renewable energy: future trends - sk.kz€¦ · renewable energy: future trends contents 1. key...

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Renewable Energy: Future Trends

CONTENTS

1. Key highlights 3

2. Global wind power 5

3. Wind power in Kazakhstan 11

4. Global solar power 16

5. Solar power in Kazakhstan 20

6. Conclusion 22

REFER TO DISCLAIMER & DISCLOSURES AT THE END OF THIS PUBLICATION


RESEARCH & KNOWLEDGE MANAGEMENT

SEPTEMBER 2017

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CONTENTS

1. Key highlights 3





6. Conclusion 22


3


Key highlights• Additions of renewable power capacities set new records in 2016, growing by 9% YoY vs. 2015

with installations of 161 gigawatts (GW). Solar photovoltaic (PV) capacity grew the most (47% of total growth in renewables) followed by wind power (34% of total) and hydropower (15.5% of total). Investments in new renewable power capacity amounted to USD250mln, approximatelydouble the investment in fossil fuel generating capacity.

Global renewable energy capacity, GW (2010-2016)

Source: Renewables 2017 Global Status Report, Samruk Kazyna

• Wind and solar power are fastest growing sources of electricity globally. Since 2008, wind power deployment has tripled, approaching 487GW of cumulative installed capacities, led by China (168.7GW), the US (82.1GW) and Germany (49.5GW). Over the past decade, global solar photovoltaic (PV) capacity increased by more than 45 times to 303GW as at end-2016.

Global wind and solar PV capacity, GW (2004-2016)


• Investments into R&D and application of new technologies have boosted efficiency and productivity, lowering the cost of renewable energy. Average cost of solar PV has decreased by more than 60% between 2010 and 2016, while costs for solar thermal and both offshore and onshore wind energy have decreased by 10%-20%. Costs of other forms of renewable energy,

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2010 2011 2012 2013 2014 2015 2016

Hydropower Wind Solar Bioenergy Geothermal Marine

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100150200250300350400450500

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Wind Solar PV

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CONTENTS

1. Key highlights 3





6. Conclusion 22


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CONTENTS

1. Key highlights 3





6. Conclusion 22


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CONTENTS

1. Key highlights 3





6. Conclusion 22


3


Key highlights• Additions of renewable power capacities set new records in 2016, growing by 9% YoY vs. 2015

with installations of 161 gigawatts (GW). Solar photovoltaic (PV) capacity grew the most (47% of total growth in renewables) followed by wind power (34% of total) and hydropower (15.5% of total). Investments in new renewable power capacity amounted to USD250mln, approximatelydouble the investment in fossil fuel generating capacity.

Global renewable energy capacity, GW (2010-2016)


• Wind and solar power are fastest growing sources of electricity globally. Since 2008, wind power deployment has tripled, approaching 487GW of cumulative installed capacities, led by China (168.7GW), the US (82.1GW) and Germany (49.5GW). Over the past decade, global solar photovoltaic (PV) capacity increased by more than 45 times to 303GW as at end-2016.



• Investments into R&D and application of new technologies have boosted efficiency and productivity, lowering the cost of renewable energy. Average cost of solar PV has decreased by more than 60% between 2010 and 2016, while costs for solar thermal and both offshore and onshore wind energy have decreased by 10%-20%. Costs of other forms of renewable energy,

0

500

1,000

1,500

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2010 2011 2012 2013 2014 2015 2016

Hydropower Wind Solar Bioenergy Geothermal Marine

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100150200250300350400450500

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Wind Solar PV

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CONTENTS

1. Key highlights 3





6. Conclusion 22


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CONTENTS

1. Key highlights 3





6. Conclusion 22


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1. Key highlights 3





6. Conclusion 22


5


1. Global wind powerAdditions in the global wind power sector decreased slightly to 55 GW in 2016 vs. 63 GW in 2015. Consequently, global power generating capacity reached 487 GW. China again led in new installations, despite a significant decline in the country’s annual market. Asia represented almost half of added capacity, with Europe and North America accounting for most of the rest

Global wind power capacity, GW (2005-2016)


The industry continued to expand in 2016, while technology innovation improved cost-competitiveness of wind power projects vs. low-cost natural gas and from solar PV projects. New markets continued to open around the world, more than 90 countries are active in developing wind power projects. Offshore wind saw the first commercial projects come online in the South Korea and the US, and substantial new capacity was added in Germany, the Netherlands and China. At least 24 countries met 5% or more of their annual electricity demand with wind power in 2016, and at least 13 met more than 10%.

Global wind power capacity and additions by country, GW (2016)


By far, Asia was the largest regional market. China added 23.4 GW in 2016, consequently, total installed capacity reached 169 GW, and accounted for one-third of total global capacity by end-2016. However, new installations were down by 24% vs. 2015.

47 59 74 94 121 159 198 239 284 320372

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3941

4536

5263

55

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2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

23.4

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100120140160180

Chin

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Germ

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biomass, geothermal and hydropower has risen marginally, nevertheless, all renewables remain cost-competitive compared to traditional forms of electricity generation. Technological maturity and lower costs make wind and solar power increasingly attractive options for policy makers seeking to meet energy policy objectives, such as improving energy security by diversifying supply, reducing local pollution and reducing CO2 emissions.

• Costs of some renewable technologies are coming down quickly. Innovations in solar PV manufacturing and installation, improvements in wind turbine materials and designs, and advances in thermal energy storage for CSP have contributed to overall cost reductions. In many countries, renewables are now cost-competitive with new fossil fuel and nuclear sources.

Global indicative generation costs for new plants, USD per kWh

Source: International Renewable Energy Agency, Samruk-Kazyna

• Onshore wind is now one of the most competitive sources of electricity available especially in higher-priced coal and gas markets. However, in some countries, onshore wind has not yet achieved widespread competitiveness versus fossil fuels, particularly in low-priced gas markets, such as the US. Wind energy can also be competitive where wind resources are strong and financing conditions are favorable, but still requires support in most countries.

• Although global investment in new renewable power and fuel capacity was approximately double that in fossil fuels, investments in new renewable energy installations (not including hydropower larger than 50 MW) were down by 23% vs. 2015. Renewable energy investment fell by 30% to USD116.6bln in developing countries and by 14% to USD125bln in developed countries. The overall lower level of investment in 2016 was due largely to the slowdown in the Chinese and Japanese markets and in other emerging economies, notably India and South Africa.

• Renewable sources such as wind and solar currently contribute less than 1% of Kazakhstan’s energy mix. Wind and solar power provided for approximately 0.4% of electricity generation in 2016. However, total production by renewable energy facilities reached 360 MW, up by 105% YoY vs. 2015, including 274 MW from wind and 86 MW from solar plants.

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2010 2016

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CONTENTS

1. Key highlights 3





6. Conclusion 22


5


1. Global wind powerAdditions in the global wind power sector decreased slightly to 55 GW in 2016 vs. 63 GW in 2015. Consequently, global power generating capacity reached 487 GW. China again led in new installations, despite a significant decline in the country’s annual market. Asia represented almost half of added capacity, with Europe and North America accounting for most of the rest

Global wind power capacity, GW (2005-2016)


The industry continued to expand in 2016, while technology innovation improved cost-competitiveness of wind power projects vs. low-cost natural gas and from solar PV projects. New markets continued to open around the world, more than 90 countries are active in developing wind power projects. Offshore wind saw the first commercial projects come online in the South Korea and the US, and substantial new capacity was added in Germany, the Netherlands and China. At least 24 countries met 5% or more of their annual electricity demand with wind power in 2016, and at least 13 met more than 10%.

Global wind power capacity and additions by country, GW (2016)


By far, Asia was the largest regional market. China added 23.4 GW in 2016, consequently, total installed capacity reached 169 GW, and accounted for one-third of total global capacity by end-2016. However, new installations were down by 24% vs. 2015.

47 59 74 94 121 159 198 239 284 320372

435

12 15 20 2738

3941

4536

5263

55

0

100

200

300

400

500

600

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

23.4

8.2

53.6 0 0.7 1.6 0.7 2 0.3

020406080

100120140160180

Chin

a US

Germ

any

Indi

a

Spai

n

UK

Fran

ce

Cana

da

Braz

il

Italy

2015 Added in 2016

4


biomass, geothermal and hydropower has risen marginally, nevertheless, all renewables remain cost-competitive compared to traditional forms of electricity generation. Technological maturity and lower costs make wind and solar power increasingly attractive options for policy makers seeking to meet energy policy objectives, such as improving energy security by diversifying supply, reducing local pollution and reducing CO2 emissions.

• Costs of some renewable technologies are coming down quickly. Innovations in solar PV manufacturing and installation, improvements in wind turbine materials and designs, and advances in thermal energy storage for CSP have contributed to overall cost reductions. In many countries, renewables are now cost-competitive with new fossil fuel and nuclear sources.



• Onshore wind is now one of the most competitive sources of electricity available especially in higher-priced coal and gas markets. However, in some countries, onshore wind has not yet achieved widespread competitiveness versus fossil fuels, particularly in low-priced gas markets, such as the US. Wind energy can also be competitive where wind resources are strong and financing conditions are favorable, but still requires support in most countries.

• Although global investment in new renewable power and fuel capacity was approximately double that in fossil fuels, investments in new renewable energy installations (not including hydropower larger than 50 MW) were down by 23% vs. 2015. Renewable energy investment fell by 30% to USD116.6bln in developing countries and by 14% to USD125bln in developed countries. The overall lower level of investment in 2016 was due largely to the slowdown in the Chinese and Japanese markets and in other emerging economies, notably India and South Africa.

• Renewable sources such as wind and solar currently contribute less than 1% of Kazakhstan’s energy mix. Wind and solar power provided for approximately 0.4% of electricity generation in 2016. However, total production by renewable energy facilities reached 360 MW, up by 105% YoY vs. 2015, including 274 MW from wind and 86 MW from solar plants.

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2010 2016

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CONTENTS

1. Key highlights 3





6. Conclusion 22


7


Wind energy technology continued to evolve, driven by mounting global competition; by the need to improve the ease and cost of turbine manufacturing and transportation; by the need to optimize power generation at lower wind speeds; and increasingly by demanding grid codes to deal with rising penetration of variable renewable sources. Digitalization continued in an effort to provide better quality of and access to data for siting and design, performance management, trading and balancing of output.

CostsThe economics of offshore wind power have improved far faster than experts expected, driven down rapidly by a combination of economies of scale achieved by larger turbines and large projects; increased competition among developers; increased experience, which reduces operating costs; technical improvements with turbines, installation processes, grid connection, and maintenance strategies andlogistics; and lower cost of capital due to reduced perception of risk in financial markets.

Onshore wind power has undergone a quiet revolution over the years. During the period 1983 to 2016, and considering the 12 countries that accounted for 87% of deployment, the levelized cost of electricity (LCOE) dropped by an average of 15% for each doubling of installed capacity. The weighted average investment cost of onshore wind declined by more than two-thirds, from USD 4,880 per kW in 1983 to USD 1,457 per kW in 2016, due to increasing economies of scale and to improvements in manufacturing and technology. Due in large part to technology advances, the global weighted average capacity factor for onshore wind power rose from 20% in 1983 to 29% in 2016.



