Kyrgyzstan is the second poorest country of the former Soviet Union and is still suffering from the Soviet Union collapse. In 1990, factories and state farms collapsed with the disappearance of their traditional markets in the former Soviet Union. Before 1990, some 98% of Kyrgyz exports went to other parts of the Soviet Union. Economic recovery since independence was shaky and the Kyrgyzstan economy is still fragile.
- ON THE BRIGHT SIDE: The bulk (90%) of Kyrgyzstan’s generating capacity is hydro power and less than 10% of its potential in hydropower has been developed so far. Kyrgyzstan has some exploitable coal, oil, and natural gas. Unfortunately, hardly enough to satisfy local demand. It was the first country in the Commonwealth of Independent States (CIS) to develop an independent regulatory agency for economic regulation of the energy sector. Approximately 95% of the population is connected to the grid. So far, the good news.
- THE SHADOW SIDE: Kyrgyzstan energy infrastructure is extremely outdated, causing frequent and big blackouts. About 30% of the distribution systems need to be replaced. Furthermore, Kyrgyzstan suffers from big losses in the distribution system ranging from 40-50% and reliability is poor. Add tot that, that its fossil fuel reserves are not enough for domestic demand. Especially in wintertime, Kyrgyzstan needs to import natural gas from Kazakhstan, which isn’t always smooth. When bills aren’t paid for, Kazakhstan simply stops delivery (not so strange). To complete the picture, domestic energy corruption is widespread and abundant hydroelectric power resources and low tariffs, have limited the development of other renewable energy sources. Hydropower is the only documented renewable energy source for electricity production on national level.
- ON THE BRIGHT SIDE PART 2: Some potential for solar energy and large scale and micro-hydro power plants exists. In Kyrgyzstan the sun shines about 2,600 hours a year and radiation is 1,500-1,900 kW/m² per year. In addition, a law on renewable energy was adopted in 2008. It includes small scale biomass small projects, small hydropower programs, small scale solar projects and wind energy. Finally, some biogas plants have been established, but only by private initiatives.
Top 3 challenges
- DEMAND REDUCTION: Per capita energy consumption is high considering average income, and the government has no comprehensive plan to reduce demand. For years experts and multilateral donors, such as the Asian Development Bank, have told Kyrgyzstan to increase its energy tariffs, which are among the lowest in the world. But successive governments have avoided the delicate issue, fearing a public backlash. A sudden spike in energy prices helped precipitate the fall of President Kurmanbek Bakiyev in 2010 (Source: Eurasia.net).
- WINTER PANIC/ DISTRIBUTION LOSSES: Up to 45 percent of electricity generated, especially in wintertime, is diverted illegally or leaks from the distribution system. Industry experts have warned that Kyrgyzstan’s energy system faces, in the words of a 2011 American government-sponsored study, a “catastrophic breakdown.” The study warned that without urgent attention and investment, a failure could take months to repair, and said infrastructure needs investments of between $1.5 and $2.1 billion, or up to 35 percent of GDP, simply to become reliable.
- ENERGY POVERTY: Kyrgyzstan suffers the same problem as Tajikistan when it comes to energy poverty. A lot of inhabitants of rural areas do not have access to energy as much as they want and are hence limited in their development.