1. 6th International Scientific Conference on Energy and Climate Change
Obstacles for the promotion of RES in Kazakhstan: Guide to the Development of a Renewable Energy Action Plan
Prof. Sergey INYUTIN,
Dr. Y. Kalashnikov, Dr. L. Inyutina
SRC KAZHIMINVEST, Kazakhstan
Athens 9-11 October 2013

2. Content Kazakhstan energy sector and current RES status
Obstacles for small hydro and ways to overcome RES development in Kazakhstan
Approach
RES potential
Key findings
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3. Electricity Generation Type Installed Capacity (МW), 2010
RK Energy sector
Electricity Generation Type
Installed Capacity (МW), 2010
Thermal
17,173
500 MW Units
(5,000)
300 MW Units
(2,100)
MW Units
(1,855)
CHP
(7,013)
Gas fired
(1,204)
Hydro
2,315
Total
19,488
Gaps
20%
Sources: National Statistics (Kazakhstan Today,2005,2008, ) MINT program projection , State Program development up to 2020
Source: KEGOC

4. Current Status of RES Development
Because Kazakhstan has not performed as expected despite having national plan and policy, more RES development with action plan is required to meet national RES target
Current Status
Electricity Produced from RES
Power Industry
Power Plants – Coal-burning: 75% – Natural gas: 23% – Oil: 3%
Electricity Consumption – Higher than OECD average
Infrastructure Condition
Power Stations & Facilities – Low energy efficiency
Distribution system – 21.5% loss for every 2,500 km
Indicators
Units
Amount
2011
2010
Installed Capacity MW
101.14
102.86
Electricity Production
mln. kWh
403.27
420
Wind Power –
2.59
Small Hydro
417.41
Solar Power
Share of Electricity %
0.49
0.48
Electricity Production by RES
National Plan & Policy
More RES Development
National RES Target
Successful RES Deployment
Source: Ministry of Industry and New Technologies of Kazakhstan; KPMG Analysis

5. Obstacles to promote small hydro and ways to overcome Barriers for RES development in Kazakhstan
Obstacles for small hydro should be considered in complex of RES, in composition
of RE needed to meet Kazakhstan’s renewable energy targets development
Provide guidance on developing scenarios for different compositions of renewable energy needed to meet Kazakhstan’s renewable energy targets for 2020-
Develop regional priorities for oblasts in Renewable Energy Sources (RES)
development based on economic feasibility resulting from a unit-cost of
generation analysis
Provide guidance on rural off-grid electrification through utilization of
renewable energy
Provide guidance to promote development of the renewable energy industry

6. Approach Policy / Legal Framework National Development Plan
National plan and policy have been developed for promoting RES in Kazakhstan, but further development and realistic improvement are necessary
Policy / Legal Framework
National Development Plan
Strategy of Industrial-Innovative Development
National RES Target
3% of Energy Consumption (≅ 2.5 TWh) with Renewable Energy Sources by 2020
Strategy of Transport Sector Development
Territorial Development
3 Laws
4 Rules
Law on Investments
Law on Power Industry
Rules for Purchase of Electricity
Rules for Connection to Grid
Rules Monitoring RES
Rules for Considering Feasibility Studies
RES Law*
Practical Amendment to Laws & Rules
National RES Target
Successful RES Deployment
* RES Law: Law of the Republic of Kazakhstan about Support of Use of Renewable Sources of Energy
Source: Ministry of Industry and New Technologies of Kazakhstan; KPMG Analysis

7. RES Potential Potential Implication
There is enough room for further RES development and improvement as Kazakhstan has tremendous RES potential, especially for wind, solar and small-scale hydro energy
Potential
Implication
Wind Energy
Total Potential Wind Power : 353,500 MWt
Total Potential Electricity : 929,000 GWt
Has developed with support from UNDP
Number of projects currently underway with institutional reforms  Expected continuous development
Solar Energy
Total Solar Radiation Incident on Horizontal Surface (Annual) – Shevchenko: 5,368 MJ/m3 – Aral Sea: 6,085 MJ/m3 – Alma-Ata: 5,218 MJ/m3
Underdeveloped in spite of its abundant solar energy potential
Great promise considering abundant Silicon reserves
Hydro Energy
(Small-Scale)
Total Economic Potential: 2,414.5 MW
– Existing SHPP: MW
– Additional SHPP Potential: 2,311.9 MW
Expected continued development
Potential is concentrated mainly in the east, south, southeastern parts
Bioenergy
Total Primary Crop Production (avg ) : 25,125,958 tonne
Annual Roundwood Production (avg ) : 852,000 m2
Have not yet met development potential
Source: Ministry of Industry and New Technologies of Kazakhstan; Ministry of Agriculture of Kazakhstan; EBRD; UNDP; AF-Mercados EMI; KPMG Analysis

8. Overview Current Target Questions to be asked
Developing a national plan is required to meet Kazakhstan’s 2020 RES target Policy directions for development
Current Target
Questions to be asked
To meet 3%(equivalent to 2.5TWh) of total energy consumption with renewable energy sources by 2020
How to mix in order to meet targets achievement
The amount of government funds required to execute plans
Provide Guidance through Case Studies
Development of
Strategic Direction
RES Mix Composition
Estimation of
Gov. Funds
Selection of promising RES
RES mix composition to meet targets for 2020
RES mix composition per time-period
Estimation of required gross investment costs to meet targets
Estimation of required government funds for development per time-period
Analysis of key factors in renewable energy development from benchmark countries
Set strategic direction for development tailored for Kazakhstan