Onshore wind is now one of the most competitive sources of electricity available. Technology improvements and declining total installed costs mean that onshore wind is now within the same cost range as that for new fossil fuel capacity. Onshore wind projects around the world are consistently delivering electricity for USD0.04-USD0.09 per kWh without financial support. However, in some countries, onshore wind has not yet achieved widespread competitiveness versus fossil fuels. Benchmark cost ranges of wind energy are increasingly comparable with generation costs from gas. In countries such as Brazil and South Africa, onshore wind can represent a more cost-effective source of new generation than fossil fuels. However, in low-price gas markets, such as the US, onshore wind would require further cost reductions. These ranges remain generally higher than that for new coal-fired generation, except in higher-priced coal markets or in the presence of robust carbon pricing.

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Meanwhile, growth in some of the largest markets was affected by uncertainty about future policy changes, and cyclical or policy-related slowdown affected some markets; however, wind deployment also was driven by cost-competitiveness and by environmental and other factors. Wind has become the least-cost option for new power generating capacity in an increasing number of markets. The drop was partially attributable to weaker electricity demand growth and to grid integration challenges.

The US ranked second for both additions (8.2 GW) and for cumulative capacity (82.1 GW) in 2016. Wind power was third after solar PV and natural gas for gross capacity additions, and second for net additions, this accounted for one-fourth of newly installed US power generating capacity. Meanwhile, the EU installed nearly 12.5 GW of gross capacity (12 GW net, accounting for decommissioning), down by 3% from the 2015 record high; additions were up by 11% onshore and down by almost 50% offshore. Total capacity as at end-2016 reached 153.7 GW (92% onshore and 8% offshore). Wind represented the largest percentage of new power capacity in the region (51% of gross additions), followed by solar PV; new fossil fuel power capacity (less than 14% of additions) was far exceeded by retirements. By end-2016, 16 EU member states had more than 1 GW each.

Share of wind power in power supply by country, % (2016)

Source: The European Wind Energy Association, Samruk-Kazyna

Wind power is playing a greater role in power supply in a growing number of countries. In 2016, wind energy covered an estimated 10.4% of EU demand and equal or higher shares in at least 11 EU member states, as well as in Uruguay and Costa Rica. At least 24 countries around the world met 5% or more of their annual electricity demand with wind power. In the US, utility-scale wind power represented over 5.5% of total electricity generation and accounted for more than 15% of generation in nine states, including Iowa (36.6%). Two German states had enough wind capacity as at end-2016 to meet over 86% of their electricity needs, and four had enough capacity to meet over 60% of their needs. Globally, wind power capacity in place by end-2016 was enough to meet an estimated 4% of total electricity consumption.

One of the most evident trends in 2016 was the growing interest in hybrid installations, particularly wind-solar PV. By end-2016, four of the world’s top turbine companies had entered the solar industry. Wind-solar hybrids, which can strengthen a plant’s generation profile and enable sharing of resources for construction and maintenance. Hybrid projects that include storage technologies also are being developed.

37.6

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CONTENTS

1. Key highlights 3





6. Conclusion 22


7


Wind energy technology continued to evolve, driven by mounting global competition; by the need to improve the ease and cost of turbine manufacturing and transportation; by the need to optimize power generation at lower wind speeds; and increasingly by demanding grid codes to deal with rising penetration of variable renewable sources. Digitalization continued in an effort to provide better quality of and access to data for siting and design, performance management, trading and balancing of output.

CostsThe economics of offshore wind power have improved far faster than experts expected, driven down rapidly by a combination of economies of scale achieved by larger turbines and large projects; increased competition among developers; increased experience, which reduces operating costs; technical improvements with turbines, installation processes, grid connection, and maintenance strategies andlogistics; and lower cost of capital due to reduced perception of risk in financial markets.

Onshore wind power has undergone a quiet revolution over the years. During the period 1983 to 2016, and considering the 12 countries that accounted for 87% of deployment, the levelized cost of electricity (LCOE) dropped by an average of 15% for each doubling of installed capacity. The weighted average investment cost of onshore wind declined by more than two-thirds, from USD 4,880 per kW in 1983 to USD 1,457 per kW in 2016, due to increasing economies of scale and to improvements in manufacturing and technology. Due in large part to technology advances, the global weighted average capacity factor for onshore wind power rose from 20% in 1983 to 29% in 2016.



Onshore wind is now one of the most competitive sources of electricity available. Technology improvements and declining total installed costs mean that onshore wind is now within the same cost range as that for new fossil fuel capacity. Onshore wind projects around the world are consistently delivering electricity for USD0.04-USD0.09 per kWh without financial support. However, in some countries, onshore wind has not yet achieved widespread competitiveness versus fossil fuels. Benchmark cost ranges of wind energy are increasingly comparable with generation costs from gas. In countries such as Brazil and South Africa, onshore wind can represent a more cost-effective source of new generation than fossil fuels. However, in low-price gas markets, such as the US, onshore wind would require further cost reductions. These ranges remain generally higher than that for new coal-fired generation, except in higher-priced coal markets or in the presence of robust carbon pricing.

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Meanwhile, growth in some of the largest markets was affected by uncertainty about future policy changes, and cyclical or policy-related slowdown affected some markets; however, wind deployment also was driven by cost-competitiveness and by environmental and other factors. Wind has become the least-cost option for new power generating capacity in an increasing number of markets. The drop was partially attributable to weaker electricity demand growth and to grid integration challenges.

The US ranked second for both additions (8.2 GW) and for cumulative capacity (82.1 GW) in 2016. Wind power was third after solar PV and natural gas for gross capacity additions, and second for net additions, this accounted for one-fourth of newly installed US power generating capacity. Meanwhile, the EU installed nearly 12.5 GW of gross capacity (12 GW net, accounting for decommissioning), down by 3% from the 2015 record high; additions were up by 11% onshore and down by almost 50% offshore. Total capacity as at end-2016 reached 153.7 GW (92% onshore and 8% offshore). Wind represented the largest percentage of new power capacity in the region (51% of gross additions), followed by solar PV; new fossil fuel power capacity (less than 14% of additions) was far exceeded by retirements. By end-2016, 16 EU member states had more than 1 GW each.

Share of wind power in power supply by country, % (2016)

Source: The European Wind Energy Association, Samruk-Kazyna

Wind power is playing a greater role in power supply in a growing number of countries. In 2016, wind energy covered an estimated 10.4% of EU demand and equal or higher shares in at least 11 EU member states, as well as in Uruguay and Costa Rica. At least 24 countries around the world met 5% or more of their annual electricity demand with wind power. In the US, utility-scale wind power represented over 5.5% of total electricity generation and accounted for more than 15% of generation in nine states, including Iowa (36.6%). Two German states had enough wind capacity as at end-2016 to meet over 86% of their electricity needs, and four had enough capacity to meet over 60% of their needs. Globally, wind power capacity in place by end-2016 was enough to meet an estimated 4% of total electricity consumption.

One of the most evident trends in 2016 was the growing interest in hybrid installations, particularly wind-solar PV. By end-2016, four of the world’s top turbine companies had entered the solar industry. Wind-solar hybrids, which can strengthen a plant’s generation profile and enable sharing of resources for construction and maintenance. Hybrid projects that include storage technologies also are being developed.

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CONTENTS

1. Key highlights 3





6. Conclusion 22


9


Challenges and opportunitiesIn accordance with energy association REN21, new wind capacity will grow with annual average rate of 6% between 2016-2020. It is projected that by 2020 half of the renewable capacity will be presented by hydropower, 25% by wind energy (96% of which onshore), and 16% by photovoltaic energy. Wind power capacity is projected to be 792 GW by 2020, while wind electricity generation is projected to be 2,727TWh.

Global wind capacity forecast (2016-2020) Global wind electricity generation forecast, TWh (2016-2020)

Source: GWEC, Medium-Term Renewable Energy Market Report 2014, Samruk-Kazyna

By 2050, the total electricity production will be in the range of 40,000 to 74,000TWh. According to the World Wind Energy Association’s assessment the wind power generation can be between 8,000TWh to as high as 29,600TWh by 2050. According ot IEA, by 2050, 15%-18% of global electricity is expected to be generated by wind farms based on the different scenarios. Wind capacity in the 2DS scenario1

reaches 2,300GW in 2050 and generates 6,150TWh, while high renewables scenario assumes that wind capacity will be at 2,700GW and electricity generation will rise to 7,250TWh. This requires investment of approximately USD5.5tln to USD6.4tln, as on average of 40-50GW would need to be installed every year for the next 45 years. Close to 70% will be spent in China, OECD Europe andOCED Americas together.

Cumulative investments in wind power, USD bln

2010-20 2020-30 2030-50

OECD Europe 256 337 831OECD Americas 209 455 628

OECD Asia Oceania 32 69 120Africa and Middle East 42 173 194

China 305 385 839India 36 38 158

Latin America 5 12 74Other developing Asia 53 105 279

Other non-OECD 22 61 185Total 960 1,635 3,308

Source: IEA Renewable Energy 2013, Samruk-Kazyna

1 This scenario sees energy systems radically transformed to achieve the goal of limiting global mean temperature increase to 20C.

14.8% 13.7% 12.7% 11.9% 11.2%

1.6%6.3% 5.9%

4.9% 5.3%

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5%

10%

15%

20%

25%

0

200

400

600

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2016 2017 2018 2019 2020Cumulative capacity (GW)Installed capacity (GW)Installed capacity growth (RHS)Cumulative growth (RHS)

936

2,0342,251

2,4832,727

0

500

1000

1500

2000

2500

3000

2016 2017 2018 2019 2020

Onshore Offshore

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Average LCOE for wind power by region, USD per kWh (2016)


The global weighted average LCOE of onshore wind power fell by 18% between 2010 and 2016 alone, to USD 0.07 per kWh for wind farms commissioned in 2016. Onshore wind power has seen a significant convergence in average LCOEs across regions, despite differences in regional cost structures, market sizes and technical skills. Offshore wind power costs, in general, are higher than for other renewable power generation technologies. However, they are falling due to several factors – including technology advances and economies of scale – and good cost reduction opportunities remain. In OECD countries, where most offshore wind capacity is deployed, the average LCOE of projects commissioned in 2016 was estimated at USD 0.15 per kWh. In China the LCOE of projects under construction or commissioned is estimated to average USD 0.16 per kWh (down by 4% from 2010) – a bit higher than in Europe, even though projects are in shallower water and closer to shore.

InvestmentsIn 2016, total global investments in wind power reached USD112.5bln, declining by 9% YoY despite the boom in offshore projects. In 2016, investments in offshore wind totaled USD30bln, up by 41% from the previous year, with no fewer than 14 projects each worth between USD500mln and USD5.7bln getting the go-ahead in the UK, Germany, Belgium, Denmark and China. Investment in wind power was up by 13% to USD60.6bln in developed countries, but down by 27% to USD51.9bln in developing countries. One of the main reasons for the decline in investments was the significant cost reduction of onshore and offshore wind power.

