Kyrgyzstan: Kingmaker of the Global Renewable Energy Transition


INSIGHT


  • KYRGYZSTAN HAS A VARIETY OF ENERGY OPTIONS. ENERGY PRODUCERS CAN SUPPLY  INDUSTRY AND COMMERCE WITH A DIVERSIFIED MIX OF RENEWABLE ENERGY SOURCES AND FOSSIL FUELS.

  • KYRGYZSTAN COULD BECOME AN IMPORTANT HUB FOR ENERGY SUPPLIES TO WESTERN CHINA. KYRGYZSTAN IS LOCATED AT A CROSSROADS IN CENTRAL ASIA AND PLAYS A CENTRAL ROLE IN CONNECTING CENTRAL ASIA WITH EAST ASIA.

  • KYRGYZSTAN CAN BENEFIT FROM THE GROWTH OF THE CENTRAL ASIAN PIPELINE NETWORK AND NATURAL GAS SUPPLIES. THIS CAN HELP KYRGYZSTAN TO FURTHER INDUSTRIALIZE.



1. Making full use of Kyrgistan’s relationship to China 


Kyrgyzstan has the advantage of being close to the border with western China. This means that Kyrgyzstan can benefit from economic growth in China. This growth is the result of infrastructure development spreading from eastern to western China.

In recent decades, China has made significant investments in infrastructure that connects the western parts of the country with the industrialized, coastal regions. This includes highways and railroads, among other things. The Silk Road has crossed Kyrgyzstan for centuries past. Trade along the Silk Roads was considered somewhat perilous. Trade movements and cross-border trade activities indicate that trade along older trade routes will increase.

The New Silk Road is likely to play a central role in Kyrgyzstan’s future. And indeed, Kyrgyzstan can benefit enormously from its relationship with China. This is due to Kyrgyzstan’s strategic location. Kyrgyzstan is located on the border of one of the fastest growing regions in the world.

There will be a spill-over effect of growth in neighboring regions along China’s borders. The continued growth of industry and trade will be as important to Kyrgyzstan’s development as its domestic mineral resources. We see major improvements in road transport, pipelines and train networks in Uzbekistan and Kazakhstan. Infrastructure is king.

Infrastructure hubs will play a major role in Kyrgyzstan’s economic development. Infrastructure is particularly important given Kyrgyzstan’s rapidly growing population. New sources of revenue must also be developed. Here, too, China plays a central role. China is investing more and more in pipeline networks to bring energy from oil- and gas-producing countries to mainland China. Iran has become an important supplier of oil and gas to China. This has allowed China to diversify the transportation routes it uses to procure energy commodities. Countries on China’s western border, such as Tajikistan and Kyrgyzstan, will benefit from this development as transit hubs for oil and gas from the Middle East.


2. Decentralization of energy sources


Kyrgyzstan can diversify its energy supply. The country can benefit from natural gas imports. Kyrgyzstan can also take advantage of gas transits to western China. If Kyrgyzstan becomes a major transit point in the gas transit system that supplies energy to western China, it may also be able to transfer some of this gas to its own industry. In addition to the use of natural gas, Kyrgyzstan can also further develop the use of hydropower resources. Both forms of energy, natural gas and hydropower, are suitable for industry and commerce. They are available regardless of local weather and can be supplied regardless of the season. By using both natural gas and hydropower, one gains a high degree of energy independence.

Decentralization of energy infrastructure remains a critical component for Kyrgyzstan’s industry and commerce. It is worth pointing out that diversifying the economy is key to driving industrialization. Kyrgyzstan’s mountainous landscape may hinder implementation. It is the mountainous nature of the region that makes decentralization of energy resources a sensible strategy. In general, it is more expensive to build a power grid in mountainous regions due to geographic barriers. Both solar and wind energy can complement existing renewable energy generation.


4. Conclusion


  • Kyrgyzstan could become a transit point for gas supplies from West Asia to China. Kyrgyzstan’s energy industry will benefit from diverse energy options and a reliable supply of energy.

  • The growing population requires further expansion of infrastructure to meet its needs. This means that both fossil fuel resources and renewable energy sources can be considered part of the energy mix.

  • Economic and commercial linkages with China provide sufficient leverage for the industrialization of the local economy.


Many thanks for the shared interest in the energy world!



Disclaimer:


This article is just meant to inform the reader of recent developments in the energy industry at large and to share knowledge and insights with a wider audience. The author does not put forth investment recommendations. This article should not be taken as investment advice and the author cannot be held to account for investments made. For more information, please refer to the Legal Disclosure and Privacy Policy, which you can click on or find at the top of this page in the menu bar. 


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