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System of auctions made it possible to achieve significant reduction in prices for green economy — Ministry of Energy

Tuesday, 09 February 2021, 11:08:10

At the government session chaired by Prime Minister Askar Mamin, issues of development of renewable energy sources were considered. Minister of Energy Nurlan Nogayev reported on the current situation on the renewable energy market.

In his Address to the people, the President of the Republic of Kazakhstan Kassym-Jomart Tokayev instructed to pursue a policy of decarbonization. New technologies in the electric power industry require new principles of power system management, relationships between participants within the market, as well as more careful planning in the long term.

According to the minister, the development of renewable energy for the country in the last decade makes it necessary to reconsider approaches in the electric power industry.

The documents of the state planning system set the following specific goals, namely:

  • to bring the share of renewable energy in the total volume of electricity production to 6% in 2025;
  • by 2030 — to 10%;
  • by 2050, renewable and alternative energy sources should account for at least half of total energy consumption.

“2020 was a milestone period for the implementation of the RES indicator in the Concept of Kazakhstan's Transition to a Green Economy. A three percent share in the total volume of electricity production at the end of 2020 has been ensured,” Nogayev said.

During the formation of the renewable energy sector, the government has created all the necessary conditions. Taking into account the best international practice, a system of fixed tariffs was introduced in 2013, and a single purchaser of RES electricity was created. The transition to electronic auctions was carried out.

The mechanism of fixed tariffs at the initial stage of RES development made it possible to quickly launch the RES market and implement a number of wind and solar energy projects. Thanks to the created conditions, the volume of renewable energy is growing steadily. Over the past 6 years, the installed capacity of renewable energy facilities has grown almost 10 times — from 178 MW in 2014 to 1,635 in 2020.

Auction international tenders 2018-2020 were held in electronic format for renewable energy projects with a total capacity of 1.5 GW. 172 companies from 12 countries, such as Kazakhstan, China, Russia, Turkey, Germany, France, Bulgaria, Italy, United Arab Emirates, Netherlands, Malaysia, Spain, took part in the auction.

As a result of the auction, 58 companies signed contracts with a single purchaser of RES electricity for 15 years for a total capacity of 1,219 MW.

The system of auctions allowed for a significant reduction in prices for the green economy. The maximum reduction in tariffs for individual projects was 64% for solar power plants, 30% for wind power plants and 19% for hydroelectric power plants.

Currently, there are 116 RES facilities in the republic with an installed capacity of 1,685 MW:

- 29 wind power plants with a capacity of 486 MW;

- 44 objects of solar power plants, with a capacity of 962 MW;

- 38 hydroelectric power plants with a capacity of 229 MW;

- 5 objects of Bioelectric power plants with a capacity of 8 MW.

By the end of 2020, the production of green energy amounted to 3.24 billion kWh.

The placement of renewable energy sources in the regions is carried out taking into account the resource potential, the need for electricity, the maximum permissible capacities in the zones of the Unified Electric Power System and taking into account the readiness of the infrastructure. This allows not to exceed the limits of renewable energy capacities for reliable operation of the Unified Electric Power System of Kazakhstan. Based on this, the largest number of capacities is in the Almaty region (32 facilities — 332.5 MW), in the Zhambyl region (15 facilities — 318 MW) and in the Karaganda region (9 facilities of 233 MW). Akimats of Aktobe, Akmola and Turkistan regions provide great support to local investors.

In recent years, work has been carried out to attract investments in the sector by signing a number of agreements and memorandums with international financial institutions and organizations in the amount of about 240 billion tenge.

“I would like to note that investors from 10 countries of the world, as well as large financial institutions such as EBRD, ADB, Asian Infrastructure Investment Bank, DBK, are now working in the green energy sector. Large oil companies, such as Eni, Total-Irene, who have already implemented projects in Kazakhstan and have plans for the further development of renewable energy projects, have come to the green energy sector as investors,” the minister said.

Since the launch of the Settlement and Financial Center, about 626 billion tenge has been attracted to the renewable energy sector and the constructed facilities will pay about 81 billion tenge in taxes.

This year, 23 RES facilities with a capacity of 381.1 MW will be commissioned (5 hydroelectric power plants, 5 solar power plants, 13 wind farms).

