EurasiaNet Business & Economics - Tajikistan: Energy Price Hikes Leave Many Fearing Cold

BUSINESS & ECONOMICS

TAJIKISTAN: ENERGY PRICE HIKES LEAVE MANY FEARING COLD
David Trilling 1/09/09

Sharply higher energy prices in Tajikistan are sending shivers down the spines of Tajiks across the country. Although the capital is enjoying almost uninterrupted supplies of electricity, extended blackouts continue in villages. Concern is widespread that energy supplies are not sufficient to last the winter.

Uzbekistan upped the cost of gas by 60 percent on January 1. At the same time, it halted transit supplies of energy to Tajikistan from Turkmenistan, purportedly to fix the transmission lines in question. The same day, in a long-anticipated move, the state-owned energy-concern, Barki Tajik, raised the price of electricity by 25 percent, purportedly to make the sector more attractive for much-needed investment.

In his New Year’s address, President Imomali Rahmon noted the troubles, reiterating his goals of making the country a net energy exporter. "We are fully aware of people’s current problems related to supply of electricity, gas and heat, and are doing our utmost to overcome these problems in the coming two or three years. The Tajik people should believe that existing problems are temporary."

Analysts say Uzbekistan’s decision to boost gas prices came as an unwelcome surprise.
Bahodur Habibov of the Tajikistan Consumer’s Union says the increase will hurt most Tajik households: "It was shocking and people were not ready for it." The gas price for Tajikistan in 2009 hit $240 per thousand cubic meters (tcm), up from $145/tcm last year.

The government’s ability to ensure regular electricity supplies, at least in major population centers, has helped alleviate uncertainty this winter season. Last winter, the harshest in decades, the country experienced drastic shortages of heating and electricity. This year, urban centers, such as Khujand and Qurghonteppa, have not yet experienced power cuts, although the same cannot be said for surrounding suburbs.

Most urban Tajiks heat their homes with electric heaters, and this is the fundamental problem behind the shortages, according to Habibov. "We cannot effectively or rationally use Tajikistan’s energy sources because we have no [functional] heating system," he says. "We can heat only about 5 percent of buildings," with the antiquated, Soviet-era infrastructure.

During the Soviet era, Tajikistan and the other Central Asian republics were part of a single power grid that ensured uninterrupted supplies of electricity and heat throughout the year. Tajikistan provided hydropower to the region in the summer, while Uzbekistan and Turkmenistan provided gas and fuel oil in the winter. That arrangement fell apart in 1991.

Adding to the hardship, the state no longer subsidizes the cost of energy.

Habibov says the use of electric heaters could cause upwards of a 300-percent rise in power demand in January and February. Where all this extra power will come from is a mystery. Even if the cities manage to get through this winter without shortages, the country is staggering between scarcities.

In late November, officials celebrated the first billionth kilowatt-hour (kWh) produced at the Sangtuda-1 hydroelectric plant, a project financed by Russia. Three out of four units at the plant are now operational; the last unit is expected to start operating early this year. But Sangtuda-1 "is still not big enough to support Tajikistan’s energy supply needs," says Muzaffar Olimov, director of the Sharq Informational-Analytical Center in Dushanbe, a think tank.

President Rahmon has an ambitious long-term plan to export power to Tajikistan’s neighbors, including Afghanistan, Pakistan and Iran. In addition to the Sangtuda-1 plant, the government is hoping to build two other hydroelectric plants -- Sangtuda-2, which is backed by Iran, and Rogun, a source of considerable tension between the Russian and Tajik governments. [For background see the Eurasia Insight archive]. The global financial crisis, which has caused a contraction in international lending, has greatly complicated Tajikistan’s task of completing its energy projects. In December, Rahmon complained to Iranian officials about the slow pace of work on Sangtuda-2, the president’s website reported. Finishing Rogun, started in 1976, could cost up to $3.2 billion.

Meanwhile, rural areas in Tajikistan are experiencing blackouts for up to 17 hours per day. Though Tajikistan produces 40 million kWh of electricity daily, Talco, the state-controlled aluminum smelter consumes half of that output, according to the Asia-Plus news agency.

Lucky for Tajikistan, Mother Nature is being gentler this year. In addition, the global economic crunch has prompted Talco to scale back production, thus freeing up additional electricity supplies. Olimov is optimistic about the winter. "We still have [power] limitations in rural areas of Tajikistan. We have problems heating as well. Not all residents of Dushanbe have electricity and heating. Nevertheless, I don’t think Dushanbe will have rotating cuts," he said.

Habibov is looking at the bigger picture. He proposes increased spending on insulation in apartment blocks. The cost of insulating the buildings would save vast amounts of power in the short-run, he calculates. "We have about 7,000 apartment blocks in Tajikistan and the main problems we have are in the residential blocks." Single-story buildings in villages and suburbs are easy to heat, he says, because they can use stoves and coal. But the apartment buildings are not equipped with stoves. In those "we cannot use alternative sources of heating, only electricity or natural gas."

"It is very expensive, but it can assist in the decrease of energy consumption by 50 percent. That’s a lot," he adds.

Despite existing hardships, many Tajiks say that mass public protests are unlikely. "This is Tajikistan. We remember the civil war," a young professional in Dushanbe responded, referring to the fighting in the 1990s that cost as many as 50,000 lives.

Tajiks "are accustomed to such cold winters," the young professional stated, adding that many did not count on the state infrastructure to function. Instead, they made "special preparations, buying coal, buying other heating systems, trying to insulate windows, doors, walls, by any accessible source."

Editor's Note: David Trilling is EurasiaNet’s Central Asia Coordinator.

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