The gradual reduction
in the cost of renewable energy (the "RE") technologies
and the introduction of state support measures in many countries
contributed to increased investments in the RE sector worldwide.
The urbanisation and systemic problems in the electric power
industry in many countries led to a growth of interest in the use
of RE in the cities where the source of electricity is in close
proximity to a consumer. Rooftop solar power plants (the
"RTS") have great potential to cover the growing demand
for electricity in cities. One of the important advantages of RTS
is relatively high productivity, compactness and the ability to
regulate the parameters of electric energy production. Moreover,
RTS, a distributed generation source, does not require land
allotment, allows us and makes it possible to receive additional
income. The use of RTS is relevant for the cities of Kazakhstan,
especially for the southern regions with high solar
potential.
Currently, two types of state support for small-scale RE are available in Kazakhstan. For non-electrified zones, the Republic of Kazakhstan legislation provides a mechanism of direct support. A net metering mechanism is available for consumers connected to distribution electric networks. The support of large-scale renewable energy facilities based on the auction mechanism in Kazakhstan is considered relatively prosperous. However, the existing schemes supporting small-scale RE do not show positive results. The comprehensive development of RTS in Kazakhstan is hindered by several barriers, including designing, obtaining approvals from authorised bodies, and constructing and operating RTS.
Currently, two types of state support for small-scale RE are available in Kazakhstan. For non-electrified zones, the Republic of Kazakhstan legislation provides a mechanism of direct support. A net metering mechanism is available for consumers connected to distribution electric networks. The support of large-scale renewable energy facilities based on the auction mechanism in Kazakhstan is considered relatively prosperous. However, the existing schemes supporting small-scale RE do not show positive results. The comprehensive development of RTS in Kazakhstan is hindered by several barriers, including designing, obtaining approvals from authorised bodies, and constructing and operating RTS.
1
The Legislative Definition of Small-scale RE and
RTS
The legislation of the Republic of Kazakhstan does not
stipulate a separate category and does not define the concept of
small-scale facilities/projects, including RTS. Therefore, except
for certain measures of state support for small-scale RE enshrined
in the legislation of the Republic of Kazakhstan, their
implementation falls under the general regulation of the activities
of energy-producing organisations using RE.
In Kazakhstan, no separately developed legislative framework contributes to the development of RTS, including special regulatory and technical construction documentation, as well as separate regulations on the operation of RTS. This leads to the fact that RTS is required to comply with general requirements in terms of construction, operation, connection to networks, obtaining permits and other aspects, which can be a repulsive factor in the implementation of RTS in Kazakhstan.
To stimulate the widespread use of small-scale RE, it is recommended to allocate small-scale RE into a separate category, to which simplified legislative requirements will be applied, which will contribute to the creation of the necessary institutional support for RTS projects in Kazakhstan.
In Kazakhstan, no separately developed legislative framework contributes to the development of RTS, including special regulatory and technical construction documentation, as well as separate regulations on the operation of RTS. This leads to the fact that RTS is required to comply with general requirements in terms of construction, operation, connection to networks, obtaining permits and other aspects, which can be a repulsive factor in the implementation of RTS in Kazakhstan.
To stimulate the widespread use of small-scale RE, it is recommended to allocate small-scale RE into a separate category, to which simplified legislative requirements will be applied, which will contribute to the creation of the necessary institutional support for RTS projects in Kazakhstan.
2
Difficulties of RTS Participation in RE
Auctions
According to the current legislation of
the Republic of Kazakhstan, if the total installed capacity of a RE
facility exceeds 100 kW, such an object can sell the
produced electrical energy of renewable energy through the RE
auction mechanism.1 Barriers to RTS participation in the
RE auctions include the need to have a RE project in the auction
schedule, the requirement for financial security for participation
in the auction, the need to meet qualification requirements,
etc.
Considering that RE auctions are aimed at implementing larger RE projects, including RTS, in the auction schedule, their participation in RE auctions is unlikely.
It is recommended to amend the current legislation on renewable energy support, simplifying and facilitating the participation of RTS and other small-scale RE in the RE auctions to have a possibility of selling electricity generated by RTS to the financial settlement centre.
Considering that RE auctions are aimed at implementing larger RE projects, including RTS, in the auction schedule, their participation in RE auctions is unlikely.
