From pv journal 10/2022
The Central Asian photo voltaic market is on a roll, with Kazakhstan the pioneer and regional chief and Uzbekistan not far behind. Kazakhstan put in 2.7 GW of photo voltaic capability between 2017 and 2021, based on the brand new REN21’s UNECE Renewable Power Standing Report, and in 2021, added over 1 GW of photo voltaic – leading to it changing into one of many top-30 international locations for renewable vitality funding.
Uzbekistan’s first utility-scale PV plant, with 100 MW of capability, was commissioned by the UAE state-owned Masdar within the Navoi area in 2021. In June 2022, the second utility-scale photo voltaic plant, of 131 MW, was commissioned by French developer Whole Eren within the Samarkand area.
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The present version of pv journal casts a watch on the broader Asia-Pacific photo voltaic markets, contemplating how cross-border interconnections can drive higher useful resource effectivity, in addition to the essential position microgrids can play within the persevering with roll-out of photovoltaics. We additionally look at the Tango fab being deliberate in Sicily by Italian vitality group Enel as a part of Europe’s makes an attempt to shore up vitality safety with a home photo voltaic provide chain.
These developments can be inconceivable with out the investment-friendly financial strikes that the 2 international locations have been enterprise to help the event of renewables, based on Yerlan Ramazanov, regional head of vitality for Eurasia on the European Financial institution for Reconstruction and Growth (EBRD). These embody a number of aggressive auctions on photo voltaic and wind capability in each international locations.
“In Uzbekistan, the auctions attracted main renewable vitality builders and achieved a few of the lowest tariffs internationally on each wind and photo voltaic, together with $0.0257/kWh on the EBRD-supported 100 MW wind tender final yr,” mentioned Ramazanov. “In Kazakhstan, an public sale system changed feed-in tariffs in 2018 and has already tendered roughly 1.3 GW of latest renewable capability. Tariffs have additionally demonstrated a gentle decline, with the weighted-average tariff for photo voltaic in 2021 lowered by round 63% and for wind by round 38% in comparison with the feed-in tariffs.”
The photo voltaic growth within the area is basically pushed by utility-scale initiatives backed by worldwide monetary establishments, most prominently by the EBRD. In Kazakhstan, the financial institution is the biggest investor in renewable vitality. By the top of 2021, the financial institution financed the development and operation of 12 PV initiatives with the overall worth in EBRD financing of €328 million ($318.5 million), based on the financial institution’s nation technique.
Totally different paths
The drivers for the event of renewables in each international locations are based mostly on safety and diversification. Each international locations have vital reserves of gasoline and oil and rely closely on fossil gasoline era for electrical energy. Uzbekistan’s electrical energy consumption is predicted to double by 2030 and home pure gasoline manufacturing alone won’t be able to cowl the rising demand, based on the IEA. In Kazakhstan, air air pollution from coal energy era, at 70% of the vitality combine, is a further driver.
Regardless of comparable objectives, the international locations took completely different paths to draw funding in renewable vitality. “Kazakhstan spent about six years on the event of a regulatory framework. For the reason that adoption of the primary regulation on renewables, it took about six to seven years for the primary severe renewable vitality initiatives to be developed,” mentioned Almas Chukin, economist and companion at funding firm Visor Kazakhstan. In 2019, Kazakhstan achieved its 2020 goal of three% renewable energy era and raised its 2030 goal to fifteen%.
In the meantime, developments in Uzbekistan have been extra advert hoc, based on Chukin. “Uzbekistan wanted to swiftly resolve vitality provide points and had no time for the event of a regulatory framework,” he mentioned. “Particular auctions underneath the auspices of the federal government, the IFC, and the ministry of vitality have been accessible just for ‘large’ buyers.” The benefit of that is velocity, he mentioned, however the systematic strategy is lacking.
