Renewable e energy s sector – Central A Asia Webinar P Presentation July 1 1, , 2020 2020 Yerlan Ramazanov – Associate Director / Energy Eurasia
Country Overview - Kazakhstan Baseline s situation i in K Kazakhstan: 9 th largest country in the world by territory ü Extremely cold winters, routinely below -40C ü ü Historic reliance on abundant and cheap coal reserves Coal-fired power plants, constructed during the ü Soviet Union, provide over 70% of electricity Very low electricity prices ü ü No shortage of power Photo: “Smog over Almaty” Source: wikimedia.org. Uphill b battle f for r renewables, h , however: Incredible solar and wind potential § Worsening environmental situation § § Decreasing cost of renewable energy 2 2
Power Sector - Uzbekistan Generation Ca Ge Capacity ty Highlights Hi • Uzbekistan is one of the world’s only two double landlocked countries, with a population of over 33.7 million (2019) GW GW • The GOU announced a 10-year program to build 5 GW of solar power 14.0 12.93 12.96 12.73 12.86 and 3 GW of wind power by 2030 1.9 12.0 1.8 1.8 1.8 1.8 1.8 • Accelerated development of renewable energy is required to 10.0 diversify the generation mix, optimize the cost of power and meet 8.0 clean energy targets 6.0 12.2 11.0 11.1 11.2 11.2 10.8 4.0 • GOU has recently implemented critical energy reforms, including the unbundling of Uzbekenergo and tariff reform with an aim of cost 2.0 recovery in the sector. 0.0 2012 2013 2014 2015 2016 2017 • Investments of ~USD 12 billion into generation assets and ~USD Fossil Fuel Hydro 700 million into transmission assets are envisaged through 2025. Wi Wind At Atlas of of Uz Uzbekistan So Solar Po Potential of of Uz Uzbekistan Source: https://www.researchgate.net/figure/Atlas-of-wind-speed- Source: https://solargis.com/maps-and-gis-data/download/uzbekistan distribution-across-the-territory-of-Uzbekistan-5_fig1_322143759 OFFICIAL USE 3
Promoting Green Economy in Kazakhstan LEGIS ISLATIO ION POLIC ICY D DIA IALOGUE A ACTIV IVIT ITIE IES § Introduction of fe feed-in t tariff s system w with Assisting for drafting of secondary legislation implementing the § 2009 2009 uniform s structure renewable ener re energy la law (2009) § Launch of operational l legal f framework with a § Advice to the Government of Kazakhstan on Developing FiTs for set of rules and norms on renewable energy Renewable Energy Sources (2010) § Introduction of (i) fi fixed feed-in tariffs, (ii) 2011- 20 Advising on improvement renewable energy pr primary le legisla lation § development of the F Financial S Settlement C Centre 2013 20 (2011) off-taking energy via (iii) development of Po Powe wer § Advising on a renewable energy sources allocation (2013) Purchase A Agreements agreement § Introduction Law o on s supporting t the u use o of § Modelling the social impact of renewable energy fe feed-in in ta tariffs Renewable E Energy 2013 20 (2013) § Introduction of full i indexation o of f feed-in t tariffs § Assisting in the final stage of developing renewable re energy ener 2014 20 against i inflation lation (2014) legisla le § Assisting Ministry of Energy on establishing a ba bankabl ble re regulatory § Introduction of the Green E Economy L Law which and le an legal fr fram amework (2015-2016) provides further supports to the development 20 2015- § Strategic En St Environmenta tal Re Review (S (SER) of RES development in and operation of renewable e energy p projects 20 2016 Kazakhstan (2015-2016) ty (2018) § Assisting in the review of the PP PPA ba bankabi bility Support for the im implem emen entatio ion of of wi wind au auctions in Kazakhstan, § § Introduction of auction s scheme for RES including regulatory support on the tender process and development. 2018- 20 documentation for the wind power projects (2019) 20 2019 § 858M 858MW of solar, wind, hydro and biomass Promoting ge gender eq equa ualit ity in RE sector (2019) § capacity was auctioned. development (2019) § Strategies for ca carbon ma mark rket de Memorandum of Understanding (2019) § 4
