Renewable e energy s sector Central A Asia Webinar P - - PowerPoint PPT Presentation

Renewable e energy s sector – Central A Asia

Webinar P Presentation July 1 1, , 2020 2020 Yerlan Ramazanov – Associate Director / Energy Eurasia

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Country Overview - Kazakhstan

§ Incredible solar and wind potential § Worsening environmental situation § Decreasing cost of renewable energy

Photo: “Smog over Almaty” Source: wikimedia.org.

ü 9th largest country in the world by territory ü Extremely cold winters, routinely below -40C ü Historic reliance on abundant and cheap coal reserves ü Coal-fired power plants, constructed during the Soviet Union, provide over 70% of electricity ü Very low electricity prices ü No shortage of power Baseline s situation i in K Kazakhstan: Uphill b battle f for r renewables, h , however:

Power Sector - Uzbekistan

OFFICIAL USE 3

10.8 11.0 11.1 11.2 11.2 12.2 1.8 1.8 1.8 1.8 1.8 1.9

0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 2012 2013 2014 2015 2016 2017 Fossil Fuel Hydro

12.73 12.96 12.93 12.86

Ge Generation Ca Capacity ty Hi Highlights

GW GW

• Uzbekistan is one of the world’s only two double landlocked

countries, with a population of over 33.7 million (2019)

• The GOU announced a 10-year program to build 5 GW of solar power

and 3 GW of wind power by 2030

• Accelerated development of renewable energy is required to

diversify the generation mix, optimize the cost of power and meet clean energy targets

• GOU has recently implemented critical energy reforms, including the

unbundling of Uzbekenergo and tariff reform with an aim of cost recovery in the sector.

• Investments of ~USD 12 billion into generation assets and ~USD

700 million into transmission assets are envisaged through 2025. Source: https://www.researchgate.net/figure/Atlas-of-wind-speed- distribution-across-the-territory-of-Uzbekistan-5_fig1_322143759

Wi Wind At Atlas of

• f Uz

Uzbekistan So Solar Po Potential of

• f Uz

Uzbekistan

Source: https://solargis.com/maps-and-gis-data/download/uzbekistan

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LEGIS ISLATIO ION

2009 2009

§ Introduction of fe feed-in t tariff s system w with uniform s structure

20 2011- 20 2013

§ Launch of operational l legal f framework with a set of rules and norms on renewable energy § Introduction of (i) fi fixed feed-in tariffs, (ii) development of the F Financial S Settlement C Centre

• ff-taking energy via (iii) development of Po

Powe wer Purchase A Agreements agreement

20 2013

§ Introduction Law o

• n s

supporting t the u use o

• f

Renewable E Energy

20 2014

§ Introduction of full i indexation o

• f f

feed-in t tariffs against i inflation

20 2015- 20 2016

§ Introduction of the Green E Economy L Law which provides further supports to the development and operation of renewable e energy p projects

20 2018- 20 2019

§ Introduction of auction s scheme for RES development. § 858M 858MW of solar, wind, hydro and biomass capacity was auctioned. § Assisting for drafting of secondary legislation implementing the re renewable ener energy la law (2009) POLIC ICY D DIA IALOGUE A ACTIV IVIT ITIE IES § Advice to the Government of Kazakhstan on Developing FiTs for Renewable Energy Sources (2010) § Advising on improvement renewable energy pr primary le legisla lation (2011) § Advising on a renewable energy sources allocation (2013) § Modelling the social impact of renewable energy fe feed-in in ta tariffs (2013) § Assisting in the final stage

• f

developing re renewable ener energy le legisla lation (2014) § Assisting Ministry of Energy on establishing a ba bankabl ble re regulatory an and le legal fr fram amework (2015-2016) § St Strategic En Environmenta tal Re Review (S (SER) of RES development in Kazakhstan (2015-2016) § Assisting in the review of the PP PPA ba bankabi bility ty (2018) § Support for the im implem emen entatio ion of

• f wi

wind au auctions in Kazakhstan, including regulatory support

• n

the tender process and documentation for the wind power projects (2019) § Promoting ge gender eq equa ualit ity in RE sector (2019) § Strategies for ca carbon ma mark rket de development (2019) § Memorandum of Understanding (2019)

