Central Asia’s first auction of renewable energy sources to be held on May 23 in Kazakhstan
Central Asia’s first auction of renewable energy sources will be held on May 23 in Kazakhstan. Its main goal is to reduce costs of electricity generated by renewable energy sources. The auctions will be held using an electronic platform, which will ensure transparency. During the three-hour trading session, participants will be able to offer their electricity tariffs. The most effective projects offering the lowest prices will be selected.
“We have developed an auction system for the selection of renewable energy projects and starting this year, we have planned to conduct a number of renewable energy auctions for the total installed capacity of one gigawatt. The auction winners will sign a fifteen-year contract with a single renewable electricity purchaser, says Kazakh energy minister Kanat Bozumbayev.
To implement the auction system, Kazakh experts have studied the experiences of countries such as the United Arab Emirates, Saudi Arabia, Chile and Mexico. This mechanism has proved its effectiveness in these particular countries. For instance, a record low price for electricity of 1.7 cents per kilowatt an hour was registered at an auction in Mexico. Kazakh government is planning to follow experiences of these countries.
“Many companies in Kazakhstan are willing to establishing renewable energy projects. Foreign investors from Turkey and European countries are also interested in participating in the auction. We expect a great interest from foreign investors. Projects for solar electricity are primarily located in the southern regions and wind energy projects in the North. There are also projects for hydroelectric station and bioelectricity. The auctions will be held separately in three regions – South, North and West Kazakhstan,” in the words of deputy chairman of Kazakhstan’s power grid Yerzhan Madiyev.
The auctions for renewable energy are planned be held twice a year in Kazakhstan. Auctions for small projects will be held in spring, and for larger projects in fall. The overall capacity of the renewable energy will total over fifty megawatts. With the auction system, the government plans to attract foreign investors and give impetus to the development of renewable energy.
By 2050, the Kazakh government aims to expand the renewable energy’s share of the overall energy consumption by 50%.
