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The introduction of auctions mechanism in the Republic of Kazakhstan demanded several years in preparation and adoption of amendments to the existing legislation in supporting of the RES sector development. In order to perform qualitative launch of the auction for the selection of RES projects, the Ministry of Energy of the Republic of Kazakhstan together with the parties concerned carried out a lot of explanatory work aimed at attracting investors to participate in the auction, including foreign ones.

When the Ministry of Energy of the Republic of Kazakhstan announced introduction of the auctions mechanism, It noted that the new mechanism will determine the objective market price for electricity produced by RE facilities, establish a transparent process of selection of potential investors and attract investments in the industry aimed at the development of the renewable generation sector in the country.

The conditions created for investors contributed to the high interest in implementation of renewable energy projects in Kazakhstan, the auction results confirm the accuracy of the state policy in the field of development of the renewable energy sector. The auction and subsequent construction of renewable energy projects will be an important step in Kazakhstan's transition to a green economy.

According to the auction schedule, approved by the order of the Minister of Energy of the Republic of Kazakhstan as of February 22, 2018 No.65, 20 auctions totaling 1,000 MW of installed capacity were held in 2018, broken down by types of power plants:

Solar Power Plants – 290 MW;

Wind Power Plants – 620 MW;

Hydroelectric Power Plants – 75 MW;

Biomass Power Plants – 15 MW.

113 Kazakh and foreign companies from 8 countries (the China, the Russia, the Turkey, the UAE, the France, the Bulgaria, the Italy and the Netherlands) have participated in the auction.

The auction was held using the electronic trading platform of JSC KOREM, the Supervisory Commission provided control over the auction process. The observers included representatives of the Ministry of Energy of the Republic of Kazakhstan, government authorities, non-governmental organizations.

As part of preparation for the auctions, each of the potential participants had to confirm their intention to participate in the auction through the issuance of the financial security for participation in the auction in favor of the Financial settlement center for the support of renewable energy sources LLP, whom auction winners will enter into a PPA contract with, in the future. During the auction, the financial security for participation in the auction was received in the amount of about KZT 8 billion, which confirms the high interest of investors in implementation of renewable energy projects in Kazakhstan.

30 companies were recognized as the auction winners and 36 projects were selected.

According to the results of the auction, the participants offered applications with total installed capacity of 3,204 MW, which exceeded the demand by almost 3 times.

Auction was taken place on the totaling 857.93 MW, including: 

Solar Power Plants – 270 MW;

Wind Power Plants – 500,85 MW;

Hydroelectric Power Plants – 82,08 MW;

Biomass Power Plants – 5 MW.

The lower level of tariffs was:

for SPP – 18 KZT/kWh, which is lower than the ceiling auction price (34.61 KZT/kWh) by 48%;

for WPP – 17.39 KZT/kWh, which is lower than the ceiling auction price (22.68 KZT/kWh) by 23%;

for WPP – 12.8 KZT/kWh, which is lower than the ceiling auction price (16.71 KZT/kWh) by 23%;

for BioPP – 32.15 KZT/kWh, which is lower than the ceiling auction price (32.23 KZT/kWh) by 0.25%;

From 20 auction, 13 of them were declared to be taken place and 7 - to be void due to the lack of sufficient number of participants and lack of total required volume of installed capacity of application for participation in auctions.

Following the results of the spring and autumn sessions of the auction for selection of RES projects in 2018, the winners were determined as follows:

1) Zenchenko i K partnership in commendam (Kazakhstan) – 2 MW with the price of 18 KZT/kWh;

2) Vichi LLP (Kazakhstan) – 7 MW with the price of 18.01 KZT/kWh, land plot – Akmola oblast, Sandyktau district, the Petrovka village for 30 ha, connection point – SS-Balkashino (52.491790, 68.725898);            

3) Ventum Energy LLP (Kazakhstan) – 4.95 MW with the price of 18.99 KZT/kWh;

4) EastWindEnergy LLP (Kazakhstan) – 4.95 MW with a price of 19.99 KZT/kWh;

5) Ivan Zenchenko LLP (Kazakhstan) – 2 MW with the price of 22.53 KZT/kWh;

6) Zhel Electric LLP (China) – 50 MW with the price of 18 KZT/kWh, land plot – Kostanai oblast, Mendykar district, the Aksuat village for 100 ha, connection point – SS110/35/10 (53.904842,64.717499);

7) VES Zhangiz LLP (Kazakhstan) – 5 MW with the price of 21.5 KZT/kWh;

8) VES Service LLP (Kazakhstan) – 10 MW with the price of 21.7 KZT/kWh;

9) Zharyk Energo National Energy Company LLP (Kazakhstan) – 8.6 MW with a price of 12.8 KZT/kWh;

10) Bekzat LLP (Kazakhstan) – 7 MW with a price of 13.13 KZT/kWh;

11) VES Tolkyn LLP (Kazakhstan) – 2 MW with the price of 13.68 KZT/kWh;

12) Hydroservice LLP (Kazakhstan) – 3 MW with a price of 15.19 KZT/kWh;

13) KAZ GREEN ENERGY LLP (Kazakhstan) – 5 MW with a price of 32.15 KZT/kWh;

14) Alcor Energy LLP (Kazakhstan) – 95 MW with the price of 22.65 KZT/kWh;

15) Vostok Veter LLP (Kazakhstan) – 10 MW with a price of 22.66 KZT/kWh;

16) URBASOLAR SAS (France) – 5 MW with the price of 28 KZT/kWh, land plot – Kyzylorda oblast, Zhanakorgan oblast, Zhanakorgan district, for 50 ha, connection point – SS25/10kV Zholshy (43.919733,67.281353);

17) TekhnoBazalt LLP (Kazakhstan) – 3 MW with a price of 28.99 KZT/kWh;

18) JSC Hydroenergy company (Bulgaria) – 10 MW with a price of 29.00 KZT/kWh;

19) MISTRAL ENERGY LLP (Kazakhstan) – 50 MW with the price of 25.80 KZT/kWh;

20) Zhel Electric LLP (China) – 100 MW with the price of 17.39 KZT/kWh, land plot – Akmola oblast, Zerendy district, the Yelenovka village, for 200 ha, connection point – Kokshetauskaya - 1150 (53.259428,68.888633).

21) Energo Trust LLP (China) – 50 MW with the price of 19.5 KZT/kWh, land plot – North-Kazakhstan oblast, Aiyrtau district, the Saumalkol village, for 150 ha, connection point – SS 220 kV Buran (53.311111,68.054722);

22) Shokparskaya wind power plant LLP (Kazakhstan) – 50 MW with the price of 19.98 KZT/kWh, land plot – Akmola oblast, Zerendy district, the Yelenovka village, for 200 ha, connection point – SS Shygys (51.030670,71.843731);

23) Investo LLP (Kazakhstan) – 50 MW with the price of 20.5 KZT/kWh, land plot – East-Kazakhstan oblast, Glubokovski district, the Berezovka village, for 200 ha, connection point – SS Berezovka (50.235443, 82.125481);

24) KazHydroOperating LLP (Kazakhstan) – 13.88 MW with a price of 14.85 KZT/kWh;

25) Kaskad Karatalskikh GES LLP – 21.6 MW, with a price of 14.9 KZT/kWh;

26) Korinskaya GES LLP (Kazakhstan) – 26 MW with the price of 15.48 KZT/kWh;

27) Zhel Electric LLP (China) – 50 MW with the price of 20.9 KZT/kWh;

28) Shokparskaya wind power plant LLP (Kazakhstan) – 100 MW with the price of 22,58 KZT/kWh;

29) Dala Solar LLP (Kazakhstan) – 2 MW with the price of 18 KZT/kWh;

30) JSC Hydroenergy company (Bulgaria) – 10 MW with a price of 19.58 KZT/kWh;

31) DSTO Solar LLP (Kazakhstan) – 10 MW with a price of 19.6 KZT/kWh;

32) KK-KIUSEN LLP (Kazakhstan) – 10 MW with a price of 19.63 KZT/kWh;

33) JSC Hydroenergy company (Bulgaria) – 50 MW with a price of 18.6 KZT/kWh;

34) Avelar Solar Technologies LLC (Russia) – 20 MW with a price of 18.8 KZT/kW*h;

35) Avelar Solar Technologies LLC (Russia) – 20 MW with a price of 22.5 KZT/kW*h;

36) Shell Kazakhstan B. V. Branch (Netherlands) – 50 MW with a price of 22.9 KZT/kW*h.

The Observers emphasizes that the adopted auction mechanism allowed to provide a transparent and understandable mechanism for selection of renewable energy projects, without human resource interference.