IPPToday #312: Kazakhstan awards over 850 MW capacity in 2018 renewables auctions
- Royal Dutch Shell
- Zhel Electric LLP
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Kazakhstan Electricity and Capacity Market Operator (KOREM) has announced that it has contracted 857.93 MW of renewable energy this year through auctions.
Twenty auctions were held in 2018, aiming to award 1,000 MW of installed capacity. Planned capacity allocations by technology were the following: 290 MW solar; 620 MW wind; 75 MW hydropower and 15 MW biomass-fired generation.
Of the twenty auctions, thirteen were declared to be taken place and seven to be void due to failure to attract the minimum number of participants (three) and failure to attract bids with the total required volume of installed capacity for participation.
The auctions that took place awarded 857.93 MW capacity. This comprised 270 MW solar capacity, 500.85 MW wind, 82.08 MW hydropower and 5 MW biomass-fired generation, split between 36 projects proposed by 30 companies.
Winners will sign power purchase agreements (PPAs) with the Financial Settlement Centre of Renewable Energy LLP (FSC), a government entity established to undertake the centralised purchase and sale of electric power produced by renewable energy sources and delivered to the grid.
The lowest tariff submitted for solar projects was KZT18/kWh (US$48.5/MWh), 48% lower than the ceiling tariff. The lowest tariffs submitted for wind and hydropower projects were both 23% lower than the respective ceiling tariffs, at KZT17.39/kWh (US$46.9/MWh) and KZT12.8/kWh (US$34.5/MWh). The lowest tariff submitted for a biomass-fired generation project was also lower than the ceiling tariff, but only by 0.25% at KZT32.15/kWh (US$86.7/MWh).
113 different companies participated in the auctions, representing nine countries. International winners include Shell (Netherlands), Zhel Electric (China) and Urbasolar (France). In order to participate, developers had to issue financial securities. Securities received totalled KZT8 billion (US$21.6 million).
Projects submitted to the auctions had a total generation capacity of 3,204 MW, exceeding demand by over 300%.
Altogether, this demonstrates an incredibly successful inaugural year for Kazahkstan's renewable energy auction mechanism, and a high level of interest by both domestic and international investors in the country's emerging renewables sector.