outlook-2030.pdf
While Turkmenistan’s government has taken some steps toward upgrading the country’s infrastructure, decarbonizing the energy sector, and introducing new legislation, further efforts are required to make tangible progress:
(i) Implement an infrastructure modernization program. Upgrading infrastructure (especially T&D assets), and developing action plans to reduce electricity losses and gas leakages is recommended.
(ii) Explore options for a potential reconnection of Turkmenistan to the Central Asian Power System. The Central Asian Power System (CAPS) was initially developed in the Soviet Union to connect Kazakhstan, the Kyrgyz Republic, Tajikistan, Turkmenistan, and Uzbekistan. In its current form, it can help expand energy trading and boost regional energy security across Central Asia. Turkmenistan disconnected from CAPS in 2003. The Asian Development Bank has approved a technical assistance grant to support an increase in regional power trade in CAPS. It also aims to study the potential reconnection of Turkmenistan to CAPS.
(iii) Reinforce efforts to deploy renewable energy projects. Both policy and legislation changes demonstrate Turkmenistan’s clear commitment to transitioning to renewable energy generation to decarbonize the power generation sector. The establishment of special incentive schemes for renewable energy projects, such as feed-in tariffs or a capacity auction on a least-cost basis, would potentially lead to a higher investment inflow due to higher transparency in the tariff setting process.
(iv) Improve the investment climate for the private sector. Recently adopted legislation in renewable energy generation is a necessary step toward opening investment opportunities for the private sector. However, additional action is required to improve Turkmenistan’s appeal to investors, including the establishment of a clear tariff structure, shortening the lengthy administrative processes, and opening the electricity generation market.
(v) Study possibilities and create a regulatory framework for the decarbonization of the gas sector. To realize Turkmenistan’s hydrogen potential in the longer term, conducting feasibility studies and launching pilot projects can be crucial at this early stage. The country has taken initial steps in this direction.
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