Topic: Renewable Energy projects in Kazakhstan Opportunities and Challenges Speaker: Bagdat Oral

Transcription

1 Topic: Renewable Energy projects in Kazakhstan Opportunities and Challenges Speaker: Bagdat Oral ЦАТЭК Green Energy LLP September 2016

2 Introduction BEng in Thermal Engineering Almaty University of Power Engineering and Telecommunications, Kazakhstan; MSc in Renewable Energy Management Albert-Ludwigs-Universität Freiburg, Germany; Internship, part time job and thesis in Fraunhofer ISE; Head of perspective development department in Samruk Green Energy LLP (100% subsidiary of Samruk Energy JSC): o WPP Yereimentau 45 and 50 MW; o WPP Shelek 60 MW; o SPP Kapshagay 2 MW. Director of CAPEC Green Energy LLP: o WPP Fort-Shevchenko 50 MW; o WPP Astana 100 MW. 2

3 Country overview (Business) OECD: Hungary (42), Italy (45), Chile (48), Israel (53), Turkey (55), Luxembourg (61). Eurasian Economic Union: Armenia (35), Belarus (44), Russia (51) and Kyrgyzstan (67). Germany (15). Source: Doing Business - 3

4 Country overview (Energy sector) Total installed capacity (source breakdown in %) 12,40% 1,21% Thermal power plants Installed capacity of RE (source breakdown in MW) 122,9 Share of energy production from RE 50% 86,39% Hydro (without small-scale hydro) Renewables (including small scale hydro) 71,8 Wind Small scale hydro 57,3 Solar PV 0,35 Bio 10% 3% 0,70% 1,20% The total installed capacity of power plants app MW; The share of RE in el.energy production for the year %. *Source: Official webpage of the Ministry of Energy of the Republic of Kazakhstan - 4

5 Country overview (Governmental regulation) Ministry of Energy is authorized body for regulation of RE sector in the country. "Strategy" Kazakhstan 2050 : new political course of established state. *Source: Official webpage of the Ministry of Energy of the Republic of Kazakhstan - *Source: Official webpage - Investor guide contains detailed information on RE project execution steps, existing preferences/legislation/norms/standards, templates of documents; Ministry list of active projects is a good information source for service suppliers, developers and investors. Tax, customs preferences are available. Land allocation, grid connection are prioritized for RE facilities. 5

6 Challenges (on a country level) Not only change of Law, but also amendment of legislative acts (rules of the game) are crucial for business; Currency connection rules and methodology are not yet defined and/or published. CAPEX is a big deal, but OPEX is even bigger; Tenge liquidity is low, lack of RE experience in local banks; No local RE production facilities. Transportation routes to be carefully studied; Weather and climate (seismic activity in southern and south-eastern Kazakhstan, cold climate in north region); Lack of transmission line infrastructure; Overall cultural and mental difference. 6

7 Challenges (on a project execution level) Steps Challenge(s) Required efforts Land allocation - Find suitable and free spot; - Authorities have different view on RE (including not in my backyard ); - Private ownership could be problematic; - Payment of agricultural losses; - Rent for foreign legal entities <10 years. Measurement campaign Feasibility study (including grid connection and preeia) and design documentation (EIA) - Almost no local service suppliers and equipment; - Permanent maintenance required; - Security is sometimes an issue; - Installation of mast requires approval (including aviation committee if 100 m.). - License for design services required; - Timeline for expertise is hard to predict (officially 45 calendar days); - Expenses are approved in local currency; - Grid connection conditions for >10 MW to be agreed by KEGOC. Getting PPA - Purchase-sale of electricity is realized via FSC; - PPA template is established by the Government; - Countdown has started (36 month to construct). expertise: pre-assessment of sites, field analysis. expertise: supply, installation, data monitoring, bankable report. expertise: foundation expertise, electrical predesign, micrositing. - Local support team. 7

8 Challenges (on a project execution level) Steps Challenge(s) Required efforts Financing - Relatively long timeline for final decision making; - Approved list of companies from Bank; - Difficulties to find credit worthy partner for foreign financial institutions. expertise: technical, legal due diligence. Contracting, delivery and construction - Structuring the deal (tax, custom, license); - 1 st category license is required; - Choosing logistics company and custom broker; - Crane availability and season dependence. expertise: technical, legal consultancies, owners engineer. Commissioning - Relatively long formal commissioning procedure; - Stepwise approach of getting permission from grid operator. - Local support team. Despite existing difficulties, opportunity and interest is definitely there. 8

9 Thank you and welcome to KZ! September 2016