Economics

Bulb expenses exclude the bulb

Savings without new power plants: how Central Asia can cut energy costs

Lightbulb Expenses Exclude the Lightbulb

The energy efficiency of commercial real estate is gradually becoming one of the most important, yet insufficiently studied, factors in the economic development of Central Asia. Kazakhstan, Uzbekistan, Kyrgyzstan, and Tajikistan are annually expanding the area of shopping centers, hotels, hospitals, administrative complexes, and office buildings; however, managing their energy consumption is still mainly focused on equipment maintenance rather than reducing operating costs. Because of this, modern facilities equipped with expensive engineering systems often spend significantly more electricity and heat than necessary to comply with standard operating conditions.

The essence of the problem lies not so much in a lack of energy-saving technologies as in the weak development of professional management of already installed systems. The International Energy Agency estimates the share of building operation at approximately 30% of global final energy consumption, making this sector one of the largest reserves for improving efficiency.

For Central Asia, the situation is complicated by climatic features, high seasonality of loads, and a historically established model of public utilities. In certain cities of Kazakhstan, winter temperatures drop below minus 30 degrees, while in summer in Uzbekistan and Tajikistan they exceed 40 degrees. Such fluctuations require complex regulation of heating, ventilation, and air conditioning, which cannot be provided by manual control alone. Therefore, the development of a market for professional energy consumption operators is becoming not just a technological direction, but an independent economic necessity.

Historically, the management of building engineering systems in Central Asia took shape within the Soviet real estate operation model, where continuous equipment operation was considered the main criterion of efficiency. At the same time, energy costs were rarely perceived as a separate managerial category, as tariffs were regulated by the state and the expenses of large institutions were covered by centralized funding. After the collapse of the USSR, a significant part of the infrastructure retained its former operating principles, despite the emergence of commercial real estate and a gradual change in tariff policy. Even modern shopping centers often operate under a scheme where the technical service is responsible for equipment operability, but bears no direct responsibility for the volume of kilowatt-hours consumed. Meanwhile, the cost of energy is determined not only by the installed capacity of equipment, but also by its operating time, temperature settings, attendance schedules, and the quality of automatic regulation. For example, the ventilation system of a large shopping complex may continue operating at full capacity after most stores close. A similar situation occurs in hotels, where room cooling and lighting are sometimes maintained regardless of actual occupancy. In hospitals, the problem has additional specifics, as different rooms require varied sanitary conditions and continuous ventilation. The lack of detailed load separation leads to administrative zones being serviced under modes required only for operating rooms and specialized units. Thus, a significant portion of energy losses arises from organizational decisions rather than physical wear and tear of the engineering infrastructure.

The economic scale of the problem is particularly noticeable when analyzing the operating expenses of large real estate properties. Consider a hypothetical shopping center with an area of 50,000 square meters that annually consumes 10 million kilowatt-hours of electricity. At an estimated tariff of 50 tenge per kilowatt-hour, its annual expenses amount to 500 million tenge, excluding additional payments and specific features of energy supply contracts. A 15% reduction in consumption yields savings of 75 million tenge per year, and under certain conditions, such a result is achieved without completely replacing engineering equipment. The main changes concern ventilation operating schedules, temperature regulation, eliminating simultaneous heating and cooling, setting up lighting, and controlling peak loads.

For a hotel complex with variable occupancy, the savings potential primarily depends on how well engineering systems can account for the actual use of rooms and public spaces. In international practice, optimizing operational modes can provide savings of around 10–20%, although the specific result is determined by the baseline condition of the building and the quality of management. At the same time, reducing energy consumption does not necessarily mean compromising guest comfort or staff working conditions. On the contrary, properly tuned systems often provide more stable temperatures and air quality by eliminating sharp parameter fluctuations. The economic logic is to turn energy from a conditionally fixed cost item into a manageable operational resource. For large real estate owners, this makes it possible to annually free up funds comparable to the budgets of individual capital repairs.

Kazakhstan has the most obvious prerequisites for forming a specialized energy management market for commercial real estate due to the scale of its urban infrastructure and diversity of climatic conditions. In Astana, a long heating season combines with intensive summer cooling of modern office and shopping complexes. In Almaty, ventilation and air quality maintenance systems become particularly important, especially in high-occupancy buildings. The structure of heat supply also plays a significant role, as centralized networks do not always allow owners to quickly adjust the volume of heat received. Installing individual heat substations with weather-compensated control can reduce room overheating, but the economic effect depends on the availability of metering devices and the billing procedure. Kazakhstan has a legislative framework for energy saving and improving energy efficiency, providing for energy audits for certain categories of consumers. However, conducting an audit and ongoing expenditure management are fundamentally different types of activity. The former helps identify shortcomings, while the latter involves daily monitoring of equipment and adjusting operational modes. It is precisely between a one-off diagnostic and continuous management that space arises for a new professional market. Its participants could include independent energy operators, specialized engineering companies, and organizations working under performance-based contracts.

