On November 22, ‘QAZAQ GREEN’ Renewable Energy Association with the support of the Konrad Adenuer Foundation held a round table on: "The current situation in the electric power industry of Kazakhstan: challenges and problems". The event was attended by Vice-Minister of Energy of the Republic of Kazakhstan Zhumabai Karagayev, Deputies of the Majilis of the Parliament of the Republic of Kazakhstan Dyusenbai Turganov, Edil Zhanbyrshin, Yeldos Abakanov, Chairman of the Board of  ‘Samruk-Energy’ JSC Sungat Yessimkhanov, Managing Director of ‘KEGOC’ JSC Zhandos Nurmaganbetov, heads of relevant departments of the Ministry of Energy of the Republic of Kazakhstan, representatives of the business community, public organizations, international financial institutions.

The Vice-Minister of Energy of the Republic of Kazakhstan Zh. Karagayev in his speech noted that the beginning of the autumn-winter period in the electric power industry is always a test of the stability of the National Grid System.

It's no secret that this year the system has faced new challenges. As a consequence of the sharp increase in electricity consumption due to the rapid development of digital mining, there was a shortage of generation in the system, which was aggravated by the emergency failure of power units at key energy facilities of the country.

"If we take historical data, our energy consumption has been growing by about 1-2% in recent years. Maximum 2% per year. But over these 10 months, we have noted an abnormal growth of about 8%. This is a fairly large increase in consumption. Here we are talking about 1000-1200 MW of electricity and, of course, we associate an increase in consumption with an increase in consumption on the part of miners," - Zh. Karagayev said.

Deputy of the Majilis of the Parliament of the Republic of Kazakhstan Dyusenbai Turganov noted that for the rapid development of renewable energy, our National Grid System with basic generation obtained from traditional coal plants, was absolutely unprepared for new trends. The shortage of maneuverable capacities and the almost inability to regulate the system has led to a growing dependence on overcurrents from neighboring countries.

As you know, the problem of shortage of maneuvering capacity found a legislative solution at the end of last year. For its implementation, auctions will be held in this December for the construction of generating units with a maneuverable generation mode for a total amount of 1,140 MW of electric capacity to ensure the availability. These are combined-cycle gas stations, installations using hydrodynamic water energy or gas for generating electric energy, as well as generating installations that do not use minerals as fuel (that is, renewable energy stations with energy storage systems).

According to the Deputy of the Majilis of the Parliament of the Republic of Kazakhstan Turganov D.N., there are also some problems here. "According to the research of KEGOC JSC for 2 MW of installed renewable energy capacity, 1 MW of maneuverable capacity is needed for regulation. In other words, today we need at least 1 GW of maneuverable capacity. According to the established indicators of renewable energy development, by 2025 the renewable energy sector should grow by 2 times (6% of the share of renewable energy generation in the energy balance). Taking into account the time for the construction of maneuverable capacities, as well as the problem of providing gas to such facilities, there are risks that the problem of the shortage of balancing capacities will not be solved in this way," - the speaker concluded.

The chief dispatcher of the National Dispatch Center of JSC ‘KEGOC’ Bekazhn Mukatov presented a report on the current situation in the country's electric power industry. Thus, since the beginning of the year, electricity generation at coal-fired power plants amounted to 66.9 billion.kWh, which is 69% of the total output. Gas-fired power plants generated 18.9 billion kWh or 19.5% of electricity, hydroelectric power plants - 7.4 billion kWh  or 8% of electricity, RES - 3.6 billion.kWh (about 3.5%). In order to resolve the situation related to the growing energy shortage, the Ministry of Energy of the Republic of Kazakhstan and the System Operator are taking measures to prevent a system accident.

It should be noted that over the past year, important changes have been taking place in the electric power industry of Kazakhstan, which generally lay the foundation for a deep modernization of the industry. On the one hand, this is our country's attempt to keep up with global challenges, such as the energy transition and the process of decarbonization of economies, which determines the green vector in the energy sector. On the other hand, it is an active search for solutions to meet the needs of the country's growing economy for electricity in the medium term.