Global investments in wind power, USD bln (2006-2016)

Source: Global trends in renewable energy investment 2017, Samruk-Kazyna

0.00

0.05

0.10

0.15

0.20

Africa Asia CentralAmerica

Eurasia Europe MiddleEast

NorthAmerica

Oceania SouthAmerica

Onshore Offshore

39.7

61.174.8 79.7

101.6

84.2 84.4 89

108.5

124.2112.5

0

20

40

60

80

100

120

140

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

9

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CONTENTS

1. Key highlights 3





6. Conclusion 22


9


Challenges and opportunitiesIn accordance with energy association REN21, new wind capacity will grow with annual average rate of 6% between 2016-2020. It is projected that by 2020 half of the renewable capacity will be presented by hydropower, 25% by wind energy (96% of which onshore), and 16% by photovoltaic energy. Wind power capacity is projected to be 792 GW by 2020, while wind electricity generation is projected to be 2,727TWh.

Global wind capacity forecast (2016-2020) Global wind electricity generation forecast, TWh (2016-2020)

Source: GWEC, Medium-Term Renewable Energy Market Report 2014, Samruk-Kazyna

By 2050, the total electricity production will be in the range of 40,000 to 74,000TWh. According to the World Wind Energy Association’s assessment the wind power generation can be between 8,000TWh to as high as 29,600TWh by 2050. According ot IEA, by 2050, 15%-18% of global electricity is expected to be generated by wind farms based on the different scenarios. Wind capacity in the 2DS scenario1

reaches 2,300GW in 2050 and generates 6,150TWh, while high renewables scenario assumes that wind capacity will be at 2,700GW and electricity generation will rise to 7,250TWh. This requires investment of approximately USD5.5tln to USD6.4tln, as on average of 40-50GW would need to be installed every year for the next 45 years. Close to 70% will be spent in China, OECD Europe andOCED Americas together.

Cumulative investments in wind power, USD bln

2010-20 2020-30 2030-50

OECD Europe 256 337 831OECD Americas 209 455 628

OECD Asia Oceania 32 69 120Africa and Middle East 42 173 194

China 305 385 839India 36 38 158

Latin America 5 12 74Other developing Asia 53 105 279

Other non-OECD 22 61 185Total 960 1,635 3,308

Source: IEA Renewable Energy 2013, Samruk-Kazyna

1 This scenario sees energy systems radically transformed to achieve the goal of limiting global mean temperature increase to 20C.

14.8% 13.7% 12.7% 11.9% 11.2%

1.6%6.3% 5.9%

4.9% 5.3%

0%

5%

10%

15%

20%

25%

0

200

400

600

800

1000

2016 2017 2018 2019 2020Cumulative capacity (GW)Installed capacity (GW)Installed capacity growth (RHS)Cumulative growth (RHS)

936

2,0342,251

2,4832,727

0

500

1000

1500

2000

2500

3000

2016 2017 2018 2019 2020

Onshore Offshore

8


Average LCOE for wind power by region, USD per kWh (2016)


The global weighted average LCOE of onshore wind power fell by 18% between 2010 and 2016 alone, to USD 0.07 per kWh for wind farms commissioned in 2016. Onshore wind power has seen a significant convergence in average LCOEs across regions, despite differences in regional cost structures, market sizes and technical skills. Offshore wind power costs, in general, are higher than for other renewable power generation technologies. However, they are falling due to several factors – including technology advances and economies of scale – and good cost reduction opportunities remain. In OECD countries, where most offshore wind capacity is deployed, the average LCOE of projects commissioned in 2016 was estimated at USD 0.15 per kWh. In China the LCOE of projects under construction or commissioned is estimated to average USD 0.16 per kWh (down by 4% from 2010) – a bit higher than in Europe, even though projects are in shallower water and closer to shore.

InvestmentsIn 2016, total global investments in wind power reached USD112.5bln, declining by 9% YoY despite the boom in offshore projects. In 2016, investments in offshore wind totaled USD30bln, up by 41% from the previous year, with no fewer than 14 projects each worth between USD500mln and USD5.7bln getting the go-ahead in the UK, Germany, Belgium, Denmark and China. Investment in wind power was up by 13% to USD60.6bln in developed countries, but down by 27% to USD51.9bln in developing countries. One of the main reasons for the decline in investments was the significant cost reduction of onshore and offshore wind power.

Global investments in wind power, USD bln (2006-2016)


0.00

0.05

0.10

0.15

0.20



NorthAmerica


Onshore Offshore

39.7

61.174.8 79.7

101.6

84.2 84.4 89

108.5

124.2112.5

0

20

40

60

80

100

120

140

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

10

2


CONTENTS

1. Key highlights 3





6. Conclusion 22


11


2. Wind power in KazakhstanKazakhstan has a considerable potential in wind power generation estimated at 929bln kWh or 354GW of installed capacity, which is more than 10 times higher than current consumption in the country. The government plans to construct 34 wind farms in 46 regions of the country with total capacity of more than 1,787MW by 2020 and 27 solar farms with a capacity of 664MW. Solar energy potential is estimated at 2.5bln kWh per year.

Kazakhstan aims to reduce carbon emissions by 15% and 25% in 2020 and 2050, respectively, compared to its 1992 level to meet its obligations under the Kyoto Protocol. It plans to bring the share of renewable energy in electricity generation to 3% by 2020 rising to 30% by 2030 and 50% by 2050. This implies that Kazakhstan will invest more on the development of renewable energy. Wind power is expected to provide 50% of all renewable energy in Kazakhstan by 2050.

Kazakhstan regions wind potentialRegion The potential based on the wind speed

Wind capacity, MW Electricity, GWhAkmola 108,500 285,100Aktobe 0 0Atyrau 0 0West Kazakhstan 0 0Karaganda 2,100 5,500Pavlodar 0 0Almaty 37,100 97,500Zhambyl 8,400 22,100South Kazakhstan 22,400 58,900Kostanai 0 0North Kazakhstan 106,400 279,600East Kazakhstan 8,400 22,100Mangystau 33,600 88,300Kyzylorda 26,600 69,900TOTAL 353,500 929,000

Source: UNDP, Samruk-Kazyna

The feed-in tariffs for the wind and solar projects were approved by the government for 15-year period at KZT22.7 per KWh and KZT34.61 per KWh, respectively. Tariffs are higher than those for electricity generated by EGRES-2 (coal-fired plant) at KZT8.65 per kWh. However, after 15-year period tariffs for the electricity generated by wind and solar farms is expected to fall as they return money invested. As for now, small hydropower plants are the most actively developing areas of renewable energy. Between 2007-2010 in Almaty region five small HPP were constructed with a capacity of 20MW. However, in the long-term experts believe in the long-term sustainability of wind power. Nowadays, the cost of renewable energy is high, but as technology improves and the cost of alternative energy reduces wind and solar power will take its place in Kazakhstan’s energy balance.

In 2016, the production of electricity by wind farms in Kazakhstan increased by more than 100% YoY and amounted to 274.1mln kWh, or 0.3% of total electricity production. This was due to commissioning of 4 projects totaling 50.39 mW. In 2017, five more wind power projects are expected to come online.

10


The main growth is forecasted to come from China, where the wind energy capacity will rise from current 145GW to almost 630GW by 2050. From 2020 to 2030, 24GW of wind turbines will be needed annually and 39 GW of wind power units need to be retired or transformed. Between 2030 and 2050, average annual wind turbine needs will be approximately 50 GW and 400 GW of wind turbines will need to be retired or reconstructed for the period of 20 years.

By 2050, approximately 25% of wind capacity is expected to be located at sea, up from 6% in 2020. Offshore costs are at present twice those of onshore, although the quality of the resource can be 50% higher. Higher wind speeds off shore mean that plants can produce up to 50% more energy than land-based ones, partly offsetting the higher investment costs. The IEA roadmap projects cost reductions for onshore wind of 25% and for offshore wind of 45% by 2050.

Three big trends will continue to drive growth in renewable energy sector in the long term. • Climate – 186 countries agreed to set long-term target to have 100% emissions free power

sector by 2050, which implies power supply from renewable sources of energy.• Lower prices - the costs of wind technology have fallen dramatically in recent years, and new

financing structures are creating the conditions for renewables to be competitive in many markets.

• Social benefits – including the growing interest in citizen control over energy production, which enables communities to choose the technologies and resources used, improved energy access, security and reliability of supply, a strengthened sense of community, and local job creation and related capacity building – also drive community renewable energy projects.

Nevertheless, several challenges remain, since wind power is still vulnerable to policy changes or measures to protect fossil fuels in some countries. In addition, grid-related challenges increased in several countries as the amount of wind output and its share of total generation have increased. Other challenges for wind power – both onshore and offshore – include lack of transmission infrastructure, delays in grid connection and lack of public acceptance. The delay of issuance of permits and high costs of administration and procedures of grid connection are key problems in many countries. Other barriers include the long term of approval of estimates of impact on environment, the lack of information about possible volumes of energy connected to the grid, insufficient quality of the planning of grid network expansion, and complexity in receiving the rights for land tenure.

Process of delivery of permissions for wind power plants can be difficult, long and expensive. Search for ways for process simplification and coordination between government bodies can accelerate construction of wind power plants considerably. For implementation of the renewables projects, it is necessary to gain its public recognition in order to avoid long processes of the appeal; the responsible government bodies have to estimate reliability of design, radars, roads and airports, and extent of influence of wind generators on habitat of bats and birds. Nevertheless, the number of places where installation of wind generators is forbidden is gradually reduced, and public awareness regarding concerns about impact of wind generators on ecology improves. Such measures as suspension of the use of turbines during migration of birds can reduce negative impact on environment and facilitate obtaining permissions for construction of wind generators.

11

2


CONTENTS

1. Key highlights 3





6. Conclusion 22


11


2. Wind power in KazakhstanKazakhstan has a considerable potential in wind power generation estimated at 929bln kWh or 354GW of installed capacity, which is more than 10 times higher than current consumption in the country. The government plans to construct 34 wind farms in 46 regions of the country with total capacity of more than 1,787MW by 2020 and 27 solar farms with a capacity of 664MW. Solar energy potential is estimated at 2.5bln kWh per year.

Kazakhstan aims to reduce carbon emissions by 15% and 25% in 2020 and 2050, respectively, compared to its 1992 level to meet its obligations under the Kyoto Protocol. It plans to bring the share of renewable energy in electricity generation to 3% by 2020 rising to 30% by 2030 and 50% by 2050. This implies that Kazakhstan will invest more on the development of renewable energy. Wind power is expected to provide 50% of all renewable energy in Kazakhstan by 2050.

Kazakhstan regions wind potentialRegion The potential based on the wind speed

Wind capacity, MW Electricity, GWhAkmola 108,500 285,100Aktobe 0 0Atyrau 0 0West Kazakhstan 0 0Karaganda 2,100 5,500Pavlodar 0 0Almaty 37,100 97,500Zhambyl 8,400 22,100South Kazakhstan 22,400 58,900Kostanai 0 0North Kazakhstan 106,400 279,600East Kazakhstan 8,400 22,100Mangystau 33,600 88,300Kyzylorda 26,600 69,900TOTAL 353,500 929,000


The feed-in tariffs for the wind and solar projects were approved by the government for 15-year period at KZT22.7 per KWh and KZT34.61 per KWh, respectively. Tariffs are higher than those for electricity generated by EGRES-2 (coal-fired plant) at KZT8.65 per kWh. However, after 15-year period tariffs for the electricity generated by wind and solar farms is expected to fall as they return money invested. As for now, small hydropower plants are the most actively developing areas of renewable energy. Between 2007-2010 in Almaty region five small HPP were constructed with a capacity of 20MW. However, in the long-term experts believe in the long-term sustainability of wind power. Nowadays, the cost of renewable energy is high, but as technology improves and the cost of alternative energy reduces wind and solar power will take its place in Kazakhstan’s energy balance.

