The Contribution of Renewable Energy Sources to the National Economy

Introduction

In recent decades, renewable energy sources (RES) — such as solar, wind, hydro, geothermal, and biomass — have moved beyond being viewed as exotic or niche technologies. They are steadily becoming a key component of the global energy sector, with a noticeable impact on the economies of many countries.

Why is this especially important today? Many nations are setting targets to reduce carbon emissions, transition to clean energy, and strengthen energy security and independence. At the same time, renewables have the potential not only to support sustainable development but also to make a direct economic contribution — through investment, job creation, innovation, and more.

According to the International Energy Agency (IEA), in 2023 clean energy added approximately USD 320 billion to global economic growth, accounting for around 10% of global GDP growth that year.

In 2024 RES also delivered a record share of new installed capacity: of the 585 GW added worldwide, more than 90% came from renewable sources.

Solar Energy: A Driver of Uzbekistan’s New Economy

Solar power has become one of the most visible symbols of Uzbekistan’s energy transformation. Over the past three years, the country has progressed from pilot plants to large-scale projects that are already shaping the future energy mix. According to the Ministry of Energy of Uzbekistan, by mid-2025 the capacity of operational solar power plants exceeded 1.2 GW, with at least 4 GW more under development or in the process of contract signing with international partners.

One of the key milestones is the construction of the 263 MW Bukin Solar Power Plant in the Tashkent region, which is scheduled to be commissioned in autumn 2025. Its annual generation is expected to reach about 570 million kWh — enough to supply more than 200,000 households (SolarQuarter). In parallel, two major 500 MW plants are being launched in the Bukhara and Kashkadarya regions as joint projects with Masdar (UAE) and Voltalia (France). Together, these facilities form a “solar belt” in the southern and western parts of the country.

But solar energy is more than just building power plants. It is a new economic ecosystem that creates jobs, technology chains, and service markets. According to Euronews Green, more than EUR 22 billion in investment was attracted to Uzbekistan’s renewable energy sector in 2024–2025, the majority of which was directed toward solar infrastructure. These investments are driving localization — the production of cables, mounting structures, distribution cabinets, and inverters is already being launched domestically, reducing import dependency and creating stable jobs.

The economic impact is clear: every new megawatt of solar generation reduces pressure on the gas-fired power sector. IEA estimates that the current solar project portfolio will enable annual savings of up to 3–4 billion m³ of natural gas — gas that can instead be supplied to industry or exported. At the same time, CO₂ emissions are expected to decrease by up to 2.5 million tons per year, bringing the country closer to its Paris Agreement climate targets (PV Knowhow).

However, the path to a solar economy is not without challenges. Key risks include evening-generation gaps, grid limitations, and the high capital intensity of projects. Some regions are already facing delays in plant commissioning due to insufficient substation capacity. In addition, like most emerging markets, Uzbekistan is dependent on imported PV modules and inverters, making the sector vulnerable to global price fluctuations.

To address these challenges, the government is developing hybrid solutions: deploying BESS storage systems, building combined PV + wind complexes, and modernizing transmission networks. Between 2025 and 2027, at least 1 GW of energy storage capacity is expected to be installed, helping balance peak loads and stabilize supply (IEA Roadmap). Investors are supported through long-term power purchase agreements (PPAs) of up to 25 years with currency indexation, while local manufacturers receive tax incentives and customs privileges for equipment imports.

As a result, solar power is evolving from an environmental trend into the foundation of a new industrial model. By 2030, Uzbekistan aims to reach 5–7 GW of installed solar capacity, generating up to 15 billion kWh annually and covering around 10% of national electricity demand. Savings in natural gas, reduced emissions, increased investment, and technology development are turning solar energy into a strategic asset — one that strengthens not only the country’s energy security but also its economic sovereignty.

Wind Energy: System Resilience and Balance

If solar energy covers peak daytime demand, wind power becomes its night-time and winter extension. It is wind generation that provides balance to the energy system, reducing dependence on natural gas and ensuring supply stability. Over the past two years, Uzbekistan has become one of the regional leaders in wind energy development, attracting major global companies to its projects.

