HYDROPOWER SECTOR DEVELOPMENT IN CENTRAL ASIA
SECTOR OVERVIEW – CENTRAL ASIA
SECTOR OVERVIEW – TAJIKISTAN
Hydropower is the first largest electricity generation source in the country, accounting for about 92% of the total generation capacity of Tajikistan, according to 2021 data.
In terms of absolute reserves of hydropower resources, Tajikistan ranks the 2nd among the CIS countries and the 7th in the world.
Tajikistan’s hydropower potential is estimated at approximately 527 billion kWh per year and its technically feasible hydropower potential is estimated to be 482 billion kWh.
In terms of absolute reserves of hydropower resources, Tajikistan ranks the 2nd among the CIS countries and the 7th in the world.
Tajikistan’s hydropower potential is estimated at approximately 527 billion kWh per year and its technically feasible hydropower potential is estimated to be 482 billion kWh.
SECTOR OVERVIEW – KYRGYZ REPUBLIC
In 2020, 15,404.2 million KWh of electricity and heat were produced in Kyrgyz Republic including 13,979.1 million KWh by hydropower plants and 1,425.1 million KWh by thermal power plants.
37 persons have acquired the status of renewable energy companies and possess 71 renewable energy certificates (including a 300 MW solar power plant and a 10 MW wind mast). According to available information, the renewable energy potential in the KR includes the following and is as follows:
37 persons have acquired the status of renewable energy companies and possess 71 renewable energy certificates (including a 300 MW solar power plant and a 10 MW wind mast). According to available information, the renewable energy potential in the KR includes the following and is as follows:
- hydro facilities – 5-8 billion kWh/year;
- wind facilities – 44.6 million kWh/year;
- solar facilities – 490 million kWh/year;
- biomass – 1.3 billion tons of equivalent fuel.
SECTOR OVERVIEW – UZBEKISTAN
The hydropower potential of the Republic of Uzbekistan is more than 27.5 billion kWh. There are more than 45 hydroelectric power plants operating in the country with a total capacity of more than 2 GW. In 2020, 6 HPPs were modernized and included in the network.
Among the largest facilities of this type are the Charvak (commissioned in 1971), Khodjikent (1975), Gazalkent (1981), Farhad (1948), Tupolang (2006) stations.
Among the largest facilities of this type are the Charvak (commissioned in 1971), Khodjikent (1975), Gazalkent (1981), Farhad (1948), Tupolang (2006) stations.
SECTOR OVERVIEW – KAZAKHSTAN
Kazakhstan has a substantial hydropower potential – 170 billion kWh, of which 30 billion kWh are economically viable for use.
The main hydropower resources of Kazakhstan are concentrated in the following three regions:
The main hydropower resources of Kazakhstan are concentrated in the following three regions:
- the Irtysh river basin with its large HPP (Bukhtarma, Shulbinsk, UstKamenogorsk);
- the Ili river basin (Kapshagay, Moinak);
- the Syrdarya, Talas and Chu (Shardara) rivers basins.
Kazakhstan has a substantial hydropower potential – 170 billion kWh, of which 30 billion kWh are economically viable for use. The main hydropower resources of Kazakhstan are concentrated in the following three regions: § the Irtysh river basin with its large HPP (Bukhtarma, Shulbinsk, UstKamenogorsk); § the Ili river basin (Kapshagay, Moinak); § the Syrdarya, Talas and Chu (Shardara) rivers basins. The most promising rivers for the construction of hydropower plants with significant capacities are Charyn, Chilik, Karatal, Koksu, Tentek, Khorgos, Tekes, Talgar, Usek, Aksu and Lepsy.
One of the very first HPPs in Kazakhstan are the Khariuzovskaya, Shulbinskaya and HPPs, built in the Altai Mountains of East Kazakhstan in the 1920-1940s. The most powerful HPPs in Kazakhstan are the Shulbinsk, Bukhtarma and Ust-Kamenogorsk HPPs with an installed capacity of 702 MW, 675 MW and 370 MW, respectively. One of the latest projects in the field of hydropower is the construction of a small HPP “Turgusun-1”. The station, which began construction in 2016, was put into operation in 2021. The operation of the Turgunskaya-1 HPP will reduce greenhouse gas emissions by approximately 680 tons of carbon dioxide per year. Another of the latest hydraulic installations is the Moinak HPP with an installed capacity of 246 MW, built on the Charyn River
One of the very first HPPs in Kazakhstan are the Khariuzovskaya, Shulbinskaya and HPPs, built in the Altai Mountains of East Kazakhstan in the 1920-1940s. The most powerful HPPs in Kazakhstan are the Shulbinsk, Bukhtarma and Ust-Kamenogorsk HPPs with an installed capacity of 702 MW, 675 MW and 370 MW, respectively. One of the latest projects in the field of hydropower is the construction of a small HPP “Turgusun-1”. The station, which began construction in 2016, was put into operation in 2021. The operation of the Turgunskaya-1 HPP will reduce greenhouse gas emissions by approximately 680 tons of carbon dioxide per year. Another of the latest hydraulic installations is the Moinak HPP with an installed capacity of 246 MW, built on the Charyn River
In general, under the 2020-2030 Plan for Development of Kazakhstan Hydropower Industry, approved by Kazakhstan Deputy Prime Minister dated 4 September 2020, the following is planed:
As part of the development of maneuverable generation and hydropower in the south of the country, in addition to the reconstruction of Almaty TPP-3 with the possibility of providing a maneuverable mode, Samruk-Energo intends to build a counter-regulating Kerbulak HPP on the Ili River with a capacity of 40 MW. The construction of the HPP will increase the regulation power of the Kapshagai HPP to 300 MW.