In 2016, the production of electricity by wind farms in Kazakhstan increased by more than 100% YoY and amounted to 274.1mln kWh, or 0.3% of total electricity production. This was due to commissioning of 4 projects totaling 50.39 mW. In 2017, five more wind power projects are expected to come online.

10


The main growth is forecasted to come from China, where the wind energy capacity will rise from current 145GW to almost 630GW by 2050. From 2020 to 2030, 24GW of wind turbines will be needed annually and 39 GW of wind power units need to be retired or transformed. Between 2030 and 2050, average annual wind turbine needs will be approximately 50 GW and 400 GW of wind turbines will need to be retired or reconstructed for the period of 20 years.

By 2050, approximately 25% of wind capacity is expected to be located at sea, up from 6% in 2020. Offshore costs are at present twice those of onshore, although the quality of the resource can be 50% higher. Higher wind speeds off shore mean that plants can produce up to 50% more energy than land-based ones, partly offsetting the higher investment costs. The IEA roadmap projects cost reductions for onshore wind of 25% and for offshore wind of 45% by 2050.

Three big trends will continue to drive growth in renewable energy sector in the long term. • Climate – 186 countries agreed to set long-term target to have 100% emissions free power

sector by 2050, which implies power supply from renewable sources of energy.• Lower prices - the costs of wind technology have fallen dramatically in recent years, and new

financing structures are creating the conditions for renewables to be competitive in many markets.

• Social benefits – including the growing interest in citizen control over energy production, which enables communities to choose the technologies and resources used, improved energy access, security and reliability of supply, a strengthened sense of community, and local job creation and related capacity building – also drive community renewable energy projects.

Nevertheless, several challenges remain, since wind power is still vulnerable to policy changes or measures to protect fossil fuels in some countries. In addition, grid-related challenges increased in several countries as the amount of wind output and its share of total generation have increased. Other challenges for wind power – both onshore and offshore – include lack of transmission infrastructure, delays in grid connection and lack of public acceptance. The delay of issuance of permits and high costs of administration and procedures of grid connection are key problems in many countries. Other barriers include the long term of approval of estimates of impact on environment, the lack of information about possible volumes of energy connected to the grid, insufficient quality of the planning of grid network expansion, and complexity in receiving the rights for land tenure.

Process of delivery of permissions for wind power plants can be difficult, long and expensive. Search for ways for process simplification and coordination between government bodies can accelerate construction of wind power plants considerably. For implementation of the renewables projects, it is necessary to gain its public recognition in order to avoid long processes of the appeal; the responsible government bodies have to estimate reliability of design, radars, roads and airports, and extent of influence of wind generators on habitat of bats and birds. Nevertheless, the number of places where installation of wind generators is forbidden is gradually reduced, and public awareness regarding concerns about impact of wind generators on ecology improves. Such measures as suspension of the use of turbines during migration of birds can reduce negative impact on environment and facilitate obtaining permissions for construction of wind generators.

12

2


CONTENTS

1. Key highlights 3





6. Conclusion 22


13


best wind characteristics among the sites. In Arkalyk, Karkaraly and Kordai smaller power turbines could be utilized as the sites have lower wind characteristics.

Kazakhstan’s potential for wind energy is estimated at 929bln kWh (or 354GW of installed capacity), which is more than 10 times higher than current consumption in the country. The volume of electricity that can be generated by modern wind farms in those regions of Kazakhstan where annual average wind speed amounts more than 7m/sec. However, not all of the potential volume can be realized due to inconvenience of the place where the farm is expected to be constructed and lack of electrical grid for connection of them to the country’s energy system. According to the plan for the development of renewable energy in Kazakhstan for 2013-2020, 34 wind farms will be constructed in 46 regions of the country with a total capacity of more than 1,787MW by 2020.

Kazakhstan regions wind potential, sq. km Region Wind speed The potential based on the wind

speedLow

< 6 m/sAverage

6 - <7 m/sHigh

7 - <8 m/sVery high8 - <9 m/s

Excessive > 9 m/s

Wind capacity, MW

Electricity,GWh

Akmola 45,500 85,200 15,500 0 0 108,500 285,100Aktobe 254,400 46,200 0 0 0 0 0Atyrau 58,100 60,500 0 0 0 0 0West Kazakhstan 61,400 89,900 0 0 0 0 0Karaganda 343,100 84,600 300 0 0 2,100 5,500Pavlodar 37,700 87,100 0 0 0 0 0Almaty 197,300 20,000 5,300 1,200 200 37,100 97,500Zhambyl 106,200 36,800 1,200 0 0 8,400 22,100South Kazakhstan 102,400 11,700 3,200 0 0 22,400 58,900Kostanai 81,500 114,500 0 0 0 0 0North Kazakhstan 0 82,800 15,200 0 0 106,400 279,600East Kazakhstan 241,300 40,800 1,200 0 0 8,400 22,100Mangystau 73,200 87,700 4,800 0 0 33,600 88,300Kyzylorda 193,100 29,100 3,800 0 0 26,600 69,900TOTAL 353,500 929,000


The main drivers of wind energy in Kazakhstan are:1) The aging power generation infrastructure;2) The need to move to a more environmentally responsible society and economy;3) Transmission and distribution losses are still high in Kazakhstan (6%) due to aging

infrastructure. The utilization of wind energy can reduce losses by reducing the distance for transmission;

4) High carbon dioxide emissions due to heavy reliance on coal for electricity production. The very low carbon intensity of wind farms presents an attractive option for government and investors.

Current cumulative installed wind capacity in the country is insignificant, but there are a number of planned construction projects of wind farm.

12


Total electricity production in Kazakhstan, bln kWh (2011-2016)

Source: Agency of Statistics, Samruk-Kazyna

In 2016, the total production of renewable energy, excluding major hydroelectric power stations,reached 928 bln kWh or 0.93% of total electricity production. The main increase was due to the commissioning of several wind and hydropower projects. The installed capacity increased by 30.9MWand 19.49MW YoY, respectively. Wind power projects continue to be concentrated in the southern regions of the country.

Total installed capacity by type of plant, MW

Source: Ministry of Energy of RK, Samruk-Kazyna

Kazakhstan is endowed with considerable wind resources, which are sufficient for the introduction of industrial scale wind farms. Almost 50% of Kazakhstan’s territory has average wind speed suitable for energy generation (4-6m/sec) with the strongest potential in the Caspian Sea, central and northern regions. The most promising sites are in the Almaty region in the Djungar Gates, 600 km northeast of Almaty close to the Xinjiang border and the Chylyk Corridor 100 km east of Almaty.

The highest wind speeds for most of the locations occur during the winter months of December, January and February. Additionally, some high-speed values are observed during May. On the other hand, the wind speeds of summer season are the lowest. Coincidentally, the electricity peak demand in Kazakhstan is observed during winter seasons what makes introduction of wind energy important. Based on the results of UNDP’s study Yereimentau, Fort Shevchenko, Karabatan and Shelek have the

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

82

84

86

88

90

92

94

96

98

2011 2012 2013 2014 2015 2016

Electricity production Share of wind power plants (RHS)

9.4

130.2

274.1

1.2

44.8

86.1

0

50

100

150

200

250

300

2014 2015 2016

Wind Solar

13

2


CONTENTS

1. Key highlights 3





6. Conclusion 22


13


best wind characteristics among the sites. In Arkalyk, Karkaraly and Kordai smaller power turbines could be utilized as the sites have lower wind characteristics.

Kazakhstan’s potential for wind energy is estimated at 929bln kWh (or 354GW of installed capacity), which is more than 10 times higher than current consumption in the country. The volume of electricity that can be generated by modern wind farms in those regions of Kazakhstan where annual average wind speed amounts more than 7m/sec. However, not all of the potential volume can be realized due to inconvenience of the place where the farm is expected to be constructed and lack of electrical grid for connection of them to the country’s energy system. According to the plan for the development of renewable energy in Kazakhstan for 2013-2020, 34 wind farms will be constructed in 46 regions of the country with a total capacity of more than 1,787MW by 2020.

Kazakhstan regions wind potential, sq. km Region Wind speed The potential based on the wind

speedLow

< 6 m/sAverage

6 - <7 m/sHigh

7 - <8 m/sVery high8 - <9 m/s

Excessive > 9 m/s

Wind capacity, MW

Electricity,GWh

Akmola 45,500 85,200 15,500 0 0 108,500 285,100Aktobe 254,400 46,200 0 0 0 0 0Atyrau 58,100 60,500 0 0 0 0 0West Kazakhstan 61,400 89,900 0 0 0 0 0Karaganda 343,100 84,600 300 0 0 2,100 5,500Pavlodar 37,700 87,100 0 0 0 0 0Almaty 197,300 20,000 5,300 1,200 200 37,100 97,500Zhambyl 106,200 36,800 1,200 0 0 8,400 22,100South Kazakhstan 102,400 11,700 3,200 0 0 22,400 58,900Kostanai 81,500 114,500 0 0 0 0 0North Kazakhstan 0 82,800 15,200 0 0 106,400 279,600East Kazakhstan 241,300 40,800 1,200 0 0 8,400 22,100Mangystau 73,200 87,700 4,800 0 0 33,600 88,300Kyzylorda 193,100 29,100 3,800 0 0 26,600 69,900TOTAL 353,500 929,000


The main drivers of wind energy in Kazakhstan are:1) The aging power generation infrastructure;2) The need to move to a more environmentally responsible society and economy;3) Transmission and distribution losses are still high in Kazakhstan (6%) due to aging

infrastructure. The utilization of wind energy can reduce losses by reducing the distance for transmission;

4) High carbon dioxide emissions due to heavy reliance on coal for electricity production. The very low carbon intensity of wind farms presents an attractive option for government and investors.

Current cumulative installed wind capacity in the country is insignificant, but there are a number of planned construction projects of wind farm.

12


Total electricity production in Kazakhstan, bln kWh (2011-2016)

Source: Agency of Statistics, Samruk-Kazyna

In 2016, the total production of renewable energy, excluding major hydroelectric power stations,reached 928 bln kWh or 0.93% of total electricity production. The main increase was due to the commissioning of several wind and hydropower projects. The installed capacity increased by 30.9MWand 19.49MW YoY, respectively. Wind power projects continue to be concentrated in the southern regions of the country.

Total installed capacity by type of plant, MW

Source: Ministry of Energy of RK, Samruk-Kazyna

Kazakhstan is endowed with considerable wind resources, which are sufficient for the introduction of industrial scale wind farms. Almost 50% of Kazakhstan’s territory has average wind speed suitable for energy generation (4-6m/sec) with the strongest potential in the Caspian Sea, central and northern regions. The most promising sites are in the Almaty region in the Djungar Gates, 600 km northeast of Almaty close to the Xinjiang border and the Chylyk Corridor 100 km east of Almaty.

