The Kyrgyz Republic is a landlocked country in Central Asia, located in the western and central part of the Tien Shan mountain system and Pamir-Alai. In the north it borders on Kazakhstan; in the west, Uzbekistan; in the southwest, Tajikistan; and in the east and southeast, the People’s Republic of China (hereafter, “China”). The area of the country is 199 951 square kilometres (km²); the population is 6.71 million, 1.05 million of which live in the capital, Bishkek. Mountains occupy 94% of the territory of Kyrgyzstan.

The World Bank states that the Kyrgyz Republic sits at the crossroads of the large Chinese, South Asian and Russian markets, with unfettered access to the Eurasian Economic Union (EAEU) (of which it is a member) and could thus attract significant investments from the immediate region. Regional export potential is especially strong in hydro energy, and promising possibilities exist in trade transit in roads and railways. Given the right socio-political and policy conditions, the country could attract massive cross regional energy and transport investments (World Bank, 2019).

Kyrgyzstan's gross domestic product (GDP) per capita in 2020 was USD 1 176 (World Bank, 2021). The World Bank classifies Kyrgyzstan as a lower-middle-income country, in the same category as neighbouring Tajikistan. In recent years, the largest contribution to GDP has come from trade and services, followed by industry and agriculture. Garment manufacturing and mining are important components of the industry.

While the country has had consistent economic growth since gaining independence in 1991, 25.3% of its population (ADB, 2021) still lives below the poverty line. Since independence, economic growth has been uneven, characterised by declines caused by political upheavals (i.e. the revolutions of 2005, 2010 and 2020) and occasional years or short periods of high growth.

The Kyrgyz Republic’s plentiful water resources make hydropower the most important energy source; it also has significant deposits of coal, but oil and natural gas resources are marginal. The country is dependent on the import of natural gas, oil and oil products.

Domestic energy production is mainly from hydroelectric power plants and coal mining. The residential sector is the largest energy-consuming sector in the country, followed by transport and industry. Citizens enjoy universal access to electricity and one of the lowest residential electricity tariffs in the world.

Kyrgyzstan’s energy system is subject to supply security threats as well as other challenges. The network is aged and inefficient, and losses are significant. In addition, hydro-based electricity production is susceptible to seasonal and weather-related fluctuations; electricity supply is therefore less reliable due to lower water inflows and high demand during the winter months.

The challenge is further amplified by rapidly growing electricity demand, fuelled by unsustainably low regulated electricity prices. Furthermore, while demand centres are in the north, more than 80% of hydropower capacity is in the south. Old transmission connections are a further handicap.

Electricity supply is also constrained by the regional water-energy nexus. The Kyrgyz major hydropower source, the Toktogul reservoir, was constructed in the Soviet times to provide more dependable water supply for downstream irrigated agriculture and to generate hydropower. In the last years Kyrgyzstan exports electricity to neighbouring countries under bilateral contracts; however, such contractual supplies are seasonal and subject to hydrological fluctuations. Volumes of bilateral trade even in high-water years do not generate enough funds to procure fuel for winter power generation by co‑generation1 plants.

The government’s primary focus is on diversifying energy sources and increasing domestic production, mainly for hydropower; in addition, a number of rehabilitation projects for existing thermal power plants are under implementation. Reconstruction of heating networks in Bishkek and Osh as well as reconstruction of substations and improvement of power regulation and water management at the Toktogul reservoir are being implemented.

The Cabinet of Ministers is also planning to continue elaborating on Rosatom’s proposal for construction of a low-power nuclear power plant. Kyrgyzstan expressed interest in studying the RITM-200 reactor. Such a reactor has a capacity of 55 megawatts (MW) and can be operated for about 50 years. It also could be built in blocks. If necessary, the initial capacity can be increased and expanded to 300 MW by adding up to six separate units.

The government’s initiatives to address these challenges have focused on addressing the longer-term adequacy dimensions of power system reliability. However, relatively little attention has been given to addressing the more immediate power system security challenges facing the Kyrgyz power system. Opportunities exist to implement a range of policies that could help to strengthen power system security in the shorter term, especially during periods of water shortage when power system reliability and resilience are likely to be under greatest stress.

Energy data management and use

Energy statistics in Kyrgyzstan are generally publicly available. The NSC regularly collaborates with the main (government) users of the data, building trust and knowledge of the available data. The NSC also co‑operates and regularly exchanges energy data with state and international organisations, including the International Energy Agency (IEA) and the United Nations Statistics Division (UNSD).