- introduction of new capacities of large HPPs: 1,300 MW;
- introduction of new capacities of small HPPs: 1,500 MW;
- increasing installed capacity of operating HPPs: 464 MW; § completion of construction of ongoing projects: 90 MW;
- construction of 70 prospective HPPs.
As part of the development of maneuverable generation and hydropower in the south of the country, in addition to the reconstruction of Almaty TPP-3 with the possibility of providing a maneuverable mode, Samruk-Energo intends to build a counter-regulating Kerbulak HPP on the Ili River with a capacity of 40 MW. The construction of the HPP will increase the regulation power of the Kapshagai HPP to 300 MW.
In general, under the 2020-2030 Plan for Development of Kazakhstan Hydropower Industry, approved by Kazakhstan Deputy Prime Minister dated 4 September 2020, the following is planed: § introduction of new capacities of large HPPs: 1,300 MW; § introduction of new capacities of small HPPs: 1,500 MW; § increasing installed capacity of operating HPPs: 464 MW; § completion of construction of ongoing projects: 90 MW; § construction of 70 prospective HPPs. Samruk-Energo JSC is carrying out pre-design work for the construction of HPP-29, a hydropower plant. In the long term, a reconstruction and modernization of the ALES cascade of HPPs in the Almaty region is required since the operating HPPs have been in operation since 1943. The project will enable an effective use of the hydrotechnical resources of the Big Almatinka River, increasing the power generation at HPP-1 and HPP-2 which are under reconstruction.
In accordance with the Development Plan for the hydropower industry of the Republic of Kazakhstan, by 2030 it is planned to commission new capacities of small HPPs up to 1,500 MW, and large HPPs up to 1,300 MW. Among the planned projects for the construction of hydroelectric power plants are the following: - Small HPP on the river Tekes (0.2 MW), Koktal HPP-1 (6 MW), HPP 1 on the river. Baskan (14.85 MW) - commissioning date – 2022; - HPP Shymbulak 1 on the river Tentek (500 MW), HPP Cascade 1-4 on the middle section of the river. Charyn (continuation of Moinak HPP) (220 MW), HPP 1-10 (188.38 MW) - commissioning date – 2025; - HPP 2 on the river. Tentek (50 MW), HPP Cascade 3 on the river. Yrgaity (5.1 MW), HPP on the river Tentek (5 MW) - commissioning date – 2026.
The current level of depreciation of power plants is about 70 %. At the beginning of 2013, the average age of the equipment of thermal power plants was 28.8 years, hydroelectric power plants – 35.7 years. At the same time, 57 % of the capacities of power plants have worked for more than 30 years.
In addition to the construction of new HPPs, the Plan for the development of the hydropower industry of the Republic of Kazakhstan plans to modernize, reconstruct and expand existing HPPs in order to increase their reliability and efficiency in the use of water resources.
For instance:
1. Until 2027, it is planned to reconstruct and modernize the HPP Cascade of the city of Almaty and upgrade the GA-4 of the Ust-Kamenogorsk HPP;
2. Modernization of the hydroelectric units of the Bukhtarma HPP until 2028 and construction of the II stage of the Shulbinskaya HPP until 2030.
In addition to the construction of new HPPs, the Plan for the development of the hydropower industry of the Republic of Kazakhstan plans to modernize, reconstruct and expand existing HPPs in order to increase their reliability and efficiency in the use of water resources.
For instance:
1. Until 2027, it is planned to reconstruct and modernize the HPP Cascade of the city of Almaty and upgrade the GA-4 of the Ust-Kamenogorsk HPP;
2. Modernization of the hydroelectric units of the Bukhtarma HPP until 2028 and construction of the II stage of the Shulbinskaya HPP until 2030.
