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Kyrgyzstan Review, 10 years ago

[08.01.24] Power Industry in Kyrgyzstan

Power production is one of the core industries in Kyrgyzstan. Most of the country's electricity is generated at hydroelectric plants and is low cost. Following a drop in electricity production in 2001 - 2002, the first signs of improvement were seen in 2002 as demand by other countries increased. The construction of the Kambarata hydroelectric cascade, that will involve foreign investors, is one of the most promising projects. Kyrgyzstan began exporting electricity to Russia in 2002 and plans to continue in this direction.
Hydropower core of electricity production
Power production is a core industry in Kyrgyzstan. It accounted for 14.7% of industrial output in 2001. Kyrgyzstan produces most of its electricity at hydroelectric plants. The country has nine large power plants with a combined capacity of 3.6 million kilowatts, including seven hydroelectric plants with a capacity of 2.9 million kilowatts and two heat and power plants with a capacity of 728,000 kilowatts. Kyrgyzstan also has small hydroelectric plants. The Toktogul, Kurpsai, and Tash-Kumyr hydroelectric plants and the Bishkek heat and power plant are the largest with a capacity of 1,200 megawatts, 800 megawatts, 450 megawatts, and 588 megawatts, respectively. Kyrgyzstan has the third largest hydroelectric resources in the CIS after Russia and Tajikistan. The estimated potential of mountain rivers is 142 billion kilowatt-hours a year but less than 10% of this is utilized. This enables the country to produce electricity for domestic consumption and export. The energy system functioned steadily up until 2001 compared with the energy systems in other CIS countries. Electricity production shrank 8.5% in 2001 to 13.7 billion kilowatt-hours and production dropped 12.8% in 2002 to 11.9 billion kilowatt-hours. Aging equipment was largely to blame for the drop in production. The situation improved in 2003 and production increased 19% in the first half of the year to 7.154 billion kilowatt-hours. Hydroelectric plants produced 6.549 billion kilowatt-hours and heat and power plants produced 605.5 million kilowatt-hours. Production increased mainly because Kyrgyzstan was able to increase exports. Failure by consumers to pay for electricity supplied is one of the biggest problems in the industry. Bishkekenergosbyt head Yuri Danilov said consumer debt to distributor Severelektro tops 800 million som. Kyrgyz President Askar Akayev said at a Security Council meeting in 2002 that the situation in the energy sector could bankrupt the industry if nothing is done. "Energy loss in 2002 totaled 3.306 billion kilowatt-hours. Most of this was lost due to theft," he said. If the financial situation in the industry does not improve rates for light and heat will be increased under IMF and World Bank recommendations, he said. Akayev has told the government and heads of power companies to complete the privatization of the industry in order to improve the situation. Privatization in the energy sector began in 1999 when parliament approved a privatization program. Independent structures were formed from Kyrgyzelektro in 2001: National Power Plants, National Power Grids, and four grid companies - Severelektro, Vostokelektro, Oshelektro, and Jalal-Abadelektro.
Kyrgyzstan exporting electricity to Russia
Kyrgyzstan signed an agreement in 2002 to export electricity to Russia. It is also in talks with Tajikistan, which is ready to buy 2 billion kilowatt-hours a year for six ' years. Kazakhstan's Shabyrkul coal basin is also ready to sign an agreement for 1 billion kilowatt-hours a year for five years. Kyrgyz Prime Minister Nikolai Tanaev said the country continues talks with China on that country's participation on that country's participation in the construction of the Kambarata hydroelectric cascade. Export volumes depend on the water levels at the Toktogul Hydroelectric Plant. AO Power Plants First Deputy General Director Abdylda Israilov said the Toktogul reservoir currently holds 19.6 billion cubic meters, which is enough to generate electricity for domestic consumers and fulfill government export plans. Israilov said this is the highest the reservoir has ever been. Since it is regulated over a period of several years Kyrgyzstan will have enough electricity for several years to come. Exports to neighboring countries will depend on water levels in Kazakhstan and Uzbekistan, which buy about 2 billion kilowatt-hours of electricity from Kyrgyzstan each year, produced using runoff from the Toktogul reservoir from irrigation water used by farms in Central Asia. Kazakhstan and Uzbekistan are ready to buy only electricity generated by water runoff. As a result in the summer they refuse water to irrigate their crops and thus electricity produced from its run-off. Kyrgyzstan exported about 800 million kilowatt-hours of electricity in the first eight months of 2003 year, nearly double that produced in the same period in 2002. Kazakhstan received 421 million kilowatt-hours, Uzbekistan received 200.3 million kilowatt-hours, Tajikistan received 173.9 million kilowatt-hours, and China received 650,000 kilowatt-hours. Unified Energy Systems of Russia began supplying electricity in 2002 from Kyrgyzstan to Russia through Kazakhstan's energy system under an agreement signed by its subsidiary ZAO In-ter RAO UES and AO Power Plants. The electricity supplied to Russia is also produced at the Toktogul Hydroelectric Plant. The import of inexpensive Toktogul electricity to Russia will improve the cost balance on FOREM, the federal wholesale energy market, UES reckons. Kyrgyzstan can supply electricity to regions of Siberia, namely Omsk region. An agreement for 1.5 billion kilowatt-hours of electricity for Omsk region was signed in April 2003 and an agreement was reached to increase supplies in the future. UES imported 715 million kilowatt-hours of electricity from Kyrgyzstan in 2002. UES Deputy Chairman Sergei Dubinin said Russia is willing to buy all the electricity the Kazakh lines can transmit, which depends on Kazakhstan Grid Company, since it is a matter of the physical capacity and economics. In any event, Kazakhstan determines the amount of electricity Russia can buy from Kyrgyzstan. In December 2003 Russia and Kyrgyzstan signed a five-year contract for electricity supplies.
Seeking foreign investors
The most promising and important project at present is the construction of the Kambarata cascade with a reservoir that is seasonally regulated by the Naryn River. Once operative the cascade will settle disputes among the Central Asian countries on the use of water for irrigation and power production. The cascade will be able to produce more than 6 billion kilowatt-hours of electricity. The Kambarata Hydroelectric Plant - Kemin power line LEP-500 will be built at the same time to supply electricity to northern Kyrgyzstan and Kazakhstan. Construction of the complex began in 1990 and since them about 30% of the work has been completed. Kyrgyzstan announced in 2001 that it planned to complete the plant and open it with Russia's help. Kyrgyzstan in April 2003 resumed work on the plant using its own resources. It plans to seek investors or form a Kyrgyz-Kazakh-Russian consortium for the project. Some of the electricity produced at the plant would be exported to Russia, Kazakhstan, China, and Pakistan. According to USAID estimates the plant will cost $1.48 billion to build, with the First to cost $1.2 billion (capacity will be 1,200 megawatts), and the second to cost $280 million (400 megawatts). UES is studying the possibility of participating in investment projects in Kyrgyzstan, including completion of the Kambarata Hydroelectric Plant-2. Grigory Rapota, general director of the integration committee of the Eurasian Economic Community, said completion of Kambarata Hydroelectric Plant-2 and the Sangtuda plant in Tajikistan would solve many of the problems in the Central Asian region and facilitate a deeper integration of the countries.
Interfax /The Times of Central Asia, January 08, 2004

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