Armen Arzumanyan, USAID “Power the Future” regional program Chief of Party

Energy is critical to economic development. The development of renewable energy and energy efficiency can help significantly to address the critical challenge of raising the quality of life and boosting economic growth while reducing the impact of the energy sector on the environment. Clean energy generation using domestic resources can also improve opportunities for increased cross-border electricity trade by freeing up conventional capacity that can be used for power export.

To assist Central Asian countries in developing renewable energy and improving energy efficiency in power generation, the United States Agency for International Development (USAID) launched the “Power the Future” regional program in September 2017.

The United States Agency for International Development (USAID)

is the leading US government agency that promotes social and economic growth, regional cooperation, including in the energy sector.

MAIN OBJECTIVES OF “POWER THE FUTURE” PROGRAM

1. Improve policy and regulatory framework for increased investment and deployment of grid-connected renewable energy

2. Strengthen power sector planning capacity and operation for high RE scenarios

3. Improve RE forecasting and RE grid integration

4. Improve energy efficiency in generation

5. Increase regional cooperation and RE knowledge sharing in Central Asia

USAID “Power the Future” Program implements its objectives in close collaboration with Central Asian energy ministries, international institutions and development banks, system operators, single electricity buyers, local and international investors and energy companies, as well as universities and industry associations.

The program is being implemented in all Central Asian countries, although most of the work is carried out in Kazakhstan and in countries where concrete measures are being taken to promote clean energy generation, in particular, in Uzbekistan. The project implementation timeline is from August 2017 to August 2021.

A brief overview of the main areas of implementation of the USAID “Power the Future”

AUCTIONS FOR RENEWABLE ENERGY SOURES^M

Following international low-carbon development trends, in 2013 Kazakhstan set ambitious targets for the generation of electricity based on renewable energy sources (RES): 3% of total generation by 2020, 10% by 2030 and 50% by 2050 (including alternative energy). Since the adoption of RE Law in 2009, the Government of Kazakhstan has made significant progress in creating a legal framework to enable the achievement of established targets, including a single buyer of electricity from RES, guaranteed purchase of electricity from generators using RES, 15-year power purchase agreement, feed-in tariffs and their indexation to foreign currency exchange rate, exemption from payments for electricity transmission, investment preferences, etc. At the end of 2017, an auction mechanism was introduced aiming to select the most cost-efficient projects and achieve competitive market prices for RE electricity.

Program in Kazakhstan and other Central Asian countries is presented below.

At the request of the Ministry of Energy of the Republic of Kazakhstan, USAID “Power the Future” Program provided timely consulting and technical support for the introduction and implementation of the first and subsequent RE auctions in the country. Thus, in 2017 after a careful analysis of the existing regulatory and technical frameworks, and using its international experience, USAID “Power the Future” together with other partner organizations, provided comments and recommendations that led to the development of rules and procedures for conducting RE auctions. Later in 2018, USAID “Power the Future” developed an IT platform and purchased software and computer equipment for the KOREM JSC to conduct the RE auctions. In addition, in 2018, in coordination with partner organizations and key sector stakeholders, USAID developed an Investors' Guide for the development of RE projects in Kazakhstan. The Guide, which is updated annually, has received numerous praises from several government agencies and private investors for its timely launch and useful contents.

"later in 2018, USAID “Power the Future” developed an IT platform and purchased software and computer equipment for the KOREM JSC to conduct the RE auctions."

The joint work of USAID “Power the Future” Program with the Ministry of Energy, KEGOC JSC, KOREM JSC, the Financial Settlement Center (FSC) for RES LLP and other partners resulted in successful auctions in 2018, raising great interest from international and national investors. Some 113 companies from Kazakhstan, USA, China, Russia, Turkey, United Arab Emirates, France, Bulgaria, Italy and the Netherlands, took part in 20 auctions. In total, bidders offered to install 3,422 MW of capacity, which is 3.4 times more than what was put up for auction - 1,000 MW. As a result, 36 projects with a total installed capacity of 858 MW were selected, and significant price reductions -when compared to FIT prices- were achieved: 48% for solar, 23.3% for wind and 23.4% for small hydro projects. This represented a great success for the first renewable energy auctions not only in Kazakhstan, but in Central Asia. In 2019, 255 MW were proposed for 8 auctions, 32 local and international companies from 8 countries took part, and, as a result, 13 RE projects with a total installed capacity of 213 MW were selected. Most power purchase agreements have been already signed, and projects are being implemented.