The current level of depreciation of power plants is about 70%. At the beginning of 2013, the average age of the equipment of thermal power plants was 28.8 years, hydroelectric power plants – 35.7 years. At the same time, 57 % of the capacities of power plants have worked for more than 30 years. In addition to the construction of new HPPs, the Plan for the development of the hydropower industry of the Republic of Kazakhstan plans to modernize, reconstruct and expand existing HPPs in order to increase their reliability and efficiency in the use of water resources.
For instance: 1. Until 2027, it is planned to reconstruct and modernize the HPP Cascade of the city of Almaty and upgrade the GA-4 of the Ust-Kamenogorsk HPP; 2. Modernization of the hydroelectric units of the Bukhtarma HPP until 2028 and construction of the II stage of the Shulbinskaya HPP until 2030.
For instance: 1. Until 2027, it is planned to reconstruct and modernize the HPP Cascade of the city of Almaty and upgrade the GA-4 of the Ust-Kamenogorsk HPP; 2. Modernization of the hydroelectric units of the Bukhtarma HPP until 2028 and construction of the II stage of the Shulbinskaya HPP until 2030.
OBSTACLES FOR HYDROPOWER PROJECTS IN KAZAKHSTAN
One of the main mechanisms for supporting the construction and modernisation of HPPs in the world today is the use of incentive tariffs through the mechanism of fixed tariffs, premiums to the market tariff or the auction mechanism.
A review of world practice shows that the determination and establishment of incentive tariffs for hydropower plants through the auction mechanism is not a common practice and is currently found in several countries, such as Canada, Brazil, Argentina and Peru. Thus, according to the IRENA agency for the period 2017-2018, only 0.5 % of the total capacity awarded through the auction mechanism in the world came from hydroelectric power plants. At the same time, incentive tariffs applied through the mechanism of long-term fixed tariffs (feed-in tariff) or surcharges on the market price of electricity for hydroelectric power plants can be found in most countries in the perimeter of the comparative analysis, which indicates the greater effectiveness of this mechanism for the development of hydropower.
A review of world practice shows that the determination and establishment of incentive tariffs for hydropower plants through the auction mechanism is not a common practice and is currently found in several countries, such as Canada, Brazil, Argentina and Peru. Thus, according to the IRENA agency for the period 2017-2018, only 0.5 % of the total capacity awarded through the auction mechanism in the world came from hydroelectric power plants. At the same time, incentive tariffs applied through the mechanism of long-term fixed tariffs (feed-in tariff) or surcharges on the market price of electricity for hydroelectric power plants can be found in most countries in the perimeter of the comparative analysis, which indicates the greater effectiveness of this mechanism for the development of hydropower.
According to the Report “Auctions for Renewable Energy Projects in Kazakhstan. Results of 2018-2021”, in accordance with the Schedule approved by the Ministry of Energy, 200 MW of capacity was put up in 2021, of which 120 MW accounted for HPPs.
The maximum starting auction price for HPPs in 2021 was 15.2 tenge/kWh. At the same time, according to the Report, the volume of demand for projects of small HPPs exceeded the volume of supply by 3 times. All this testifies to the relevance and importance of the hydropower sector in the conditions of modern realities in Kazakhstan.
The maximum starting auction price for HPPs in 2021 was 15.2 tenge/kWh. At the same time, according to the Report, the volume of demand for projects of small HPPs exceeded the volume of supply by 3 times. All this testifies to the relevance and importance of the hydropower sector in the conditions of modern realities in Kazakhstan.
The main factor determining the size of the tariff is the size of the initial capital investment. As the analysis showed, the average level of capital costs for small HPPs can vary from 1797 to 3797 US dollars per kW of installed capacity. The capital cost range for large HPPs ranged from $1,304 to $3,180 per kW of installed capacity.
Being one of the main factors determining the predicted volume of electricity generation in the future, the size of the installed capacity utilization factor (ICU) also has a significant impact on the final tariff. According to IRENA data, the world average for the Other Asia region, to which Kazakhstan belongs, is 50 % for large ones and 54 % for small ones, respectively.
Operating costs represent an insignificant part of the costs in the tariff structure and have an insignificant impact on the tariff level. Annual operating costs in relation to the initial capital investment for the construction of hydropower plants are in the range of 1 %, which is the lower threshold of the same global average, which, according to the IRENA study, is 1-3 %.
Being one of the main factors determining the predicted volume of electricity generation in the future, the size of the installed capacity utilization factor (ICU) also has a significant impact on the final tariff. According to IRENA data, the world average for the Other Asia region, to which Kazakhstan belongs, is 50 % for large ones and 54 % for small ones, respectively.
