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General information about the WtE sector and participation in auctions

Kazakhstan has adopted and is implementing a concept for transition to "green" economy, in order to implement it, a legislative framework has been established and clear target indicators for the development of the RES sector have been identified. The competent authority implementing the state policy in the renewable energy sector is the Ministry of Energy of the Republic of Kazakhstan.

According to the concept for the transition of the Republic of Kazakhstan to the "green economy", share of renewable energy sources of electricity production should be 3% by 2020, 10% by 2030, 50% by 2050, taking into account alternative energy.

The Ministry of Ecology, Geology and Natural Resources of the Republic of Kazakhstan, in accordance with the Law "On Supporting the Use of Renewable Energy Sources", is currently working on organizing and conducting auction auctions for energy waste disposal projects (hereinafter referred to as the WtE Auction Bidding).

The auction of the WtE is held in accordance with the Rules for the Organization and Conduct of Auction Sales, including qualification requirements for auction participants, the content and procedure for filing an application, types of financial support for the application for participation in the auction and the conditions for their entry and return, the procedure for summing up the results and determining the winners approved by order of the Minister of Energy of the Republic of Kazakhstan dated December 21, 2017 No. 466.

So, to conduct the Auction trades of the WtE for the selection of technologies for energy waste utilization, by order of the Minister of Ecology, Geology and Natural Resources of the Republic of Kazakhstan dated April 26, No. 119-p, a Commission on the formation of the List was created, whose members by open vote decided to determine a group of settlements for the introduction of energy utilization facilities. The group of settlements included the following cities: Nur-Sultan, Almaty, Shymkent, Karaganda, Ust-Kamenogorsk and Aktobe.

In order to conduct the auctions of the WtE, amendments were made to the current legislation in the field of support of RES sector and the Rules of organizing and holding auction were developed.

The auction of the WtE is held on the basis of schedule of auction annually approved by the Ministry of Ecology, Geology and Natural Resources of the Republic of Kazakhstan.

To attract private investment in the renewable energy sector of the Republic of Kazakhstan, the following measures are envisaged:

 

  • the single buyer of RES electricity is the financial settlement center for the support of renewable energy sources, established under JSC KEGOC, Kazakhstan Electricity Grid Operating Company;
  • investors are guaranteed to purchase the entire volume of RES energy at auction prices for 15 years upon signing purchase agreement with the FSC;
  • auction prices are subject to annual indexation starting from the second year of electricity generation: 70% for change of national currency exchange rate against convertible currencies and 30 % for consumer price index;
  • RES producers are exempt from payment for electricity transmission from RES;
  • financial settlement of imbalances from RES performs the FSC.
  • RES producers are granted priority dispatch in the transmission of electrical energy;
  • energy transmission organization may not refuse connection of RES facility due to grid unavailability;
  • energy transmission organization may not refuse connection of RES facility due to grid unavailability;
  • land plots and connection points to the grid are reserved for auction for selection of RES projects;

To implement the RES facility construction project in Kazakhstan through the mechanism of guaranteed centralized purchase, a potential investor should:

 

  • Get acquainted with auction schedule and decide which RES project is acceptable;
  • Visit the auction organizer's website, get online registration in the trading system;
  • Sign agreement with auction organizer;
  • Not later than two working days before the auction to provide application financial guarantee for participation in auction in the name of the FSC of RE LLP;
  • Take part in the auction;
  • Become the auction winner;
  • Within 60 days after the inclusion of the auction winners in the RES list, contact the FSC of RE LLP for signing purchase agreement;
  • After signing purchase agreement make financial guarantee for performance of agreement.


Auction key dates