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Kazakhstan's renewables sector thriving through auctions, with EBRD's help

Kazakhstan Materials 2 May 2023 20:45 (UTC +04:00)
Asmar Bayramova
Asmar Bayramova
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BAKU, Azerbaijan, May 2. A long list of the EBRD’s [European Bank for Reconstruction and Development] decarbonization support achievements contains a number of energy efficiency measures and support in the development of Kazakhstan's local carbon market, Anton Usov, EBRD Chief Spokesman, told Trend.

According to him, EBRD helped Kazakhstan establish the Emissions Trading Scheme (ETS) in 2013 – the first country to achieve this feat in the Commonwealth of Independent States (CIS). The EBRD strongly supports a more rigorous National Allocation Plan of carbon quotas and competitive functioning of the ETS, which would further attract foreign investment into the country.

"In light of the introduction of the Carbon Border Adjustment Mechanism by the EU, which imposes carbon taxes on imported goods, the EBRD believes that local industrial players will be further incentivized to participate in the ETS and carbon offset projects," he said.

In addition, he noted that a part of the EBRD’s efforts aimed at supporting the renewable energy sector is concentrated on the promotion of auctions. In 2021-2022 the EBRD worked with the Kazakh Ministry of Energy on the implementation of site-specific wind auctions for three utility-scale wind power projects. Technical documentation for each site that was prepared with the EBRD’s support and helped attract numerous investors to the latest auctions held in November 2022.

"An intensive competition allowed to establish lowest tariffs to date, with the price for wind energy dropping to 12.39 Kazakh tenge (equivalent of 2.64 cents) per KWh, which is almost twice lower even in nominal terms than prices at which wind projects commenced back in 2017. Renewables are getting more affordable for end-users – a rigorous shift from the initial skepticism about the economic side-effects of introducing renewables in a coal-dominated region," the chief spokesman said.

At the same time, as Usov noted, understanding the intermittency of renewable energy, the Bank is supporting the strengthening of the grid, working with its long-standing partner – KEGOC. The distribution part of the energy value chain is also financially supported by the EBRD which in turn helps reduce losses and increase efficiency.

Antov Usov also touched on the recent landmark financing (the transaction signed on November 25th) of Almaty Combined Heat and Power Plant-2’s (CHP-2) coal-to-gas conversion.

"This coal-to-gas conversion demonstrated that the EBRD is ready to support similar conversion of the country’s coal-based power generation on a substantial scale. The Coal-to-gas conversion of the plant not only reduces CO2 emissions by 2.8 million tons annually but also exerts a multiplier effect in greening the city and the entire country," he concluded.

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