By 2050 Kazakhstan intends to cover a half of its energy consumption by means of alternative sources

The Republic of Kazakhstan Minister of Energy Kanat Bozumbayev declared that the following goals have been set for the ministry: to bring the share of renewable energy sources in total volume of power production to 3% in 2020, to 6% in 2025 and by 2030 – to 10%, by 2050 the share of renewable and alternative energy sources shall be equal to not less than a half of overall aggregate power consumption.

In the opinion of the official the country has “rather significant potential” on the market of renewable sources of energy as well as a good legislative base.

The law defines the support measures in form of guaranteed purchase of electric power from facilities of renewable sources by single purchaser of electric power – the Accounting and finance center under 15-years agreement according to auction rate (in KZT) as well as ensuring connection of the facility to power networks”, – said the minister.

Investors receive the following preferences:

  • the rates are indexed annually with consideration of inflation and change of dollar exchange rate;
  • power producers are exempted from payment for electric power transmitting services of power transmitting organizations;
  • investment preferences are provided within frames of the Entrepreneurship code.

Such a system of fixed rates at the initial development stage has allowed to quickly launch the market of green energy. In 2014 there were available 26 operating facilities with foreseen power output of 178 MW.

According to 2019 outcome 87 facilities with power output of 1042 MW will be operating in the country.

Output over 9 months of the current year was equal to 1,65 billions of kWh, its share makes around 2,2% of the domestic market. Increase in output of electric power by renewable power sources over 9 months of 2019 is equal to 65% in comparison with similar period of 2018.

Thanks to systematic work related to expansion of capacities 108 facilities with output of 1610 MW will be operating in the system according to outcome of 2020, by the end of 2024 there will be not less than 3000 MW from renewable power sources in the power supply system.

According to data of the Ministry of energy currently investors from 10 countries of the world as well as large financial organizations such as European Bank of Reconstruction and Development, Asian Development Bank, Development Bank of Kazakhstan are operating in the green energy sector.

“Asian bank of infrastructure investments has particularly chosen renewable power source facility – the 100 MW wind park in Zhambyl region – as the first investment project in Kazakhstan. This transaction should be completed by the end of the current year.

A good signal for us is the fact that to the green power sector have come as investors such large petroleum companies as Shell, Eni, Total, which in the course of competition win the right to realize the projects in Kazakhstan.

Thus, from the moment of the Accounting and finance center operation around 406 billions of KZT have been invested into the renewable power sources sector, and the constructed facilities will pay around 81 billions KZT of taxes.

Also in the period of facilities construction Kazakhstan engineers, builders and supporting personnel (around 300-400 specialists to each facility) are involved, and constant 975 so called “green” jobs have been created (834 from them are for men, 141 – for women), and many of them are located in remote areas of Kazakhstan”, – said Bozumbayev.

The minister said that selection started in the Republic since the last year for realization of projects, which take place as per auction mechanism. This allows to gradually reduce rates for power with end consumers.

According to outcome of 2018-2019 auction the rates for electric power of wind electric stations were reduced by 11%, of small hydro power stations – by 15%, of solar electric power stations – by 36%. Whereas maximum reduction of rates under individual projects was 51% – for solar energy, 23% – for wind and water energy.

The Ministry emphasized that Kazakhstan has significant potential as to reduction of cost of green energy and the level of influence on rates of end consumers and economy of the country. This will be possible when solving the following issues:

  • provision of financial aid by the government to the Accounting and finance center in case of failure to perform its payment obligations towards projects of renewable power sources;
  • extension of validity period of contract on purchase of electric power to 20 or 25 years;
  • international arbitration on neutral territory.