In spite of great potential of Kazakhstan in renewable and alternative energy sources the RES branch has been in an embryo state for a long period of time and it was developed only due to the enthusiastic efforts of private companies. At the same time, the conduct of EXPO-2017 in Astana with the motto of “Energy of Future” shall change the state’s approach to the area a lot.
As we know, on the 22nd November, in Paris, at the 152nd General Assembly of International Expo Bureau the membered countries selected the capital of Kazakhstan as a ground for EXPO-2017 give it the preference over Liege, Belgium. In many ways, our victory was presupposed by the mainstream selected by Kazakhstan as a refrain for the international event when it was said than the exposition in Astana would be devoted to Energy of Future, or to alternative energy sources, in other words, and to “green” technologies. The selection was not random. Today, the problems of RES are actual for the whole world: conventional energy sources are gradually getting exhausted and this lead to an unavoidable global energy crisis if only everything stays as it is now. EXPO-2017 will help to gather the best international power-saving technologies on the same ground as well as new developments on the use of power of sun, wind, marine, oceanic and thermal waters.
At the same time, our country has to prove in reality how much it is devoted to the ideas on transfer to “green” economy. As it was said in the speech of the President on the 6th December at the Stage Committee on Organization and Conduct of EXPO-2017, for the upcoming five years Kazakhstan shall do an innovative breakthrough in development and implementation of clean energy. “Therefore I assign the government to work out and approve an adequate Comprehensive Plan on Development of Energy of Future for 2013–2017. This plan shall cover all regions, national holdings, research institutes, and potential domestic and overseas investors. It is required to coordinate all documents in the program”.
At the moment Kazakhstan has no reasons for proud in this area. Though RES potential of our country is more than 1 trillion kWh, and 920 billion kWh out of them can be used at the use of wind energy, today the part of alternative energy sources in the Republican energy balance is 0.5% only. At the same time, within the Forced Industrial-Innovative Development Program the target in the sphere is to obtain production of RES power at 1% in 2014 and 3% in 2020. For comparison, in Germany the indicator is 25% and by 2030 the Federative Republic of Germany intends to use only alternative energy.
Independent experts connect the low attractiveness of the RES projects for private investors with the lack of relevant legislative base in Kazakhstan. Meanwhile, as it was declared at the latest forum of KAZENERGY by the Vice-Minister of Industry and New Technologies, Mr. Bakhytzhan Jaksaliyev, the department had worked out and submitted a draft law to the Majilis of Parliament. The draft law provides the use of fixed tariffs for RES which will serve a kind of guarantee for investors and it shall also help to distribute electricity to all consumers through the RES specialized support centre. In addition, the state will reimburse 50% of costs for purchase of RES units for individual users not connected to electric power grids. Also, the state will provide them with an opportunity to sell surplus of energy produced through the networks of general use.
As per the words of Mr. Jaksaliyev, taking into account that the RES energy is more expensive than from conventional sources and the RES integration into the national power balance involves the necessity to solve some technical problems; by 2030 the state will have to perform direct coordination of all events and works in this area.
At the same time, the Ministry of Industry considers three possible scenario for development of RES in Kazakhstan: pessimistic, moderate and optimistic. “The pessimistic scenario provides the existence of obstacles for investments and consumers are not willing to pay for expensive energy from RES. As per the moderate scenario the state will create stimulating conditions: part of obstacles is eliminated, fixed tariffs are implemented for a long period of time, there is an opportunity to sell quotas to reduce emissions within the country as well as at the international trade grounds, also, the ecological sanctions are settled.” The last, optimistic scenario will be possible if only the state manages to create the best conditions and actively supports and promotes RES development and if it also eliminate a part of barriers and approve the program on privileged financing.
Still there is no simple answer to the question what of the suggested scenarios will be chosen by Kazakhstan. For instance, the chairman of KAENERGY Association, Timur Kulibayev, believes that currently the RES energy is too expensive and the process shall not be forced for this reason. “The God blessed Kazakhstan with the whole range of energy resources. We have oil, gas and coal. We are the major producers of raw material for uranium products... It’s clear that as the technologies develop the changes will occur in the power balance but right now the implementation of alternative energy in Kazakhstan is unfavourable. I understand that it’s a trend and it’s actual, everybody talks about it, but the energy produced on the base of alternative sources will cost more than the energy we have currently. Alternative power industry is now available for rich countries only, however, in future, with the implementation and wide use of new technologies it will be available for other countries as well. And when the moment comes, we shall be ready to develop it actively. In due course it will take its part in the national power balance.”
Gennady Andreev, a President of KazNIPIenergoprom Institute JSC, in his turn, thinks in development of RES Kazakhstan shall not follow the ambitious targets of developed countries as they have no own reserves of solid fuel and have to spend huge amounts to implement innovative technologies. In the expert’s opinion, certainly, we need to make use of them but only in the cases when it is required, convenient and reasonable. “Kazakhstan is a northern country and first of all we need to provide heat to cities. In order to do it we build electrical power stations with a combined cycle where two energy types are produced through burning, as a rule, of solid fuel and constructing long heat supply networks. International experts warn us that we shall not ruin our systems in order to keep them as much as possible as they are our asset. Is there any alternative approach to heat our cities with renewable energy sources? I think there is no and there is no for many years ahead!”
In Mr. Andreev’s opinion, the most important and proper thing is to implement and use the renewable energy sources in agriculture. Because the state has to subsidize power supply to remote settlements where power lines were installed many years ago and the operation of the power lines is just gainless now.
There is another factor which Kazakhstan has to consider in implementation of its policy in RES area; this is a coordination of all its activities with neighbours. Moreover, in 2015 our electrical energy industry shall function under conditions of the unified electrical energy market of the Common Economic Space.
