Kazakhstan‘s new leadership, faced with concurrent challenges of volatile oil prices and the coronavirus pandemic, has approved nineteen new renewable energy projects worth $1.1 billion in the country’s latest effort to go green and diversify its energy supply.
To date, there are already 97 operating renewable energy facilities in Kazakhstan, with over half of the renewable power generated by solar power plants and another fourth from wind farms.
While more than 70% of the Central Asian country’s electricity is currently produced by coal-burning, the development of renewable energy has become an important agenda item under the post-Soviet state’s new leadership, and the country is stepping up efforts to transition to low-carbon development, diversify the economy and bring private capital and investments.
In February, Kazakhstan added its renewable energy industry to the list of priority investment projects, seeking to tackle the issue of high capital tax, as nearly 80% of costs in the renewables sector are racked up in the purchase of expensive equipment.
The move will allow investors to receive a range of tax breaks and benefits as part of the investment deal with the Kazakh foreign ministry.
Kazakhstan pledged to bring its share of renewable energy to 3% in 2020, 10% by 2030 and have half of its energy coming from green sources by 2050.
The country’s vast windy steppes and 3,000 hours of annual sunlight offer a lot of green potential to tap into.
In 2017, Kazakhstan hosted its Expo dedicated to “Future Energy,” aimed at fostering the global debate on “how to ensure safe and sustainable access to energy for all while reducing CO2 emissions,” and since then has been steadily investing in renewable sources.
In 2019, twenty-one renewable projects attracted $613 million in investments in the country, and Central Asia’s largest solar power plant, the Saran solar project, built by German developers, began operating in the same year.
The ‘Green Central Asia’ initiative, which is intended to support regional integration, launched at a high-level ministerial conference in Berlin this January, attests to increased attention in Europe for the region’s climate action.
Since the beginning of the year, six renewable projects were commissioned and Kazakhstan’s energy ministry expects renewable energy production to reach around three billion kilowatt-hours in 2020.
“The attractiveness of the renewable energy industry is growing year by year,” said Aliya Salimzhuarova, renewable energy project manager at Kazakh Invest, the state company attracting foreign investors in priority sectors of the economy and supporting investment projects.
Salimzhuarova said that the legal framework for green investments has also improved since the government switched in 2017 from feed-in tariffs, payments for the generation of renewable energy to an auction mechanism meant to foster competition, resulting in better projects and prices.
Auctions are held at the KOREM open electronic trade system and the lifespan of an auction tariff is 15 years.
[Edited by Zoran Radosavljevic]