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Record Low Price Achieved at Latest Auction (Tender) for Renewable Energy Projects in Kazakhstan

/28th November 2019, RENEWABLE MARKET WATCHTM/ In the course of the pilot auction for 50 MW solar photovoltaic (PV) power plant in Kazakhstan there has been a record low price set for solar photovoltaic power generation. The auction was recognized to be succeeded. Geography of the auction participants is represented by 6 countries, including Kazakhstan, Italy, Russia, Germany, China and the Netherlands.

In the course of trading session 7 companies were allowed to participate in the auction, there were 95 price proposals submitted. The total volume of proposed capacity was 350 MW. During the trading session, the applications price received from auction participants ranged from KZT12.49/kWh (EUR 0.029, USD 0.032) to 29 KZT/kWh (EUR 0.068, USD 0.075) without VAT.

The auctions with documentation is the best world practice on organizing the auctions for selection of renewable energy projects. This practice involves auctioning the sites for which potential investors are provided in advance with information characterizing project key parameters, including necessary basic technical data of the project. This information allows to estimate possible investment and technical risks connected with selection of the land plot, development of scheme of power distribution that, eventually, promotes the offer of the lowest possible price for 1 kWh of "Green" electric energy.

In order to implement this practice in the Republic of Kazakhstan and test it on the renewable energy market, a package of documentation on implementation of the solar photovoltaic (PV) power project with an installed capacity of 50 MW was prepared within the framework of a joint initiative of the Ministry of Energy of the Republic of Kazakhstan and the UN Development Program.

During 2019, the experts of the UNDP project on derisking of investing in the RES sector there was prepared a package of documents characterizing key parameters of the project – information on connection of potential solar photovoltaic (PV) power plant to the electric grid, including all necessary approvals, preliminary environmental impact assessment (pre-EIA) with mandatory public hearings, selection and study of the land plot for construction of the potential station. In order to inform potential investors about the initiatives there were implemented several training seminars and webinars, where potential investors had the opportunity to get answers to all their questions. Also was organized a visit of potential investors directly to the site in the Shaulder village.

The auction winner has been defined as LLP «Arm Wind» (Italy) with a price KZT12.49/kWh (EUR0.029, USD0.032) excluding VAT. The ceiling auction price – KZT29/kWh (EUR0.068, USD0.075) excluding VAT during the trading session decreased by 2.3 times.

The success in the 2019 auction in the Republic of Kazakhstan is the result of joint work of the Ministry of energy of the Republic of Kazakhstan, the UN Development Program "Derisking of investing in the renewable energy sector", the USAID program "Future Energy", industry associations, JSC KOREM, FSC of RE LLP, JSC KEGOC and JSC NC Kazakh Invest.

Representatives of the Ministry of energy of the Republic of Kazakhstan, KazEnergy and Atameken NCE, Kazakhstan Solar Energy Association, RES Association, Kazakhstan Electric Power Association, UNDP, USAID, European Bank for Reconstruction and Development took part in the auction as observers. The observers noted the auction to be held in accordance with approved regulatory legal acts and confirmed the transparency of electronic trading system of the auction organizer – the JSC KOREM.

According to the auction schedule, approved by the order No.97 of the Ministry of Energy of the Republic of Kazakhstan as of 19.03.2019, the auctions in amount of 255 MW of installed capacity have been held in 2019, broken down by types of power plants:

1) Solar Photovoltiac (PV) Power Plants – 80 MW;

2) Wind Power Plants – 100 MW;

3) Hydroelectric Power Plants - 65 MW;

4) Bioenergy Power Plants – 10 MW.

The JSC KOREM has been determined to be the auctions organizer.

The more information about the renewable energy market in Kazakhstan, including full contact details of renewable energy project owners, developers and stakeholders, you may read here: ’Kazakhstan Renewable Power Market Outlooks 2019÷2028’. Furthermore, you may receive up to 4 quarterly updates.

In order to download brochures with sample pages of these exceptional reports please access from here: Kazakhstan Solar Photovoltaic Power Market Outlook 2019 - 2028

and here: Kazakhstan Wind Power Market Outlook 2019 - 2028

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