Promoting Green Economy in Kazakhstan

EBRD support to reforms in Uzbekistan’s power sector

OFFICIAL USE 5

Ac Accomplished

20 2018 – 20 2019 Uzbekistan Power Sector Ta Tariff Re Reform: Affordability and Design

• f

Mitigation Measures for Vulnerable Consumers’ Protection 20 2018 – 20 2019 Un Unbundling of

• f Uz

Uzbekenergo go 20 2018 – 20 2019 Roadmap for attracting investment through Corporate and Structural reform – analysis of the Si Single Bu Buyer er fu function 20 2018 – 20 2019 Establishment of co compliance ce fu function in electricity power companies

On Ongoing

20 2019 – 2020 2020 New El Electr tricity ty La Law targeted at improving investment climate 20 2019 – support to the implementation of the first Wi Wind au auction 2020 2020 – review and amendment

• f

th the Re Renewables la law 20 2019 – 2020 2020 Lo Low Ca Carbo bon Ro Roadmap for the power sector 20 2019 – 2020 2020 Po Powe wer Se Sector Cl Climate Re Resilience in Uzbekistan: Risk Assessment and Investment Needs

Kazakhstan R Renewables F Framework

Ph Phase I I – 200 200 million e euro § 322 322 MW MW of new renewable capacity, four new private foreign investors, one grid-strengthening project. Ph Phase II II – 300 300 million e euro § In 2019 EBRD approved a €300 300 mi million ex exten ensi sion of Kazakhstan Renewables Framework, to catalyse the next phase of renewables development in country, focusing more on supporting the auctions but also with strong inclusion component.

EBRD investments in Energy in Kazakhstan

§ The EB EBRD is is th the pi pioneer in supporting sustainable energy projects in Kazakhstan and has committed ov

• ver $500

500 mi million in in 12 12 pr project cts, translating into 572 572MW MW of

• f ne

new re renewable en ener ergy ca capa paci city and re rehabilitation of

• f 100

100MW MW Hy Hydro Po Power Pl

• Plant. EBRD supported investors from

France, China, UK, UAE, Germany, Bulgaria and others.

Memorandum o

• f U

Understanding

§ As part of the Framework, the EBRD signed a Me Memorandum

• f
• f Un

Understanding with the country’s Ministry of Energy reaffirming commitment to support renewable energy in Kazakhstan.

EBRD In Investments i in R Renewables i in K Kazakhstan Support f for R RES a auctions

§ RE auctions launched in 2018. § 858MW awarded in 2018 and 203MW in 2019. § As a result price for solar dropped from 34 tenge (USDc 9) down to 12.49 tenge (USDc 3.20) for the most recent November 2019 round.

6

7

Re Renewables (fo forthcoming)

• First wind a

auctions in Karakalpakstan region

• Planned support to small hydro rehabilitation

Na Navoi Tr Transmission Up Upgrade

USD 96.1m

Mu Muruntau Su Substation

USD 82.5m

Ta Talimarjan Po Power Pr Project

USD 240m

Po Power transmission

• Uz

UzbekEnergo go Mu Muruntau au Substation

• construction
• f a 500/220 KV transmission substation, USD

82.5mln

• Na

Navoi Transmission U Upgrade

• construction of a c.

188.5 km 500 KV transmission line, USD 96.1 m

100MW w wind au auction

Co Conventional po power generation

• Ta

Talimarjan Power P Project - construction of 900 MW CCGT on Talimardjan TPP – USD 240 mln

EBRD investments in Energy in Uzbekistan

Activities in RES sector in Mongolia

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Solar park

• 1 project signed
• EUR 9m EBRD financing
• 30 MW new capacity installed
• EUR 19m total co-financing:
• IFIs: EUR 19m

Wind farms

• 3 projects signed
• EUR 87m EBRD financing
• 155 MW new capacity installed
• EUR 138m total co-financing:
• IFIs: EUR 138m
• Despite having huge RES potential Mongolia relies on costly electricity

imports from Russia and coal-dominated domestic facilities, and is in ur urgent nt ne need of

• f in

investments.

