Kazakhstan works out draft concept for development of electric power industry

Oil&Gas Materials 18 October 2022 15:20 (UTC +04:00)
Kazakhstan works out draft concept for development of electric power industry
Nargiz Sadikhova
Nargiz Sadikhova
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BAKU, Azerbaijan, October 18. A draft concept for the development of the electric power industry in Kazakhstan until 2035 has been worked out, the country’s Energy Minister Bolat Akchulakov said during the government meeting in Astana on October 18, Trend reports via the government's website.

“The ministry plans to present the concept to the government for consideration after its approval by the state bodies in October this year," Akchulakov noted.

According to him, at the first stage of the practical implementation of this vision, the ministry has prepared a package of legislative amendments, which are being currently agreed upon with interested state bodies.

In order to reduce the depreciation of generating capacities by 15 percent by 2035, it’s necessary to transform approaches to tariff setting as part of the transition to a new policy called ‘Tariff in exchange for investment’, which will require a three-time increase in annual investments, the minister further said.

For the implementation of this program, the ministry considers it expedient to ensure the strengthening of the role of owners of energy-producing organizations, Akchulakov explained.

In this regard, according to him, measures will be established for investing funds in the implementation of investment projects. Besides, when selecting projects, it’s planned to set targets and measures, including reduction of the depreciation of the main equipment, specific fuel consumption, and improvement of environmental performance.

Transparency in the use of funds from energy-producing organizations will also be ensured by holding public consultations and open tenders by the subjects [which will spend the funds]. At the same time, quality control will be established by the authorized body during the period of repair work. To be able to implement these measures, countermeasures of support from the state will be provided, the minister said.

“In order to ensure the stability of the work of energy enterprises, a predictable tariff policy envisaging indexation to the level of inflation is required,” Akchulakov said.

Within the framework of the electric power market, a limit has been set on the number of funds allocated for the return of investments made in the industry. Currently, the limit is 32 billion tenge ($68 million) and requires an increase of 100 billion tenge ($210 million), he pointed out.

Besides, in order to ensure the inflow of investments, it’s necessary to increase the tariff in the electric power market from the current 590,000 tenge ($1,260) per one MW per month to 885,000 tenge ($1,890), added the official.