9. Priority Rankings by RES Overall Priority Ranking
Key Findings :Regional RES Development
Although marginal costs of renewable energy vary among sites within oblasts, Almaty and South Kazakhstan showed the highest potential for RES development among others
Priority Rankings by RES
Overall Priority Ranking
Wind
Priority
Oblasts 1
Almaty, East Kazakhstan 2
Aqmola, North Kazakhstan, Pavlodar, Qostanay 3
Atyrau, Mangghystau, West Kazakhstan 4
Aqtobe, Qyzylorda, South Kazakhstan 5
Qaraghandy, Zhambyl
Priority
Oblasts 1
Almaty 2
South Kazakhstan 3
Zhambyl 4
East Kazakhstan 5
Qyzylorda 6
Mangghystau 7
Atyrau 8
Pavlodar 9
Aqmola 10
West Kazakhstan 11
Qostanay 12
North Kazakhstan 13
Aqtobe 14
Qaraghandy
SHP
Priority
Oblasts 1
Zhambyl 2
South Kazakhstan 3
Almaty 4
East Kazakhstan
Solar PV
Priority
Oblasts 1
South Kazakhstan, Qyzylorda, Almaty, Zhambyl 2
Mangghystau, Atyrau, Qaraghandy 3
East Kazakhstan, Aqtobe, West Kazakhstan, Pavlodar 4
Aqmola, Qostanay, North Kazakhstan
Source: “Modeling Regional Renewable Energy Feed-in Tariffs within Kazakhstan,”
published by AF-Mercados EMI in 2011, MKE 2008

10. Key findings: Estimation of Required Gov. Funds
Example: Estimation of gross investment costs and required government funds based on a preliminary analysis
Gross Investment (Million KZT)
Government Funds(Million KZT)
Price-weighted
Price-weighted
RES
2013
2016
2020
SHP
13.46
10.90
9.11
Wind
1.22
11.99
343.63
Solar PV
0.23
10.76
3,019.24
Solar-thermal -
5.16
2,869.69
Biomass
135.08
83.10
Total
14.91
173.89
6,324.77
2013
2016
2020 7 82
2,692
Related industrial development potential-weighted
Related industrial development potential-weighted
RES
2013
2016
2020
SHP
0.68
0.50
0.37
Wind
1.22
11.96
342.03
Solar PV
0.24
11.93
3,682.97
Solar-thermal -
5.22
3,016.22
Biomass
191.89
120.94
Total
2.14
221.50
7,162.53
2013
2016
2020 1
104
3,049
Source: KPMG Analysis

11. Key findings: RES Mix Composition
Example: Kazakhstan’s RES mix composition based on a preliminary analysis
2020 RES mix
RES mix per Time-period (TWh)
Price-weighted
(Unit: TWh)
Price-weighted
RES
2012
2015
2020
SHP
0.51
0.56
0.66
Wind
0.01
0.92
Solar PV
0.61
Solar-thermal
0.14
Biomass
0.15
0.17
Total
0.72
2.5
Related industrial development potential-weighted
Related industrial development potential-weighted
(Unit: TWh)
RES
2012
2015
2020
SHP
0.51
0.52
Wind
0.01
0.92
Solar PV
0.74
Solar Themal
0.15
Biomass
0.16
0.17
Total
0.66
0.68
2.5
Source: KPMG Analysis 11

12. Key findings: Rural off-grid Development
Kazakhstan’s abundant RES potential can be used for rural off-grid electrification and heating uses more easily than grid extension or conventional energy sources
Rural Off-grid Development Goal
Grid Extension
Conventional Energy
RES
1. Economic Feasibility
Costly, requires economies of scale
Costly for households
Becoming more cost effective
2. Ease of Deployment
Time consuming, resource intensive
Easy to access
Rural deployment relatively easy
3. Sustainability
N/A
Resource intensive, potentially high emissions
Environmentally friendly
4. Contribution to long-term energy policy
Conducive
Very Poor
5. Contribution to regional economies
Key Considerations for off-grid RES utilization
Policy and Institutions - must be in line with overall goals set forth in Sustainable Energy Action Plan
Financing and Markets – Private sector participation, long-term financing plans necessary for effective deployment
Technology and Data – Full utilization and development of local technology and deployment based on accurate data

13. Key findings: RES Industry Development
Developing a domestic RES industry can be a new source of economic growth but requires a strong home market based on supportive policies
▶ Home Market Development :
Strong local market for RES attracts foreign investment
Local markets can act as a technology test-bed for local manufacturers
Central Factor for Domestic RES Industry Development
▶ Cost savings
▶ Ease of maintenance
▶ Conducive to technology transfer
▶ Export potential
Benefits of Domestic RES Industry
Policy support and financial support strategies must be designed to support home market development
Continued R&D investment and cooperation with international firms for technology transfer
Alignment with national energy strategies such as off-grid RES utilization to serve as test-bed for domestic producers
Key Implications

14. THANK YOU FOR ATTENTION! lyubov.inyutina@mail.ru KAZHIMINVEST
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