ELECTRIC ENERGY IN THE REPUBLIC OF KAZAKHSTAN - CAREC Program

 
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ELECTRIC ENERGY IN THE REPUBLIC OF KAZAKHSTAN - CAREC Program
ELECTRIC ENERGY
IN THE REPUBLIC OF
    KAZAKHSTAN
ELECTRIC ENERGY IN THE REPUBLIC OF KAZAKHSTAN - CAREC Program
How the power sector works in RK

 1  Generating              2  High-voltage power              3 Distribution power grids and
 plant                    lines                               substations
                          The power is transmitted
 Electric and thermal     between regions to RPCs (or         Regional and city RPCs reduce the voltage and
 power is generated       directly to major consumers)        electricity is transmitted to end users
                                                              (wholesale and retail)
                                                                                                4 Consumption

                            transmission of heat

Main task of the power sector:
100% reliable provision of power to the economy depending on the state of the industry itself …

…which in its turn, is determined by the technical level, level of investments and quality of
management
                                                                                                                2
ELECTRIC ENERGY IN THE REPUBLIC OF KAZAKHSTAN - CAREC Program
Historic dynamics of power generaGon and consumpGon

A"er the downturn of the economy in 2008 power genera8on has grown confidently and beginning in 2013 it exceeded
                                           the demand for electricity

                                                                                                                  3
ELECTRIC ENERGY IN THE REPUBLIC OF KAZAKHSTAN - CAREC Program
Balance of electric power and electric capacity in the RK unGl 2030

  The balance shows that the power sector saGsfies the needs of Kazakhstan's economy unGl 2030

25,000

20,000

15,000

                                                                    Surplus of disposable capacity over consump8on
10,000

 5,000

    0
     2016   2017   2018   2019   2020     2021    2022   2023    2024    2025    2026     2027     2028     2029     2030

                                        Располагаемая мощность
                                         Disposable capacity      Потребление
                                                                   Consump8on

                                                                                                                            4
ELECTRIC ENERGY IN THE REPUBLIC OF KAZAKHSTAN - CAREC Program
Current state of the power sector of the RK

                                                        PLANTS

                                                                    Power generaGon
1                              111                       3
                                                                                                     billion kWh
    Number of power plants –                                          2015      2016       2017
                                                                     actual    actual      plan
                                                                      90.8      94.1      94.2

2   Installed capacity   22 055 MW                       4   Total generaGon – 94,1 billion kWh
                                 As of January 1 2017                                      as of January 1 2016

Annual maximum load in Kazakhstan in 2016 reached        In 2016 power genera8on increased by 3.6% compared to
13 990 MW whereas disposable capacity in the             2015.
winter of 2017 reached 17500 MW. Hence full
coverage of consump8on with a significant level of
reserves.
                                                                                                                   5
ELECTRIC ENERGY IN THE REPUBLIC OF KAZAKHSTAN - CAREC Program
Current state of the power sector of the RK

                                                  POWERLINES

   KEGOC
      110-1150 kV
                                   74
                                substa8ons
                                                   31
                                                  thousands of
                                                  kilometers of
FuncGons:                                         power lines
1) Ensures electrical linkages between regions of the republic and neighboring countries
2) Ensures power supply by power sta8ons and its transmission to wholesale consumers
3) Performs technical dispatching
4) Plays the func8on of a system operator

                                    above                roughly

    RECs – 21                       5000                 500
       0.4-220 kV                   substa8ons       thousands of
FuncGons:                                            kilometers of power
1) Ensures electrical linkages inside the regions    lines
2) Ensures transmission and distribu8on of power between retail consumers

    Total number of power transmission organizaGons - 160
                                                                                           6
ELECTRIC ENERGY IN THE REPUBLIC OF KAZAKHSTAN - CAREC Program
100 concrete steps for implementaGon of 5 insGtuGonal reforms

     Within the framework of implementaGon of the "NaGon's plan - 100 concrete steps for
     implementaGon of 5 insGtuGonal reforms" in 2015 the department of electric energy started
     acGviGes to implement steps 50, 51 and 52:

                  STEP 50. ReorganizaGon of the power sector IntroducGon of the "Single buyer"
                  model (introduced from January 1 2019)

Step 51. AggregaGon of regional energy network companies
(The Law was signed by President of the Republic of Kazakhstan on July 11 2017)

                  Step 52. IntroducGon of the new tariff policy in the power sector
                  sGmulaGng investments in the industry. (introduced from January 1 2019).

                                                                                                 7
ELECTRIC ENERGY IN THE REPUBLIC OF KAZAKHSTAN - CAREC Program
STEP 50. ReorganizaGon of the power sector IntroducGon of the "Single buyer"
                                  model

   By Law of the RK of 12 November 2015 No 394-V "On the introducGon of changes and addenda to certain legislaGve
         acts in the area of electric power" the new Single Buyer model will be introduced from January 1 2019.

      Purchase of the capacity by the Single buyer will take place as follows:
      1. 1) Purchasing the capacity from exis8ng power genera8ng organiza8ons
      2. 2) Purchasing the capacity from new power genera8ng organiza8ons under direct long-term contracts based on
 the results of tenders
      3. The law envisages an addi8onal mechanism to purchase capacity from exis8ng power genera8ng organiza8ons
 without tenders. This type of capacity purchase is brought about by the need to ensure long term guarantees for the
 return of investments made in moderniza8on, reconstruc8on, renova8on, expansion of the exis8ng power producing
 organiza8ons.
      4. Guaranteed purchases of capacity from CHPs within technological minimums.

