Kazakhstan - Electrical Power GenerationKazakhstan - Electric Power
This is a best prospect industry sector for this country. Includes a market overview and trade data.
Eighty-seven percent of Kazakhstan’s electricity is generated from fossil fuels, with hydropower accounting for 12 percent and less than one percent generation from solar and wind installations. Oil accounts for about a quarter of Kazakhstan’s gross domestic product and about 60% of its total exports. Natural gas production volumes have been increasing and Kazakhstan became a net gas exporter in 2003. Kazakhstan also has the largest recoverable coal reserves in Central Asia and is the second largest coal producer in the region (after the Russian Federation). Coal, produced in the northern regions, is used to power most of the country’s electricity generation. Kazakhstan is also the world’s largest exporter of uranium ore. There is no domestic nuclear generation. Kazakhstan’s economy is highly energy-intensive and uses two to three times more energy than the average for the Organization for Economic Co-operation and Development countries.
Kazakhstan's power generation industry has undergone a challenging and painful post-Soviet transformation. The production and consumption of electricity in Kazakhstan fell significantly following independence in 1991. An aggressive privatization program followed this, with state involvement in a few generation companies. Robust economic growth during the early 2000’s helped boost generation but the financial and economic crisis later in the decade caused a decrease in electricity generation as well as consumption due to production stagnation in metallurgical plants and the construction industry.
According to the operator of Kazakhstan’s electricity and capacity market, in 2018 the country produced 107,06 billion kWh of electricity, a 3.8% increase over the previous year. Total electricity consumption in Kazakhstan was 103,228 kWh in 2018.
The state has set a goal for the share of generation from renewable energy sources to reach 3% in 2020 (and about 10% by 2030). Prior to 2010, Kazakhstan was a net exporter of electricity, and later became a net importer consuming more than it produces. In 2013, the growth of electricity production again allowed the country to export electricity. Almost 80% of the country's power generation comes from coal-fired plants located in the northern coal producing regions. Kazakhstan's hydroelectric facilities are located primarily along the Irtysh River, which flows from China across northeast Kazakhstan.
In terms of output, the leading position are held by condensing power plants, accounting for about half of the energy generated by power plants, followed by combined heat and power plants (36.5%), hydroelectric (12.3%), and gas turbine power plants (2.3%).
The structure of the energy sector of the Republic of Kazakhstan represented by the following economically independent entities:
National Grid (JSC "KEGOC"), formed on the basis of the backbone electric grids 220-500-1150 kV, electric networks that supply large consumers and power distribution lines from large thermal power plants and hydropower plants.
Regional electricity companies (RECs), containing distribution networks of 110 kV and below that transmit power at the regional level.
Electricity producers - independent or integrated with large industrial enterprises and power plants.
The majority of Kazakhstan's generating capacity is in the northeast of the country while the southeast is the main power consumer. While north-south connections for the transfer of power exist, they are insufficient to meet southern demand. Kazakhstan also lacks sufficient generating capacity in the west and relies on Russian imports to overcome deficits. Furthermore, Kazakhstan’s electricity sector is unable to regulate its generating frequency — i.e. to manipulate its generating capacity to meet increases in demand during peak loads or supply disruptions. Therefore, the country needs to import electricity not only to offset supply gaps, but also to regulate frequency. Energy trade is not a one-way proposition as Kazakhstan is also a significant exporter of energy to Russia, Kyrgyzstan and Uzbekistan. The bi-directional nature of electrical power trade reflects both variations in seasonal energy supply/demand as well as the legacy of a Soviet-era grid that was built without respect to modern-day national boundaries. Soviet power planners, for example, established the northern Kazakhstan city of Pavlodar as the primary energy-producing hub for a region that straddles the current Kazakhstan-Russia border.
The electric power industry remains a key factor in Kazakhstan’s industrial development and economic growth as electric power generation accounts for about one-tenth of all industrial output. The government of Kazakhstan has developed an action plan for electric power development up to 2030, which includes a list of proposed power plants for modernization or reconstruction as well as the construction of new facilities.
Needs are great in the services market as Kazakhstan seeks to replace aging plants and equipment. Overall, a large part of the equipment of power generating facilities of the republic - 65% has been in use for more than 20 years, and about 31% - for more than 30 years. Electrical generating equipment and networks’ level of wear is estimated at 70% and 65% respectively, while 94% of Kazakhstan's gas turbines, 57% of its steam turbines, and 33% of its steam boilers have been in use for at least twenty years. Electricity transmission networks are inefficient, with estimated losses of 15% across transmission and distribution systems. Construction of new power plants and expansion of power transmission and distribution networks are priorities for the government and are likely to be implemented in the medium-term.
Major categories of goods imported by the electric power generation sector include fuel elements (non-irradiated), liquid dielectric transformers, inverters, parts for transformers and inverters, and vapor-generating boilers and parts. Considering the overall remodeling of the Kazakhstan Electric Grid Operating Company’s (KEGOC’s) systems and development of new power generation facilities, it is likely that demand for IT support, management, and communications systems will increase as well.
