Kazakhstan to consolidate energy transmission companies by 2022

ASTANA – The Kazakh government plans to consolidate the country’s electrical grid and reduce the number of energy transmission companies by 30 percent by 2022.

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“We expect the number of energy transmission companies to reduce from 160 to 110 and 27 public utilities and 23 private energy transmission enterprises will cease operations by 2019 and by 2022 as part of the consolidation of regional electric grid companies,” said head of Electric Power Industry Department of the Ministry of Energy Bauyrzhan Sarsenov at the briefing, adding that only a small number of companies meet the country’s requirements.

“These companies are Kazakhstan Electricity Grid Operating Company (KEGOC), Regional Electricity Company and 14 medium-sized supply companies. At the moment when we move to consolidation, there will be a chain: the station – KEGOC – regional electricity company and then the energy transmitting organisations will deliver electricity to consumers,” Sarsenov said.

The largest number of electricity intermediaries are in the Karaganda and East Kazakhstan regions.

“There are up to 40 energy transmitting organisations. There are 17 such companies in the East Kazakhstan region. It is still difficult to say whether they will be able to meet the necessary requirements,” he said.

The electricity tariff and charges will remain the same with a reduction in the number of electricity transmission organisations.

“The fees will not be included in the tariff. The system and all the services that are needed to operate the networks will be automated at the expense of their own investments. Accordingly, these expenses will not be taken into account in the tariff,” he said.

Kazakhstan adopted a law to consolidate energy transmission companies to increase their reliability last July. The law also provides for the release of power transmission organisations from corporate income tax and property tax after receiving abandoned electrical grid facilities and lifting the prohibitions provided for by legislation in the field of natural monopolies. The law contains a mechanism for transferring abandoned electricity grids through amendments to the law on state property.