The highest wind speeds for most of the locations occur during the winter months of December, January and February. Additionally, some high-speed values are observed during May. On the other hand, the wind speeds of summer season are the lowest. Coincidentally, the electricity peak demand in Kazakhstan is observed during winter seasons what makes introduction of wind energy important. Based on the results of UNDP’s study Yereimentau, Fort Shevchenko, Karabatan and Shelek have the

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

82

84

86

88

90

92

94

96

98

2011 2012 2013 2014 2015 2016

Electricity production Share of wind power plants (RHS)

9.4

130.2

274.1

1.2

44.8

86.1

0

50

100

150

200

250

300

2014 2015 2016

Wind Solar

14

2


CONTENTS

1. Key highlights 3





6. Conclusion 22


15


16 Baidibek-2, Zhambyl oblast 120 TOO NAR 2017 68,76517 Gulshat, Karaganda oblast 50 - 2016 20,00018 Arkalyk, Kostanai oblast 48 Kazwind Energy 2018 15,80019 Mendikaryn, Kostanai oblast 30 Ecowind Ltd 2016 16,08820 Aral, Kyzylorda oblast 10 Global Energy Co 2015 -

21 Fort-Shevchenko, Mangistau oblast 19.5 JSC Caspiy ; LLP DMK 2016 5,62522 Fort-Shevchenko, Mangistau oblast 42 LLP South Wind Power 2015 15,00023 Fort-Shevchenko, Mangistau oblast 50 LLP Bogart 2017 18,00024 Kurik, Mangistau oblast 50 LLP Invest Green 2017 -25 Tupkaragan, Mangistau oblast 42 LLP Redkometalnaya c 2018 -26 Kyzylzhar, North KZ region 1.5 LLP Zenchenko and co 2013 18527 Kyzylzhar, North KZ region 2 LLP Zenchenko and co 2014 40328 Esil, North KZ region 50 LLP KGCM service 2017 16,00029 Tainshin, North KZ region 35 LLP MGP UK 2017 11,950

30Baidibek, South KZ region 40

LLP Kazakhstan municipal system

2015 -

31 Baidibek, South KZ region 50 LLP Sovitek 2017 -32 Kentau, South KZ region 60 LLP Uzhshahstroy 2017 -33 Saryagash, South KZ region 100 LLP SB Capital 2017 36,400

* Expansion of existing wind farmSource: Plan for development of renewable energy in Kazakhstan for 2013- 2020, Samruk-Kazyna

The main problem of renewable resources energy is its instability. Even with average annual wind speed of 5 m/s situations with the failure of electricity generation in the absence or insufficient wind velocity are unavoidable. As it is impossible to accumulate electricity in sufficient quantities, the energy failures must be either regulated or compensated in a timely manner with other sources. This aspect is extremely important for industrial companies, which consume almost 70% of electricity in Kazakhstan.

In Western countries, where the share of wind power is high, complex systems aimed to balance production and consumption of energy were created. However, this resulted in an increase of the cost of production and distribution of wind energy. In addition, such systems are effective, only if the proportion of wind energy in the total amount does not exceed 10-15%. This implies that the energy system of Kazakhstan could build wind power plants with total capacity of no more than 2,000 MW. Otherwise, the creation of reserve capacities is needed. This means that each wind power plant requires the creation of duplicate coal-fired or gas-fired plant. The coefficient of wind generator inactivity is estimated at 50%, which demands a duplicate power plant to operate during the rest of time. This can be justified when the cost of natural energy resources (coal, gas, oil) is high and savings from the use of wind power are essential.

Traditional fossil-based power plants are more cost-competitive in Kazakhstan, rich in natural resources. It is cheaper to use existing thermal power plants than to construct wind farms. Ekibastuz GRES-1, a coal-fired thermal power plant, sells electricity at KZT8.65, while tariffs of wind farm in Yereimentau were at KZT22.68. Thus, there are no economic benefits of using the wind power. Nevertheless, Kazakhstan is trying to enter the global mainstream on development of alternative energy sources. In the long-term, energy will continue to move away from traditional fuels. The development of wind energy in Kazakhstan in the near term will depend partly on the government support.

14


First Wind FarmLLP First Wind Farm was founded in 2011 and is owned by Samruk-Energy. The installed capacity of the wind farm amounts to 45MW. This farm consists of 22 wind turbine generators with capacity of 2.05 MW each. The total estimated cost of the project is KZT18.9bln. The electricity production stood at 79mln kWh in 2015 and is expected to reach 172mln kWh in 2016-2017. Tariffs for electricity was imposed at KZT22.68kWh and is expected to stay flat in 2016 and to increase to KZT24.27kWh in 2017. The project is expected to allow to reduce electricity deficit in Akmola region, while a part of generated electricity will be used for the needs of EXPO- 2017 in Astana.

Yereimentau Wind FarmThe project is located in south-west of Yereimentau town with an installed capacity of 50MW. The project is implemented by Samruk Green Energy LLP, a renewable energy subsidiary of Samruk-Energy. The project is the second stage of an ambitious program to develop 300MW wind power capacity in Yereimentau area. The project consists of 20 wind turbine generators of 2.5MW each.

The third wind farm project in the area around Yereimentau with a capacity of 30-50MW will be developed by Chevron company. This project is in a planning stage, construction has not been initiated.

In 2013, the government of Kazakhstan adopted a plan for the development of renewable energy generation for 2013-2020. As a part of this plan, the government wants to put into operation 106 renewable energy facilities with installed capacity of 3,054MW. It is planned to construct 33 wind farms with capacity of 1,737MW. Four wind power plants will be launched in Almaty oblast in the period from 2016 to 2018, two of them will be located in Shelek corridor and another two in the Djungar gates area. Samruk-Energy jointly with a Chinese corporation plan start construction a wind farm with a capacity of 60MW in Shelek corridor in 2016.

New wind farms construction for 2013-2020

Water power stattionCapacity, MW

Responsible company YearInvestment, KZT

mln 1 Yereimentau, Akmola oblast 50 Samruk Green Energy 2016 19,7002 Yereimentau, Akmola oblast 50 Chevron Munaigas Inc 2017 30,0003 Badamsha, Aktobe region 48 LLP Arm Wind 2018 16,0004 Kargaly, Aktobe oblast 100 LLP «SB Capital» 2018 36,4005 Shelek corridor, Almaty oblast 51 LLP Samruk Green Energy 2015 12,8816 Shelek corridor, Almaty oblast 60 LLP Samruk Green Energy

LLP Ak kuat2017 27,000

7 Djungar Gates, Almaty oblast 72 2018 15,0008 Djungar Gates, Almaty oblast 19.5 TOO VES Saikan 2015 5,7259 Atyrau oblast 30 LLP Antares Platinum 2016 17,290

10 Karabatan, Atyrau oblast 50 Greenfortis Gmbh 2016 24,03511 Tainty, West KZ region (winpark) 24 LLP Spainconsulting 2016 8,08412 Kordai, Zhambyl oblast 21 LLP Vista International 2016 5,451

13Zhanatas, Zhambyl oblast 100

LLP Central Asia Green power

2017 28,500

14 k-1, Kordai, Zhambyl oblast* 18 LLP Izen Su 2017 4,91215 Shokpar 2, Zhambyl oblast 250 LLP Windhan 2017 56,056

15

2


CONTENTS

1. Key highlights 3





6. Conclusion 22


15


16 Baidibek-2, Zhambyl oblast 120 TOO NAR 2017 68,76517 Gulshat, Karaganda oblast 50 - 2016 20,00018 Arkalyk, Kostanai oblast 48 Kazwind Energy 2018 15,80019 Mendikaryn, Kostanai oblast 30 Ecowind Ltd 2016 16,08820 Aral, Kyzylorda oblast 10 Global Energy Co 2015 -

21 Fort-Shevchenko, Mangistau oblast 19.5 JSC Caspiy ; LLP DMK 2016 5,62522 Fort-Shevchenko, Mangistau oblast 42 LLP South Wind Power 2015 15,00023 Fort-Shevchenko, Mangistau oblast 50 LLP Bogart 2017 18,00024 Kurik, Mangistau oblast 50 LLP Invest Green 2017 -25 Tupkaragan, Mangistau oblast 42 LLP Redkometalnaya c 2018 -26 Kyzylzhar, North KZ region 1.5 LLP Zenchenko and co 2013 18527 Kyzylzhar, North KZ region 2 LLP Zenchenko and co 2014 40328 Esil, North KZ region 50 LLP KGCM service 2017 16,00029 Tainshin, North KZ region 35 LLP MGP UK 2017 11,950

30Baidibek, South KZ region 40

LLP Kazakhstan municipal system

2015 -

31 Baidibek, South KZ region 50 LLP Sovitek 2017 -32 Kentau, South KZ region 60 LLP Uzhshahstroy 2017 -33 Saryagash, South KZ region 100 LLP SB Capital 2017 36,400

* Expansion of existing wind farmSource: Plan for development of renewable energy in Kazakhstan for 2013- 2020, Samruk-Kazyna

The main problem of renewable resources energy is its instability. Even with average annual wind speed of 5 m/s situations with the failure of electricity generation in the absence or insufficient wind velocity are unavoidable. As it is impossible to accumulate electricity in sufficient quantities, the energy failures must be either regulated or compensated in a timely manner with other sources. This aspect is extremely important for industrial companies, which consume almost 70% of electricity in Kazakhstan.

In Western countries, where the share of wind power is high, complex systems aimed to balance production and consumption of energy were created. However, this resulted in an increase of the cost of production and distribution of wind energy. In addition, such systems are effective, only if the proportion of wind energy in the total amount does not exceed 10-15%. This implies that the energy system of Kazakhstan could build wind power plants with total capacity of no more than 2,000 MW. Otherwise, the creation of reserve capacities is needed. This means that each wind power plant requires the creation of duplicate coal-fired or gas-fired plant. The coefficient of wind generator inactivity is estimated at 50%, which demands a duplicate power plant to operate during the rest of time. This can be justified when the cost of natural energy resources (coal, gas, oil) is high and savings from the use of wind power are essential.

Traditional fossil-based power plants are more cost-competitive in Kazakhstan, rich in natural resources. It is cheaper to use existing thermal power plants than to construct wind farms. Ekibastuz GRES-1, a coal-fired thermal power plant, sells electricity at KZT8.65, while tariffs of wind farm in Yereimentau were at KZT22.68. Thus, there are no economic benefits of using the wind power. Nevertheless, Kazakhstan is trying to enter the global mainstream on development of alternative energy sources. In the long-term, energy will continue to move away from traditional fuels. The development of wind energy in Kazakhstan in the near term will depend partly on the government support.

14


First Wind FarmLLP First Wind Farm was founded in 2011 and is owned by Samruk-Energy. The installed capacity of the wind farm amounts to 45MW. This farm consists of 22 wind turbine generators with capacity of 2.05 MW each. The total estimated cost of the project is KZT18.9bln. The electricity production stood at 79mln kWh in 2015 and is expected to reach 172mln kWh in 2016-2017. Tariffs for electricity was imposed at KZT22.68kWh and is expected to stay flat in 2016 and to increase to KZT24.27kWh in 2017. The project is expected to allow to reduce electricity deficit in Akmola region, while a part of generated electricity will be used for the needs of EXPO- 2017 in Astana.