Within the framework of the USAID “Power the Future“ Program provided recommendations were also provided on key issues related to RE investment attractiveness such as, among others: long-term creditworthiness of the single buyer, the acceptability by banks of the PPA, pre-qualification requirements for auction participants, connection of RE facilities to the transmission and distribution networks, and prospective planning of RE auctions. Some of the recommendations made were adopted and reflected in the updated legislation. This year, the USAID “Power the Future” Program plans to purchase new equipment for Kazakhstan to measure and analyze the wind and solar resource potential. The USAID “Power the Future” Program continues to provide support for RE auctions in 2020, jointly with the European Bank for Reconstruction and Development (EBRD) and the United Nations Development Program (UNDP).

STRATEGIC PLANNING FOR THE DEVELOPMENT OF THE POWER SECTOR

The importance of the power sector for a country's development cannot be overemphasized. A reliable and stable availability of electricity and its expanded use is considered a critical factor for productivity enhancement and economic growth. As a rule, countries ensure this direct correlation between the two metrics, by regularly conducting integrated resource planning and developing strategies for power sector development. The energy community of Kazakhstan has repeatedly raised the issue of the need to develop a long-term Government strategy for power sector development.

The USAID “Power the Future” Program supports the Ministry of Energy of Kazakhstan and the system operator KEGOC in planning the development of the power sector, considering the growing share of renewable energy. Thus, in 2019 using agreed data and set targets, a Least Cost Generation Plan (LCGP) was prepared using two state-of-the-art modeling tools: ORDENA for economic analysis, and DIgSILENT- Power Factory for technical studies. The calculations were carried out with a perspective for 20 years and considering several scenarios for long-term power system development. The study considered the target indicators for renewable energy penetration, and assessed the adequacy of electricity transmission infrastructure, as well as the stability of the system operation in the face of an increasing deployment of renewable energy.

The USAID ““Power the Future” program supports the Ministry of energy of Kazakhstan and the system operator KEGOC in planning the development of the power sector, considering the growing share of renewable energy. "

The results of this work were discussed with key stakeholders of the energy sector, and recommendations were presented to the Ministry of Energy and to KEGOC. USAID “Power the Future” Program also provided several training seminars for staff of various agencies on the use of modeling techniques for power systems development planning. In this regard, “Power the Future” Program acquired a license of the software ORDENA for KEGOC and conducted a two-week training for the staff of the Ministry of Energy, KEGOC and the National Dispatch Center of the System Operator (NDC SO). It is expected that using modeling tools will improve the approach to strategic planning for the development of the electric power industry in Kazakhstan until 2040, considering the impact of renewable energy.

Improvement of forecasting and renewable energy GRID integration

The integration of RE projects into the grid is especially relevant today due to the increase of their installed capacity in the country's generation matrix. In this regard, the USAID “Power the Future” Program provides technical support to the system operator KEGOC and the Ministry of Energy, which are both responsible for the development of the power sector of Kazakhstan.

In 2019, jointly with NDC SO KEGOC JSC, joint studies were carried out to assess the impact of RE on the static and dynamic stability of the Kazakhstan power system.

Based on an agreed methodology, calculations were performed using a model of the network built with the simulation software DIgSILENT (Power Factory). The study made use of data for the level of expected loads, generation and RE volumes for the years 2019, 2020 and 2023. The results of this study showed that with an increase in the RE share, there is a decrease in throughput, and this is due to a change in the structure of generating capacities, with different capabilities of voltage regulation at traditional power plants and RE plants, as well as the remoteness of RE connection points from power substations (SS). In this regard, in order to mitigate the impact of renewable energy generation on the system and address the issues of RE integration, the “Power the Future” Program presented specific recommendations for improving the forecast of renewable energy sources, developed technical requirements for the integration of renewable energy facilities into the grid, as well as standards for renewable energy equipment. Currently, a joint research on the integration of renewable energy projects into the grid is being conducted by the USAID project team and specialists from NDC SO and KEGOC JSC.