It is recommended to amend the current legislation on renewable energy support, simplifying and facilitating the participation of RTS and other small-scale RE in the RE auctions to have a possibility of selling electricity generated by RTS to the financial settlement centre.
pic
A power plant in the Karaganda region. Photo credit: EBRD
3
Drawbacks of the Direct Support
Mechanism
According to the RE Law, this type of state support is applied
only to non-electrified settlements. Direct support is compensation
by the state of 50% of the cost of the RE facility. One of the main
conditions for obtaining support is purchasing equipment made in
Kazakhstan with an installed capacity of no more than five
kW.2 All the conditions mentioned above make it much
more difficult to get direct support. An individual consumer who
has received explicit support for purchasing a RE installation is
not entitled to sell electric and (or) thermal energy generated at
this installation to other consumers.3
It is recommended to amend the RE Law by excluding provisions stipulating that the direct support mechanism applies only to non-electrified settlements, remove the requirement for Kazakhstani content, increase the amount in the budgets of the regions of the Republic of Kazakhstan for each year to finance this program, as well as simplify the procedure providing direct support to individual consumers.
It is recommended to amend the RE Law by excluding provisions stipulating that the direct support mechanism applies only to non-electrified settlements, remove the requirement for Kazakhstani content, increase the amount in the budgets of the regions of the Republic of Kazakhstan for each year to finance this program, as well as simplify the procedure providing direct support to individual consumers.
4
Unsatisfactory Condition of Electrical Distribution
Networks
The intermittent nature of RTS generation creates an
additional burden on the outdated infrastructure of the
distribution system, which is an obstacle to the comprehensive
integration of RTS into the country's energy system. In
addition, the legislation of the Republic of Kazakhstan does not
establish requirements for investments in electric networks
necessary to support the development of RTS.
It is recommended to include in the legislation of the Republic of Kazakhstan the obligation to include in the investment plans of energy transmission organizations the necessary funds for the modernization of networks for the integration of RTS.
It is recommended to include in the legislation of the Republic of Kazakhstan the obligation to include in the investment plans of energy transmission organizations the necessary funds for the modernization of networks for the integration of RTS.
5
Economic Barriers
The production and installation of RTS
equipment require initial investments. The available measure of
support of small-scale RE in electrified areas is a net metering
mechanism. The mechanism allows net consumers to sell surplus
electricity produced by the RE facility to the grid at the current
tariff of the energy supply organisation. The maximum capacity of
the RE facility eligible for net metering in Kazakhstan is 100
kW.4 One of the main obstacles to investment in
small-scale RE in electrified areas, including in RTS, is the low
retail electricity prices, which leads to an increase in the
payback period of RTS installation.
This work is made possible by the
support of the American People through the United States Agency for
International Development (USAID) through its Power Central Asia
Activity, implemented by Tetra Tech, Inc. The contents of this
document are the sole responsibility of Unicase as Tetra Tech, Inc.
subcontractors, and do not necessarily reflect the views of USAID
or the United States Government.
Analysis of the legislation of the Republic of Kazakhstan shows that the regulation of RTS in the Republic of Kazakhstan needs further improvement to stimulate private investment in this promising renewable energy sector.
Unicase is open to provide additional consultations for the comprehensive implementation of RTS in Kazakhstan.
Analysis of the legislation of the Republic of Kazakhstan shows that the regulation of RTS in the Republic of Kazakhstan needs further improvement to stimulate private investment in this promising renewable energy sector.
Unicase is open to provide additional consultations for the comprehensive implementation of RTS in Kazakhstan.
Footnotes
1 Article 9.1 of the Law of
the Republic of Kazakhstan dated July 4, 2009, No. 165-IV "On
support for the use of renewable Energy sources" (the "RE
Law")
2 Article 9.10 of the RE Law
3 Article 9.11 of the RE Law
4 Article 9.9 of the RE Law
https://www.ebrd.com/news/2018/ebrd-gcf-boost-kazakh-green-power-generation-.html
2 Article 9.10 of the RE Law
3 Article 9.11 of the RE Law
4 Article 9.9 of the RE Law
https://www.ebrd.com/news/2018/ebrd-gcf-boost-kazakh-green-power-generation-.html
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