Yereimentau Wind FarmThe project is located in south-west of Yereimentau town with an installed capacity of 50MW. The project is implemented by Samruk Green Energy LLP, a renewable energy subsidiary of Samruk-Energy. The project is the second stage of an ambitious program to develop 300MW wind power capacity in Yereimentau area. The project consists of 20 wind turbine generators of 2.5MW each.

The third wind farm project in the area around Yereimentau with a capacity of 30-50MW will be developed by Chevron company. This project is in a planning stage, construction has not been initiated.

In 2013, the government of Kazakhstan adopted a plan for the development of renewable energy generation for 2013-2020. As a part of this plan, the government wants to put into operation 106 renewable energy facilities with installed capacity of 3,054MW. It is planned to construct 33 wind farms with capacity of 1,737MW. Four wind power plants will be launched in Almaty oblast in the period from 2016 to 2018, two of them will be located in Shelek corridor and another two in the Djungar gates area. Samruk-Energy jointly with a Chinese corporation plan start construction a wind farm with a capacity of 60MW in Shelek corridor in 2016.

New wind farms construction for 2013-2020

Water power stattionCapacity, MW

Responsible company YearInvestment, KZT

mln 1 Yereimentau, Akmola oblast 50 Samruk Green Energy 2016 19,7002 Yereimentau, Akmola oblast 50 Chevron Munaigas Inc 2017 30,0003 Badamsha, Aktobe region 48 LLP Arm Wind 2018 16,0004 Kargaly, Aktobe oblast 100 LLP «SB Capital» 2018 36,4005 Shelek corridor, Almaty oblast 51 LLP Samruk Green Energy 2015 12,8816 Shelek corridor, Almaty oblast 60 LLP Samruk Green Energy

LLP Ak kuat2017 27,000

7 Djungar Gates, Almaty oblast 72 2018 15,0008 Djungar Gates, Almaty oblast 19.5 TOO VES Saikan 2015 5,7259 Atyrau oblast 30 LLP Antares Platinum 2016 17,290

10 Karabatan, Atyrau oblast 50 Greenfortis Gmbh 2016 24,03511 Tainty, West KZ region (winpark) 24 LLP Spainconsulting 2016 8,08412 Kordai, Zhambyl oblast 21 LLP Vista International 2016 5,451

13Zhanatas, Zhambyl oblast 100

LLP Central Asia Green power

2017 28,500

14 k-1, Kordai, Zhambyl oblast* 18 LLP Izen Su 2017 4,91215 Shokpar 2, Zhambyl oblast 250 LLP Windhan 2017 56,056

16

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1. Key highlights 3





6. Conclusion 22


17


demand. The US was a distant second after China for new installations in 2016, with solar PV representing the country’s leading source of new generating capacity for the first time. More than 14.8 GW of capacity was brought online, for a total of 40.9 GW.

PV capacity additions by country, % of total (2016)

Source: International Energy Agency Report 2017

Market expansion was attributed to the increasing competitiveness of solar PV, as well as to rising demand for electricity and improving awareness of solar PV’s potential. In many emerging markets solar PV now is considered a cost-competitive source for increasing electricity production and for providing energy access. Nevertheless, markets in most locations continue to be driven largely by government incentives or regulations.

While demand is expanding rapidly for off-grid solar PV, the capacity of grid-connected systems is rising more quickly and continues to account for the vast majority of solar PV installations worldwide. Decentralized (residential, commercial and industrial rooftop systems) grid-connected applications have struggled to maintain a stable global market (in terms of capacity added annually) since 2011, particularly with the transition from feed-in tariffs and net metering to self-consumption. Centralized large-scale projects, by contrast, have comprised a rising share of annual installations, particularly in emerging markets, representing the majority of annual installations despite grid connection challenges.

Investment and cost of energyGlobal investment in solar PV in 2016 amounted to USD113.7bln (47% of total) remaining larger than those into other renewables, although the volume of investments decreased by 34% vs. 2015. Small-scale solar PV installations (less than 1 MW) accounted for USD39.8bln worldwide, representing a decline of 28%. Significant cost reductions played a large role in these falling investment numbers, since the solar PV market increased by nearly 50% relative to 2015. R&D spending was down by 20% to USD3.6bln. Even though total investment in renewables capacity fell by 23% in 2016 in dollar terms, it was still approximately double that in new fossil fuel power stations, and more than seven times the amount committed to new nuclear plants.

46%

20%

12%

6%

3% 2% 1%

1%

10%

China US Japan India UK Germany Korea Australia Rest

16


3. Global solar powerDuring 2016, at least 75 GW of solar PV capacity was added worldwide – equivalent to the installation of more than 31,000 solar panels every hour. More solar PV capacity was installed in 2016 (up by 48% over 2015) than the cumulative world capacity five years earlier. By end-2016, global solar PV capacity totaled at least 303 GW.

Solar PV global capacity, GW (2006-2016)

Source: Renewables 2017 Global Status Report, Samruk-Kazyna

For the fourth consecutive year, Asia surpassed all other markets, accounting for approximately two-thirds of global additions. The top five markets – China, US, Japan, India and the UK – accounted for 85% of additions; other countries in the top 10 for additions include Germany, Korea, Australia, Philippines and Chile. For cumulative capacity, the top countries were China, Japan (which passedGermany) and the US. Emerging markets on all continents have begun to contribute significantly to global growth. By end-2016, every continent had installed at least 1 GW, at least 24 countries had 1 GW or more of capacity, and at least 114 countries had more than 10 MW. The leaders for solar PV capacity per inhabitant were Germany, Japan, Italy, Belgium and Australia.

Top 10 countries by PV capacity, GW (2016)


In 2016, China added 34.5 GW (up 126% over 2015), increasing its total solar PV capacity by 45% to 77.4 GW, far more than that of any other country. The record increase came despite a downwards adjustment in China’s target for 2020, made in response to a slowdown in the growth of electricity

6 7 16 2340

7099

137

177

228

303

0

50

100

150

200

250

300

350

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

77.4

45.8

41.3

40.9

19.3

11.7

9.1

7.1

5.8

5.5

C h i n a J a p a n G e r m a n y U S I t a l y U K I n d i a F r a n c eA u s t r a l i a S p a i n

17

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1. Key highlights 3





6. Conclusion 22


17


demand. The US was a distant second after China for new installations in 2016, with solar PV representing the country’s leading source of new generating capacity for the first time. More than 14.8 GW of capacity was brought online, for a total of 40.9 GW.

PV capacity additions by country, % of total (2016)

Source: International Energy Agency Report 2017

Market expansion was attributed to the increasing competitiveness of solar PV, as well as to rising demand for electricity and improving awareness of solar PV’s potential. In many emerging markets solar PV now is considered a cost-competitive source for increasing electricity production and for providing energy access. Nevertheless, markets in most locations continue to be driven largely by government incentives or regulations.

While demand is expanding rapidly for off-grid solar PV, the capacity of grid-connected systems is rising more quickly and continues to account for the vast majority of solar PV installations worldwide. Decentralized (residential, commercial and industrial rooftop systems) grid-connected applications have struggled to maintain a stable global market (in terms of capacity added annually) since 2011, particularly with the transition from feed-in tariffs and net metering to self-consumption. Centralized large-scale projects, by contrast, have comprised a rising share of annual installations, particularly in emerging markets, representing the majority of annual installations despite grid connection challenges.

Investment and cost of energyGlobal investment in solar PV in 2016 amounted to USD113.7bln (47% of total) remaining larger than those into other renewables, although the volume of investments decreased by 34% vs. 2015. Small-scale solar PV installations (less than 1 MW) accounted for USD39.8bln worldwide, representing a decline of 28%. Significant cost reductions played a large role in these falling investment numbers, since the solar PV market increased by nearly 50% relative to 2015. R&D spending was down by 20% to USD3.6bln. Even though total investment in renewables capacity fell by 23% in 2016 in dollar terms, it was still approximately double that in new fossil fuel power stations, and more than seven times the amount committed to new nuclear plants.

46%

20%

12%

6%

3% 2% 1%

1%

10%

China US Japan India UK Germany Korea Australia Rest

16


3. Global solar powerDuring 2016, at least 75 GW of solar PV capacity was added worldwide – equivalent to the installation of more than 31,000 solar panels every hour. More solar PV capacity was installed in 2016 (up by 48% over 2015) than the cumulative world capacity five years earlier. By end-2016, global solar PV capacity totaled at least 303 GW.

Solar PV global capacity, GW (2006-2016)


For the fourth consecutive year, Asia surpassed all other markets, accounting for approximately two-thirds of global additions. The top five markets – China, US, Japan, India and the UK – accounted for 85% of additions; other countries in the top 10 for additions include Germany, Korea, Australia, Philippines and Chile. For cumulative capacity, the top countries were China, Japan (which passedGermany) and the US. Emerging markets on all continents have begun to contribute significantly to global growth. By end-2016, every continent had installed at least 1 GW, at least 24 countries had 1 GW or more of capacity, and at least 114 countries had more than 10 MW. The leaders for solar PV capacity per inhabitant were Germany, Japan, Italy, Belgium and Australia.

Top 10 countries by PV capacity, GW (2016)


In 2016, China added 34.5 GW (up 126% over 2015), increasing its total solar PV capacity by 45% to 77.4 GW, far more than that of any other country. The record increase came despite a downwards adjustment in China’s target for 2020, made in response to a slowdown in the growth of electricity

6 7 16 2340

7099

137

177

228

303

0

50

100

150

200

250

300

350

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

77.4

45.8

41.3

40.9

19.3

11.7

9.1

7.1

5.8

5.5

C h i n a J a p a n G e r m a n y U S I t a l y U K I n d i a F r a n c eA u s t r a l i a S p a i n

18

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1. Key highlights 3





6. Conclusion 22


19


global PV capacity that had been installed by end-2019 would be generating 530 TWh to 580 TWh, or approximately 2% of global electricity consumption.

Regional production of PV electricity (2015-2050f)

Source: Technology Roadmap Solar PV energy 2014

Based on hi-Ren scenario, deployment of solar PV is expected to be at 1,700GW by 2030 and 4,670GW by 2050.This represents capacity additions of over 120GW per year on average. Electricity generation is forecasted to be 2,370TWh by 2030 and 6,300TWh by 2050, so that PV achieves a 16% share in the global electricity mix.

PV capacities by region in 2030 and 2050 in the hi-Ren scenario (GW)

Year USOther OECD

Americas EU

Other OECD

China India Africa Middle East

Other Asia

Eastern Europe &

former USSR

Non-OECD

Americas World

2013 12.5 1.3 78 18 18 2.3 0.3 0.1 1.4 3 0.2 135

2030 246 29 192 157 634 142 85 94 93 12 38 1,7212050 599 62 229 292 1,738 575 169 268 526 67 149 4,674

Source: Technology Roadmap Solar PV energy 2014, Samruk-Kazyna

China is expected to overtake Europe as the largest producer of PV electricity soon after 2020 with its share regularly increasing from 18% of global generation by 2015 to 40% by 2030 then slowly declining to 35% by 2050. From 2030 to 2050, the share of India and other Asian countries is expected to rise from 13% to 25%. By contrast, the US’s share is expected to remain at 15% from 2020 on, and Europe’s share to decrease constantly from 44% in 2015 to 4% in 2045.