Within the framework of the USAID “Power the Future” Program, substantial work is being carried out to improve the forecasting of RE generation. Correct forecasting allows to consider more accurately the generation from renewable energy sources, reduce integration costs and maintain power system balance with smaller reserves. Jointly with the FSC, a pilot project on forecasting at several renewable energy plants was implemented, and a transition to full-fledged forecasting of electricity generation at 20 renewable energy plants is currently underway. The results of this work will be used to better plan power system operation and to improve operational management.

INCREASING THE EFFICIENCY OF POWER GENERATION

Kazakhstan set specific targets to reduce greenhouse gas emissions: 15% by 2020, and 25% by 2050, compared to 1990 levels. In Kazakhstan, coal-fired CHP plants are the main source of emissions, and there is a great potential to increase efficiency. In line with this, within the framework of “Power the Future” Program, technical studies and assessment of the current condition of three CHPs were carried out in Almaty. The work was conducted in close coordination with representatives of the CHP plants and based on the results obtained, a list of specific actions was recommended, preliminary feasibility studies were prepared, and business plans were developed to finance and implement potential supply-side efficiency projects. The proposed measures are aimed at increasing the overall efficiency of the generating plants by reducing the specific fuel consumption per unit of output, coupled with a reduction of energy consumption for own needs. At present the “Power the Future” Program, at the request of the Akimat of Pavlodar region, is conducting a similar assessment for CHP-2, CHP-3 of Pavlodarenergo JSC and CHP Ekibastuz of Ekibastuzteploenergo LLP.

RAISING AWARENESS IN RENEWABLE ENERGY

To improve the quality of staff training in the area of renewable energy, USAID “Power the Future” established a regional platform for technical cooperation, capacity building and professional development at the Almaty University of Power Engineering and Telecommunications (AUPET). In 2018, USAID and AUPET signed a Memorandum of Understanding and agreed to support the development of renewable energy education in Central Asia. In coordination with international experts and teachers from leading universities, RE educational courses were developed, containing extensive materials on clean energy theory and practice of project implementation. Since 2018, several seminars have been held for teachers and students of AUPET and other universities in Central Asia. Today, universities in Tajikistan and the Kyrgyz Republic are interested in introducing this program for their students, and USAID “Power the Future” Program is providing support in this direction.

SUPPORT FOR WOMEN IN ENERGY

USAID “Power the Future” Program supports women in realizing and increasing their potential in green energy. In 2018-2019, several field trips and workshops were organized for female employees of ministries of energy, system operators and energy companies from Central Asian countries, as well as for faculty staff and students. The visits to solar and wind power plant sites in Kazakhstan were organized to promote professional collaboration and clean energy education. Within the framework of these seminars, professionals from Central Asia exchanged experiences in the field of gender equality and women's empowerment in the energy sector and discussed issues of women's leadership and professional growth. USAID “Power the Future” also organized trainings and summer internships for female students from energy departments of several universities to increase their interest in electrical engineering.

ACTIVITIES IN OTHER CENTRAL ASIAN COUNTRIES

Despite the fact that the USAID “Power the Future” Program is being implemented to a greater extent in Kazakhstan, the Program also provides technical support for the development of renewable energy sources in other Central Asian countries, taking into account the specific needs and objectives set by the governments of these countries in the field of renewable energy.

For example, in the Kyrgyz Republic, the “Power the Future” Program and the State Committee of Kyrgyzstan for Industry, Energy and Subsoil Use, signed a Coordinated Action Plan, within the framework of which trainings and seminars are organized for Kyrgyz specialists to increase their knowledge in the field of renewable energy, including modern technologies and international trends in the development of renewable energy, legal, institutional and regulatory aspects, RES assessment tools, as well as issues of RES grid integration. To this end, USAID purchased a license of DIgSILENT Power Factory software for OJSC National Electric Grid of Kyrgyzstan (NEGK), as well as special equipment for conducting remote trainings for NEGK specialists. Also, the “Power the Future” Program is assisting the Government of Kyrgyzstan in the creation and launch of the OJSC Kyrgyz Energy Settlement Center (KESC). Currently, the Program is working to increase the potential of KESC as an operator of the electricity market.

