Turkmenistan’s Electricity Export Plans: How Feasible?
Turkmen President Gurbanguly Berdimuhamedov recently conveyed plans for Turkmenistan to radically increase its electricity exports, expressing the ambition to add 3 billion kilowatt hours (kWh) to the current volume of 3.3 billion kWh per year. While achieving an almost twofold increase in power exports may seem unrealistic, the plan is quite reasonable in the context of regional electricity needs.
Turkmenistan has several neighbors with insufficiency electrical generation capacity. Tajikistan, though rich in hydropower, suffers from regular seasonal variability in hydropower output, with surplus power in the summer but shortfalls in the winter. Seasonal power deficits have caused winter power shortages, most notably in 2007. While power authorities have sought to prevent this by releasing more water from reservoirs in the winter, this can lead to shortages of water for irrigation in the following months. Afghanistan, while relatively underdeveloped, is a growth market for electrical power. Energy demand in the nation is growing rapidly, and under the auspices of the Asian Development Bank (ADB), Afghanistan plans on increasing its electrification rate from 30 percent to 83 percent by 2030. Furthermore, the paucity of local energy resources and the unstable security situation in the country have prevented investment in local generating capacity, causing Afghanistan to import 80 percent of the electricity that it consumes. Pakistan also stands to benefit from connection to Turkmen generating capacity. The South Asian country has experienced persistent issues with power shortages, resulting in a record shortfall of 9,278 MW during last summer. Given Ashgabat’s abundance of natural gas, importing power from Turkmenistan seems like the obvious solution to the power needs of Tajikistan, Afghanistan and Pakistan.
However, regional power integration faces significant political and security challenges. The Central Asian Power System (CAPS), an electricity transmission platform inherited from the Soviet Union, facilitated cross border power sales in the 1990s but broke down in the 2000s. Uzbekistan served as both a transmission hub for electricity sales and a major power producer. In order to prevent sales of cheap Turkmen power from undercutting its own market share in Tajikistan and Kyrgyzstan, Uzbekistan levied high transit fees on Turkmen power, ultimately inducing Turkmenistan to withdraw from CAPS altogether in 2003. In 2009, Uzbekistan and Kazakhstan pulled out of CAPS amid allegations that Tajikistan was overdrawing from the network, causing a blackout there and in southern Uzbekistan. Representatives from the power authorities of the Central Asian states met in Astana in May of 2017 to discuss a reboot of CAPS, but talks were still ongoing as of August 2018.
Security challenges are the primary threat to Turkmen power exports to Afghanistan and Pakistan. Turkmenistan is largely pinning its hopes upon the Turkmenistan-Afghanistan-Pakistan Power Interconnection Project (TAP), a project to build a 700 km electricity transmission line alongside the TAPI gas pipeline, which must traverse territory held by the Taliban. A self-described representative of the organization promised the Taliban’s cooperation on the construction of TAPI. However, representatives of the Afghan government are skeptical, pointing to the confession of 10 militants purportedly trained to sabotage TAPI under the direction of the Iranian government.
Despite the many challenges, the ADB has invested heavily in Turkmenistan’s power industry. A $4.5 million grant for CAPS will “explore potential reconnection of Turkmenistan to CAPS and its further expansion to Afghanistan.” The ADB has also granted Turkmenistan a $500 million loan to improve its electrical grid, and while the project is specific to Turkmenistan, the bank notes that the “reinforced transmission network is an essential prerequisite for improving power supply reliability for […] current and expanded future electricity exports.” In 2011, the ADB provided a $1.3 million grant to investigate cross border trade in power between Turkmenistan and Afghanistan. Subsequently, the development bank provided $275 million of funding to Afghanistan with the goal of increasing “power imports by constructing the last missing links to forge Turkmenistan-Afghanistan inter-connector.” While there are risks to any large infrastructure project, the fact that the ABD is putting its money on the line is indicative of the institution’s confidence in the profitability of Turkmen power exports.