The NSC also disseminates its energy statistics data internationally to the IEA through the joint annual United Nations Economic Commission for Europe (UNECE)/IEA/Eurostat questionnaire. However, Kyrgyzstan does not yet report monthly data to the Joint Organisations Data Initiative (JODI).

Kyrgyzstan has achieved great progress in strengthening energy statistics data collection: the NSC has submitted joint annual questionnaires to the IEA since 2014, and for 2015 the breakdown of natural gas consumption by sector had improved.

The NSC continued strengthening energy statistics data collection and by its decrees also approved the methodological recommendations:

• for estimated calculations of electricity production obtained from solar energy (approved on 18 January 2019)
• for calculating the national indicator Sustainable Development Goal 7.2.1.1 "Share of renewable energy sources in total energy consumption" (approved on 21 May 2021).

Future goals include improved reporting on residential biomass use data, which are currently unavailable, and conducting a full accounting of renewable energy sources to calculate the energy balance in accordance with international standards (hydropower, solar and wind energy, biogas, etc.).

In May 2022 the Council on Statistics of the Kyrgyz Republic was established by decree of the president of the Kyrgyz Republic to provide strategic recommendations to producers of official statistics.

The Council on Statistics was established to increase participation of civil society in the process of developing strategic recommendations to producers of official statistics.

Coal is Kyrgyzstan's second-most-important source of domestically produced energy. Kyrgyzstan has substantial coal reserves. Coal production has more than quadrupled since 2010, driven by the government decision to boost coal production to decrease dependence on imported coal, foster decentralised heating supply and minimise use of electricity for heating purposes by households.

Production currently exceeds the demand, and export to neighbouring countries increases. Local coal is mainly used by households during the heating season, and use of coal in technological processes is very limited.

Most of the companies operating in the coal industry are small and do not have financial resources to invest in new technologies and modernisation of production equipment.

Coal prices are not regulated.

There are a number of mothballed coal deposits which the government is planning to reactivate to increase coal supply for domestic consumers to encourage use of coal for heating and thus to reduce the load on the electric system during the heating season.

Building a 1 200 MW coal plant at Kara-Keche coal mine makes sense in terms of adding baseload to the system currently overdependent on hydro generation. However, the plant should meet the world-class standards for high efficiency and pollution control.

The Kyrgyz Republic has a fairly large renewable energy potential, including the energy of the sun, small watercourses, biofuels, geothermal and wind energy. However, despite the huge potential, the practical use of renewable energy sources (RES) is currently insignificant, and in the country's energy balance it is no more than 1%.

The government policies in the area of renewable energy focused on development of small hydropower plants until 2018.

The National Development Strategy of the Kyrgyz Republic for 2018‑2040 sets a target of the share of renewables to be least 10% of the country's total energy balance. However, currently there is no economic and technical analysis of how to achieve the stated 10%. Neither is there a clear implementation plan supported by technical studies to identify any risks to the reliability of the national power system.

A number of solar and wind projects are being planned for implementation, but the country lacks rules for integration of new variable capacity additions to the national power system. Transparent rules and procedures for integration of new renewable energy facilities could help avoid any unintended consequences that have the potential to worsen overall reliability of supply.

Electricity tariffs do not yet reach cost recovery level, and planned tariff reform is restrained. The law provides for a preferential feed-in tariff for renewable energy that is high compared with the purchase prices in the domestic market, and end users’ tariffs are still below costs. 

Kyrgyzstan ratified the Kyoto Protocol in February 2003, and the Paris Agreement on climate change in November 2019.

Kyrgyzstan prepared the First (2004), Second (2008) and Third (2016) National Communications on Climate Change. Preparation of the Fourth National Communication on Climate Change and the First Biennial Update Report on the United Nations Framework Convention on Climate Change (UNFCCC) will be completed in 2022.

Kyrgyzstan’s greenhouse gas (GHG) emissions are small but the country demonstrated its commitment to fulfilling its obligations under the Paris Agreement by presenting the Updated Nationally Determined Contribution (NDC) in April 2021.

In April 2021, the Kyrgyz government approved an Updated NDC until 2030, setting the overall mitigation goal of the Kyrgyz Republic to unconditionally reduce GHG emissions by 16.63% by 2025 and by 15.97% by 2030, under the business-as-usual scenario. Should international support be provided, GHG emissions will be reduced by 2025 by 36.61% and by 2030 by 43.62%, under the business-as-usual scenario.