In Tajikistan, at the request of the Ministry of Energy and Water Resources, the Program is supporting the local company Pamir Energy in increasing the potential for the development of renewable energy sources, and, jointly with other international donors, is participating in the implementation of the Sebzor HPP construction project with a capacity of 11 MW. This hydroelectric power station in the Gorno - Badakhshan Autonomous Oblast (GBAO) will supply electricity not only to remote mountain settlements of the Pamirs.

 USAID “Power the Future” program is also supporting the improvement of the company's financial stability, the development of new renewable energy projects (small hydro, solar, wind), the creation of a project implementation coordination department, and a personnel training center. in addition, the program is providing the department and center with the necessary equipment for its work"

Furthermore, a pilot project of a solar power plant and battery energy storage is being implemented in the remote mountainous region of the Pamirs at an altitude of about 3,600 meters. The project will increase access to electricity by local communities, while regional energy companies will gain valuable experience in the design, installation and operation of such technologies in harsh climatic conditions. The experience gained will serve as a catalyst for the launch of similar renewable energy projects, and thus will increase the energy security of the mountainous regions of Tajikistan.

In Turkmenistan, “Power the Future” Program took part last year in a roundtable discussion on the development of renewable energy, organized by USAID and the OECD for key government agencies and power sector agencies. At this event, experts from “Power the Future” Program presented international experience and recommendations for the development of a Strategy and a Roadmap for the development of renewable energy sources. In June 2020, representatives of the Government of Turkmenistan announced the creation of a Commission for the development of a National Strategy for the Development of RES, which includes representatives from 14 ministries, chaired by the Ministry of Energy. In this regard, with the support of USAID, “Power the Future” expects to be actively involved in the creation of the RES Agency and the preparation of a RES Development strategy in Turkmenistan.

In Uzbekistan, the development of renewable energy sources has become a priority for the power sector in recent years. The government of Uzbekistan has adopted several programs to accelerate the deployment of renewable energy sources, by defining specific objectives, the most important of which is to increase the share of renewable energy sources in the structure of generating capacities from 13 percent to 20 percent by 2025. The government also expects

that by 2030, about 25 percent of electricity will be generated from clean energy sources. To achieve these goals, Uzbekistan plans to build 5 GW of solar photovoltaic and 3 GW of wind power plants within the next ten years. To this end, the Government of Uzbekistan is actively cooperating with Development Financial Institutions to use international experience in creating mechanisms for RES investment projects on the basis of public-private partnerships, as well as improving public policy and creating an enabling environment to attract private investors into the clean energy sub-sector.

In 2019, at the request of the Ministry of Innovative Development of Uzbekistan, USAID “Power the Future” Program developed a preliminary feasibility study to assess the potential for hydropower generation from the Talimarzhan reservoir. As part of this activity, the capacity potential of the reservoir was assessed, the available flows and the level of the reservoir during the past years were also studied, the options for installing generating capacities on the reservoir were identified, and the costs of construction work, equipment and power transmission infrastructure, were estimated.

This past May, in addition to the implementation of several activities to investigate the potential of renewable energy, the Ministry of Innovative Development and the Ministry of Energy of Uzbekistan expressed interest and requested USAID “Power the Future” Program to conduct a detailed assessment of the potential impact of renewable energy on power system operation. By a joint Decree of both ministries, a schedule of work was approved to conduct the study, including, among others, issues of RE integration, assessment of RE zones, and assessment of reserves for frequency regulation. To achieve this goal, a special working group of 12 specialists was created and several seminars have already been organized to provide training on the use of PLEXOS integrated simulation software to conduct an analysis of the power system considering the growth of renewable energy sources.

USAID “Power the Future” regional program welcomes the initiatives of the central asian countries in the development of renewable energy and expresses gratitude to the governments of the countries and all partners for the successful cooperation in achieving the set goals."