Renewable Energy Sources: Kazakhstan Increases the Investment attractiveness of the Sector

Recently, it has been made known that the Government of the Republic of Kazakhstan is going to approve the fixed rates in respect of electric power produced by various objects of Renewable Energy Sources (hereinafter “RES”) for a fifteen year period. That includes energy from wind power stations – at the level of 19 tenge, solar stations – at the level of 29 tenge, hydroelectric stations – at the level of 14 tenge and biogas plant – at the level of 27 tenge. The relevant Government Resolution is expected in next few months.

Adoption of the fixed rates is nothing else but government support of investors guaranteeing return on investments. Gradually Kazakhstan adopts the best world practices of support of RES and in recent years, the country has been trying to develop both the  legal framework, and economic instruments of sector development. The law of the Republic of Kazakhstan on Support of Use of Renewable Energy had been passed in 2009, however, the provisions of the Law was remaining “dead” for several years representing no interest, both for local and foreign investors.

Only in the beginning of 2013, people started discussing changes and amendments to the Law that could really stimulate development of the sector. So, for the purpose of expansion of RES use, it was decided to create a financial center for RES support under KEGOC – system operator of the electric power market. As from 11 February 2014, the financial center for RES must carry out the centralized purchase and sale of the electric power produced by the RES objects (technical devices that produce electric and thermal energy) and supplied to electric power networks of unitary electrical power system of the Republic of Kazakhstan, at the fixed rate. Thereby, two main issues, related to sale price and guaranteed procurement, have been solved for investors.

Considering the huge territory of our country, and some settlements placed where centralized power supply is economically inexpedient, it was very important to adopt, so called, “Address Help” to individual consumers. The notion of Address Help stands for state partial compensation of expenses (up to 50 per cent) in respect of individual consumers (people living in non-electrified settlements) for acquisition of devices on use of renewables from Kazakhstani producers.

A revolutionary thing for Kazakhstani market is granting to individuals opportunity to sell surplus (not exceeding 500 kW per month) from their own consumption of electric power produced by their own RES objects to the power supply organization, through its delivery to electric distribution network.

The legal entities, carrying out design, construction and operation of RES objects, can depend on investment preferences according to the legislation of the Republic of Kazakhstan on investments.

Support of use of alternative power energy and increase of RES share in the energy balance of the country is carried out within preparation for the international specialized exhibition EXPO-2017. The law on EXPO-2017 was adopted in the end of 2013. The commencement of construction of objects is planned in May 2014. Foreign specialists with extensive experience in design and construction of worldwide objects with elements of new and energy-saving technologies can expect a simplified procedure for receiving a work permit.

Gaukhar Abdigaliyeva

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