News & Analysis

Current energy market situation

At the moment, 85.5% of Kazakhstan’s electricity comes from coal-fired plants and 8.7% from hydroelectric sources.  The coal-fired plants are located in north coal-producing regions. Hydroelectric facilities are located mostly along the Irtysh River. Kazakhstan’s southern regions do not have enough energy resources, and electricity consumption is covered by import from the Kyrgyz Republic. The transmission and distribution system comprises three networks, two in the north and one in the south, totalling 285,000 km of distribution lines. Of the northern networks, one exports electricity to Russia and the other imports from Russia. The southern network—connected to the Unified Energy System (UES) of Central Asia—imports electricity from the Kyrgyzstan and Uzbekistan.

On 30 August 2013, Kazakhstan has adopted the “Energy Efficiency 2020” programme to reduce energy use by 10% every year until 2015. 22 legal acts and 3,000 energy standards have been approved to implement the scheme. The new measures include energy efficiency classes for buildings and household appliances. Special emphasis is being placed on the industrial sector, which consumes more than 50% of its energy resources. More than 2,000 industrial businesses will have to undergo energy audits by July 2015. Three energy centres, which will demonstrate and promote energy-saving and energy-efficient technologies, are being built in Almaty, Aktobe and Astana, the Kazakh capital.

Current solar and wind markets situation

Kazakhstan is a very promising emerging market for wind and photovoltaic (solar PV) energy investments amongst CIS countries, according to CIS Countries Photovoltaic (Solar PV) and Wind Power Market Outlooks 2013 – 2018. With the introduction of support mechanisms in the law in 2009, 2010, 2012 and the subsequent amendments in 2013, Kazakhstan photovoltaic and wind energy market is supposed to start growing in next years. Starting from 2014 the wind energy will be used by two power plants near Yerementau town in Akmola oblast. Three wind power plants will be launched in Almaty oblast in the period from 2014 to 2018, two of them will be located in the Shelek corridor and another in the Djungar gates area. The country has a cumulative photovoltaic installed capacity of approximately less than 1 MWp and wind capacity less than 3 MW by the middle of 2013.

A feed-in tariff (FIT) for solar and wind energy in Kazakhstan

Kazakhstan has also adopted at the end of August 2013 a new feed-in tariff law – “On Supporting the Use of Renewable Energy Sources” – that will provide support to renewable energy producers.  The EBRD has worked with the Ministry of Industry and New Technologies and the Ministry of Environmental Protection to help develop various aspects of the new legislation, beginning with the model for determining the feed-in tariffs. The cost of the programme is estimated at KZT1,100 bn (€ 5.3bn).

The long and much anticipated feed-in tariffs for solar energy proposed by Ministry of Environment and Water Resources of Kazakhstan in December 2013 equal to approximately € 0.145/KWh (KZT 29/KWh) for solar projects, € 0.095/KWh (KZT 19/KWh) for wind projects and 15 years PPA period are expected to pave the way for fast further growth of wind power and solar PV market in Kazakhstan according to Kazakhstan Photovoltaic (Solar PV) and Wind Power Market Outlooks 2013 – 2018 These feed-in tariffs will enter into force in 2014 and still need to be confirmed on the highest government level by the end of 2013, but we do not expect a significant deviation from already announced levels.

Wind and Solar resource potential of Kazakhstan

Exceptionally rich in wind resources, about 50% of Kazakhstan’s territory has average wind speeds about 4-5 m/sec at the height of 30m. Some calculations estimate Kazakhstan’s wind potential around 1,820 billion KW/h per year spread over most of the country. Windy sites are mostly located in the Caspian Sea area of Atyray and Mangistau oblasts and central and southern Kazakhstan. A country wide-wind atlas is available. With a density of wind capacity about 10 MW/sq.km, there is a possibility to install thousands MW of wind farms in Kazakhstan.

Profile of electricity consumption and production in the country

The industry is the key consumer of electricity for the country (oil industry, metallurgy, mining, chemical industry, energy and machine construction), followed by households and transportation industry. The Kazakh economy is overall more energy-intensive than the economies of the countries in the EU. There are 71 power stations in Kazakhstan, including 5 hydropower plants. This represents an installed electricity capacity of approximately 19,400 MW, and available output 15,300 MW at the end of 2012. Wind and solar electricity account for less than 0.03 % of all electrify capacity. Interconnections with CIS countries have improved, stabilizing the power system.

More information about this very promising solar and wind market you may read here: Kazakhstan Photovoltaic (Solar PV) and Wind Power Market Outlooks 2013 – 2018