Uzbekistan demonstrates another model for developing this market, associated with rapid urban real estate growth and the need to modernize energy infrastructure. Tashkent is actively expanding commercial real estate areas, hotels, medical facilities, and multifunctional complexes, which increases requirements for power supply reliability. In a hot climate, air conditioning systems become one of the main sources of seasonal growth in electricity consumption. Loads are particularly noticeable during daytime hours, when office buildings, shopping centers, and public institutions operate simultaneously. The installed capacity of cooling equipment does not reflect the actual efficiency of its use, as much depends on automation settings, filter condition, coolant temperature, and pump operation modes. Even small parameter deviations can increase energy consumption over thousands of hours of annual operation. In Uzbekistan, changes in the tariff system and the state's drive to reduce inefficient energy resource use serve as additional incentives. The growing economic importance of every kilowatt-hour consumed is gradually changing real estate owners' attitudes toward engineering infrastructure. While previously the location and area were considered a building's main advantages, operating expenses are now beginning to affect its competitiveness. In the long term, this fosters demand for specialists capable of managing energy costs without compromising commercial facility operating conditions.

Kyrgyzstan and Tajikistan face a somewhat different structure of energy constraints, as a significant part of their power generation is tied to hydropower and seasonal fluctuations in water flow. Kyrgyzstan is characterized by a winter growth in electricity consumption associated with heating, domestic loads, and heat availability features. At the same time, commercial buildings often use electric heating systems or additional heating equipment, which increases the load on distribution networks. In Bishkek, the development of shopping complexes, hotels, and office real estate increases energy consumption concentration in limited urban areas. Tajikistan possesses significant hydropower potential; however, the seasonal nature of generation and the state of distribution infrastructure remain important for power supply reliability. In both states, professional load management can produce an effect extending beyond an individual building's expenses. Reducing consumption during peak hours reduces pressure on transformer substations and distribution networks. For hotels, medical centers, and administrative complexes, the ability to automatically limit secondary loads without shutting down critical equipment is particularly important. Given limited investment resources, such solutions may prove economically more attractive than immediately expanding generation capacity. However, their implementation requires accurate metering, reliable automation, and qualified staff, which is currently lacking in the regional market.

International experience shows that professional building energy management develops most actively where owners derive measurable financial benefits from efficiency gains. In the United States, building automation systems integrating heating, ventilation, air conditioning, lighting, and supervisory control are widespread. The European Union is gradually tightening real estate energy performance requirements, considering operational efficiency as part of climate and economic policy. Of particular interest is the energy service contract model, where a specialized company receives remuneration based on verified cost reductions. Such a mechanism allows technical and financial risks to be shared between the property owner and the professional operator. However, contract efficiency depends on properly defining the baseline consumption level, as savings must be calculated taking into account weather, room occupancy, and changes in operating modes. Without such normalization of results, cost reductions might be mistakenly attributed to management improvements, whereas in reality they are linked to a warm winter or fewer visitors. For Central Asia, this issue is particularly relevant due to significant climate differences between cities. Building the market will require not only technical specialists, but also independent result-measurement procedures. It is the credibility of calculations that will form the foundation of trust between real estate owners, energy operators, and financial organizations.

The development of professional energy management is directly linked to the digitalization of engineering systems and the emergence of new categories of qualified workers. A modern building management system allows data collection on temperature, humidity, carbon dioxide concentration, coolant flow, and electricity consumption of individual units. Based on this information, software identifies deviations from standard modes and detects inefficiently operating equipment. However, automation itself does not guarantee savings, as incorrectly set parameters can persist for years even in expensive digital complexes. Therefore, the central figure in the new industry becomes a specialist combining knowledge of thermal engineering, electrical engineering, data analysis, and property management economics. Their work differs from the activities of a traditional facility energy manager, who is primarily focused on supply reliability and technical equipment operability. A professional manager must evaluate the cost of each operating mode and correlate energy indicators with the actual needs of the building. Forecasting algorithms that take into account weather conditions, event schedules, and expected building attendance provide additional opportunities. At the same time, using artificial intelligence does not eliminate the need to verify results and comply with sanitary requirements. Particularly strict restrictions remain for hospitals, laboratories, and facilities where violations of ventilation modes directly affect human safety.

The formation of an independent energy management market is capable of changing the real estate economy of Central Asia far deeper than individual equipment modernization programs. In the traditional model, an owner finances building construction, purchases engineering systems, and then views utility bills as unavoidable operating expenses. The new model implies continuous measurement of the efficiency of invested capital throughout the entire lifecycle of the object. This is especially important for commercial real estate, where even a relatively small reduction in annual costs increases net operating income and the potential investment value of the building. Capitalizing income at a hypothetical rate of 10%, an annual confirmed savings of 50 million tenge theoretically corresponds to an increase in asset value of 500 million tenge, all else being equal.

Thus, energy management becomes a tool not only for reducing costs, but also for increasing the attractiveness of real estate to investors. Simultaneously, a new segment of professional services is taking shape, combining engineering consulting, software, technical monitoring, and energy service financing. For the states of Central Asia, its development means the ability to reduce pressure on energy infrastructure without a proportional increase in capital investments in generation. The main structural shift lies in transitioning from viewing energy as a resource that must be constantly produced in growing volumes to understanding its consumption as a manageable economic process. It is the ability to organize this process at the level of thousands of individual buildings that will determine how effectively the region can use its existing energy infrastructure amidst further urbanization and rising utility resource costs.

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