U.S. companies must prepare to compete with Russian, German, Korean, and Chinese companies that have acquired strong positions in the market and are sometimes entitled to tax breaks and other preferential treatment (particularly when they qualify as investors and not only as importers). Attempts to sell equipment for the power generation sector are more likely to be successful if based on a strategic approach to the market and accompanied by appropriate training, servicing, and consulting programs.
Renewables: The Kazakhstani Government has taken steps to attract greater investment into the renewable energy segment in recent years - introducing a 15-year feed-in-tariff (FiT) mechanism in 2013 - and there are plans to open the power and energy sectors to greater numbers of private investors. The country has recently introduced renewable auctions in place of fixed tariffs, an effort to spurn investment in the sector. The focus for the renewables sector will be wind and solar power. The European Bank for Reconstruction and Development (EBRD) plans to invest approximately USD244.2 million in Kazakhstan renewable energy sources (RES) attracting private and international financial investment. Fifty-two renewable energy facilities will be built through 2020. Six wind power plants are planned to be built in the North-Kazakhstan Oblast (SKO) through 2019. Wind power plants with capacity from 35 to 100 MW will be built in four districts of the region - Esil, Taiynshinsky, and Akkayynskiy and Musrepov. Six renewable energy projects totaling 247 MW will be put into operation in the Zhambyl region in 2017-2020. This will include solar, wind and hydro power plants. The projects will be carried out by public-private partnerships with the participation of Civic-Oriented Entrepreneurial Corporation Taraz, Samruk-Kazyna Invest LLP and the UK-based United Green Energy Limited.
In June 2018, Eni announced its intent to build, develop and operate a 50MW wind power project in Kazakhstan.
Nuclear: The government of Kazakhstan has revived efforts to develop a nuclear energy program. The Ministry of Energy has recently expressed in exploring cooperation on advanced nuclear fuels, small modular reactors, and training of “up to 1,000” specialists for the field. Senior government officials have indicated that a “marketing plan” is currently being developed by, among others, Ministry of Energy entities such as the Kurchatov National Nuclear Center and the Institute for Nuclear Physics.
Kazakhstan's electricity sector, both its generating and transmitting infrastructure, suffers from a high degree of physical depreciation. A senior official at the Kazakhstan Electric Grid Operating Company (KEGOC) recently complained that the majority of the firm's 25,000 kilometers of power transmission lines were built in the Soviet era. He noted that KEGOC is conducting an assessment to identify "vulnerable" transmission lines that need to be modernized, and he claimed that KEGOC will implement 15 projects valued at USD3 billion to modernize or construct new power transmission lines and substations by 2025. Meanwhile, the Chairman of Kazakhstan's national electricity generator Samruk- Energo has stated that Kazakhstan plans to install 14 GW of new power generating capacity by 2030, and Kazakhstani Government plans that investments in the power sector should reach USD63 billion over the next 18 years, including USD37 billion in power generation, USD9 billion in power distribution networks, and USD17 billion in regional power distribution organizations.
The condition of power generation infrastructure is weakest in Kazakhstan’s villages and small towns. According to experts it is necessary to build roughly 112.6 thousand km 110 kV and below lines, 614 distribution substations of 110 kV and 35 kV with total capacity of 4.13 million kW, and 23 700 consumer substations with total capacity of more than 4.3 million kW. In general, investment in Kazakhstani power grid construction estimated at a minimum of 4.5 billion U.S. dollars.
Although Kazakhstan has significant hydrocarbon resources concentrated in the west, this region still imports electric energy from neighboring Russia. In this connection, local authorities and oil companies are seeking to create their own power supplies. The primary focus is on the construction of a gas-turbine power station (GTPS) that will utilize local gas. The most significant projects in this area will be: construction of gas- turbine installations (GTI) with 48 MW capacity at the Aktobemunaygas industrial complex; the start of the Tengizchevroil Ltd gas-turbine power station with 144 MW capacity, completely covering the needs of the Tengiz oil-and-gas complex; and the construction of a 200 MW GTI at the Kumkol (Kzylorda area) developed by Petro Kazakhstan Inc.
International Exhibition of Equipment & Technologies for Power Engineering & Electric Machinery: 28-30 May 2019, Pavlodar, Kazakhstan
Powerexpo Almaty 2019: Kazakhstan International Energy, Electrical equipment and Machine Building Exhibition: 23-25 October 2019, Almaty, Kazakhstan
KIOGE 2020: Kazakhstan International Oil & Gas Exhibition & Conference: 30 September – 2 October 2020, Almaty, Kazakhstan
Alatau Zharyk Company
Balkhash combined heat and power station
Kazakhstan Electricity Association
Kazakhstan Electricity Grid Operating Company
Kazakhstan Operator of Electricity Market
Central Asian Electric Power Corporation
Energy Efficiency and Renewable Energy Consulting
For more information contact Commercial Specialist Azhar Kadrzhanova.
Kazakhstan Energy Trade Development and Promotion