For the further development of the renewable energy sector, the ministry, together with stakeholders, will work in the following areas:

  • Holding an auction for the selection of renewable energy projects for 250 MW;
  • Development of renewable energy sources with energy storage systems;
  • Improvement of the mechanism of distributed generation of RES among the population and SMEs;
  • Providing incentive mechanisms for large hydropower plants;
  • Increasing the volume of clean energy by 2 times until 2025.

“Development of the market for renewable energy sources in Kazakhstan will continue to diversify the energy sector and for sustainable development. Having successfully completed the first stage of the development of renewable energy sources, I would like to note that the next stage will focus on the dynamic development of green energy on a systematic basis with the involvement of stakeholders in this area, including scientists and engineers,” summed up Nogayev.

Chair of the Board of Kazakhstan Electricity Grid Operating Company JSC KEGOC Bakytzhan Kazhiev said that on behalf of the Government, KEGOC, in accordance with the requirements of the legislation, created a single purchaser of renewable energy — Settlement and Financial Center for Renewable Energy Support LLP (RFC ), which has been successfully operating since 2014, performing all the functions assigned to it.

“Since then, thanks to the well-coordinated work of KEGOC and RFC, the RES support system has proven its worth. In particular, the project auctions proposed by the company proved their effectiveness at the auctions in 2019 and 2020, and record low prices for renewable energy were obtained. In total, RFC concluded 134 PPA contracts for the total installed capacity of 2,835 MW, including: WPP — 1,379 MW; SPP — 1,155 MW; HPP — 285 MW; Bio-power plants — 16 MW,” Kazhiev informed.

At the end of 2020, the number of operating renewable energy plants selling electricity through the RFC amounted to 72 units with a total installed capacity of 1,570 MW. At the same time, electricity generation by renewable energy facilities is growing at an increasing pace. At the end of 2020, electricity generation by renewable energy facilities only through the RFC, not counting bilateral agreements, amounted to 2.5 billion kWh, and by 2025 it will be more than 8 billion kWh.

“The growing share of renewable energy sources makes new demands in terms of ensuring the stability and reliability of the country's energy system. In this regard, in order to achieve the set goals of the government to achieve the share of renewable energy sources of 10% of the total generation by 2030, the Ministry of Energy, together with KEGOC, is implementing a whole range of ambitious tasks to modernize the energy system of Kazakhstan. This is, first of all, diversification of the structure of generating capacities in the UES of Kazakhstan through the construction of new maneuverable capacities, digitalization of the energy system, introduction of a balancing market, development of energy storage systems, forecasting and modeling the operation of the energy system," Kazhiev explained.

It is worth noting that the issues of building new flexible power plants are being resolved thanks to the relevant amendments to the Law on Electricity, adopted in December 2020. Currently, under the leadership of the Ministry of Energy, work is being carried out to prepare a plan for the location of flexible generation facilities and organize auctions for the construction of new gas stations. Already next year, it is expected to start construction of new maneuvering stations in the south of Kazakhstan, which will significantly speed up the construction of new renewable energy sources.

At the same time, the construction of new flexible generation will take some time, and in order to maintain the pace of commissioning of renewable energy sources in accordance with the target indicators, KEGOC, within the framework of the Smart Grid concept, implemented a very important project to digitize the national energy network. This project includes a number of high-tech systems, such as a centralized emergency control system (CSPA), a control system based on vector measurements WAMS / WACS, an automatic frequency and power control system.

According to the chair of the board, the system provides automatic compensation for the instability of electricity generation by renewable energy facilities and imbalances in the UES of Kazakhstan as a whole by managing reserves at the power plants connected to the system. This year it is planned to attract 5 power plants to work as part of the system: Ekibastuz GRES-1, Moinak HPP, Bukhtarminskaya, Shulbinskaya, Ust-Kamenogorsk HPP with a total reserve of 500 MW.

In addition, KEGOC is working to connect the power systems of Uzbekistan and Kyrgyzstan to the system. The company held negotiations with the system operators of these countries, created a working group and discussed the parameters of joint work. Considering that the energy systems of Uzbekistan and Kyrgyzstan are more flexible, such integration will allow obtaining systemic and economic effects for all our countries, and will also strengthen the energy independence and energy security of the region.