As it was stated by a collegium member (a Minister) on energy and infrastructure at the Eurasian Economic Commission, Mr. Danial Akhmetov, on the 23rd November in Moscow at the first meeting of the Consulting Committee on electrical energy industry at the EEC: “In the nearest future the Eurasian Economic Commission intends to work out a Concept for development of common electrical energy market of Russia, Kazakhstan and Belorussia. Basing on the concept the solid policy document will be approved and the document, as we assume, will help in the nearest future to form the common electrical energy market of countries membered in the Customs Union and Common Economic Space.”
According to Mr. Akhmetov, the common market will be based on the free access to the infrastructure, harmonized legislative base, new technical standards and norms. Herewith, one of the main segments in the suggested structure is the whole-sale market. Besides, it will include markets of centralized sales, system and auxiliary services as well as balancing market.
The Minister also said that the EEC will work out a well-balanced program on development of electrical energy market of Russia, Kazakhstan and Belorussia. After approval of the program the national strategies of countries within the Customs Union and CES will be well synchronized. “We think that our normative and legislative bases will be transformed considerably. Alongside with this, if the issue is solved it will help to organize a precedent of common market formation, if so, for the first time on the territory of our countries we’ll have a real and efficiently operated electrical power market based on the best international practices”.
As it is expected, the formation of common market will solve the problem with improvement of potential at the power complexes of the countries. “Currently, the efficiency of generating capacities of Belorussia, Kazakhstan and Russia is about 60%. It means, that due to the common market it is possible to considerably increase the indicator,” – summarized Danial Akhmetov.
In the context, coming back to the RES development, it should be noted what Yuri Sentyurin, a Deputy Minister of Energy in Russia, said that Russian economy is not ready to make “green” energy the priority in its development. “Green” projects already exist within the frames of documents recently ratified by the Ministry of Energy, such as the 2030 Strategy, for instance, and the Energy Efficiency Program and in the frames of major corporate structures. Herewith, we believe that it is too early to change the orienting points in development. The stake of international energy industry for conventional resources will be retained for the medium-term and even for long-term prospect, presumably.”
Anyhow, the news on start of various projects related to implementation of RES in Kazakhstan occur in increasing frequency recently. As an example, the administration of the Zhambyl Region seemed to be purposeful when they made their region to be a centre for the development of the solar energy. In 2013 here they start realization of the first stage on construction of the solar electric plant of 24 MW capacity with the prospect of increase up to 2 thousand MW and this is 10% of the total power consumption in our country. The participants of the project costing USD 80 million and payback period at 15 years are Fonrocheenergie SAS (France) and ZhambylHydroEnergo (Kazakhstan). At the moment the tariffs have been finally agreed and the feasibility study was completed.
Simultaneously, the akimat of the Zhambyl Region, Kazatomprom NAC JSC and KEGOC JSC signed the Memorandum of Cooperation in the sphere of development and construction of solar electrical plants part with the unit capacity at 20 MW and with the use of domestically produced solar modules. It is expected that Kazatomprom will provide the manufacturing and delivery of the main elements of the solar electrical plants which are photoelectric modules complying with the requirements of international quality certificates and KEGOC will support the project in obtaining of technical requirements for the plants to be connected to electrical grids.
The other project is a construction of heliostation of 2 MW in Kapshagay town. Its future operator is Samruk-Green Energy LLP (100% subsidiary of Samruk-Energy JSC) and on the 1st November the company signed the contract on purchase of work package to design, supply and turnkey basis construction with BISOL Group (Slovenia), a producer of solar panels of high quality. As per the project’s initiators, within the project frames, for the first time in Kazakhstan the advanced techniques will be used (70% of fixed and 30% of monitoring systems) and the most efficient equipment (monocrystal panels).
It should be noted that Samruk-Green Energy LLP is torrentially turning into a key player at the domestic market of alternative energy. Thus, on the 3rd October the company awarded a contract on purchase of 100% share in the equity capital of First Wind Electric Station LLP which plans to build a wind power plant of 45 MW at the place of Ereimentau in the Akmola Region. The project has come through all required preparatory stages according to the efficient legislation and it is totally ready to the implementation including the development of design and construction documents and the start of building and assembly. The construction of the plant will be commenced in Quarter 1 of 2013.
On the 9th October in Taldykorgan Samruk-Green Energy LLP also signed an agreement on purchase of 51% in the equity capital of Energy Semirechie LLP from SPC Zhetysu NC JSC. The controlled company participates in the construction project of RES with the capacity 60 to 300 MW in the Shelek tunnel (Enbekshikazakh area of the Almaty Region). Construction of RES was not a random selection. An annual average wind speed at 50 m high is 7.8 m per second here and the flux density is 310 W/m2. At the moment, by the assignment of Samruk-Energy JSC the feasibility study is being developed.
Finally, on the 1st November Samruk-Green Energy LLP signed the Memorandum with KD Stahl und Maschinenbau GmbH (Germany). The contract stipulates the construction of the plant manufacturing wind-mill power stations of small capacity at the free economic zone of the Innovative Technologies Park. It is assumed, that the new plant will produce small-sized wind-mill units with the capacity starting from 300 W up to 7 kW. The main advantage of German wind mills is an opportunity to produce electricity at the low wind speed (of 2 m per second) irrespective of the wind direction.
In general, as per the data provided by the Ministry of Industry and New Technologies, currently, there are applications received from the investors into the RES area for 2 000 MW which is 6 time more than the figures for 2015 included into the program on the development of the branch. In 2012 only there were five small-sized hydro-electric power stations built in the Almaty Region with the installed capacity about 20 MW as well as one solar power stations at 52 kW. In the Kostanay Region the biogas plant was commissioned. All of this confirms that the investors are interested in projects of alternative energy in spite of some restraining factors and the interest is still growing.