On January 26, 2021, speaking at an expanded meeting of the Government of the Republic of Kazakhstan, the President instructed the Government to develop the Energy Balance of the Republic of Kazakhstan until 2035. This document should take into account not only internal aspects - consumption, generation of maneuverable capacities, an increase in the share of environmentally friendly energy, but also plans for the development of our neighbors' energy systems. As we know, recently the Minister of Energy of the Republic of Kazakhstan presented this document to the President. However, we should note that, unfortunately, we, the RES business community, were not introduced to its content.

Moreover, the Ministry of Energy of the Republic of Kazakhstan was instructed to develop a National project for the development of the electric power industry. This is a new regulatory document in the System of state planning, which is actually a plan for the development of the industry.

For reference

The national project is a document that provides comprehensive interdepartmental cooperation and priority budget financing for the implementation of a set of measures aimed at solving tasks (projects), certain critically important for achieving National priorities, goals, objectives and strategic indicators and performances in a timely manner. National projects are approved by the decree of the Government of the Republic of Kazakhstan after approval by the Supreme Council for Reforms under the President of the Republic of Kazakhstan.

Speaking at a meeting on the development of the electric power industry on May 26 this year, The President noted that the National Electric Power Project is an application document that should become the basis for the development of the industry for the next at least 5 years. At the same time, it was instructed to ensure the mutual alignment of the national project with the Low-carbon Development Strategy and carefully discuss them with international and domestic experts. However, in this October, only 10 National projects were approved, where the issues of the development of the electric power industry were included in the National Project "Sustainable economic growth aimed at improving the welfare of Kazakhstanis" as its part.

The round table touched upon important topics and problems for the industry: the growing energy shortage, the needs of the economy for electricity, the impact of new directions in generation (RES with energy storage systems) and consumption (digital mining of cryptocurrencies) on the electric power industry, the need for new maneuverable capacities, the use of market mechanisms (demand management, balancing market), issues of attracting investments in the electric power industry, goals to achieve carbon neutrality and the readiness of both the government and business to transform in the industry.

Of course, there are still a lot of factors that were not mentioned during the round table. Thus, it is necessary to insert external factors into the general equation for the development of the electric power industry, such as the introduction of a common electricity market of the countries of the Eurasian Economic Union (2025), the introduction of a carbon footprint tax in the European Union (2023), Kazakhstan's obligations under the Paris Agreement (2030).

An important factor is the statement of the President of the Republic of Kazakhstan K.K. Tokayev on November 19 as part of his trip to Almaty on the prospects for development of nuclear energy, including the construction of nuclear power plants: "I think that eventually we will finally come to such a decision. We are already feeling the first signs of a shortage of electricity in Kazakhstan. Of course, there is no total shortage. The balance is approximately zero. But the first signs are marked. Therefore, looking to the future, we will have to make inherently unpopular decisions about the construction of a nuclear power plant. But, as it's said, the role of a leader is to make unpopular decisions," Kassym-Jomart Tokayev said.

How will our electric power industry solve the old problems inherited from the Soviet past and the new challenges dictated by the global conjuncture? How to build a common policy for all sectors of the economy? How structurally should the electric power industry change? What energy sources will the industry use to fuel our economy in the long term: coal, gas, nuclear energy? How much should the share of renewable energy be in order to achieve all the country's obligations?

So it turns out that so far there are more questions than answers, and so far the situation in the electric power industry looks like an equation with several unknowns, which the Government must solve in the near future. As industry experts and observers of the whole process, so far we see only the tactics of "extinguishing fires" (we are urgently looking for gas for the Zhambyl GRES, urgently rushing the stations to finish repairs, attracting foreign investors to build large volumes of capacity, transferring our energy assets to them, etc.).

However, as before, we do not have a common vision - a strategy for the development of the industry, at least for the medium term. This issue, especially now, when the system is working at maximum and can no longer cover the economy's demand for electricity, should be first on the agenda of the authorized state body, the system operator, development institutions and the business community.

Following the results of the round table, a proposal was put forward to initiate an appeal addressed to the President with justifications for the need to develop a Strategy for the development of the electric power industry that would correspond to the State Planning System and would be approved at the highest level.