Kazakhstan Continues its Ambitious Plans for Renewable Power Capacity Increase and Pursues Clean Energy Leadership Position Among the CIS States
/25th June 2020, RENEWABLE MARKET WATCHTM/ In the first quarter of 2020, the share of green electricity generated in the total amount of energy generated in Kazakhstan was 1.8%. This is 58% more than for the same period in 2019. Renewable energy development in Kazakhstan is accelerating. For three years, the amount of green energy generated has doubled. In 2017 renewable energy power plants in the country generated 1.1 billion kWh, while in 2019 this figure was 2.4 billion kWh. The state plans in 2020 to bring this figure to 3.15 billion kWh. According to the Kazakhstan Solar Photovoltaic (PV) Power Market Outlook 2020 ÷ 2030, electricity consumption in Kazakhstan will continue to show steady growth. Electricity consumption amid the development of the Kazakh economy shall increase by 2030 to 133.8 billion kWh, and by 2050 - to 162.7 billion kWh. The growing demand for electricity and the decommissioning of old power plants due to physical wear and tear in Kazakhstan will require significant construction of new power capacities: 10-15 GW by 2030 (which corresponds to approximately 60% of installed capacity for 2012) and 35-40 GW by 2050. This creates incredible opportunities for investors in renewable energy projects.
Current Power Market Situation and Forecast of Electricity Consumption in the Republic of Kazakhstan
More than 70 percent of Kazakhstan’s electricity is produced in ageing coal-fired plants, served by the large volumes of cheap local coal in the northeast part of the country, according to the Kazakhstan Solar Photovoltaic (PV) Power Market Outlook 2020 ÷ 2030. Consequently, the energy sector, in particular power and heat generation, accounts for 80 per cent of the country’s carbon emissions. The growth of the national economy requires the accelerated development of the electric power industry. The main factors for the stable development of the sector are significant investments and effective management for reliable power supply to Kazakhstan's consumers.
Country Focus on Renewable Energy
The “National Concept for Transition to a Green Economy up to 2050” has been approved in Kazakhstan in 2013. This concept established the principles of the green economy as a future development path.
Chart 1: Share of Renewable Energy Capacity in the Power Mix of Kazakhstan 2020 ÷ 2030 (in %); Source: Ministry of Energy of the Republic of Kazakhstan, Renewable Market Watch™
Kazakhstan aims renewable energy (RE) to reach 50% of its power mix by 2050, with intermediate targets of 3% by 2020, 6% by 2025 and 10% by 2030. One of the main instruments to attract the required investments will be the renewable energy auctions mechanism launched in May 2018. Kazakhstan may receive support to reach their renewable energy objectives by the European Commission, which can mobilize upon request specific technical assistance under the EU Technical Assistance Facility for Sustainable Energy.
Renewable Electricity Generation in Kazakhstan
In the first quarter of 2020, the share of green electricity generated in Kazakhstan's total amount of energy was 1.8%. This is 58% more than for the same period in 2019. Renewable energy development in Kazakhstan is accelerating, according to the Kazakhstan Wind Power Market Outlook 2020 ÷ 2030. For three years, the amount of green energy generated has doubled. If in 2017 stations using renewable energy sources generated 1.1 billion kWh, in 2019 this figure was 2.4 billion kWh. The state plans in 2020 to bring this figure to 3.15 billion kWh. Meanwhile, in Kazakhstan, the share of renewable energy in the total amount of electricity generated remains insignificant. In 2019, this figure did not exceed 2.3%, in 2020 it is planned to increase it to 3%. This indicator is included in the Concept for the Republic of Kazakhstan's transition to a green economy.
Power Infrastructure Condition and Plans for Modernization and Improvement
Existing depreciation of electrical equipment and a steady increase in energy consumption will lead to the need for significant investment in developing new power generating capacities in Kazakhstan. For the state budget - this is a burden, for the investors - the opportunity to effectively invest money. From the moment of gaining independence to the present day, Kazakhstan's electric power industry has passed a serious reform path. However, the basic sector of the industry – power generation has not undergone fundamental changes. The core of the generation sector is still the equipment put into operation in the last century's 60-80s.
