Tajikistan suffers severe energy shortages in winter, caused by a combination of low hydropower output during winter, when river fl ows are low, and high demand driven by heating needs. Shortages affect some 70 percent of the population, costing about 3 percent of annual GDP. This fi gure excludes human and environmental costs, as well as the serious negative effect on the business investment climate. If no measures are undertaken to address this problem, then current electricity shortages, estimated at about one-quarter of winter demand (2,700 GWh), could increase to more than one-third of winter demand (4,500 GWh) by 2016. The Government of Tajikistan recognizes both the importance and challenges of energy security and has therefore introduced various measures to help meet demand. Tajikistan s Winter Energy Crisis explores a range of supply and demand alternatives including thermal, run-of-river hydro, other renewables, energy effi ciency, and demand management to further inform its development partners on the country s efforts to meet its winter energy demand. The study recommends that the Government of Tajikistan accelerate its efforts in energy effi ciency and demand management, including tariff reform; add new dual-fi red thermal power supply to complement the existing hydropower supply during winter; and pursue energy imports and rebuild regional energy trade routes to leverage surplus electricity supply in neighboring countries. Energy conservation and demand-side management, effective resource management, and reduction alone could address 40 percent of the shortages, including a signifi cant package of economic measures at the main aluminum smelting plant. The study suggests that by following these recommended actions shortages could be signifi cantly reduced within 4 5 years and a solid base for long-term energy established."

Energy efficiency is an important factor in an economy, since it helps meet energy needs, decrease costs, and lower environmental impacts. A review of the evolution of energy intensity in European and Former Soviet Union countries indicates a positive trend: high-energy-intensity countries have now reached the level of medium-energy-intensity economies 15 years earlier, and in the same period, medium-energy-intensity ones had similarly evolved to levels of low-energy-intensity. At the same time, the fast transitioning economies of Central Europe converged towards similar levels of energy intensities, in line with EU Directives, while successful EU-15 countries managed to maintain economic growth while keeping energy use flat. This report looks at how countries effect the transition from high- to medium- to low-energy-intensity, exploring whether leapfrogging is possible (it s not) and what policies can be particularly helpful. Some of the lessons include: energy prices tend to evolve from subsidized levels to full-cost-recovery to full-cost-recovery-plus environmental externalities; industrial energy efficiency is often the starting point, with privatization and competition driving companies to reduce production costs, including energy; successful countries excell at governance (setting targets, building institutional capacity, creating and improving the legal and regulatory framework, and monitoring and evaluating); households tended to be the last, and most difficult, area of reform, starting with pricing improvements, outreach campaigns, financing programs, and building certificates programs."