EIA Kazakhstan Electricity

energy

By SRI ⋅ January 10, 2008 ⋅

Kazakhstan has 71 power plants, including five hydroelectric power stations, giving the country an overall installed generating capacity of 17 gigawatts (GW), 80 percent of which are coal fired, and 12 percent of which are hydroelectric. Almost 85 percent of the country’s power generation comes from coal-fired plants located in the northern coal producing regions. Kazakhstan’s hydroelectric facilities are located primarily along the Irtysh river, which flows from China across northeast Kazakhstan.

The production and consumption of electricity in Kazakhstan fell significantly following independence. However, robust economic growth since 2000 has helped boost generation to 64.2 billion kilowatthours (BkWh) in 2006 and consumption to 58 BkWh. Transmission issues necessitate that Kazakhstan continue to import electricity in the southern part of the country, as the country’s northern generating units are connected to a separate transmission grid (see below). In 2006 the Kazakh energy ministry expects 8 percent annual growth in electricity production to levels of 73 billion KWh, and consumption levels of 71 billion KWh. The latest statistics indicate that Kazakhstan exported roughly 4 billion kWh of electricity to Russia in 2005.

Although Kazakhstan technically generates almost enough electricity to meet its demand, the country has suffered from frequent power shortages since 1992 due to the sector’s deteriorating infrastructure. Kazakhstan incurs large electricity losses during transmission and distribution over its 285,000 miles of distribution lines. According to Kazakh Minister of Energy and Natural Resources Vladimir Shkolnik, an average of 15 percent of the electricity generated in Kazakhstan is lost before it reaches consumers due to the widespread deterioration of Kazakhstan’s power infrastructure.

Electricity Infrastructure in Kazakhstan

Energy officials in Kazakhstan estimate that electricity demand may outpace supply as early as 2008. Kazakhstan Electricity Grid Operating Company (KEGOC) President Kanat Bozumbayev estimates that over $3.0 billion will be needed to build roughly 1,500 MW of new power plants and to repair old ones in the next decade.

Transmission and Distribution

Due to the large geographical distance between cities across the vast Kazakh steppe, the country’s electricity distribution system consists of three disconnected networks rather than a unified system. The two in the north are connected to Russia, and the one in the south is connected to the Unified Energy System of Central Asia. The northern networks, which service the coal-fired power plants that make up most of the country’s installed capacity, have recently begun exporting electricity to Russia. In January 2003, the Ekibastuz Power Plant No. 2, located in the northern Pavlodar region, began exporting electricity northward. Conversely, the southern network, which is connected to the Unified Energy System of Central Asia, is forced to import electricity from neighboring Kyrgyzstan and Uzbekistan because of its lack of installed generating capacity.

Because Kazakhstan’s southern regions are largely dependent on expensive imported electricity supplies, in 2004 KEGOC proposed a project to construct a second North-South power line to complement the existing, 600-MW-capacity line, thereby making it possible to supply the country’s southern regions fully with energy generated in Kazakhstan (see map below). The line would also help connect Russia to other more electrically isolated countries in Central Asia. For example, it will enable Tajikistan, which plans to export up to 700 million KWh in 2005, to export electricity via Kyrgyzstan and Kazakhstan to Russia.

North-South Transmission Line Project

In 2003, the European Bank for Reconstruction and Development (EBRD) helped finance KEGOC’s implementation of the $148 million first phase of the 690-mile transmission project. The second and third phases will complete the remaining 530 miles of the transmission line, continue the upgrading of the Ekibasutzkaya and Agadyr substations, and will provide for the purchasing of new distribution equipment. Total funding for the project will amount to $347 million. The EBRD and World Bank are also funding KEGOC’s purchase of high voltage, telecommunication and information technologies equipment under a $180 million loan. More detail on these projects is available at the following pages maintained by KEGOC and by the EBRD.

Industry Organization – Deregulation Status

Kazakhstan has privatized all of its power plants, but the sale of regional electricity distribution companies has proceeded more slowly. Also, the majority of the distribution networks has not yet been privatized. KEGOC has granted management rights to several private companies, but KEGOC maintains control over high-voltage transmission lines, substations, and the central dispatching apparatus.

Non-payment of electricity bills, an inadequate collection system, and a lack of market-based transportation tariffs are all obstacles to further large-scale investment in Kazakhstan’s transmission and distribution sector. Under the former Soviet Union, Kazakhstan utilized a system of fixed electricity tariffs that were unrelated to production costs and investment needs. Kazakhstan’s State Anti-Monopoly Committee is working to bring electricity tariffs in line with those in other countries and to allow the market to determine transmission tariffs.

Nuclear Power

Kazakhstan has the second largest uranium reserves in the world, at around 1.5 million tons, which represents almost 20 percent of the world’s supply. Kazakhstan will soon join Canada and Australia as a principal source of mine-based uranium supplies. In 2006, Kazakstan produced approximately 5,280 tons of uranium, and the country has plans to increase production to 15,000 tons by 2010.

In April 2005 South Korea and Kazakhstan established a joint mining venture for uranium, scheduled to begin operations in 2008 with an eventual annual output of 1,000 tons. In April 2006 Kazakhstan and Japan signed a civil nuclear cooperation agreement under which Japan will import uranium for power generation from Kazakhstan. Other foreign companies investing in Kazakhstan’s uranium industry include Canada’s SXR Uranium One Inc., Japan’s Marubeni Corp., China’s Guangdong Nuclear Power Group, Britain’s New Power Systems Ltd. and the U.S. uranium trading company Nukem.