Renewable energy (the "RE") is the most dynamic and fast-growing area in the energy sector. Since 2015, investments in RE in developing countries and countries with economies in transition have exceeded those in developed economies. Global trends show that the renewable energy sector is already truly global, and its development has an important role for all countries, both developed and developing.
Status quo
In our opinion, the RE auction bidding mechanism, taking into account the past RE action results, may be considered as a successful initiative. For instance, in the period of 2018-2019 1,205 MW of RE capacity was put up for auctions. 18 auctions were held for the total capacity of 1,021 MW. 42 winning companies signed a 15-year contract with a single off-taker Financial and Settlement Centre LLP (the "FSC"). The total installed capacity which is planned for the RE auctions in 2020 is 250 MW.
As for the use of the PPP mechanism in the RE sector of Kazakhstan, we may declare that there are certain PPP projects in the power sector, however, most of them are related to improving energy efficiency in municipal facilities. According to the statistics of the project database of the Kazakhstan PPP Centre, currently, there are about 1,335 registered PPP projects, 183 of which are related to the “Energy and housing sector”. Most of the “Energy and housing sector” projects are aimed at building power lines, improving energy efficiency through the reconstruction of thermal power plants, improving street lighting, and lighting state-owned enterprises. The project database of the Kazakhstan PPP centre shows that there are no PPP projects in the field of renewable energy at all.
Apparently, one of the main reasons for that is that the RE sector in Kazakhstan mostly operates based on the RE Law, according to which the government sets tariffs based on the results of auctions, thereby ensuring the liquidity of RE facilities. In addition, under the RE Law the state supports connection to electricity and heat transmission networks, obliging energy transmission companies to freely and on non - discriminatory basis determines the nearest point of electric or heat networks and connect RE facilities to them.
Implementation of the RE projects through PPP
Key drivers to pursue implementation of the
RE projects through PPP:
PPP as a possible solution:
Possibility of receiving one or more of the following
types of state support:
However, the PPP mechanism has its drawbacks that hinder the active application of the PPP model in the RE projects, for instance: