One of the most important events for the world community of Energy was the conference in Paris, which took place in December this year within the United Nations Framework Convention on Climate Change. With the realization of responsibility for future civilizations, the leaders of more than 190 nations signed the declaration of acceptance of voluntary commitments to reduce the emission of greenhouse gases at the international level. Head of State confirmed the strategic intention of the Republic of Kazakhstan, which fully fulfills the signed agreement. What does this mean for the state where the backbone of an economy is the power industry using fossil hydrocarbon fuel? The Republic of Kazakhstan has an excess of all primary energy resources, in terms of domestic consumption for hundreds of years. Nevertheless, it has given the international community a clear signal about its willingness to radical modernization of the country's power structure in the medium term. Tasks that include the effective strategic development of the power transition are the systematic challenges of the development, i.e. using rather effective and ecology-friendly technologies.
Renewable energy attracts with its low emissions. At the same time, speeding up the transition may cause temporary loss of competitiveness of the economy, de-industrialization, the increase in electricity prices, job losses in traditional industries, not to mention the problems associated with the need to ensure the reliability of the power supply. However, the delay with following the global trend of development involves social costs of anthropogenic impacts on the environment, as well as limited access to technology and financial resources. The moment of transition to low-carbon energy, taking into account the experience gained, is a process subject to laws of the economy. We must make full use of the advantages of our energy to achieve the most optimal path. Developed by the expert community and approved by the Government, the Concept of development of fuel and energy complex of Kazakhstan takes into account all the challenges of this modernization. The fundamental principles of this policy document are to improve mechanisms of regulation of the industry, the planned construction of "clean" electricity sources, energy efficiency, energy and resource conservation.
It is no coincidence that the major success of the JSC "Samruk-Energy” in the last year are the achievements in the development of "clean" technologies. 45 MW “Yereymentau” wind power plant project was presented on December 11 this year during the national teleconference on the results of the country’s industrial-innovative development program . The capacity factor of the wind farm is greater than that of traditional heat sources. The project of expansion of the wind farm to 50 MW is planned to start next year in partnership with the EBRD and the Clean Technology Fund. The operation of these power plants will provide facilities of the international specialized exhibition EXPO-2017 with the symbolic theme of "Future Energy" with “green” electricity.
The reconstruction of Shardarinskaya HPP is underway. Full technical update of the hydro power plant which has been producing electricity for half a century will increase the plant’s capacity by 26%. Works are carried out without stopping the production and will be completed in 2017.
Implementation of a comprehensive program of environmental measures will reduce emissions of ash more than 3 times - our plants have reduced these volumes from 108 to 36 thousand tons. ESPs were installed at all Ekibastuz GRES-1 and GRES-2 units. Chemical water treatment system was completely upgraded. A combined ash handling system was put into operation at Almaty CHP-2 this year, which significantly lowered the environmental impact.
Work carried out in this area has been appreciated by our company being awarded the Grand Prix of the Presidential Award "Paryz" 2015 for achievements in the field of environmental and social responsibility, which we received from the hands of the Leader of the Nation. High award also reflects our progress in improving corporate governance, labor protection, large-scale support to domestic producers and sustainable development.
With the support of the Government and the Shareholders, the investment program is being successfully implemented. Units No.8 and No.2 with capacity of 500 MW each were rehabilitated and commissioned at Ekibastuz GRES-1. JSC "AlES" completed the work on reconstructing the boiler room at the Almaty CHP-2. According to the program of power networks development in Almaty city, JSC "AZhK" completed the construction of Besagash, Mamyr, Esentai, Altai substations. The reconstruction of Aktobe CHP and reconstruction of a boiler set No.8 of Almaty CHP-2 is nearing completion. The implementation of these projects has led to reduced loss and increased the reliability of electricity and heat.
The Board of Directors of JSC "Samruk-Energy" accepted the long-term development strategy for 2015-2025 in October this year; it is aimed at building an effective operational holding company, the leader of the market in Kazakhstan. The company's mission is to create value for shareholders, employees and society as a high-tech guarantor of power provider in Kazakhstan and Eurasia, guided by the principles of caring for the environment and lean manufacturing.