• Po

Policy di dialogue: EBRD has played an in instrumental ro role in the development

• f the RES sector in Mongolia through (i) assisting the government in

drafting of the first RES law in 2007 and (ii) pioneering the financing of the first RES plant, the milestone 50 MW Salkhit wind farm, in 2012.

• Mongolia targets reaching 20

20% of installed capacity from RES by 2023 2023 and 30 30% by 2033

• 2033. EBRD has financed ne

new RE RES cap capaci acity of

• f 18

185 MW MW, with EUR 338m of total project cost, or 15% of total installed capacity of Mongolia.

• Cu

Current TC TCs: RES tariffs in Mongolia are high compared to international levels while grid absorption capacity for RES facilities is limited. EBRD provided Te Technical Co Cooperation fund funds to assist Mongolia in those areas.

• Mo

Mobi bilising co co-fi financi cing: EBRD has led suc successful ssful pa partne nersh ships ips with strong sponsors and IFIs such as Newcom, Soft Bank, Engie, Jica, FMO, Triodos, EIB and others, to mobilise robust co-financing.

• Wi

Wind an and so solar: EBRD has financed all four of Mongolia’s existing RES facilities through total debt and equity fi financi cing of

• f EU

EUR 95 95m and total cap capaci acity of

• f 18

185 MW MW.

EBRD Energy portfolio in Central Asia

ü EU EUR 1.605 605 bi billi llion of EBRD investment ü 36 36 Pr Projects ü 20 20 RE RES pr project cts ü 978 978 MW MW of renewable capacity KA KAZAKH KHSTAN 22 projects (13 RES) EBRD finance: EUR 942m 672 MW total RES capacity 572 MW Solar 100 MW Hydro rehab MONGOLIA IA 4 projects (4 RES) EBRD finance: EUR 95m 185 MW total RES capacity 30 MW Solar 155 MW Wind TAJIK IKIS ISTAN 4 projects (2 RES) EBRD finance: EUR 191m 126 MW total RES capacity 126 MW Hydro rehab KYRGYZ R REPUBLIC IC 2 projects EBRD finance: EUR 8m UZBEKIS ISTAN 3 projects EBRD finance: EUR 362m

Success Factors and Outlook - Kazakhstan

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Looking F Forward:

§ The Bank is running a “turnkey” energy auction for three wind farms (expected in 2021) § TC includes site selection, resource measurement, project preparation and further improvement of legislation Ø New Targets for Kazakhstan § This autumn Kazakhstan will auction 250MW renewables (120MW hydro, 55MW solar, 65MW wind and 10MW biogas) § On track to achieve its 3% and 6% renewables in Kazakhstan’s energy balance by YE2020 and YE2025, respectively

ü Po Policy Di Dialogue ü St Strong ng pr presence on

• n the

the gr ground ü Lo Local cu currency cy fu funding ü Co Co-fi financing fr from Cl Climate Fu Funds ü In Involvement of

• f ot
• ther MD

MDBs ü St Strong ng in interest fr from pr private se sector Achievements i in K Kazakhstan:

Ø Wind Auction in Kazakhstan

Success Factors and outlook - Uzbekistan

OFFICIAL USE 11

Looking F Forward: : § The Bank is supporting the first “turnkey” energy auction for a wind farm in Karakalpakstan region § TC includes site selection, environmental assessment, auction design, further improvement of legislation and implementation support Ø New Targets for Uzbekistan § Uzbekistan is planning to auction 1000MW wind projects with the support of the EBRD

ü Po Policy Di Dialogue ü St Strong ng pr presence on

• n the

the gr ground ü Pu Public ic se sector in investments in in en ener ergy ü In Involvement of

• f ot
• ther MD

MDBs ü St Strong ng in interest fr from pr private se sector

Achievements i in U Uzbekistan:

Ø Wind Auction in Uzbekistan

Thank You!

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EBRD HQ One Exchange Square London, EC2A 2JN United Kingdom www.ebrd.com

Yerlan R Ramazanov

Associate Director, Regional Head Energy Eurasia Sustainable Infrastructure Group Tel: +7 777 2242724 Email: RamazanY@ebrd.com