Nurlan Kapenov: Kazakhstan besides technical solutions has opportunity to introduce market mechanisms in RES

Nurlan Kapenov, Chairman of the Board of Directors of the Qazaq Green RES Association, spoke about challenges and prospects of green energy development in Kazakhstan during Energy Week Central Asia & Mongolia in Tashkent.

Kazakhstan joined the global movement to achieve carbon neutrality targets at the end of 2020.

According to Nurlan Kapenov, Kazakhstan currently has a high level of depreciation of funds in the coal energy sector, and the retiring capacities need to be replaced by renewable energy sources, primarily solar and wind generation.

In four years the Association has achieved the following results: 134 renewable energy facilities operate in the country, generating about 4% of electricity.

The development of green energy in Kazakhstan has exposed key problems of the power industry, such as imbalances in the system, lack of maneuvering capacity, dependence on neighboring states, depreciation of equipment, isolation of the Western zone, energy security of our country.

It takes time and serious investment to solve the maneuvering capacity deficit, Qazaq Green said.

"Decarbonization of electricity and heat will require the introduction of market prices for energy services, which stimulates the introduction of energy-saving technologies and changes in consumer behavior. The largest emitter of greenhouse gases in the energy sector - electricity and heat production - has the greatest potential to reduce emissions," said the chairman of the Association.

In the long term, the use of renewable energy sources will be accompanied by power conservation systems, which will allow to regulate the supply of electricity and better integrate renewable energy sources into the energy system.

Also, in addition to technical solutions, Kazakhstan has the opportunity to introduce market mechanisms, such as:

- Improving the quality of electricity generation forecasting by RES facilities;

- Introduction of financial responsibility for covering deviations between forecasted and actual capacity of RES facilities, as one of the incentives for installing renewable energy sources;

- Transition from daily to hourly schedules of generation planning;

- Use of geospatial distribution of RES through the RES allocation plan as a tool for the System Operator for grid modernization;

- Launching a balancing electricity market;

- Return to the practice of hourly differentiated tariffs for wholesale and retail consumers, as the initial stage of implementing a demand management program (increasing tariffs during peak hours and reducing them during down hours);

- Development of the market for ancillary system services;

- Utilizing the potential of existing plants;

- Wide use of small RES by the population and businesses of the country.

Recall, the conference is held in the capital of Uzbekistan from 26 to 28 April, it aims to bring together representatives of government agencies, energy companies and renewable energy projects from Uzbekistan, Kazakhstan, Kyrgyzstan, Tajikistan and Mongolia, as well as representatives of international financial institutions and development organizations, international energy companies.