The primary focus of the development is the construction of "green" energy objects. Some of our initiatives for the development of hydro- and wind power generation entered into an intergovernmental list of projects with a high degree of preparedness to be implemented in cooperation with Chinese partners. Among them, the construction of counter regulatory Kerbulak hydropower plant, 60 MW wind power plant in Shelek corridor, the construction of small hydropower plants in Almaty power center, and diversion of Kensu river’s runoff to the Bestyubinsk water reservoir, which will increase power generation at Moynak hydropower plant.
The construction of the Balkhash thermal power plant is still in progress with the restoration and modernization of Unit No.1 and 500 kV outdoor switchgear at Ekibastuz GRES-1.
One of the main priorities is the co-operation with our Russian partner PJSC "Inter RAO" and the United Company "Rusal". The two existing units at Ekibastuz GRES-2 have been upgraded. As part of the construction of the third power unit of Ekibastuz GRES-2, there are issues related to the current economic situation. At present, discussions are held about adjustments related to project schedule. LLP "Bogatyr Komir" continues the project of transition to a cyclic-flow technology of production, averaging and loading of coal. LLP "Bogatyr Komir" celebrated the 45th anniversary of starting the commercial production at the coalmine, loading 1.5-billion tons of thermal coal on November 30, the eve of the Day of the First President of the Republic of Kazakhstan.
At present, there are a number of external factors affecting the company's operations.
The prospects of creating a single energy market within the ECU will open up new possibilities in terms of development and expansion of exports of electricity and coal. At the same time, increased market competition will require mobilization of reserves. Marketing functions were centralized as the operational measures of "Samruk-Energy" , competence center of sales and trading functions "Trade house" of JSC "Samruk-Energy" was established.
In 2015, there was a decrease in production and energy consumption associated with the slowdown of the Republic of Kazakhstan economy. The introduction of floating exchange rate of the national currency in the form of exchange rate difference has affected on the company’s financial performance. In order to avoid such factors, the shareholder and the Company’s Board of Directors have revised the medium-term plans towards reducing costs and optimizing the investment program.
The international rating agency Standard & Poor's confirmed the long-term credit rating of "Samruk-Energy" at the level of "BB", short-term rating at 'B'. The forecast of the ratings change - "Stable". The rating is based on the strategic importance of JSC "Samruk-Energy" for the state, which is reflected in financial support, as well as the strong market position of the company.
Trends in the economy underline the timely start of transformation program. Transformation will increase the efficiency of investment and operating activities, will ensure improved competitiveness of JSC "Samruk-Energy". Mobilization of reserves is the basis of the philosophy of activity transformation that involves the re-engineering of business processes with the exception of inefficient units. The change in the evaluation criteria of the company and employees performance with the approval of the EVA ratio as the main indicator is crucial.
At present, on behalf of the Government and "Samruk-Kazyna" Fund , the privatization of assets is conducted , which is a part of the systematic work to liberalize the economy. The final list of facilities that are subject to privatization, transfer to the competitive environment is being determined. The final structure of the company's assets will allow continuing the work on the company’s going public. About 20-25% of additional issue will be offered in the initial public offering in Kazakhstani market.
The main objective of long-term development is innovative development. In the framework of the VIII Astana Economic Forum of JSC "Samruk-Energy", a Memorandum of Understanding was signed with the research center at Stanford University to join the program industry Stanford Energy 3.0. Co-operation will contribute to strengthening our position in the electric power industry and the economic development through the transfer of new technologies. Together with the American company Primus Power (Californian start-up), we have started the pre-investment phase of the installation of electricity storage systems that allow the network to stabilize the operation, including through the integration of wind and solar power. Together with the Kazakhstan National Academy of Natural Sciences and the National Engineering Academy of Kazakhstan, the company became involved in the organization of the World Congress of engineers and scientists on the theme "Energy for the future: innovative scenarios and methods for their implementation."
Today, JSC "Samruk-Energy" is ready to implement instructions of the Government, set within five institutional reforms proposed by the Head of State and reflected in the Nation’s Plan "100 steps". Systematic work of power engineers to ensure the reliability of power supply by Kazakhstani consumers, effective responses to new global challenges will contribute to the economic development of the country.
- JSC – Joint-Stock Company
- EBRD – European Bank for Reconstruction and Development
- HPP – Hydropower Plant
- LPP – Limited liability partnership
Article of JSC "Samruk-Energy" Chairman of the Board Almassadam Satkaliyev for "Kazakhstanskaya Pravda" newspaper
Translated by Muhammed Bakijev