One of the key investors is ACWA Power from Saudi Arabia, which is building the 500 MW Navoi wind farm and the 1,500 MW Bukhara wind farm. The latter, known as the Bash Wind Project, is set to become one of the largest wind complexes in Eurasia once operational, with projected annual generation of up to 5 billion kWh — enough to supply electricity to 1.7 million households (ACWA Power, 2025). In parallel, Masdar (UAE) is implementing 500 MW wind projects in the Kashkadarya and Navoi regions, while sites for an additional 1 GW of wind capacity are being assessed in Karakalpakstan. According to the Ministry of Energy, total installed wind capacity in Uzbekistan may reach 8 GW by 2030 (MinEnergy.uz, 2025) — almost one-third of the country’s total renewable energy target.

The main strength of wind power lies in its diverse generation profile. Unlike solar energy, wind resources are active at night and during the cold season, when energy consumption is highest. According to the International Energy Agency (IEA), a combination of wind and solar plants can reduce the need for backup generation by up to 40%, if they are distributed across regions with different wind profiles. Thus, wind farms do not compete with solar plants — they complement them, creating a balanced energy mix.

Economically, wind power is becoming increasingly attractive: according to Renewables Now (2025), tariffs in new contracts in Uzbekistan have reached a historic low of 3.1–3.5 US cents per kWh, comparable to the cost of gas-fired generation. Long-term 25-year Power Purchase Agreements (PPAs) provide predictability for investors and stable prices for the country, independent of global fuel market fluctuations.

However, the wind sector also faces challenges. Key issues include the complex logistics of transporting heavy equipment (80-meter blades and towers weighing up to 100 tons) and the shortage of specialized machinery. In some regions, there are no suitable roads or cranes with the required lifting capacity. In addition, wind variability demands highly accurate forecasting: without digital control systems, frequency imbalances and efficiency losses become likely.

These projects also generate significant socio-economic impact. For example, the Bash Wind Project alone is expected to create over 3,000 jobs during the construction phase and around 300 permanent positions — from engineers to maintenance technicians. In the Navoi region, the wind industry is already forming a new chain of services and logistics, stimulating the development of regional infrastructure and small businesses.

According to IEA estimates, by 2030 wind energy could account for up to 20% of the country’s total electricity generation. Combined with solar, it will form the foundation of a flexible, low-carbon energy system where wind and sun mutually balance each other. This is more than technological progress — it marks a shift to a new model in which Uzbekistan moves from being a fuel importer to an exporter of green energy.

Waste-to-Energy and Green Hydrogen: The New Frontier of the Green Economy

The development of renewable energy in Uzbekistan is no longer limited to solar and wind power. The next stage is the deployment of alternative technologies that combine energy, environmental, and industrial potential. These include Waste-to-Energy (WtE) — the conversion of municipal waste into electricity — and the production of green hydrogen, which may become a major export resource of the future. Together, these directions form a new layer of the country’s “green economy,” where waste and surplus energy are transformed into valuable assets.

Waste-to-Energy: Turning a Problem into a Resource

Uzbekistan generates more than 10 million tons of municipal solid waste every year, and volumes continue to grow. Until recently, most of this waste was sent to landfills without sorting, resulting in the loss of recyclable materials and methane emissions. This approach is now changing. In 2024, the government approved a USD 1.3 billion Waste-to-Energy program, which includes the construction of waste-processing plants in the Tashkent, Samarkand, and Andijan regions (Reuters, 2024).

The first of these facilities, the Andijan WtE plant, is being built with the participation of China’s Shanghai SUS Environment and is designed to process up to 1,500 tons of waste per day, generating around 100 million kWh of electricity annually (Kursiv Media, 2025). These plants not only reduce the burden on landfills, but also create new sources of affordable energy for municipal infrastructure. According to the Ministry of Ecology, by 2027 the share of processed waste will rise to 35%, while WtE capacity will enable the production of up to 2 billion kWh of electricity per year.