In the non-OECD countries, it is expected that solar generation to grow by 19.2% per year on average from 2020 to 2040, nearly twice the growth rates for wind (7.7% per year) and geothermal (8.6% per year). By comparison, in the OECD region, wind, solar, and geothermal generation grow at comparable rates of more than 4.5% per year.

Grid access, financing and administrative barriers remain the largest challenges to growth for the solar power industry. However, recent technological progress has made solar PV increasingly cost-competitive with traditional power sources, with large-scale projects outcompeting even new fossil fuel plants in some markets, especially in regions with low-cost financing.

18


Solar energy investments, USD bln (2015-2016)


Of all renewable energy technologies, utility-scale (larger than 1 MW capacity) solar PV has experienced the most rapid decline in the levelized cost of electricity (LCOE), driven by reductions in module prices and balance of systems costs. Between 2010 and 2016, the global weighted average total installed cost of commissioned utility-scale solar PV projects fell by 65%, with the LCOE falling by 67% over the period. Projects commissioned in 2016 had an average LCOE of approximately USD 0.12 per kWh, and a range of USD 0.05 per kWh to USD 0.35 per kWh. Costs vary by region, with the 2016 weighted average LCOE of utility-scale solar PV at USD 0.09 per kWh in China and India (down by 68% from 2010), USD 0.14 per kWh in OECD countries (down by 61% from 2010) and USD 0.17 per kWh elsewhere (down by 57% from 2011).

LCOE for solar power in main regions, USD/kWh

Source: Renewables 2016 Global Status Report

Challenges and opportunitiesAccording to the IEA Medium-Term renewable energy market report, cumulative installed capacity will likely to exceed 400GW worldwide by 2020. China adopted a target of 70 GW PV capacity by 2017 and would lead the world, with over 110 GW. Japan and Germany would each reach approximately 50 GW, followed by the US at over 40 GW. Italy and India would rank fifth and sixth with 25 GW and 15 GW, followed by the UK, France and Australia, all nearing 10 GW. By 2020 China would be leading with almost 14 GW per year, followed by the US (5 GW per year) and Japan (3 to 4 GW per year). In 2020,

-40.00%

-20.00%

0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

0

50

100

150

200

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

USDbln % change

0.00

0.05

0.10

0.15

0.20

0.25



NorthAmerica


19

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1. Key highlights 3





6. Conclusion 22


19


global PV capacity that had been installed by end-2019 would be generating 530 TWh to 580 TWh, or approximately 2% of global electricity consumption.

Regional production of PV electricity (2015-2050f)

Source: Technology Roadmap Solar PV energy 2014

Based on hi-Ren scenario, deployment of solar PV is expected to be at 1,700GW by 2030 and 4,670GW by 2050.This represents capacity additions of over 120GW per year on average. Electricity generation is forecasted to be 2,370TWh by 2030 and 6,300TWh by 2050, so that PV achieves a 16% share in the global electricity mix.

PV capacities by region in 2030 and 2050 in the hi-Ren scenario (GW)

Year USOther OECD

Americas EU

Other OECD

China India Africa Middle East

Other Asia

Eastern Europe &

former USSR

Non-OECD

Americas World

2013 12.5 1.3 78 18 18 2.3 0.3 0.1 1.4 3 0.2 135

2030 246 29 192 157 634 142 85 94 93 12 38 1,7212050 599 62 229 292 1,738 575 169 268 526 67 149 4,674

Source: Technology Roadmap Solar PV energy 2014, Samruk-Kazyna

China is expected to overtake Europe as the largest producer of PV electricity soon after 2020 with its share regularly increasing from 18% of global generation by 2015 to 40% by 2030 then slowly declining to 35% by 2050. From 2030 to 2050, the share of India and other Asian countries is expected to rise from 13% to 25%. By contrast, the US’s share is expected to remain at 15% from 2020 on, and Europe’s share to decrease constantly from 44% in 2015 to 4% in 2045.

In the non-OECD countries, it is expected that solar generation to grow by 19.2% per year on average from 2020 to 2040, nearly twice the growth rates for wind (7.7% per year) and geothermal (8.6% per year). By comparison, in the OECD region, wind, solar, and geothermal generation grow at comparable rates of more than 4.5% per year.

Grid access, financing and administrative barriers remain the largest challenges to growth for the solar power industry. However, recent technological progress has made solar PV increasingly cost-competitive with traditional power sources, with large-scale projects outcompeting even new fossil fuel plants in some markets, especially in regions with low-cost financing.

18


Solar energy investments, USD bln (2015-2016)


Of all renewable energy technologies, utility-scale (larger than 1 MW capacity) solar PV has experienced the most rapid decline in the levelized cost of electricity (LCOE), driven by reductions in module prices and balance of systems costs. Between 2010 and 2016, the global weighted average total installed cost of commissioned utility-scale solar PV projects fell by 65%, with the LCOE falling by 67% over the period. Projects commissioned in 2016 had an average LCOE of approximately USD 0.12 per kWh, and a range of USD 0.05 per kWh to USD 0.35 per kWh. Costs vary by region, with the 2016 weighted average LCOE of utility-scale solar PV at USD 0.09 per kWh in China and India (down by 68% from 2010), USD 0.14 per kWh in OECD countries (down by 61% from 2010) and USD 0.17 per kWh elsewhere (down by 57% from 2011).

LCOE for solar power in main regions, USD/kWh

Source: Renewables 2016 Global Status Report

Challenges and opportunitiesAccording to the IEA Medium-Term renewable energy market report, cumulative installed capacity will likely to exceed 400GW worldwide by 2020. China adopted a target of 70 GW PV capacity by 2017 and would lead the world, with over 110 GW. Japan and Germany would each reach approximately 50 GW, followed by the US at over 40 GW. Italy and India would rank fifth and sixth with 25 GW and 15 GW, followed by the UK, France and Australia, all nearing 10 GW. By 2020 China would be leading with almost 14 GW per year, followed by the US (5 GW per year) and Japan (3 to 4 GW per year). In 2020,

-40.00%

-20.00%

0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

0

50

100

150

200

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

USDbln % change

0.00

0.05

0.10

0.15

0.20

0.25



NorthAmerica


20

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1. Key highlights 3





6. Conclusion 22


21


a horizontal surface ranges from 6.4 to 7.5 kWh per day. Thus, the most suitable locations for solar power plants are the South Kazakhstan, Kyzylorda regions, and the Aral Sea region.

New solar farms construction for 2013-2020

Solar power stationCap, MW

Responsible for implementation YearInvt, KZT mln

1 Kapshagai, Almaty oblast 5 LLP Kun kuaty 2016 -2 Kapshagai, Almaty oblast 80 LLP SE WS SOLAR KAZAKHSTAN 2018 33,000

3 Zhambyl region, Almaty oblast 25LLP Promondis Kazakhstan; JSC

Zhetisu2015

4 Talgar region, Almaty oblast 5 LLP Zhetisu Solar Power, JSC

Zhetisu2015 4,620

5 Uigur region, Almaty oblast 5 LLP Energiya Alemi 2016 4,3206 Atyrau oblast 35 LLP Solar Kurylis 2015 12,740

7 Atyrau oblast 10 LLP Ecoprotec- Kulsary 2016

8 Zhambyl region, Zhambyl oblast 24 LLP Aquila Solar 2016 9,2509 Korday region, Zhambyl oblast 7 LLP Kazecowatt 2015 2,002

10 Shu region, Zhambyl oblast 10 LLP Company A&T-energy 2015

11 Shu region, Zhambyl oblast 50 LLP Sun Solutions Kazakhstan 2017 18,00012 Taraz, Zhambyl oblast 100 LLP Cogenhan 2017 20,000

13Burnoe, Zhualyn region,

Zhambyl oblast50

LLP Samruk-Kazyna Invest; United Green; JSC Taraz

2015 23,560

14Aktogai region, Karagandy

oblast40 LLP KPM-Delta 2016 15,000

15 Kyzylorda oblast 50LLP Samruk-Kazyna Invest ; Kyzyl-

Orda2016 20,905

16Zhalagash region, Kyzylorda

oblast30 LLP Nomad Solar 2017

17 Aktau, Mangistau oblast 5 LLP Best group NC 2016 4,620

18 Aktau, Mangistau oblast 2 LLP Group Independent 2016

19Tupkaragan region, Mangistau

oblast50 JSC Caspiy, Pataki-Cahill Group 2018

20 Shymkent, South KZ oblast 1 LLP Aksu-Energy 2014 1,200

21Ordabasin region, South KZ

oblast15 LLP Arman Еngineering 2016 9,000

22Zhuldiz, South Kazakhstan


23Baidibek region, South KZ

oblast10 LLP Promondis Kazakhstan 2015 4,500

24 Sairam region, South KZ region 30 LLP Promondis Kazakhstan 2016 14,00025 Otrar region, South KZ oblast 20 LLP Promondis Kazakhstan 2016 9,00026 Tolebi region, South KZ oblast 10 LLP DSTO Solar 2015 4,50027 Otrar region, South KZ oblast 15 LLP Promondis Kazakhstan 2017 7,250

Source: Plan for development of renewable energy in Kazakhstan for 2013-2020, Samruk-Kazyna

20


4. Solar power in KazakhstanIn 2015, the electricity production by solar PV in Kazakhstan amounted to 86.1mln kWh, almost twice as much than in 2015. The increase was due to commissioning of electricity generation by Burnoye solar station in Zhambyl region. Nevertheless, solar power accounts for 0.1% of Kazakhstan’s total electricity production.

Solar PV production, 000 kWh (2012-2016)

Source: Ministry of Energy of RK, Agency of statistics, Samruk-Kazyna

In the end of 2016, the installed capacity of solar farms reached 57.3MW, compared to 5.04MW a year ago. Five more solar PV stations are expected to be introduced in 2017, raising the total capacity by 65MW. Looking further, by 2020 17 additional solar PV projects should come online, increasing production by 724.8MW.

Solar energy potential in Kazakhstan is estimated at 2.5bln kWh per year. This corresponds to an area of approximately 10sq. km of solar cells at an efficiency of 16%. The average efficiency of modern solar batteries in the range of 15-25%. Promising technology developments allow to get the efficiency up to 53%. According to the project of the Strategy Concept of Kazakhstan's future Sustainable Energy until 2050, the share of solar energy in Kazakhstan in 2050 is expected to be at the level of 1% driven by photovoltaic devices.

Intensity of solar lighting in several regions of KazakhstanRegion kWh/sq. m per

yearkWh/sq. m per day

average June DecemberShymkent 1,780 4.88 7.95 1.65Aktau 1,442 3.95 6.71 0.98Astana 1,297 3.55 6.47 0.83Semey 1,441 3.95 6.74 1.2Taldykorgan 1,703 4.67 7.4 1.58

Source: UNESCO, Samruk-Kazyna

Solar energy can be used intensively in two-thirds of the territory of the Republic of Kazakhstan (to the south of 500 north latitude). A large part of the territory of Kazakhstan has favorable climatic conditions for the use of solar energy. In the southern regions, the solar radiation duration is between 2,000 to 3,000 hours per year, and the annual input of solar energy on a horizontal ground surface ranges from 1,280 to 1,870 kWh per 1 sq. meter. In the sunniest month June, the amount of energy per 1 sq. m on

0

20

40

60

80

100

2012 2013 2014 2015 2016

21

2


CONTENTS

1. Key highlights 3





6. Conclusion 22


21


a horizontal surface ranges from 6.4 to 7.5 kWh per day. Thus, the most suitable locations for solar power plants are the South Kazakhstan, Kyzylorda regions, and the Aral Sea region.