                                                                                                                       8
ELECTRIC ENERGY IN THE REPUBLIC OF KAZAKHSTAN - CAREC Program
STEP 52. IntroducGon of a new tariff policy in the power sector sGmulaGng investments in the
                                          industry

       By Law of the RK of 12 November 2015 No 394-V "On the introducGon of changes and addenda to
     certain legislaGve acts in the area of electric power" a new tariff policy in the power sector sGmulaGng
                       investments in the industry will be introduced from January 1 2019.

        The exis8ng power tariff will be split in two parts

                 ELECTRIC POWER TARIFF:                                      CAPACITY TARIFF:
       variable part which will                                the permanent part which will ensure return of
                     ensure return of costs                  investments made in the construc8on of new, and
                for genera8ng electric power.                  renova8on, moderniza8on, reconstruc8on and
                                                                   expansion of exis8ng electrical capacity.

                                                                                                                9
ELECTRIC ENERGY IN THE REPUBLIC OF KAZAKHSTAN - CAREC Program
Market model according to the changes to the Law "On the electrical energy sector" within
               the framework of execuGon of steps from January 1 2019.

  Market Council

                                                             POWER PLANTS

                                                                                                                    New PPOs
                   all PPOs (by                        Func8oning PPOs not              Func8oning PPOs
                                              RE                                                                commissioned under
                      groups                          requiring moderniza8on         requiring moderniza8on
                                                                                                                     tenders

                                                      Short-term capacity
                     Power Market                                                              Long-term capacity market
                                                            market

        Bilateral             Centralized    100%                                                              Long-term nego8a8ons
                                            procure   Centralized trading for
      agreements                trading                                             Investment agreements      based on tender results
                                             ment           one year
                                                                                                                (more than 10 years)

                                                                   SETTLEMENT AND FINANCE CENTER
                                                                     Single buyer of RE and capacity

                                                                                                                       Consumers

                                                                                                                                         10
RESOURCE POTENTIAL OF
      RENEWABLE ENERGY
IN THE REPUBLIC OF KAZAKHSTAN

                                11
920       billion
                    3000
          kWh per year

Wind energy              Solar energy
                                        hours of
                                        sunshine
                                        per year
                                                   62    billion
                                                         kWh per year

                                                   Hydropower

                                                                        12
RE SECTOR DEVELOPMENT INDICATORS

2016                               2020

50        RE facilities
          till 2020
                          WPP
                          100 MW
                          HPP
                                   103          RE facilities
                                                till 2020
                                                                WPP
                                                                960 MW
                                                                HPP
                          142 MW                                290 MW
300 MW                             2000 MW
                          SPP                                   SPP
 total capacity           58 MW    total capacity               750 MW

                                                                         13
2016                                       RE share in the total
                                           power generation

 50        RE facilities
           till 2020
                                  WPP
                                  100 MW
                                                              50       %
                                  HPP
                                  142 MW
 300 MW
 total capacity
                                  SPP
                                  58 MW              10     %

2020
                                            3  %

 103              RE facilities
                  till 2020
                                  WPP
                                  960 MW

                                  HPP
                                  290 MW
 2000 MW                                   2020      2030       2050
                                  SPP
 total capacity                   750 MW

                                                                           14
NUMBER OF COUNTRIES
       EMPLOYING THE AUCTION METHOD
       OF RE SUPPORT

70
60
50
40
30
20
10
 0

        2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

     At present 67 countries aroung the world use the auction method for RE support

                                                                                      15
SOLAR GENERATION TARIFFS, $/kWh                                           COMMISSIONING OF NEW SOLAR
                                                                                       CAPACITY, GW
 1                                                                        100
               0.95
0.9                                                                                                                      80
0.8                                                                        80                                       75

0.7                                                                                                            55
                      0.6                                                  60
0.6                                                                                                       40
                            0.5                                                                     32
0.5
                                                                           40                  30
0.4                               0.35                                                    18
0.3                                  0.15                                  20
                                            0.12 0.08 0.06                       5
0.2                                                          0.03 0.025

0.0                                                                        0
       2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017                   2009 2010 2011 2012 2013 2014 2015 2016 2017

                  Over the last 10 yeas the cost of solar power declined from 1,0 to 0,025 USD
       This has resulted from an economy of scale, cheapening technologies and the shift towards a market
                                            mechanism – the auction.
PRICE OF WIND ENERGY, $/kW

0.5

      0.40    0.39
0.4
                      0.30
0.3

                             0.17
0.2
                                    0.10
                                           0.06   0.05   0.04   0.034
0.0
       2009   2010    2011   2012   2013   2014   2015   2016    2017

                                                                        17
The price of RE may be lower that new coal and gas-fired power plants

       2016 AUCTION RESULTS BY TYPES OF GENERATION
7

6

5                                         4.8     4.75                  4.8
                4.3                                               4.2
4
                         3.2
       2.8                        2.9
3                                                         2.5

2
       solar

                                  solar

                                                          solar
                                                  coal

                                                                        coal
                gas

                                           gas

                                                                  gas
                         win

1

0
      Mexico   Mexico   Mexico   Chile    Chile   Chile   UAE     UAE   UAE

                               Cents/kW (in USD)

                                                                               18
FURTHER DEVELOPMENT OF RE IN KAZAKHSTAN

It is necessary to address two important tasks:

1
     Select and implement the most effective
     RE projects and attract the best investors with
     advanced technologies

2     Reduce RE burden on the country’s economy

AUCTION
MECHANISM
to RE support will enable us to address these two tasks

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