NUR-SULTAN
Kazakhstan, the world’s ninth biggest country by land mass, yet sparsely populated (19 million, or at 197th in density, one of the lowest in the world), might not be associated with the rush to “Green energy”.
After all, bigger than France, Germany, Italy, Spain, Greece, and many smaller EU countries combined with 1/20 of the population, Kazakhstan is the world’s ninth-largest producer of coal, has the 11th –highest proven reserves of crude oil, and the 29th of natural gas.
Those jewels and huge deposits of uranium and other ores have catapulted it to near the top quarter of the world’s living standards in terms of purchasing power per capita and several other markers.
But the government of President Kassym-Jomart Tokayev, a protégé of former leader Nursultan Nazarbayev (who ruled for 29 years before him) and is still the head of the powerful National Security Council, is putting a major emphasis on the issue.
And that has meant a programme to boost capacity in energy generation from renewable sources like wind, solar and hydro power and a serious bid to overhaul enabling legislation.
Kazakhstan, with its mammoth size, varied climates, including the usually sun-drenched south and the wind-buffeted north and centre, would seem to be a natural for renewable potential.
ACKNOWLEDGMENT MORE THAN JUST PR
Squeezing fossil fuels from the ground, as well as exploiting the country’s huge tracts of arable farmland – much of which still remain largely untapped – gave the country an upper hand in early development.
But officials understand underground riches won’t last forever.
President Tokayev, then Prime Minister, first acknowledged this way back in 2009, when Kazakhstan first adopted a strategy on encouraging renewable energy and limiting greenhouse emissions.
“We are witnessing ferocious competition on the energy markets. Energy has become a substantial part of global diplomacy. The whole world has been divided into two zones: those that produce and those that transport and consume,” he told the country’s parliament when the first signal to renewables was made in 2009.
“However, there is one area which at least must become common for all countries … protection of the environment. ln this context, the development of renewable energy becomes a matter of paramount significance.”
HUGE BUT DECLINING RESERVES MEAN CALL TO ACTION
Kazakhstan’s huge reserves of traditional energy sources, namely: cheap coal, oil, and natural gas, are nonetheless being chipped away at every year. Year-on-year, there is a gradual decline among existing fields and sources, despite some new recently announced finds.
And the extraction of such resources requires increasingly significant financial investments, especially if associated with deep offshore oil drilling and complex technologies. Offshore oil drilling (for Kazakhstan, in its sector of the Caspian Sea) becomes more expensive and thus less profitable, given the technological sophistication required.
The Kazakhstan authorities understand that if they do not adapt their economy to new energy realities, then the eventual decrease in hydrocarbon fuel demand and mineral reserves will inevitably bring about an economic recession.
Laura Malikova, Chairperson of the Association of Practicing Ecologists, told the Tribune: “The transition of Kazakhstan to renewable energy sources and solving environmental problems is a necessity, rather than a whim. In this regard, you need to look at the economy, at the changes that are happening in the world. We have to adapt accordingly,” she said.
The drive to support renewable energy sources has been reinforced by several recent laws on supporting the use of renewables and electricity use, to name just two recent statutes.
Eldos Abakanov, who heads the Association of Environmental Organisations of Kazakhstan, told the Tribune that early on, the focus was more about reducing emissions from highly polluting industries or power sources and an emphasis on organic agriculture.
Abakanov said the adoption of a law on energy use reduction among enterprises in Kazakhstan had resulted in conducting energy use audits and how energy provision contracts are implemented.
LOW BUT INCREASING GREEN ENERGY USAGE
Kazakhstan has held demonstrative examples of its commitment to “Go Green”. It hosted EXPO-2017, which broadcast the country’s intention to produce renewable energy sources, not just be a fossil fuel giant. It was during this event that the government announced more forcefully an active switch to renewable energy.
It also vowed to increase the share of renewable energy sources in the energy balance by 2030 to 10 percent, still relatively modest, but up from three percent in 2020 and a planned six percent in 2025. By 2050, the aim is at least half or more.
Over the past six years, the installed capacity of renewable energy facilities has grown nearly 10-fold – from 178 MW in 2014 to 1,635 MW in 2020 and three percent of total electricity production.
The number of renewable industrial-size energy facilities has also grown to 116, including solar and wind. Twenty-five more such renewable energy facilities with a capacity of 583 MW were commissioned in 2020 – 10 wind, one hydro and 12 solar power plants.
In 2021, 23 more renewable energy facilities are on schedule to be added – with a capacity of 381.1 MW.
According to Prime Minister Askar Mamin, this will also allow Kazakhstan to fulfil its obligations under the Paris Agreement on low-carbon and climate-sustainable development.
INTERNATIONAL INVESTORS ENCOURAGED
Investors from 10 countries are already working in the “Green Energy” sector of Kazakhstan. They have been aided by the European Bank for Reconstruction and Development, (EBRD), the Asian Development Bank (ADB), and the Asian Infrastructure Investment Bank.
Large previously fossil-fuel extraction companies such as Eni (Italy), already involved in traditional oil and gas projects in Kazakhstan are also taking part in the current development of new projects.
The government is providing incentives for international investors in the renewable energy sector.
The state provides guarantees for the purchase of the entire volume of Renewable Energy Sources (RES) electricity at fixed tariffs or auction prices from producers. There are also negotiable tax and customs benefits.
Since the adoption in 2009 of the law “On Supporting the Use of Renewable Energy Sources”, the total investment in the RES sector has amounted to 626 billion tenge ($1.6 billion).
FLURRY OF MORE NEW INITIATIVES
In addition, a new environmental code, EcoCode, was adopted on January 2, 2021. Analysts say this is the most aggressive move yet towards the “green” transformation because it involves not only renewable energy production but also environmental issues resulting from emissions.
“The new EcoCode had been under development for three years. The emphasis was placed on large industrial enterprises, which should accelerate the process of their modernisation,” explained the environmentalist leader Eldos Abakanov.
The “EcoCode” goes further by mandating that over a 30-year period, waste recycling must be implemented, clean drinking water must be ensured, and wastewater treatment upgraded.
Abakanov noted that as a nation on the verge of becoming one of the 30 most developed countries in the world and a member of the Organisation for Economic Cooperation and Development (OECD), producers and exporters will need to comply with the environmental requirements of the European Union.
Of course, “green” in production technologies requires significant investments. The question is whether domestic enterprises are ready to introduce the best available technologies (BAT) in the near future.
Ecologist Laura Malikova noted that gradual transitions to allow companies to make changes have been taken into account. Though some rules formally kick in on July 1, 2021, in many cases 10 years are allotted for adjustments. In addition, industrial enterprises that introduce BATs earlier will get tax breaks for investments.
Carbon taxes have also been considered as a way to ensure that exporters meet international standards. “When our products enter the countries where the carbon regulation mechanism has been introduced, then there are obligations for Kazakhstan exporters, especially raw materials, to pay a certain cost in the form of tax or some kind of payment,” said Malikova.
Accordingly, products can become uncompetitive due to their carbon footprint, that is, how much coal has been burned per tonne of product. If a lot of coal is burned, then it has a large carbon footprint.
For Kazakhstan, this is an even greater impetus to move towards renewables, noted Abakanov, the Kazakhstan Environmental Organisation’s head. It means the country has no choice but to increase the share of renewable energy sources every year.