Kazakhstan's electricity sector today

Baurzhan Ibrayev
Baurzhan Ibrayev Chairman, Central Asia Advisory Board New Nuclear Watch Institute

There are clear signs of impending collapse in the development of Kazakhstan's energy sector lately, as the growing energy deficit will hinder the country's economic growth.

The confusion in the energy situation was evident at the January meeting of the Kazakhstani government, where the minister of energy's lively report stating that the Unified Power System of Kazakhstan was operating normally contradicted the Prime Minister's remarks about widespread power outages in the northern regions of the country in December.

In the President's Address, in order to ensure energy security and reliable supply of the country's economy and population, it was instructed to commission additional capacity of at least 14 GW. This is also necessary to achieve the goal of doubling GDP. How will the country achieve these goals?

According to the minister's report, based on the approved capacity balance, by 2030, with a required reserve level of 17%, the electricity demand in Kazakhstan will amount to 28.2 GW, while the available capacity, taking into account the introduction of new capacity, will only amount to 22 GW. The electricity capacity deficit in the Unified Power System of Kazakhstan, even with the introduction of about 4 GW of new capacity, exceeds 6 GW.

Moreover, an analysis of the balance in Central Asian countries also showed an electricity capacity deficit of 2.7 GW by 2030.

The country has adopted a concept aiming to increase the share of renewable energy sources (RES) in the total energy production to 50% by 2050, and the potential of nuclear energy in shaping the energy balance is widely recognized worldwide - it is part of the state's policy.

With the successful implementation of the Ministry's developed Action Plan for the development of the electricity industry, the structure of installed capacity by fuel type by 2035 is as follows:

  1. RES - 24.4%
  2. Hydroelectric power plants - 10.8%
  3. Gas - 25.8%
  4. Coal - 34.3%
  5. Nuclear power plants - 4.7%

Planned generation facilities will be distributed throughout the power system to ensure a balance in electricity capacities and a uniform load on the power grids. It is expected that all regions of the country will be covered by backbone 500 kV lines.

The Ministry has also prepared a tariff formation project, which establishes clear and comprehensive principles of tariff regulation and criteria that regulated tariffs for thermal energy should meet, namely the improvement of tariff methodology, ensuring economically justified tariffs, and the possibility of attracting investments.

Starting from January 1, 2024, 24 electricity generating companies have applied for tariff increases of 30% to 90%.

The submitted adjustments are related to the increase in costs independent of the companies - the increase in fuel costs, including transportation, the increase in salaries of production staff, proportionate to the level of inflation in the country, the increase in the cost of purchasing and transporting materials and equipment necessary for repair campaigns and ensuring stable operation of energy generating facilities.

Renowned Kazakhstani economists R. Oshakbayev and P. Svoik noted in the "ZONA" program on February 21, 2024, that attracting investments in the development of Kazakhstan's energy sector threatens an even greater increase in tariffs in the near future.

In the Government's program to increase GDP by 2029, 2.5% is allocated to the energy sector without taking into account the introduction of new capacity. Electricity consumption in the country is growing (approximately by 500-600 MW per year), and in February 2024, we are importing 2.5 GW from Russia (compared to 1 GW a year ago), and the unsatisfied demand for electricity by 2029, according to the Ministry of Energy of Kazakhstan's balance, will be at least 4.5 GW - this is the electricity production of 4 operating nuclear units of 1.2 GW each.

Nurlan Zhakupov, Head of the Samruk-Kazyna Fund, said on February 23 of this year in an interview with the "Odagay" program: "It would be very correct for the people to understand all the risks, all the difficulties associated with the construction of nuclear power plants in Kazakhstan, as well as all the advantages that this construction will bring, and based on the full picture, make a well-balanced decision. Nowadays, there are many phobias..., obscurantism floods social networks." Unfortunately, there is almost no work on informing the population about the advantages and risks of nuclear energy, which is the responsibility of both the Ministry of Energy and the Samruk-Kazyna Fund.

All that remains is to wait and see what decision the people of Kazakhstan will make in the national referendum on the construction of nuclear power plants in the country.

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