“This year KEGOC is conducting research on energy storage facilities. Based on the research results, it will be possible to determine the optimal model for placing storage units in the power system, taking into account economic, technical and geographical factors. The use of storage units will provide compensation for fluctuations in the generation of renewable energy sources, will provide additional regulation capacity in the power balance, especially during the hours of the evening maximum load,” said Kazhiev.

Also, KEGOC has carried out a number of studies on modeling the integration of renewable energy sources. A mathematical model of the UES of Kazakhstan was created on the Power Factory software package, with the inclusion of renewable energy sources planned for construction in the model, which made it possible to study the influence of renewable energy sources on the transmission capacity of networks. The PLEXOS software complex simulated the needs of the power system for maneuverable reserves, and also obtained the most efficient sites for the placement of RES in terms of the best potential and technical feasibility of integrating RES facilities.

The company is studying the possibilities of a forecasting system for the generation of renewable energy facilities. A pilot project to improve the quality of forecasting with the involvement of existing RES facilities at the completion stage. The widespread introduction of forecasting the generation of RES facilities can reduce the planned deviations of RES facilities, provide more accurate planning of daily schedules, and minimize power imbalances.

In general, KEGOC is constantly and systematically working to modernize the National Electricity Grid in order to increase the share of renewable energy sources in the energy system of Kazakhstan and achieve target indicators.

In his speech at the meeting of the Government, Akim of Zhambyl region Berdibek Saparbayev noted that the region is systematically working on the development of renewable energy sources in accordance with the instructions of the Head of State and the concept of Kazakhstan's transition to a green economy.

As the akim noted, Zhambyl region is one of the leading in the republic in the use of renewable energy sources.

Today there are 16 renewable energy sources in the region. Of these, 5 are hydroelectric power plants, 6 are wind and 5 are solar. Over the past year, their total electricity generation amounted to 318 MW, which is about 20% of the republican figure.

In general, in 2020, the region generated 2.5 billion kW of electricity, of which 24% is generated through renewable energy sources. Compared to 2019, the growth in electricity generation from renewable sources in 2020 was 47%.

Currently, the region is implementing 4 projects with a total capacity of 96 MW. These are 2 wind farm projects and 2 hydroelectric power plants. Two projects will be commissioned this year. The remaining two are planned to be completed in 2022. As a result, in 2022, electricity generated in the region by renewable energy sources will amount to 415 MW.

In the future, until 2025, it is planned to implement 4 more projects for the construction of power plants, which will provide an additional 218 MW of electricity. This will enable the creation of 845 jobs.

“In the next five years, it is planned to increase the generation of electricity from renewable sources to 633 MW. That is, to bring to 45-50% the share of electricity generated from renewable energy sources. The work is under control,” summed up Saparbayev.

In turn, the akim of the Karaganda region Zhenis Kassymbek noted that following the results of the past years, 4 solar power plants with a total capacity of 200 MW were launched in the region.

In addition, there are two biogas stations in the region. This is LLP APK Volynsky in Bukhar-Zhyrau region and the second — in the village of Kurminskoye, Abay region. Also, in the region there is a mini-hydroelectric power station on the Intumak reservoir. The total capacity of renewable and alternative energy in the region today is 223 MW.

As the akim noted, a comparative analysis of the generation of 2019 and 2020 shows a tangible increase in the generation of renewable energy. The growth was 77%.

As for investments, their total volume for projects implemented over three years amounted to about 102 billion tenge.

“If we talk about the plans for the future, today, the regional akimat, together with KAZ GREEN ENERGY LLP, is implementing another project for the construction of a solar power plant near the Konyrat microdistrict of the city of Balkhash with a capacity of 100 MW. The expected commissioning date of the 1st stage (50 MW) is the end of August 2021, the 2nd stage (50 MW) is December 2021,’’ Kassymbek informed.

In addition, in Saran, Czech investors plan to build and operate a fundamentally new renewable energy facility in the form of a hybrid solar power plant with storage units with an installed capacity of 100 MW and above. To date, a reservation of a land plot for the construction of this object is being carried out. Until the end of this year, it is already planned to start the implementation of the project.

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