Kazakhstan - Country Commercial Guide
Power Generation

This is a best prospect industry sector for this country.  Includes a market overview and trade data.

Last published date: 2020-10-05

Overview

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.  Coal, produced in the northern regions, is used to power more than 70% of the country’s electricity generation.  Kazakhstan’s only nuclear power plant, a BN–350 nuclear reactor at Aktau, was shut down in 1999.  Kazakhstan has some of the largest uranium deposits in the world and is the world’s largest uranium producer.  Although plans have long existed to build additional nuclear power plants, little progress has been made on constructing these units.  Kazakhstan’s economy is highly energy-intensive and uses two to three times more energy than the average for  OECD countries.

Electricity in Kazakhstan is generated by 155 power plants of various forms of ownership.  As of January 2020, the total installed capacity of power plants in Kazakhstan was 22,937 MW and available capacity is 19,330 MW.   

Kazakhstan’s national grid is operated by the Kazakhstan’s Electricity Grid Operating Company (KEGOC), a state–owned company responsible for electricity transmission and distribution network management.  Several medium and small regional electricity companies handle distribution, some of which are privately owned.  The electricity transmission and distribution sectors are considered to be natural monopolies and are regulated by the government. However, wholesale generation of power is generally considered a competitive market with most generation assets owned by private enterprises.

Needs are great in the power generation market as Kazakhstan seeks to replace aging plants and equipment.  Approximately 65% of equipment in use at power generating facilities has been in use for more than 20 years, and about 31% for more than 30 years.  Electricity transmission networks are inefficient, with estimated losses of 15% across transmission and distribution systems.  The government of Kazakhstan has developed an action plan for electric power development through 2030, which includes a list of proposed power plants for modernization or reconstruction as well as the construction of new facilities.

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.

Leading Sub-sectors

Renewable Energy

1- Hydro Power:  Kazakhstan has abundant hydro resources, which are mainly concentrated in the eastern and southern parts of the country.  Today, 15 large hydropower stations (>50 MW) with a total capacity of 2.25 GW account for up to 13 per cent of the country’s total generating capacity.

2- Wind Power:  For the development of wind energy potential, the government of Kazakhstan, with the support of the United Nations Development Program, has developed a program of wind energy development thru 2030.  The framework of this program provides for the implementation of wind farm construction with the introduction of 2000 MW by 2030.

3- Solar Power:  The potential of solar energy in Kazakhstan is estimated at 2.5 billion kWh per year.  Solar energy can be widely used in two-thirds of the territory of the Republic of Kazakhstan.   The government aims to put 28 solar power plants into operation by the end of 2020.

4- Biomass:   Key areas for bioenergy development include co-firing coal and biomass plants, use of biomass for production of heat for district heating  and use of excess residues for liquid biofuel production.

Opportunities

Despite significant wind, solar, hydro and biomass potential, these resources have not been sustainably captured and deployed due a range of technical, institutional, social and economic barriers.  To spur development of renewable energy, the government of Kazakhstan in 2013 adopted the “National Concept for Transition to a Green Economy – 2050.”  Under the Concept, the government has taken steps to attract greater investment into the renewable energy sector, such as the introduction of a 15-year feed-in-tariff mechanism.  The country has recently introduced renewable auctions in place of fixed tariffs, an effort to spurn investment in the sector.  The European Bank for Reconstruction and Development (EBRD) also plans to invest approximately USD 244.2 million in Kazakhstan renewable energy sources.

Kazakhstans electricity sector, both its generating and transmitting infrastructure, suffers from a high degree of physical depreciation.  KEGOC, the national transmission grid operator, has plans to implement 15 projects valued at USD 3 billion to modernize or construct new power transmission lines and substations in the country by 2025.   Meanwhile, the Chairman of Kazakhstans national electricity generator, Samruk-Energo, has stated that Kazakhstan plans to install 14 GW of new power generating capacity by 2030.  The Government plans that investments in the power sector should reach USD 63 billion over the next 18 years, including USD 37 billion in power generation, USD 9 billion in power distribution networks, and USD 17 billion in regional power distribution organizations.  The following power plants are expected to be renovated over the next five years:​

  • Balkhash Coal-Fired Power Plant, Ulken​
  • Ekibastuz GRES-2 Unit 3 Power Plant, Pavlodar​
  • Karabatan Combined Cycle Power Plant, Atyrau

Resources

U.S. Energy Information Administration

Renewable Energy in Kazakhstan - EBRD

Samruk Energy

Kazakhstan Electricity Association

Kazakhstan Electricity Grid Operating Company (KEGOC)

Kazakhstan Operator of Electricity Market

KazAtomProm

 

For more information contact Commercial Specialist Azhar Kadrzhanova.

 

This is a best prospect industry sector for this country.  Includes a market overview and trade data.