Around 60% of all GHG emissions in Kyrgyzstan are created by the energy sector. A decrease in the consumption of fossil fuels and an increase in renewable energy is planned, as well as the modernisation of energy supply systems. The promotion of activities to increase energy efficiency will also contribute to GHG emissions reduction.

The Kyrgyz Republic recognises the importance of the adoption of the Low-Carbon Development Strategy and the National Adaptation Policy.

Even though most of the mitigation measures proposed by the Updated NDC are aligned with the effective national development strategies and government policies, there is still a need to more explicitly address climate change issues in the long-term strategies for integrated energy sector development. The key climatic impacts, and changes in the gross hydropower potential of rivers, should be carefully assessed as part of sector planning to address the growing demand. In addition, the proposed non‑hydro renewable energy developments should be carefully assessed and aligned with the transmission and distribution plans.

The government of Kyrgyzstan should:

• Strengthen the country’s long-term energy strategy by:

>     Developing a comprehensive long-term strategy for all energy sectors development with an outlook to 2050.

>     Establishing clear targets in line with national socio‑economic development goals and energy security objectives, based on solid analysis of supply-demand trends and alternative scenario models that apply reliable data and sound assumptions.

>     Addressing all types of energy, including fossil fuels and renewable energy (solar, wind, biogas etc.), in policy coverage.

>     Incorporating an analysis of options for the diversification of generation and exploration of opportunities in solar and wind resources, including a clear understanding of associated cost and available incentives. Sector planning should include a least-cost generation plan as well transmission and distribution plans.

>     Setting energy savings targets covering all key sectors of the economy and with a particular focus on heating in public and residential buildings, which constitute the largest share of growing energy demand.

>     Assessing the pros and cons of building a low-power nuclear power plant and a coal-fired power plant, making certain they would meet the highest environmental and safety standards. If meeting such standards is not feasible, consider alternatives for providing baseload to the power system.

>     Applying solid economic analysis to gas network extensions in remote and mountainous areas, such as in Naryn and Issyk-Kul regions (where there is no gasification at all).

>     Ensuring clear links among the country’s energy strategy and sustainable development strategies as well as the country’s commitments under the UNFCCC.

>     Introducing a robust action plan and monitoring mechanisms to track progress and adjust implementation schemes if needed.

• Develop relevant legal and regulatory framework to enable implementation of the new country’s long-term energy strategy to 2050.
• Develop and implement mechanisms for technical and economic integration of variable RES, particularly for the introduction of solar and wind energy, in order to ensure the power system’s secure and cost-effective operation.
• Adopt measures for strengthening power system security, especially during low water periods, (see the IEA energy policy roadmap on Strengthening power system security for Kyrgyzstan [IEA, 2022]). Opportunities exist to implement a range of policies that could help to strengthen power system security in the shorter term, especially during periods of water shortage when power system reliability and resilience are likely to be under greatest stress.
• Continue to improve the collection of national energy statistics to inform policy decisions and develop new indicators and reporting requirements, such as energy efficiency indicators, and improved reporting requirements for renewable energy sources to calculate the energy balance in accordance with international standards (hydropower, solar and wind energy, biogas, etc.).
• Continue tariff reform. Tariffs should reflect the actual cost of the production and delivery of the energy, while providing suitable means for protecting the most vulnerable in the society. Careful review should be given to cross-subsidies between residential electricity tariffs and heating tariffs. Cross-subsidies remain insufficient for full cost recovery in either sector. Tariff reforms should be accompanied by communication and outreach.
• Consider restoring the autonomous status of the Energy Regulator and strengthening its functions in licensing, setting service standards, and ensuring that investments are used efficiently and optimally. Clear licensing requirements and obligations are especially important in the new consolidated structure of the power sector.
• Develop and implement demand-side measures. Such measures will help managing daily, weekly and seasonal periods of peak consumption that create tight supply-demand conditions that could threaten power system security.
• Develop a detailed strategy, including implementation and enforcement mechanisms, to improve energy efficiency, leveraging work already begun in this area. Improve institutional arrangements and governance to ensure energy efficiency policies and measures are fully developed and implemented.
• Develop a programme for introduction of clean coal technologies and introduce mandatory clean coal standards.
• Strengthen the links and co‑operation between policy makers, scientific research institutions and industry, e.g. through establishing working groups and conducting regular roundtables to address the concrete challenges in the energy sector requiring scientific research and innovation.
• Formulate an energy research, development and innovation (RDI) strategy, including the setting of clear priorities within thematic areas and applied research, to ensure that priorities are linked with those of the new country’s long-term energy strategy to 2050.