In addition to its energy value, this program also delivers social benefits — creating jobs, encouraging separate waste collection, and raising public environmental awareness. In 2025, Tashkent launched a pilot project for “smart containers” with QR identification: residents receive bonuses for sorting waste, and data is automatically uploaded to the Toza Hudud monitoring system (Gazeta.uz, 2025). This digital approach is already showing results — the share of sorted plastic doubled within the first months.

Green Hydrogen: A Step Into the Industrial Future

Another strategic area is the production of green hydrogen powered by renewable energy. Uzbekistan views this resource as a way to decarbonize its industries and develop a new export market. In 2025, the Ministry of Energy, together with ACWA Power and Air Products, signed an agreement to establish the country’s first hydrogen cluster in the Bukhara region (Arab News, 2025). The first phase includes the installation of 3 GW of electrolysers capable of producing up to 300,000 tons of green ammonia per year.

The project is designed not only as an energy initiative, but also as an industrial hub. The hydrogen produced will be supplied to the chemical and metallurgical sectors and partially exported as green ammonia, particularly to Europe and South Korea. According to BloombergNEF, the export potential of green hydrogen from Central Asia may exceed USD 10 billion annually by 2035, and Uzbekistan aims to secure a leading position in this market.

The main challenge remains the high cost of production and the need for large-scale infrastructure — electrolysis capacity, storage systems, and transport networks. To address this, the country is developing regulatory frameworks and state support mechanisms. According to Minister of Energy Jurabek Mirzamakhmudov, the first national standards for green hydrogen have already been prepared, along with a certification system for energy origin — essential for validating the “green” status of export products (MinEnergy.uz, 2025).

Outlook: Technology Synergy

Waste-to-Energy and green hydrogen are different by nature but similar in essence. Both convert excess into value: one transforms household waste, the other — surplus renewable electricity. Together they form a circular resource model, where everything is reused and returned into the economy.

According to IEA forecasts, the combined contribution of these technologies could cover up to 5% of national electricity demand by 2030, and — more importantly — reduce the carbon footprint of industry and urban infrastructure.

If solar and wind power form the “skeleton” of the green energy system, WtE and hydrogen create its “muscles” — adding flexibility, resilience, and industrial depth. This diversification is Uzbekistan’s strategic advantage: the country is not just building power plants, but developing a fully integrated low-carbon economy, where waste, energy, and technology work toward a single goal — sustainable development.

Conclusion

The development of renewable energy has become a key driver of Uzbekistan’s economic modernization. In recent years, renewables have evolved from a supplementary sector into a strategic instrument shaping the country’s industrial development, employment, and export potential.

The energy transition is creating new industries and jobs, strengthening energy independence, and making the economy more resilient to external shocks.

Thanks to the implementation of solar, wind, hydrogen, and Waste-to-Energy projects, Uzbekistan has already:

•  saved more than 3.5 billion m³ of natural gas;
• prevented over 2.2 million tons of pollutant emissions;
• increased the share of clean energy to 20.3% of the national energy mix (MinEnergy.uz).

By 2030, the country aims to expand its renewable energy capacity to 25 GW, including 8–9 GW of solar and 8 GW of wind generation.

This will reduce annual CO₂ emissions by 16 million tons, cut natural gas consumption in power generation by 85%, and raise the localization rate of energy equipment manufacturing to 40%.

However, achieving these targets requires: modernization of power grids and deployment of energy storage systems; incentives for private investment through transparent PPA mechanisms; and development of human capital and technological expertise.

Renewable energy has already become not just an environmental initiative, but a new model of economic growth. Its foundation is energy, innovation, and resilience — integrated into a unified strategy aimed at strengthening national competitiveness and improving quality of life.

This is Uzbekistan’s strategic objective: not simply to replace fossil fuels, but to build the economy of the future — low-carbon, technology-driven, and sustainable.