KEGOC JSC, acting as the transmission system operator (TSO) of the UES (Unified Electric Power System of the Republic of Kazakhstan), owning and managing the assets of the NES (National Electric Grid), completed and commissioned two important projects last year, one of which is in the Pavlodar region: strengthening communication Pavlodar energy centre with the electricity system.
The second KEGOC project is the construction of a 220 kV Tulkubas-Burnoye overhead line (OHL). The construction of a power transmission line between the HV substations Tulkubas-Tyag and Burnoye -Tyag within the framework of the project “Modernization of the NES Stage II” is of great importance for increasing the reliability of power supply to the Zhambyl and Turkestan energy centres, and also increases the overall transmission capacity of electric power in the southern regions of the country.
Current Renewable Power Market Situation in the Republic of Kazakhstan
Renewable Market Watch™ reported that there are currently 101 renewable power plants (37 solar, 37 hydro, 22 wind and 5 biogas) in the country, according to data published by the Ministry of Energy of Kazakhstan. Simultaneously, the total capacity of renewable energy power plants in Kazakhstan at the end of 2019 amounted to 1,050MW. Furthermore, by the end of 2020, it is planned to increase the capacity to 1,655MW due to the construction of new renewable energy power plants. In January-March 2020, wind power plants generated the most electricity - 45% of the total renewable energy produced, followed by solar power plants - 35.7% and small hydropower plants - 19%.
Chart 2: Cumulative Installed Capacity of Renewable Power Plants in Kazakhstan (in MW) 2013 ÷ 2019 (excluding hydropower); Source: Renewable Market Watch™
In 2019, 21 new renewable energy power plants were commissioned. For renewable energy projects, the total amount of attracted investments amounted to 613 million US dollars, and the number of renewable energy facilities was 90 in total. Looking at statistics data, in 2019, the installed renewable energy capacity in Kazakhstan doubled: from 531MW in 2018 to 1,050MW in 2019, reported the Renewable Market Watch™.
Future Renewable Energy Market Trends
In the past few years there has been a steady decline in prices for clean electricity, that is, generated by renewable energy sources. And this is no coincidence. The lowering of prices for renewable energy sources is primarily promoted by the growing price competitiveness of technologies using renewable energy sources, political initiatives conducive to the development of this sector, and more open access to financing. As a result, new renewable energy power plants are emerging in all regions of the world.
As the country progresses in its pursuit of the green economy, Kazakhstan’s renewable energy sector's future is promising. Dynamic development of the renewable energy capacity in the next decade is expected in the country, according to the research department of Renewable Market Watch™. In 2020, another 18 renewable energy power plants are planned with a total capacity of 605.5 MW to be commissioned in Kazakhstan. According to the forecasts for 2020, renewable energy generation will amount to about 3 billion kWh of electricity. International auctions were held in 2019 in electronic format for renewable energy projects with a total capacity of 255 MW. As a result of the auction, 12 companies signed contracts for the sale of electricity with a Financial Settlement Centre (FSC) for 15 years for a total capacity of 202 MW.
In 2020, the adoption of the Law of the Republic of Kazakhstan “On Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Support of the Use of Renewable Energy Sources and Electric Power Industry” is expected. The main conceptual innovations of the proposed draft law are the stimulation of the construction of manoeuvring capacities, the establishment of a through tariff to support renewable energy sources, the creation of favourable conditions for the development of renewable energy sources and an extension of the terms under PPA contracts (Power Purchase Agreements).
Kazakhstan has 19,605 cases of COVID-19 (Coronavirus) as of 25 June 2020 and is not part of the most affected countries. However, we will continue to monitor the governmental response to the economic impacts of COVID-19 (Coronavirus) in Kazakhstan and the availability of financial streams available for renewable energy projects.
The more information about the solar power market in Kazakhstan including full contact details of solar project owners and developers you may read here: Kazakhstan Solar Photovoltaic (PV) Power Market Outlook 2020÷2030
The more information about the wind power market in Kazakhstan including full contact details of solar project owners and developers you may read here: Kazakhstan Wind Power Market Outlook 2020÷2030
To download an executive summary brochure with sample pages, please access from here: Kazakhstan Solar Photovoltaic (PV) Power Market Outlook 2020÷2030 - Sample
To download an executive summary brochure with sample pages, please access from here: Kazakhstan Wind Power Market Outlook 2020÷2030 - Sample
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