Kazakhstan is building many renewable energy projects: it’s time to set restrictions

Kazakhstan is building many renewable energy projects: it’s time to set restrictions

The introduction of new renewable energy sources (RES) capacity in the country may have to be suspended in the coming years. This conclusion can be reached after reading the KEGOC presentation, which was presented at the February meeting of the Kazenergy association. The document, entitled “Revision of the priorities in the legislation on support for RES for energy producing organizations (i.e. power plants. – Ed.) using RES” was published in the Jaryq Telegram channel, inbusiness.kz reports .

The presentation begins with the forecast balance of electric capacity of the unified energy system of Kazakhstan until 2035. As it turns out, the current capacity deficit in the country is expected to disappear in 2027 with a total volume of 24.4 GW and in another eight years may turn into a surplus of up to 9.1 GW against the background of a need of 30.6 GW. It is unclear why consumers should pay for such a volume of excess capacity, but apparently they will have to accept the lack of choice, it has already been decided for them how much they will need. Perhaps such a large surplus in ten years is necessary due to the low actual available capacity of renewable energy sources, which in “green” energy is often 20-30% of the declared, installed on paper.

At the same time, the generation structure by 2035 is calculated as follows: coal – 28.64%, gas – 20.12%, hydroelectric power plants – 5.59%, nuclear power plants – 11.94%, and renewable energy sources – 33.6%. Meanwhile, by 2030, the share of renewable energy sources is projected to be at the level of 34% , which is twice as high as the previously set target indicator of 15%.

“The early introduction of renewable energy sources leads to the following negative consequences: the threat of systematic separation from the energy systems of the Russian Federation and Central Asian countries as a result of unbalanced operation and network overload, forced payment to the RFC (the Settlement and Financial Center under the Ministry of Energy. – Ed.) for limiting the generation of renewable energy sources within the framework of the Intergovernmental Agreements on gigawatt renewable energy projects TotalEnergies, Masdar, Acwa, China Power. – Ed.) (Take or Pay) and auctions, a decrease in the annual values ​​of the KIUM (the coefficient of use of the installed capacity. – Ed.) of coal and gas plants (existing and prospective), a decrease in the generation of nuclear power plants due to the introduction of renewable energy sources, an increase in tariffs for consumers due to the introduction of renewable energy sources, ESS (electricity storage systems. – Ed.) and the need to develop networks,” the  KEGOC presentation says.

The document also concludes that the advanced introduction of renewable energy sources leads to such negative consequences as destabilization of the energy system, forced restriction of renewable energy sources to maintain its reliability, payment for undelivered electricity from renewable energy sources by consumers and the impossibility of ensuring priority dispatching of renewable energy sources. As is known, renewable energy sources currently receive priority dispatching from KEGOC and are mainly purchased under contracts from the settlement and financial center. In the event of a network restriction of generation, the so-called curtailment, when the energy system cannot take “green” electricity from renewable energy sources, it will still have to be paid for if this is stipulated in the purchase contracts based on the results of auctions or in intergovernmental agreements.

For its part, KEGOC, as before, proposes measures to reduce the impact of the destabilizing factor of renewable energy sources on the energy system. They include changing or excluding the mandatory rule on priority dispatching of renewable energy sources with the right to the system operator to reduce the generation of renewable energy sources to ensure the balance stability and reliability of the energy system.

In addition, KEGOC believes that it is necessary to continue developing maneuverable, gas and base generation. Moreover, it is necessary to build more intersystem and regional power transmission lines to ensure throughput and exchange capacity. It is also necessary to develop automatic control systems to ensure stability, implement AI to forecast renewable energy generation and develop SNE as a separate type of maneuverable capacity, KEGOC believes.

At the same time, the presentation also highlighted in red and white a rather unusual measure.

“It is necessary to suspend the “deployment” of new renewable energy projects for a period of 2-3 years in order to pull up the introduction of the planned volume of maneuverable generation, accelerate the construction of planned intersystem and regional power transmission lines, assess the situation in the energy system and propose further measures for the development of the Unified Energy System of the Republic of Kazakhstan for the long term. A further increase in the share of renewable energy in the energy system will lead to an increase in curtailment, which will negatively affect the balance stability of the energy system and an increase in the fee for undelivered electricity (take or pay) (the condition of full payment in case of refusal to supply. – Ed.) , ”  the document states.

Such a move could come as a surprise to investors preparing to participate in renewable energy auctions for 1,810 MW of installed capacity from May to November this year. It should be noted that 1,270 MW were up for grabs at the 2024 auctions , but only 960 MW of contracts were signed. Last year, only eight renewable energy facilities with a total installed capacity of up to 200 MW were commissioned , compared to about 2.9 GW of existing “green” energy facilities.

https://www.inbusiness.kz/ru/news/kazahstan-stroit-mnogo-proektov-vie-pora-stavit-ogranicheniya

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