New solar farms construction for 2013-2020

Solar power stationCap, MW

Responsible for implementation YearInvt, KZT mln

1 Kapshagai, Almaty oblast 5 LLP Kun kuaty 2016 -2 Kapshagai, Almaty oblast 80 LLP SE WS SOLAR KAZAKHSTAN 2018 33,000

3 Zhambyl region, Almaty oblast 25LLP Promondis Kazakhstan; JSC

Zhetisu2015

4 Talgar region, Almaty oblast 5 LLP Zhetisu Solar Power, JSC

Zhetisu2015 4,620

5 Uigur region, Almaty oblast 5 LLP Energiya Alemi 2016 4,3206 Atyrau oblast 35 LLP Solar Kurylis 2015 12,740

7 Atyrau oblast 10 LLP Ecoprotec- Kulsary 2016

8 Zhambyl region, Zhambyl oblast 24 LLP Aquila Solar 2016 9,2509 Korday region, Zhambyl oblast 7 LLP Kazecowatt 2015 2,002

10 Shu region, Zhambyl oblast 10 LLP Company A&T-energy 2015

11 Shu region, Zhambyl oblast 50 LLP Sun Solutions Kazakhstan 2017 18,00012 Taraz, Zhambyl oblast 100 LLP Cogenhan 2017 20,000

13Burnoe, Zhualyn region,

Zhambyl oblast50

LLP Samruk-Kazyna Invest; United Green; JSC Taraz

2015 23,560

14Aktogai region, Karagandy

oblast40 LLP KPM-Delta 2016 15,000

15 Kyzylorda oblast 50LLP Samruk-Kazyna Invest ; Kyzyl-

Orda2016 20,905

16Zhalagash region, Kyzylorda

oblast30 LLP Nomad Solar 2017

17 Aktau, Mangistau oblast 5 LLP Best group NC 2016 4,620

18 Aktau, Mangistau oblast 2 LLP Group Independent 2016

19Tupkaragan region, Mangistau

oblast50 JSC Caspiy, Pataki-Cahill Group 2018

20 Shymkent, South KZ oblast 1 LLP Aksu-Energy 2014 1,200

21Ordabasin region, South KZ


22Zhuldiz, South Kazakhstan


23Baidibek region, South KZ

oblast10 LLP Promondis Kazakhstan 2015 4,500

24 Sairam region, South KZ region 30 LLP Promondis Kazakhstan 2016 14,00025 Otrar region, South KZ oblast 20 LLP Promondis Kazakhstan 2016 9,00026 Tolebi region, South KZ oblast 10 LLP DSTO Solar 2015 4,50027 Otrar region, South KZ oblast 15 LLP Promondis Kazakhstan 2017 7,250

Source: Plan for development of renewable energy in Kazakhstan for 2013-2020, Samruk-Kazyna

20


4. Solar power in KazakhstanIn 2015, the electricity production by solar PV in Kazakhstan amounted to 86.1mln kWh, almost twice as much than in 2015. The increase was due to commissioning of electricity generation by Burnoye solar station in Zhambyl region. Nevertheless, solar power accounts for 0.1% of Kazakhstan’s total electricity production.

Solar PV production, 000 kWh (2012-2016)

Source: Ministry of Energy of RK, Agency of statistics, Samruk-Kazyna

In the end of 2016, the installed capacity of solar farms reached 57.3MW, compared to 5.04MW a year ago. Five more solar PV stations are expected to be introduced in 2017, raising the total capacity by 65MW. Looking further, by 2020 17 additional solar PV projects should come online, increasing production by 724.8MW.

Solar energy potential in Kazakhstan is estimated at 2.5bln kWh per year. This corresponds to an area of approximately 10sq. km of solar cells at an efficiency of 16%. The average efficiency of modern solar batteries in the range of 15-25%. Promising technology developments allow to get the efficiency up to 53%. According to the project of the Strategy Concept of Kazakhstan's future Sustainable Energy until 2050, the share of solar energy in Kazakhstan in 2050 is expected to be at the level of 1% driven by photovoltaic devices.

Intensity of solar lighting in several regions of KazakhstanRegion kWh/sq. m per

yearkWh/sq. m per day

average June DecemberShymkent 1,780 4.88 7.95 1.65Aktau 1,442 3.95 6.71 0.98Astana 1,297 3.55 6.47 0.83Semey 1,441 3.95 6.74 1.2Taldykorgan 1,703 4.67 7.4 1.58

Source: UNESCO, Samruk-Kazyna

Solar energy can be used intensively in two-thirds of the territory of the Republic of Kazakhstan (to the south of 500 north latitude). A large part of the territory of Kazakhstan has favorable climatic conditions for the use of solar energy. In the southern regions, the solar radiation duration is between 2,000 to 3,000 hours per year, and the annual input of solar energy on a horizontal ground surface ranges from 1,280 to 1,870 kWh per 1 sq. meter. In the sunniest month June, the amount of energy per 1 sq. m on

0

20

40

60

80

100

2012 2013 2014 2015 2016

22

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1. Key highlights 3





6. Conclusion 22


23


Onshore wind is now one of the most competitive sources of electricity available especially in higher-priced coal and gas markets. However, in some countries, onshore wind has not yet achieved widespread competitiveness versus fossil fuels, particularly in low-priced gas markets, such as the US. Wind energy can also be competitive where wind resources are strong and financing conditions are favorable, but still requires support in most countries.

Wind power capacity development (2010-2050f) Solar PV capacity development (2015-2050f)

Source: IEA Wind Energy roadmap 2013, Solar PV Energy roadmap 2014

Renewable sources such as wind, solar currently contribute less than 1% of Kazakhstan’s energy mix. Wind and solar power provided almost 0.4% of electricity generation in 2016. However, Kazakhstan has a considerable potential in wind power generation estimated at 929bln kWh or 354GW of installed capacity, which is more than 10 times higher than current consumption in the country. Solar energy potential is estimated at 2.5bln kWh per year.

The cost of electricity generated by wind farms is higher than that produced by coal-fired plants in Kazakhstan. However, as technology develops and the cost of alternative energy cheapens wind and solar power will take its place in Kazakhstan’s energy balance. The government plans to move away from traditional fuels and aims to reduce carbon emissions by 15% by 2020 and by 25% by 2050 compared to its 1992 level to meet its obligations under the Kyoto Protocol. In addition, the use of renewable energy will help to reduce costs of power supply for remote population centers and construction of power lines, as there are losses of energy during its transmission to remote customers. The government plans to bring the share of renewable energy in electricity generation to 3% by 2020 rising to 30% by 2030 and 50% by 2050. This implies that Kazakhstan will need to invest more on the development of renewable energy. However, the development of wind energy will depend on the government support.

22


5. ConclusionWind and solar power are fastest growing sources of electricity globally. Wind power now provides approximately 3% of global electricity demand, while global solar PV capacity in operation is enough to produce near 1% of electricity per year. Policy support has been instrumental in stimulating this tremendous growth. Progress over the past five years has boosted energy yields and reduced operation and maintenance costs. Between 2008 and 2015, the average cost of land-based wind decreased by 35% and that of solar PV by almost 80%. Technological maturity and lower costs make wind and solar power increasingly attractive options for policy makers seeking to meet energy policy objectives, such as improving energy security by diversifying supply, reducing local pollution and reducing CO2 emissions.



By 2050, 15% to 18% of global electricity is expected to be generated by wind farms, while the wind capacity is forecasted to be in the range of 2,300GW to 2,800GW. This will reduce emissions of up to 4.8Gt of carbon dioxide per year. Solar PV generation is expected to contribute almost 16% of global electricity by 2050.



050

100150200250300350400450500

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Wind Solar PV

0.000.050.100.150.200.250.300.350.40

Biom

ass

Geot

herm

al

Hydr

opow

er

Sola

r PV

Sola

r The

rmal

Ons

hore

Win

d

Offs

hore

Win

d

2010 2016

23

2


CONTENTS

1. Key highlights 3





6. Conclusion 22


23


Onshore wind is now one of the most competitive sources of electricity available especially in higher-priced coal and gas markets. However, in some countries, onshore wind has not yet achieved widespread competitiveness versus fossil fuels, particularly in low-priced gas markets, such as the US. Wind energy can also be competitive where wind resources are strong and financing conditions are favorable, but still requires support in most countries.

Wind power capacity development (2010-2050f) Solar PV capacity development (2015-2050f)

Source: IEA Wind Energy roadmap 2013, Solar PV Energy roadmap 2014

Renewable sources such as wind, solar currently contribute less than 1% of Kazakhstan’s energy mix. Wind and solar power provided almost 0.4% of electricity generation in 2016. However, Kazakhstan has a considerable potential in wind power generation estimated at 929bln kWh or 354GW of installed capacity, which is more than 10 times higher than current consumption in the country. Solar energy potential is estimated at 2.5bln kWh per year.

The cost of electricity generated by wind farms is higher than that produced by coal-fired plants in Kazakhstan. However, as technology develops and the cost of alternative energy cheapens wind and solar power will take its place in Kazakhstan’s energy balance. The government plans to move away from traditional fuels and aims to reduce carbon emissions by 15% by 2020 and by 25% by 2050 compared to its 1992 level to meet its obligations under the Kyoto Protocol. In addition, the use of renewable energy will help to reduce costs of power supply for remote population centers and construction of power lines, as there are losses of energy during its transmission to remote customers. The government plans to bring the share of renewable energy in electricity generation to 3% by 2020 rising to 30% by 2030 and 50% by 2050. This implies that Kazakhstan will need to invest more on the development of renewable energy. However, the development of wind energy will depend on the government support.

22


5. ConclusionWind and solar power are fastest growing sources of electricity globally. Wind power now provides approximately 3% of global electricity demand, while global solar PV capacity in operation is enough to produce near 1% of electricity per year. Policy support has been instrumental in stimulating this tremendous growth. Progress over the past five years has boosted energy yields and reduced operation and maintenance costs. Between 2008 and 2015, the average cost of land-based wind decreased by 35% and that of solar PV by almost 80%. Technological maturity and lower costs make wind and solar power increasingly attractive options for policy makers seeking to meet energy policy objectives, such as improving energy security by diversifying supply, reducing local pollution and reducing CO2 emissions.



By 2050, 15% to 18% of global electricity is expected to be generated by wind farms, while the wind capacity is forecasted to be in the range of 2,300GW to 2,800GW. This will reduce emissions of up to 4.8Gt of carbon dioxide per year. Solar PV generation is expected to contribute almost 16% of global electricity by 2050.



050

100150200250300350400450500

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Wind Solar PV

0.000.050.100.150.200.250.300.350.40

Biom

ass

Geot

herm

al

Hydr

opow

er

Sola

r PV

Sola

r The

rmal

Ons

hore

Win

d

Offs

hore

Win

d

2010 2016

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