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Electric Power Sector Governance in Kazakhstan

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Electric Power Sector Governance in Kazakhstan ELECTRIC POWER GOVERNANCE INITIATIVE ELECTRIC POWER SECTOR GOVERNANCE IN THE REPUBLIC OF KAZAKHSTAN: INSTITUTIONAL AND CASE STUDY Results of EGI Methods’ Application in the Republic of Kazakhstan TABLE OF CONTENT AUTHORS: Section 1. HISTORY AND CURRENT STATUS OF Petr SVOIK Director of the establishment “Democratical Expert Evaluation. Petr Svoik Analytical ELECTRIC POWER INDUSTRY Service”, Almaty; ҚАЗАҚША 1.1 Restructuring 1.2 Generating Capacities Eduard NAZAROV Director of the Non-governmental Foundation “Central-Asian Development Institute”, 1.3 Electric Grids Nazarov Eduard Yurievich, Almaty; 1.4 Electric Power Generation and Consumption 1.5 Tariff Policy Sergey BELOV Youth Public Organization “Active Youth of NKO”, Petropavlovsk; 1.6 Sale of Electricity РУССКИЙ 1.7 Electricity Market Sara ESPENOVA Non-governmental Foundation “KAMEDA”, Astana; Section 2. DEVELOPMENT OBJECTIVES Aziya Kurmanbayeva NGO “Committee on Non-Governmental Monitoring the Execution of Government 2.1 General Development Parameters, Goals and Programs at the Local Level”, Semey; Objectives 2.2 The balance between demand and supply with the Vadim Litvinov Non-governmental Foundation “Ecology-Youth-Initiative-Development”, Ust- growing energy consumption Kamenogorsk; ENGLISH 2.3 Development of Renewable Energy Sources and Their Integration into the National Grid Ulugbek Tnaliev Non-governmental Foundation “Center of Budget Analysis and Economic Monitoring”, 2.4 The Need to Attract the Large-Scale Investment for the Industry Atyrau. 2.5 Energy Saving and Energy Efficiency Improvement Principal Editor: Eduard Nazarov, NGF “Central-Asian Development Institute” Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN 3.1 Target Model The document is prepared by a team of experts from Kazakhstan’s non-gevernmental organizations in association 3.2 Power Generation (Wholesale Market) 3.3 System Operator with the World Resources Institute (USA) and Prayas Energy Group (India), with financial support from Soros – 3.4 Transmission and Distribution of Electricity Kazakhstan Foundation. 3.5 Power Supply 3.6 Creation of Power Market The contents of this publication reflect the views of the authors and not necessarily those of the Soros Foundation-Kazakhstan. Section 4. “TRANSPARENT TARIFF” CIVIL INITIATIVE: CONTENT AND WAYS OF IMPLEMENTATION 4.1 Critical Analysis of Bureaucratic Tariff Policy 4.2 Tariff Process Transparency: Laws and Practice 4.3 Monitoring of Natural Monopolies: Regulatory Framework and Practice 4.4 General Critical Conclusion on Effective Procedure for Tariff Regulation 4.5 Offers for a Transparent and Effective Tariff Process 4.6 Principles of Organization of Annual Professional and Independent Financial and Technical Audits 4.7 Transparent Tariff Initiative: Promotion of Common Ideology and Civil Partnership Mechanisms into National Laws and Practice 4.8. Organizational Sequence of Including the Consumer into the Tariff Process BASIC QUESTIONNAIRE ON INDICATORS 2 TABLE OF CONTENT The pilot project “Advancement of Power Supply Governance Initiative in the Republic of Kazakhstan” is the first stage of extension in Kazakhstan of international initiative of power supply governance, which is executed Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY according to the joint program of World Resources Institute and Prayas Energy Group (India). The Power Supply ҚАЗАҚША 1.1 Restructuring Governance Program (PSGP) is a sustainable development partnership project registered at the UN Commission 1.2 Generating Capacities on Sustainable Development. National Institute of Public Finances and Politics (India) was also involved in the 1.3 Electric Grids 1.4 Electric Power Generation and Consumption development of instruments for the Power Supply Management Project (PSGP) and pilot assessment of the program 1.5 Tariff Policy in Asian countries. Prior to execution in Kazakhstan, this Program has been executed for a number of years in the 1.6 Sale of Electricity Kyrgyz Republic, as well as in the Republic of Tajikistan. РУССКИЙ 1.7 Electricity Market The Power Supply Governance Program (PSGP) is considered as an overall initiative of the civil society, politicians, Section 2. DEVELOPMENT OBJECTIVES legislative power and other members of the power supply sector on the development of an open, accountable 2.1 General Development Parameters, Goals and Objectives decision making procedure as an integral part of social and environmental stability of power industry in the future. 