A dreary time.. it's raining, the autumn clouds crowd the cars sneaking on the serpentine. Snow has already fallen in the mountains and foothills of the Alai area of the East Kazakhstan region, their white caps stand out clearly against the dull landscape. Nature is braced for a winter miracle to fall asleep to the howling winds and crackling Altai frosts. In contrast, the place of our destination is bubbling over with energy all year round - 'Development Bank of Kazakhstan' JSC organized a press tour to the Turgusunskaya HPP at the end of October.

 The plant with a history

The Turgusun River, on which the hydroelectric power station is located, flows in the Zyryanovsky area of the East Kazakhstan region and joins Bukhtarma River - the right-bank tributary of the Irtysh River. The name of the river comes from the Mongolian language (Mong. "turgen us"), which means "fast river".

From the middle of the XVIII century, peasant serfs from Altai factories run to Turgusun; Old Believers were looking for Belovodye here – the legendary land of freedom mentioned in Russian folk legends. The development of the mining industry in this area is associated with the reign of Peter the Great, when experts began to be sent here and mineral deposits were leased. Under the reign of Elizabeth Petrovna, the Tsar's Cabinet was created, which began to manage all the mines. In 1791, Gerasim Zyryanov discovered a large deposit near the city, which was later named in his honor. The first hydroelectric power station was built on the Berezovka River, which used Hungarian technologies. Thus, a settlement with a population of about five thousand people grew up.

At the end of the XIX century, on the eve of the opening of the Eiffel Tower, in the framework of cooperation between Russia and France, Emperor Alexander III visited Paris. The Tsar's cabinet decided to transfer the Zyryanovsky mine complex to the French side in a concession for 60 years. The new management of the company "Zyryanovskoye Mining Company" retrofitted the non-automated equipment and put into operation powerful electric motors and pumps. This required a new source of energy. This is how the construction of a hydroelectric power station on the Turgusun River began, 7 km from the Kutikha settlement at an altitude of 941 m above sea level. Hungarian technologies were used in the construction of the plant, which was completed in 1902. It was equipped with three turbines.

In May 1902, torrential rains hit the region, the water over the crest of the dam rose by 45-50 vershkov (one vershok – 4.5 cm). On the night of May 24-25, the dam of the power plant was completely washed away by water. According to the report in Petersburg, that night the water rose by 78 vershkov. Work at the Zyryanovsky mine was terminated on June 1 already the French side terminated the contract and left the mine together with the brought equipment.

Later, the mine was leased to Austrian company, and in 1916-1918 an English company worked at the mine.

In 1932, the construction of the Turgusunskaya HPP was resumed and transferred to the Zyryanovsky Plant. In December 1935, the restoration of the station was completed. On January 1, 1936, the hydroelectric power station gave industrial current to the enterprises of Zyryanovsk. On July 15, 1957, it was liquidated due to putting of Altayenergo system into service.

So, the obstinate Turgusun River won its unrestricted flow for almost 60 years, until 2013 when the implementation of the new Turgusunskaya HPP-1 project began.

Small hydroelectric power station for a big business

The construction of the HPP was started in April 2017 and completed in 2021. The project was implemented by Turgusun-1 LLP with the financial support of the Development Bank of Kazakhstan JSC. The capacity of the HPP is 24.9 MW, which will reduce the shortage of electricity in the region by 79.8 million kilowatt hours per year, as well as reduce carbon dioxide emissions by 680 tons per year.

In total, construction of Turgusunskaya HPP gave job to about 500 people, who worked in hard-to-reach places and under extreme weather conditions, for example, the air temperature in winter reached 42 degrees below zero. However, its management is now fully automated. The current staff is 20 employees.

The total cost of the project is 13.39 billion KZT, while Development Bank of Kazakhstan JSC carried out the deal structuring in the amount of 9.6 billion KZT in the following form: 5 billion in the form of a long-term loan for a period of 12 years was provided by the "Development Bank of Kazakhstan", 3.6 billion tenge in the form of leasing for purchase of equipment was allocated by a subsidiary of DBK - 'Industrial Development Fund" JSC, 1 billion tenge in the form of a loan was provided by AOM Rail BV, part of DBK Equity Fund, a subsidiary of DBK managed by 'Kazyna Capital Management' JSC. The remaining funds in the amount of 3.8 billion tenge are the borrower's own funds.

It should be noted that the Development Bank of Kazakhstan JSC is one of the first domestic financial institutions in the country that has begun to build up competencies in financing renewable energy projects, which has sufficient experience in structuring "green" projects. The joint efforts of the Development Bank of Kazakhstan JSC and Turgusun-1 LLP, which worked on the construction of the Turgusunskaya HPP, made a great contribution to increasing the share of RES in the country's energy balance.

In July 2021, the commercial commissioning of the Turgusunskaya hydroelectric power plant was carried out. Today, electricity output in favor of the buyer (‘Financial Settlement Center of RE’) amounted to 5.5 million kWh.

When implementing the project, modern technical solutions were used, such as Chinese-made equipment corresponding to the latest achievements in the field of hydroelectric power plant design. Three turbines of different capacities are installed at the station: one is 1.9 MW and other two are 11.5 MW each. This allows using not all generating equipment of the station during the low-water period.

The launch of the Turgusunskaya HPP makes a significant contribution to providing the East Kazakhstan region and the National Electric Grid of the Republic of Kazakhstan with its own sustainable energy supply. During the construction of the hydroelectric power plant, in addition to the main hydroelectric and reservoir, it was possible to build related infrastructure facilities – access roads, power lines, bridges - which today have significantly improved the transport and information support of the region and created all conditions for the placement of energy-intensive, export-oriented industries.

