Uzbekistan to modernize heating system, cut gas consumption by 20%

On March 11, President Shavkat Mirziyoyev signed a decree titled "On Fundamental Reforms in the Heating Energy Supply Sector and Measures to Improve Energy Efficiency of Buildings" (PP-100).

The document outlines the key directions for sectoral development over the next five years, until 2030. Specifically, it provides for the introduction of a unified state policy in the heating sector, the management of enterprises through a specialized organization ("Issiqlikta'minoti"), and the adoption of best international practices.

One of the major changes includes the construction of local boiler houses and the implementation of alternative heating technologies in multi-apartment buildings with four or more floors that are not connected to centralized heating. This is expected to reduce household gas demand by at least 20%.

Key reform measures until 2030:

• Modernization of 103 outdated boiler houses and nearly 1,600 kilometers of heating networks.
• Implementation of modernization projects in nine cities and districts through public-private partnerships and in 13 locations with international financial institutions' involvement.
• Expansion of centralized heating coverage from 37% to 58% and reduction of system losses from 38% to 20%.
• Installation of 8,681 individual heating points in multi-apartment buildings and social institutions (480 units in 2025) and transitioning centralized heating to a closed system.
• Launching pilot projects to enhance the energy efficiency of individual and multi-apartment residential buildings, social and state institutions, industrial, and private sector facilities.
• Encouraging the installation of energy-efficient and modern equipment (gas burner devices) in households and public institutions with high gas consumption.
• Developing a new market for energy service provision and energy efficiency improvements in heating and other sectors through private sector participation, including the ESCO (Energy Service Company) mechanism and innovative financial tools.

ESCO mechanism: A model for energy efficiency

ESCOs are specialized companies that help businesses, institutions, and even households reduce energy consumption by implementing energy-efficient technologies.

Under this model, an ESCO company installs modern heating equipment, insulation, solar panels, and other energy-saving solutions at no upfront cost to the client. The cost of modernization is later covered by the savings in utility bills, with the client making phased payments from the savings.

For example, if a school currently spends 10 million UZS annually on heating, an ESCO company installs a modern heating system, reducing costs to 6 million UZS. The 4 million UZS difference is directed as payment to the ESCO. After five years, once the equipment has fully paid for itself, the school retains the full 4 million UZS in savings for its own needs.

Additional measures

To support the heating sector's development, the government is establishing the "Issiqlikta'minoti" state enterprise.

Additionally, from June 1, all new and renovated buildings must be equipped with solar panels, water heaters, and heat pumps. The transition of centralized heating to a closed-loop system will also begin.

In 2025, the government plans to:

• Connect 135,000 new households to the centralized heating system.
• Install electric stoves in kitchens.
• Cut energy consumption for street lighting by half in residential areas.