This is a best prospect industry sector for this country. Includes a market overview and trade data.
Eighty-four percent of Kazakhstan’s electricity is generated from fossil fuels, with hydropower accounting for 12 percent and less than two percent generation from solar and wind installations as of 2019. 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, although the government is actively considering building a new nuclear power plant. 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 1, 2022, the total installed capacity of power plants in Kazakhstan was 23,957, MW, and the available capacity is 19,004 MW.
In total, inI2021, 114. 3 billion kWh of electricity was generated at the country’s power plants. Kazakhstan’s national grid is operated by 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 privately owned. The electricity transmission and distribution sectors are considered 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 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 be prepared 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.
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.
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 2,000 MW by 2030.
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 Kazakhstan’s territory. The government aimed to put 28 solar power plants into operation by the end of 2021, and met this goal, with currently 51 solar power plants in operation.
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.
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 EBRD also plans to invest approximately USD 244.2 million in Kazakhstan’s renewable energy sources. Electricity generation from renewable energy sources in Kazakhstan increased by 15% in 2021. By 2050, the government anticipates that non-thermal sources will generate at least half of Kazakhstan’s energy needs. This plan requires the start of a domestic nuclear energy program and significant growth in non-hydro renewables. Kazakhstan will remain open to foreign investment as a means to import the capital and expertise to realize its objectives, although investor uncertainty about the operating environment will further militate against the government achieving its targets. Kazakhstan’s 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. In addition, 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. 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
- Almaty CHP (Combined Heat and Power) 2 (the largest thermal power plant in Kazakhstan)
- Trade Show: rade Show: Power Expo Almaty 2022
- Kazakhstan International Energy, Electrical equipment and Machine, Almaty, Kazakhstan-Dates: 28-30 September 2022. Almaty, Kazakhstan
- Trade Show: Power Expo Astana 2023-Dates: 24-26 May.
- 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
- KazAtomPromNur-Sultan, Kazakhstan
For more information, contact Commercial Specialist Azhar.Kadrzhanova@trade.gov.