The electric power industry in Kazakhstan includes the following sectors:
Electricity generation sector
Electricity in Kazakhstan is generated by 222 power plants of various forms of ownership. As on 01 January 2024 the total installed capacity of power plants in Kazakhstan was 24641,9 MW and available capacity is 20428,4 MW.The power plants are branched into power plants of national importance, power plants of industrial importance and those of regional importance.
The power plants of national importance are the large thermal power plants generating and selling electricity to consumers at the electricity wholesale market of Kazakhstan:
And large hydro power plants used as auxiliary units and to control load schedule profile of Kazakhstan UPS:
The power plants of industrial importance are the combined heat power plants (CHPP), which supply heat and electric power to large industrial enterprises and nearby populated areas:
The power plants of regional importance are the CHPPs integrated with the territories, supplying electricity through the networks of regional electricity network companies and power transmission organisations and heat to the towns nearby.
Electricity Transmission Sector
Electric networks in Kazakhstan include 0.4-1,150 kV substations, switchgears and electricity transmission lines connecting them to transmit and/or distribute electricity.
The backbone grid in Kazakhstan UPS is the National Power Grid (NPG) that provides electric connections between the regions of the country and with the power systems of the neighbouring countries (the Russian Federation, the Kyrgyz Republic and the Republic of Uzbekistan) and deliver electricity from the power plants to the wholesale consumers. KEGOC owns 220 kV and above substations, switchgears, interregional and/or interstate transmission lines being a part of the NPG including lines used for connection of power plants.
Regional power networks provide electrical connections within regions and power transmission to retail consumers. Electric networks of regional level belong to and are being operated by the Regional Electric Network Companies (REC).
The power transmission companies provide contract-based electricity transmission services using their own or managed (rent, lease, trust management and other types of use) electric networks for the wholesale and retail consumers or power supplying companies.
Electricity supply sector
The electricity supply sector of the electricity market of Kazakhstan consists of energy supplying organisations (ESOs), which purchase electricity from a single electricity purchaser and (or) from net consumers and then sell it to end retail consumers. A part of ESOs fulfils the functions of "guaranteeing suppliers" of electricity.
Electricity market of the Republic of Kazakhstan
Kazakhstan's wholesale electricity and capacity market is made up of the wholesale electricity market, the balancing electricity market, the capacity market, and the market for system and ancillary services.
The wholesale electricity market is based on the purchase and sale of scheduled volumes of electricity included in the system operator's daily electricity production-consumption schedule.
The real-time balancing electricity market operates to physically and then financially settle hourly unscheduled imbalances that occur on operating days.
The market for system and auxiliary services operates on the basis of both the purchase of auxiliary services from wholesale electricity market entities and the provision of system services to wholesale electricity market entities by the system operator to ensure the reliability of the Republic of Kazakhstan's UES and the quality of electricity established by national standards.
To meet demand for electric capacity, the electric capacity market attracts investments to maintain existing and commission new electric capacities in the unified power system (UPS) of Kazakhstan.
Electricity purchase and sale transactions between energy producing organizations and a single purchaser, as well as between a single purchaser and digital miners in an electronic trading system, are examples of centralized electricity trading.
Participants of the wholesale electricity market include those on the following list (maintained by the system operator):
-energy producing organizations, including those that use renewable energy sources, secondary energy resources, and energy waste management;
-energy transmission organizations;
-energy supplying organizations;
-wholesale electric energy consumers;
-digital miners.
To be included in the above list, a legal entity must conclude:
Currently, the following participants are eligible for system services contracts:
- an electricity consumer with an average daily (base) capacity of at least 1 MW;
- an energy supplying organization (if it has a licence for the right to purchase electricity for energy supply purposes) meeting the requirements for an average daily (base) capacity of at least 1 MW.
The wholesale electricity market also includes the system operator, the centralised trading market operator, and the single electricity purchaser.
Single Electricity Purchaser and Settlement Centre of the balancing electricity market
Amendments to the Law "On Electricity" went into effect on July 1, 2023, regulating the mechanism of operation of the wholesale electricity market by introducing a single electricity purchaser and a real-time balancing electricity market.
The target market model calls for a shift to centralized purchasing and selling of planned volumes of electricity. This means that all electricity generated by energy-generating organizations is sold to the single electricity purchaser. The purchase and sale of electricity between consumers and energy producing organizations belonging to the same group of entities is an exception.
Electricity is centrally purchased a day in advance from domestic power plants in the following order (priority):
and then sold to wholesale buyers.
If domestic power plants are unable to meet the daily demand, planned electricity imports are made.
In its turn, the balancing electricity market (BEM) working in real time ensures the settlement of imbalances in the UPS of Kazakhstan, allocating them to the market participants that caused the imbalance.
All wholesale market entities are obliged to participate in the balancing market.
Centralised purchase and sale of electricity on the BEM to settle imbalances is carried out by the Settlement Centre of the balancing market.
By orders of the Ministry of Energy dated 6 June 2023, Financial Settlement Centre for Support of Renewable Energy Sources LLP and KOREM JSC are determined as the Single Electricity Purchaser and Settlement Centre of the Balancing Electricity Market, respectively.
To ensure the operation of the new market model, the system operator provides market participants with the service of using the NPG, as well as the service of electric power transmission in the NPG, in accordance with the Law "On Electric Power Industry," on the basis of relevant contracts.
The service of using the NPG is provided to wholesale market entities when they conduct operations on the wholesale and balancing electricity markets for the purchase and sale of electricity. This is because electricity distribution is not "addressable" (it is impossible to determine the transmission route from producer to consumer).
In turn, the service of electricity transmission in the NPG will be provided by the system operator:
With the transition to the new model, KEGOC maintains a significant market presence and performs the following primary functions:
- provides system services, including a "new" service for the use of the NPG;
- owns the upgraded hardware and software complex: the balancing market system, which is the main instrument of wholesale market operation and management of the balancing electricity market with the inclusion of "Single Buyer" and "Balancing Market Settlement Centre"vmodules;
- physically settles imbalances in the energy system by using price bids of domestic market participants.
Link to the website of the Balancing Electricity Market System for Wholesale Electricity Market Entities: https://bems.kegoc.kz/
