Power plant fuel and repair costs increase in Kazakhstan

In 2020 and since the beginning of 2021, the costs of energy-producing organizations have increased, said Vice-Minister of Energy Kairat Rakhimov.

In 2020, the cost of Karazhyr coal increased by 8.6%, and Bogatyr Komir coal by 9.9%. Transportation costs increased by 7%.

- Energy-producing organizations have debts to coal mines in the total amount of about 2 billion tenge, and gas enterprises of about 4 billion tenge, - Rakhimov said during the briefing in Central Communications Service.

With the growth of "green" energy, the amount of electricity that traditional power plants are required to buy from renewable energy facilities has increased. According to Rakhimov, in 2021 the volume of electricity purchased from RES increased by 68% compared to 2020, the costs of renewable energy increased by 49%.

The costs of mandatory payments to the budget increased due to an increase in the monthly calculation index (from 2 778 tenge in 2020 to 2 917 tenge in 2021).

The Vice-Minister also noted the dynamics of changes in mandatory payments to the budget by power plants. Thus, the payment of taxes in 2016 amounted to 10.5 billion tenge, by the end of 2021 the amount will exceed 14 billion tenge. Environmental payments have almost doubled since 2016, from 7.4 billion tenge to the expected 13.2 billion tenge by the end of 2021.

There is an increase in the cost of repair work due to the increase in prices for equipment imported from outside the country.

The marginal tariffs for electric energy production in accordance with the legislation are set for 7 years. Energy-producing organizations have the right to apply for an adjustment of the marginal tariffs in the event of an actual increase in the cost of producing electric energy.

Based on the above-mentioned reasons, in September 2020, 37 energy-producing organizations of 45 submitted applications to the Ministry of Energy to review the marginal tariffs for electricity generation.

According to the submitted applications, the growth of marginal tariffs was predicted at the level of 36%. The validity of the submitted applications was analyzed for more than six months.

As a result of the work carried out and discussions, the share of  increase in the declared levels of marginal tariffs of stations was reduced by more than two times.

The corresponding draft order was published on the website "Open NLA" on March 5, 2021. The order was discussed with the National Chamber of Entrepreneurs "Atameken" and expert organizations accredited in the Ministry of Energy. The draft order was considered at the Public Council, and was also discussed on the electronic platform of the portal "Open NLA".

According to the results of the work carried out, the adjustment of tariffs was made on March 30 of this year by the corresponding order of the Minister of Energy of the Republic of Kazakhstan.

This order will enter into force on April 1, 2021. The average increase of marginal tariffs of energy-producing organizations in Kazakhstan is projected at 15% level.

Unofficial translation