Operating costs represent an insignificant part of the costs in the tariff structure and have an insignificant impact on the tariff level. Annual operating costs in relation to the initial capital investment for the construction of hydropower plants are in the range of 1 %, which is the lower threshold of the same global average, which, according to the IRENA study, is 1-3 %.
The current legislation on the auction mechanism for HPPs does not stimulate the development of hydropower and hinders the implementation of initiated projects for the construction of HPPs.
The auction trading mechanism introduced in 2018 did not meet the expectations of investors. In general, over three years (2018–2020), 36 renewable energy auctions were held for a total installed capacity of 1510 MW. Of these, 1218.77 MW were selected, of which 18 projects were selected for HPPs with a total installed capacity of 112.08 MW and only a few projects are currently being implemented.
In 2021, a total of 11.8 MW were put up for HPPs, 4 projects were selected, the minimum auction price was 15 tenge. The main reason is that low tariffs do not pay off hydroelectric projects and many projects have been suspended or closed.
The auction trading mechanism introduced in 2018 did not meet the expectations of investors. In general, over three years (2018–2020), 36 renewable energy auctions were held for a total installed capacity of 1510 MW. Of these, 1218.77 MW were selected, of which 18 projects were selected for HPPs with a total installed capacity of 112.08 MW and only a few projects are currently being implemented.
In 2021, a total of 11.8 MW were put up for HPPs, 4 projects were selected, the minimum auction price was 15 tenge. The main reason is that low tariffs do not pay off hydroelectric projects and many projects have been suspended or closed.
The calculations showed that in the case of applying the proposed methodology and the above input parameters, the level of tariffs for large and small HPPs will be 41.23 and 54.98 tenge per kWh of electricity, respectively.
- Large HPPs:41,23 tenge/kWh
- Small HPPs:54,98 tenge/kWh
Land plot
Investors in HPP projects are faced with the problem of finding land required for the location of HPPs, many of which are located in areas favorable for HPP construction are forest lands and specially protected natural areas, where economic activities are restricted.
In order to transfer land from the category of forest reserves and specially protected natural areas to another category, it is necessary to adopt a Resolution of the Government of Kazakhstan, and the adoption of such an act is a very difficult task for ordinary investors.
Investors in HPP projects are faced with the problem of finding land required for the location of HPPs, many of which are located in areas favorable for HPP construction are forest lands and specially protected natural areas, where economic activities are restricted.
In order to transfer land from the category of forest reserves and specially protected natural areas to another category, it is necessary to adopt a Resolution of the Government of Kazakhstan, and the adoption of such an act is a very difficult task for ordinary investors.
HPP projects implementation period
Within the framework of the state policy of supporting the use of RES, the FSC concludes contracts for the purchase and sale of electrical energy with energy producing organizations using RES.
Under the terms of the agreement concluded between the FSC and the energy producer, the seller (investor of the HPP) is obliged to provide the settlement and financial center with a copy of the act of acceptance into operation of the facility for the use of renewable energy in accordance with the legislation of the Republic of Kazakhstan in the field of architectural, urban planning and construction activities within 60 (sixty) months from the date of signing the contract.
The construction of a hydroelectric power station is a complex technical project to implement, obtaining permits and construction and installation work require a lot of time. The HPP investors can’t launch the HPP within five years after the conclusion of the contract.
Within the framework of the state policy of supporting the use of RES, the FSC concludes contracts for the purchase and sale of electrical energy with energy producing organizations using RES.
Under the terms of the agreement concluded between the FSC and the energy producer, the seller (investor of the HPP) is obliged to provide the settlement and financial center with a copy of the act of acceptance into operation of the facility for the use of renewable energy in accordance with the legislation of the Republic of Kazakhstan in the field of architectural, urban planning and construction activities within 60 (sixty) months from the date of signing the contract.
The construction of a hydroelectric power station is a complex technical project to implement, obtaining permits and construction and installation work require a lot of time. The HPP investors can’t launch the HPP within five years after the conclusion of the contract.
Сontrol of HPP constructions
The hydropower potential of Kazakhstan is located unevenly and is concentrated in the east and south of the country. Many potential large hydropower projects need to be implemented in the channels of the same rivers using a single water flow. It should be understood that large hydroelectric power plants that provide maneuverable capacities include reservoirs and regulate the flow. In this regard, all HPPs on this river depend on the mode of operation of each other. In the case of a hydroelectric project with a reservoir on one river, then downstream investors will be able to implement their projects only taking into account the operating mode of the upper hydroelectric power station.
At the moment, there is no single plan for the implementation of hydropower projects in Kazakhstan. The legislation does not have a procedural requirement for the implementation of HPPs on rivers, taking into account the use of water bodies by other water users, including HPPs.
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