EBRD support to reforms in Uzbekistan’s power sector Ongoing On Ac Accomplished 20 2019 – 2020 2020 New El Electr tricity ty La Law targeted at 20 2018 – 20 2019 Uzbekistan Power Sector Ta Tariff improving investment climate Reform : Re Affordability and Design of Mitigation Measures for Vulnerable 20 2019 – support to the implementation of the Consumers’ Protection first Wi Wind au auction 2018 – 20 20 2019 Un Unbundling of of Uz Uzbekenergo go 2020 2020 – review and amendment of th the Re Renewables la law 20 2018 – 20 2019 Roadmap for attracting investment through Corporate and 20 2019 – 2020 2020 Lo Low Ca Carbo bon Ro Roadmap for the Structural reform – analysis of the Si Single power sector Bu Buyer er fu function 2019 – 2020 20 2020 Po Powe wer Se Sector Cl Climate Re Resilience 2018 – 20 20 2019 Establishment of co compliance ce in Uzbekistan: Risk Assessment and fu function in electricity power companies Investment Needs OFFICIAL USE 5
EBRD investments in Energy in Kazakhstan EBRD In Investments i in R Renewables i in K Kazakhstan § The EB EBRD is is th the pi pioneer in supporting sustainable energy projects in Kazakhstan and has committed ov over $500 500 mi million in in 12 12 pr project cts, translating into 572 572MW MW of of ne new re renewable en ener ergy ca capa paci city and re rehabilitation of of 100 100MW MW Hy Hydro Po Power Pl Plant . EBRD supported investors from France, China, UK, UAE, Germany, Bulgaria and others. Kazakhstan R Renewables F Framework Phase I Ph I – 200 200 million e euro § 322 322 MW MW of new renewable capacity, four new private foreign investors, one grid-strengthening project. Phase II Ph II – 300 300 million e euro § In 2019 EBRD approved a € 300 300 mi million ex exten ensi sion of Kazakhstan Renewables Framework, to catalyse the next phase of renewables development in country, focusing more on supporting the auctions but also with strong inclusion component. Memorandum o of U Understanding § As part of the Framework, the EBRD signed a Me Memorandum of of Un Understanding with the country’s Ministry of Energy reaffirming commitment to support renewable energy in Kazakhstan. Support f for R RES a auctions § RE auctions launched in 2018. § 858MW awarded in 2018 and 203MW in 2019. As a result price for solar dropped from 34 tenge (USDc 9) down to § 12.49 tenge (USDc 3.20) for the most recent November 2019 round. 6
EBRD investments in Energy in Uzbekistan Renewables ( fo Re forthcoming ) First wind a auctions in Karakalpakstan region o Planned support to small hydro rehabilitation o 100MW w wind au auction Mu Muruntau Su Substation USD 82.5m Na Navoi Tr Transmission Co Conventional po power generation Upgrade Up USD 96.1m Ta Talimarjan Power P Project - construction of 900 o MW CCGT on Talimardjan TPP – USD 240 mln Po Power transmission Uz UzbekEnergo go Mu Muruntau au Substation - construction o of a 500/220 KV transmission substation, USD 82.5mln Talimarjan Po Ta Power Navoi Transmission U Na Upgrade - construction of a c. o Project Pr 188.5 km 500 KV transmission line, USD 96.1 m USD 240m 7
Activities in RES sector in Mongolia • Despite having huge RES potential Mongolia relies on costly electricity imports from Russia and coal-dominated domestic facilities, and is in investments . ur urgent nt ne need of of in dialogue : EBRD has played an in role in the development • Po Policy di instrumental ro Wind farms of the RES sector in Mongolia through (i) assisting the government in • 3 projects signed drafting of the first RES law in 2007 and (ii) pioneering the financing of the • EUR 87m EBRD financing first RES plant, the milestone 50 MW Salkhit wind farm, in 2012. • 155 MW new capacity installed • EUR 138m total co-financing: • IFIs: EUR 138m • Mongolia targets reaching 20 20% of installed capacity from RES by 2023 2023 and 30 30% by 2033 2033 . EBRD has financed ne MW , with new RE RES cap capaci acity of of 18 185 MW EUR 338m of total project cost, or 15% of total installed capacity of Mongolia. TCs: RES tariffs in Mongolia are high compared to international • Cu Current TC levels while grid absorption capacity for RES facilities is limited. EBRD Solar park provided Te funds to assist Mongolia in those areas . Technical Co Cooperation fund • 1 project signed • EUR 9m EBRD financing cing : EBRD has led suc ips with strong • Mo Mobi bilising co co-fi financi successful ssful pa partne nersh ships • 30 MW new capacity installed • EUR 19m total co-financing: sponsors and IFIs such as Newcom, Soft Bank, Engie, Jica, FMO, Triodos, • IFIs: EUR 19m EIB and others, to mobilise robust co-financing. solar : EBRD has financed all four of Mongolia’s existing RES • Wi Wind an and so facilities through total debt and equity fi 95m and total financi cing of of EU EUR 95 MW . cap capaci acity of of 18 185 MW 8
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