Kazakhstan pursues alternative energy agenda

By bne IntelliNews June 4, 2013

Clare Nuttall in Astana -

With its vast reserves of oil, gas, coal and uranium, Kazakhstan is not an obvious candidate for investment into alternative energy, but the government has set ambitious targets for the sector and several large-scale projects have already been initiated.

The upcoming EXPO-2017 world fair due to take place in Astana has the theme Energy of the Future, as Kazakhstan aims to showcase the latest renewable energy and energy-saving technologies. Just months after the Bureau International des Expositions selected the Kazakhstani capital to host EXPO-2017, the organisers are already planning to ensure the expo city is powered by renewable energy, and that cutting edge energy technologies are incorporated into the pavilions and other facilities.

"The world's reserves of oil and gas are limited. They won't run out today or tomorrow, but it will happen some day. The same is true for coal, even through the reserves are bigger," Kaharman Jazin, director of the directorate for the preparation and organization of the EXPO-2017, explains. "To ensure that our descendants live comfortably on a clean planet, we need to develop new energy technologies."

Kazakhstan President Nursultan Nazarbayev has set the ambitious target of raising the share of alternative energy in Kazakhstan's energy mix to 50% by 2050. In the shorter term, the government has drawn up investment plans for the next eight years with the aim of boosting generation capacity by 1,000 megawatt (MW) by 2020, raising the share of renewables in the energy mix from just 0.5% in 2012 to 3% by 2020. Under a programme adopted by the government in January this year, there are plans to build 13 wind farms, 14 hydropower plants and four solar power plants across the country.

"Kazakhstan's energy agenda is amazingly ambitious," Jeffrey Ball, scholar-in-residence at Stanford University's Steyer-Taylor Center for Energy Policy, told a press briefing during the Astana Economic Forum on May 22. "Kazakhstan is one of the world's top 20 oil producers, among the top 10 coal producers, and since 2009 the number one uranium producer, but the government is now talking about diversifying the energy infrastructure. This is happening in the global context; it is part of a shift that is causing major economic ripples around the world."

Wind on the steppe

Construction of Kazakhstan's first industrial-scale wind farm is going ahead on the northern steppe not far from Astana. The farm, which will have capacity of 45 MW, is expected to help power the expo city in 2017. First Wind Power Plant, a subsidiary of state-owner power company Samruk Energy, is building the farm with a $94m loan from the Eurasian Development Bank.

Also near Astana, in December 2012 Kazakhstan's first solar panel production plant started operations. The KazPV plant was set up by Astana Solar, a subsidiary of nuclear energy company Kazatomprom. It produces a full range of photovoltaic panels for sale in Kazakhstan and abroad.

There is also considerable interest in the use of small-scale solar and wind installations to power remote settlements and households that are not connected to the national grid.

To encourage the use of alternative energy, Kazakhstan is expected to adopt legislation that will allow electricity generated from alternative sources to feed into the grid. A new law that would allow fixed tariffs to be set for electricity from renewable sources was approved by the lower house of parliament on May 8.

Kazakhstan's large industrial base, in particular sectors such as metallurgy, needs a stable supply of power, however, which at least for the time being means it must come from conventional sources, with coal expected to continue as Kazakhstan's main source of electricity generation for the foreseeable future. Asset Magauov, general director of Kazakhstan's energy sector association Kazenergy, points out that many questions need to be addressed before renewables can contribute to a substantial share of Kazakhstan's energy mix. "To use renewable energy, a lot of issues have to be resolved including the tariff issue. Also, we need to introduce a capacity market like there is in Russia," Magauov told bne during the Astana Economic Forum.

At the same time, Kazakhstan has good conditions for several types of renewable energy generation. The southern regions have a high level of sunlight, while a "wind atlas" produced by the UNDP and Kazakhstan's Ministry of Industry and New Technologies demonstrates the potential for wind power generation at many sites across the country.

Siddharth Saxena, director of the Cambridge Central Asia Forum, points out that not only does Kazakhstan have favourable geographic conditions, the country's mineral resources and existing petrochemicals processing capacity combine to give unique potential to develop new technologies. "Kazakhstan has a petrochemicals-based economy, and is building up its capacity to produce polymers, plastics and other downstream products. It is also endowed with rare earths and other oxides, which are a very hot topic globally due to their importance in electronics, medical applications, space and other industries... Combining these things with geographical factors, Kazakhstan may have the chance to lead in this kind of sector," Saxena says, citing the example of emerging technologies such as plastic electronics in solar cells.

The hopes are in Astana that as EXPO-2017 approaches it will give the impetus to Kazakhstani and international companies to develop technologies such as these.

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