 Problems of the renewable energy industry: sun, air and water

As part of the visit to Turgusunskaya HPP-1, an open dialogue took place with the management of the station and employees in charge of economic issues, issues of operation of the HPP and dispatching support of its work.

According to the management of the HPP, today low marginal tariffs are established for the implementation of hydroelectric power projects. Thus, for example, in case of auction for selection of HPP projects, the maximum auction price is 15.2 tenge per kWh. This does not correspond to the capital costs of the construction of the facility, therefore, auctions for hydroelectric power plants are unattractive for many investors. For example, the level of capital expenditures for Turgusunskaya HPP-1 amounted to about $2 million for 1 MW of installed capacity. This level of capital expenditures is approximately 2.5 times higher than that of solar power plant construction projects (the marginal tariffs for auctions for SPP in 2021 are 16.96 tg/kWh). At the same time, according to the HPP engineers, the efficiency of generating equipment is 60-80%, which is 3-4 times higher than that of solar power plants.

At the same time, the company has plans to expand the project and build a whole cascade of hydroelectric power plants on the Turgusun River. Thus, it is planned to build Turgusunskaya HPP-2 with a capacity of 43.8 MW with an average annual electricity generation of 127 million kWh and Turgusunskaya HPP-3 with a capacity of 90-120 MW with a dam height of about 100 m and electricity generation of about 350 million kWh.

Since the capacity of the Turgusunskaya HPP is less than 25 MW, this allows it to be attributed to small HPPs and renewable energy sources. As for all renewable energy facilities in Kazakhstan, a big problem is forecasting electricity generation, since renewable energy generation is variable and depends on changing weather conditions.

As is well known, the National Dispatch Center of the System Operator (NDC SO) ensures reliable functioning of the National Power Grid of the Republic of Kazakhstan, parallel operation of the National Power Grids of the Republic of Kazakhstan with neighboring countries. To do this, the NDC forms daily schedules of electricity production/consumption, draws up a balance and determines the operating mode of the power system. In turn, in order for NDC SO to make a daily schedule of electricity production/consumption, market entities (energy transmission companies and consumers) send a schedule of electricity production/consumption for their stations to the NDC on a daily basis. The situation becomes more complicated when stations have to give forecasts for weekends and holidays, and this is a period of 2 to 5 days.

At the same time, according to the operators of Turgusunskaya HPP-1, the daily forecasting is not suitable for such facilities – it is necessary to introduce an hourly planning time-frame. For example, while the delegations of journalists were talking about the work of the hydroelectric power station and carried out photo and video shooting, it started to rain, the snow that fell the day before melted in the mountains, the water level in the storage increased by 60-80 cm with the margin of 10-15 cm. The dispatcher complained that another hour and he would have to call the NDC and start a second turbine to carry out an unscheduled water discharge. According to the current rules, facilities such as hydroelectric power plants are not allowed to drain water not through generating units. Therefore, at the end of the day, the facility will exceed the forecast output, which will lead to receiving "threatful warnings" from the System Operator for the prediction error, which may be 35%.

It seems that the solution to the problem with marginal tariffs for renewable energy auctions can be applying market pricing, when investors and bidders can independently submit prices based on their own financial estimates without setting a price ceiling. Such a measure would be a positive signal from the government for domestic and foreign investors in the medium term.

As for the transition from the daily planning of RE generation to hourly planning, this is an alternative measure that will entail more responsible planning and more accurate forecasts for electricity generation by renewable energy stations, which will reduce the negative impact on imbalances in the National Power Grid of the Republic of Kazakhstan.

 Instead of a conclusion

The construction of hydroelectric power plant is a large and time-consuming process. Director of Turgusun-1 LLP Kalaubek Baymukhanbetov who has more than 30 years of experience in the hydropower industry and participated in the construction of large hydroelectric power plants, such as Moynakskaya HPP (300 MW) and Shulbinskaya HPP (702 MW), and the entire team who implemented the Turgusun-1 project, are real heroes. Thus, during the construction of the hydroelectric power station in 2018, the spring flood lasted three months, which, according to historical data, happened for the first time in the last 56 years. It seems that the river decided to show its restless disposition once again. The water level in the river was so high that it rose up to 6 m several times, and the construction pit of the hydroelectric power station was flooded eight times. Builders were often caught off guard by the famous East Kazakhstan frosts. The temperature at the site dropped to minus 50 degrees several times, stopping all work at the facility. Now it is already a part of the great three-century history of the taming of the obstinate river with the ancient name Turgusun, which was managed by the hydraulic builders of independent Kazakhstan.

At dusk, on returning to the regional center along the shore of the Bukhtarma Sea, as locals call it one of the world's largest man-made reservoirs, in the dark lighted with lights of houses, tourist bases and holiday homes, you can help but think about the scale of the country's hydropotential. To date, the country has adopted a Plan for development of the hydropower industry of the Republic of Kazakhstan for 2020-2030, a working group consisting of industry experts has been created under the Ministry of Energy of the Republic of Kazakhstan, measures are being taken to create an online map of the hydro potential of the Republic of Kazakhstan. All these activities are aimed at increasing the share of clean electricity for the growing needs of the country's economy.

After we passed the city of Serebryansk, the road stretched along a mountain serpentine, rain began to fall, which turned into abundant snow, covered with thick fog. I remembered the operator of Turgusunskaya HPP-1, who will experience problems during his night shift at the end of October due to these precipitations.