Coal remains king in $63bn Kazakh power investment drive

By bne IntelliNews October 4, 2012

Clare Nuttall in Astana -

Kazakhstan outlined plans to invest as much as $63bn to boost power generation capacity over the next 20 years on October 3. A partial shift of the country's energy mix should be produced via the development of renewables, but coal will remain the Kazakh power sector's main fuel source.

Kazakhstan's master plan for development of the energy industry envisages a 62% increase in power generation capacity by 2030, and calls for investment of around KZT9.3 trillion, Almassadam Satkaliyev, CEO of Samruk-Energo, the power generation arm of state holding company Samruk-Kazyna, said on October 3 at the Kazenergy forum in Astana.

Coal powered thermal plants will remain the dominant source in the country under the plan, but their share in electricity production should decrease to 70.9% from the current 82.4%. Gas turbine generation will increase from 6% to 6.3%, and hydropower generation will remain relatively stable. If Kazakhstan decides to go ahead with the construction of the country's first nuclear power plant, that will account for an additional 3% of capacity.

Meanwhile, renewable energy generation is planned to boost from a meagre 0.5% currently to 11% of total generation, Satkaliyev said, noting that the UNDP suggests Kazakhstan has "huge potential" for hydro, solar and wind energy, possibly up to 1 trillion kWh per year. "We are building new wind power plants in the Akmola and Karaganda regions. We are also building new HPPs and researching the potential for smaller HPPs," he pointed out.

However, Timur Kulibayev, chairman of the Kazenergy industry association, warned that the use of renewable sources will only be expanded if it becomes "economically viable" through lowered costs.

"Green energy is very fashionable and relevant, and with the development of new technologies there will be changes in the energy balance," Kulibayev said. "As the price of oil production and geological exploration becomes more expensive, we expect oil prices to rise, and renewable energy will have a place in the global energy balance. We have adopted legislation in Kazakhstan to support the development of green energy."

"However," he added, "alternative energy still costs more then conventional energy, which in Kazakhstan is mainly coal based. Today one of the advantages for the Kazakhstani economy is that we have cheap coal energy, that is our reality."

No surprise then that new generation capacity based on traditional sources is the focal point of the strategy, with Kazakhstan's largest ongoing projects the construction of the Balkhash thermal power plant, and the modernisation of Ekibastuz GRES-2, both of which are coal-fired.

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