Kazakhstan Accelerates Renewable Energy Transition
Jun 23, 2021
Meeting with the heads of Kazakhstan’s electricity production industry on May 26, President Kassym-Jomart Tokayev announced his intention to increase the share of renewable energy sources (RES) in the country’s total energy portfolio from 10 to 15 percent by the year 2030. It is the second time Kazakhstan’s government has increased its 2030 RES goal and indicates its desire to keep up with worldwide decarbonization trends and to address climate change. The updated target follows Kazakhstan successfully meeting its previous 3 percent RES goal by 2020, which is in line with the 2013 Presidential Concept for Transition to Green Economy. The Green Economy resolution ultimately aims for at least half Kazakhstan’s electricity to come from renewable sources by 2050. The recent increase is impressive compared to only 1.4 percent of the country’s electricity coming from RES in 2018, but it is insufficient to achieve Kazakhstan’s Nationally Determined Contribution to the United Nations Framework Convention on Climate Change (UNFCCC) treaty, which aims for 15 to 25 percent reduction of greenhouse gas (GHG) emissions by 2030 as compared to 1990 levels.
Currently, Kazakhstan’s total energy production (178 million metric tons of oil equivalent,covers twice the country’s domestic demand. Electricity production is dominated by coal (50 percent), with the rest almost equally distributed between oil and natural gas. Oil exports have long been one of the main drivers of Kazakhstan’s economic development, comprising close to a third of the country’s GDP and around 60 percent of total export values. As Deputy Minister of Ecology, Geology, and Natural Resources Aliya Shalabaeva told the 5th TransCaspian Forum on June 10, Kazakhstan looks to increase use of natural gas to replace coal-fired facilities.
As the world’s ninth-largest exporter of coal and crude oil, as well as 12th-largest supplier of natural gas, Kazakhstan feels international pressure to act. Deputy Minister Shalabaeva noted the expected negative impact the EU’s planned carbon tax on imports will have on Kazakhstan’s trade when the mechanism comes into force in 2023. The European Union is Kazakhstan’s largest trade partner, and will be hit badly as the EU’s tax targets goods from countries that have not sufficiently decarbonized. Kazakhstan currently falls short of these targets as the 17th-largest contributor to world GHG levels with 13.9 metric tons per capita, primarily due to inefficient and outdated energy sector infrastructure and overall heavy coal reliance. Acknowledging this challenge, President Tokayev identified the development of renewables as a national objective, noting to the leadership of the Kazakhstani energy industry that:
“It is important to understand that at this stage of world development, the status, reputation, and the international capabilities of any country will be largely determined by the contribution to the decarbonization of the world economy. In particular, this will be one of the criteria determining the possibility of Kazakhstan’s admission to the OECD.”
At the same time, the country’s wind and solar potential is substantial. With more than half of the country’s territory seeing average wind speeds of 4-5m/s at minimum (turbines typically start producing at 3m/s), and possessing 2,500 annual hours of sun, Kazakhstan has significant renewable energy potential. The government has taken decisive steps over the last decade to attract larger investments into the renewable industry, introducing a 15-year feed-in-tariff (FiT) mechanism and planning to open the market for foreign private companies. These efforts are supported by international partners; In 2020, Kazakhstan signed a deal for a $95.3 million syndicated loan with the European Bank for Reconstruction and Development (EBRD), Asian Infrastructure Investment Bank (AIIB), Industrial and Commercial Bank of China ICBC), and the Green Climate Fund (GCF) for construction of the 100MW Zhanats Wind-Power Station. The wind farm, which started partial operation in 2020, will reduce Kazakhstan’s 313.8 million metric tons of annual carbon dioxide emissions by an estimated 262,000 metric tons.
A missing piece from Kazakhstan’s current strategy to produce cleaner energy is nuclear power. As the world’s single largest producer of uranium, Kazakhstan is uniquely positioned to incorporate nuclear energy, which produces no carbon emissions in generating electricity, into the portfolio as it moves towards cleaner energy production. Currently, the country has no active nuclear power plants as previous construction efforts were met with opposition from the population that remembers the detrimental effects of Soviet-era nuclear testing at the Semipalatinsk. President Tokayev’s speech to the industry indicated that the government of Kazakhstan sees the value-add of nuclear power production, but is wary of public backlash.
President Tokayev’s announcement to update the 2030 RES target indicates Kazakhstan’s commitment to diversifying its energy portfolio. If fulfilled, accelerating implementation of the Green Economy Concept will further secure its place in the regional energy picture and utilize more of the country’s substantial solar and wind resources while preventing Kazakhstan from falling behind in the shift to a less carbon-intensive future.
Photo Source: ERBD