Article: Kazakhstan's Renewable Woes

Steppe on It

Steppe on It

Oct. 15, 2019

by Babak Babali

Kazakhstan's potential for renewable energy offers hope despite lasting scars of pollution and ambitious targets.

Smoke rises from chimneys as a participant rides a horse during a traditional hunting contest in Almaty, Kazakhstan, December 1, 2018. REUTERS/Pavel Mikheyev

In 2012 Kazakhstan set itself the goal of generating 3% of the nation's required electricity from renewable sources by 2020, while pledging to raise the share of green energies to 50% by 2050.

This appears to have been an ambitious goal, especially as renewables currently account for just under 1% of all power generation.

However, the objective is perfectly within the realm of possibility given Kazakhstan's conducive climate for an array of renewable energy sources.

The vast central Asian country's geography offers a high degree of feasibility for hydroelectric and wind power enterprises, making Kazakhstan well-positioned to become a regional leader in renewables.

The Kazakh Steppe, which covers vast parts of northern and central Kazakhstan, is an ideal location for setting up wind farms, as the wind speed averages around 4-6 meters per second there.

Meanwhile, the southern parts of this massive landlocked nation receive 2,000-3,000 hours of sunlight each year, which is enough for the generation of 1,500kW of photovoltaic power per each square meter.

With so much potential, the government has undertaken some legislative measures to help the nation's transition to renewables, including a 2013 law “on supporting the use of renewable energy sources," new regulations regarding feed-in tariffs, the 2020 energy efficiency initiative, and a body of long-term strategies which are still in the making.

But aside from legislation, going green requires money, and the European Bank of Reconstruction and Development (EBRD) has offered a helping hand in this regard.

In September, 2019, a memorandum of understanding was signed between the government of Kazakhstan and EBRD, by virtue of which the bank accepts a significant role in the financing of clean energy enterprises.

The MoU is tied to the launching of Kazakhstan Renewables Framework Phase II by EBRD, which “will consist of up to EUR300 million" in financing for renewable energy generation projects in Kazakhstan, according to the bank.

EBRD is by no means a newcomer to Kazakhstan, as it has already invested over EUR2 billion in the nation's green economy in addition to over EUR6 billion in general development projects.

The new renewables framework was preceded by an earlier initiative of the same name that was launched in 2016 and is now “90% complete." In the first phase of the framework, over EUR200 million worth of finance was directed to renewable projects, adding over 260MW of solar capacity alone.

All this makes EBRD one of the largest international investors in Kazakhstan.

Now, EBRD and the Green Climate Fund have earmarked another EUR300 million for the promotion of wind farms, small hydropower stations, and biogas plants. In 2020, alone, 52 new green energy facilities will be constructed with the participation of other local and international investors, says Kanat Bozumbayev, the country's minister of energy.

Indeed, small and medium-sized renewable projects are announced quite routinely in Kazakhstan.

In January 2019, for instance, a total of USD50 million was secured by EBRD and the Green Climate Fund for the construction of a solar plant in Chulakkurgan, located in the south of Kazakhstan, while the same month saw the launch of a similar plant in the Karaganda region in the north.

However, it is expected that both the number and scale of such projects will increase thanks to the new MoU and the launching of the second phase of the renewables framework.

The initiative will also play a part in the empowerment of women, giving them employment opportunities in the country's expanding renewables industry through offering technical training programs and other capacity-building opportunities.