On March 15, the Caspian Policy Center hosted a webinar event to discuss the transition to renewable energy resources in the Caspian Region. Dr. Robert Ichord, Azhar Iqbal Hussain, and Jandos Temirgali joined this online discussion to explain the upcoming opportunities and challenges in this transition towards renewables. 

As the shift towards renewable energy accelerates demand for transition energy metals, such as lithium, nickel, and rare earths, this event addressed how the Caspian Region can transition from a hydrogen-based economy to a minerals, metals, and technology-based economy, and how Caspian countries do this quickly and efficiently.

To answer this, Robert Ichord, Senior Fellow of the Atlantic Council, stated that the improvement of interregional relationships in Central Asia “is going to be critically important in the future with regards to taking advantage of the differential renewable resource endowments and addressing the seasonal variations in hydro and renewables.”

He explained that the Caspian Region has “excellent solar and wind resources that can help diversify their energy mixes and reduce their dependence on gas and coal, as well as hydro.” And, “Over the last few years, we’ve seen larger and larger wind and solar projects. Especially in Azerbaijan, Uzbekistan, and Kazakhstan.”

However, “To mobilize investments to meet the targets, it will require improvements in the policy and regulatory environment.”

Azhar Iqbal Hussain, Regional Business Devlopment Lead in the Infrastructure Group of the International Finance Corporation (IFC), added that, “decarbonization would help in terms of increasing energy security and it would significantly lower the cost of power generation.” And to successfully achieve this transition, “this shift can be done through government commitment, clear enabling regulations, and private capital directed to these markets.”

In the Caspian Region, political support for the energy transition has rapidly increased in the past decade, but the region is still far from its potential- not only due to financial and technical challenges but also due to competing interests over rare minerals. In order to reach the emission reduction targets, policies and economic relationships must be reassessed in the Caspian Region.

Jandos Temirgali, Deputy Chairman of Kazakh Invest, explained that Kazakhstan began reassessing its energy commitment several years ago to adapt to this shifting market. He explained that “several years ago, Kazakhstan introduced the open transparent auction system to bring private sector investments to the renewable sector of the country.” He further explained Kazakhstan’s upgrade by stating that for renewable power generation, Kazakhstan has a goal of  “6% by 2025, 15% by 2030, and 50% by 2050. And then, Kazakhstan will become carbon neutral by 2060.”

Azhar Iqbal Hussain, added ”Kazakhstan and Uzbekistan have announced a carbon neutrality target.. That’s good news.. But, we need to see a lot of political commitment in terms of substituting fossil fuels, particularly in Kazakhstan and Uzbekistan.”

Ecological issues, geopolitical challenges, and the securitization of minerals have been an obstacle to cooperation between mineral producers and consumers.  All panelists agreed that the region has great potential to adapt to this energy transition, but, political commitments must be maintained. Further, the regulatory environment must improve in all Caspian countries to achieve carbon neutrality by their respective target dates.