2.2 The balance between demand and supply with the growing energy consumption The mission of the program consists in providing transparency, accountability and openness in the public finance ENGLISH 2.3 Development of Renewable Energy Sources and governance for the benefit of the current and future Kazakh generations. Their Integration into the National Grid 2.4 The Need to Attract the Large-Scale Investment for the Industry 2.5 Energy Saving and Energy Efficiency Improvement ANALYTICAL RESEARCH Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY for the electric power industry sector of Kazakhstan as per the methods of DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN international “Electricity Governance Initiative” and development of certain 3.1 Target Model recommendations and plans of action to increase the efficiency and openness 3.2 Power Generation (Wholesale Market) 3.3 System Operator of the sector 3.4 Transmission and Distribution of Electricity 3.5 Power Supply 3.6 Creation of Power Market Section 4. “TRANSPARENT TARIFF” CIVIL INITIATIVE: CONTENT AND WAYS OF IMPLEMENTATION 4.1 Critical Analysis of Bureaucratic Tariff Policy 4.2 Tariff Process Transparency: Laws and Practice 4.3 Monitoring of Natural Monopolies: Regulatory Framework and Practice 4.4 General Critical Conclusion on Effective Procedure for Tariff Regulation 4.5 Offers for a Transparent and Effective Tariff Process 4.6 Principles of Organization of Annual Professional and Independent Financial and Technical Audits 4.7 Transparent Tariff Initiative: Promotion of Common Ideology and Civil Partnership Mechanisms into National Laws and Practice 4.8. Organizational Sequence of Including the Consumer into the Tariff Process BASIC QUESTIONNAIRE ON INDICATORS 3 TABLE OF CONTENT Section 1. Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY ҚАЗАҚША 1.1 Restructuring HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY 1.2 Generating Capacities 1.3 Electric Grids 1.4 Electric Power Generation and Consumption 1.5 Tariff Policy Electric power industry includes generation, transmission, supply and consumption of electric 1.6 Sale of Electricity РУССКИЙ 1.7 Electricity Market and thermal power, and is the basis of the economical function and the livelihood of the country. Concerning the economy of the Republic of Kazakhstan, the electric power industry is Section 2. DEVELOPMENT OBJECTIVES of particular importance, since the key industries of the country, such as metallurgy and oil and 2.1 General Development Parameters, Goals and Objectives gas production are characterized by high energy consumption. Therefore, the competitiveness 2.2 The balance between demand and supply with the of the heavy industry of Kazakhstan and the living standards largely depend on reliable and growing energy consumption qualitative power supply to consumers at affordable prices. ENGLISH 2.3 Development of Renewable Energy Sources and Their Integration into the National Grid 2.4 The Need to Attract the Large-Scale Investment for the Industry 2.5 Energy Saving and Energy Efficiency Improvement 1.1 Restructuring Section 3. MAIN PRINCIPLES AND STRATEGIES Historically, the formation of the current electric power industry structure of the Republic of Kazakhstan and FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF appropriate economic relations were determined by conserving the capacity of the industry and its further KAZAKHSTAN development. As part of the economy’s transition to market-oriented relations, in 1995 the privatization of power 3.1 Target Model generation facilities and major industry restructuring was launched. As a result, large power plants have been 3.2 Power Generation (Wholesale Market) 3.3 System Operator allocated to the legally separated enterprises, privatized or transferred to concession. CHP with the heating 3.4 Transmission and Distribution of Electricity networks were privatized or transferred to municipal ownership. National Power Grid, which provides interregional 3.5 Power Supply and interstate electric power network, remained in state ownership. National Company JSC “KEGOC”, comprising 3.6 Creation of Power Market the national dispatch center systems’ operator (NDC SO), has been established in order to manage this grid. Section 4. “TRANSPARENT TARIFF” CIVIL On the basis of electric distribution networks of 0.4 – 110 kV, the regional grid companies (RGC’s) have been INITIATIVE: CONTENT AND WAYS OF IMPLEMENTATION established distributing the electric power at the regional level. Part of the RGC’s are privately owned, some of 4.1 Critical Analysis of Bureaucratic Tariff Policy them are in the communally owned, and the remaining is part of «Samruk-Energo» group of companies. 4.2 Tariff Process Transparency: Laws and Practice 4.3 Monitoring of Natural Monopolies: Regulatory In 2004, energy sale divisions of RGC were allocated to legally separate organizations, which become a basis for Framework and Practice establishing the energy
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