In 2019, Uzbekistan declared plans to put in 8 GW of renewable vitality by 2030 with the intention of attaining a 25% share in electrical energy era by 2030. Two years later, the goal was raised to 12 GW, together with 7 GW photo voltaic and 5 GW of wind. Since then, a number of initiatives have gone to public sale and a few have been developed by means of bilateral contracts. After profitable the primary photo voltaic public sale tender in 2019, the UAE’s Masdar received a young for a 457 MW challenge within the Surkhandarya area and two PV initiatives totaling 400 MW within the Jizzakh and Samarkand areas.
The newest 131 MW photo voltaic challenge, commissioned by Whole Eren in 2022, was initially launched in 2018 through the go to of Uzbek president Shavkat Mirziyoyev to France, with a 25-year PPA agreed. Details about its worth of electrical energy is confidential, the press workplace of Whole Eren advised pv journal.
Small-scale renewables
Past utility-scale initiatives, each international locations have seen little progress on distributed, small-scale renewables. However in Kazakhstan, company curiosity for photo voltaic is rising, mentioned Abdulla Ushurov, founding father of Kazakhstan-based Solarway. “There aren’t any state subsidies or tax breaks for the set up of photo voltaic panels. The one incentive for authorized entities is the likelihood to promote extra vitality at a market fee,” he mentioned.
Solarway was based in 2016 with the adoption of a regulation on renewable vitality feed-in tariffs, which allowed the set up of renewables techniques whose extra vitality might be bought to the grid. Most of Solarway’s shoppers come from the company sector however every area has its personal tariffs.
“There is no such thing as a single electrical energy tariff in our nation. Every area varieties its personal tariff, with the very best tariffs within the southern areas. The pattern for annual progress of tariffs is as much as 4.5%,” mentioned Ushurov. Tariffs based mostly on native foreign money the tenge have lifted greater than 56% since 2016.
Personal households within the nation additionally more and more present curiosity in renewable vitality, mentioned Ushurov, with most putting in hybrid inverters with batteries to make sure secure energy provide. “Particularly in the summertime interval, renewable vitality supplies an answer to households through the durations of electrical energy scarcity and rolling blackouts for a number of hours within the nation.” However, for a lot of, photo voltaic continues to be a major funding due to a scarcity of state help and an imperfect legislative framework. Extra monetary incentives are wanted, added the Solarway founder.
In the meantime, the federal government of Uzbekistan is involved in creating distributed, small-scale renewables and the EBRD at present helps the vitality ministry with technical cooperation on creating the respective authorized and market frameworks, mentioned the EBRD’s Ramazanov.
Challenges of transition
With the growing share of renewables, the foremost problem confronted by all stakeholders is securing the mixing of intermittent renewable vitality. Ramazanov mentioned: “It requires a multidisciplinary strategy which incorporates modernization of grids, introduction of digital options, storage and in chosen circumstances introduction of latest balancing gasoline capability and regional interconnection.” Subsequently, the EBRD is financing two funding initiatives that strengthen the grid within the northwestern a part of Uzbekistan, whereas the Kazakhstan Electrical energy Grid Working Firm (KEGOC) is a long-standing companion and recipient of the financial institution’s financing.
Visor Kazakhstan’s Chukin says that additional deployment of renewables requires highly effective versatile era which is at present missing within the nation. Subsequently, in July 2022, two auctions have been organized, for 925 MW and 240 MW combined-cycle gas-fired vegetation which will likely be constructed with the intention of balancing renewables within the grid, and two extra auctions are deliberate.
Worldwide buyers have been eyeing the quickly-developing photo voltaic markets in Central Asia. In Kazakhstan, competitors with Chinese language buyers has been powerful for the European corporations.
“Buyers from China observe extraordinarily aggressive pricing to safe infrastructure and grid entry within the wind and photo voltaic sector. As buyers, we wouldn’t have entry to extraordinarily low-cost funds, as is the case in China. Consequently, a medium-sized firm from Europe, like us, can’t compete with Chinese language buyers,” mentioned Tobias Schüßler, chief working officer of German-based developer Goldbeck Photo voltaic.
Goldbeck Photo voltaic has been lively in Kazakhstan since 2017, when first exploring different markets throughout a quiet interval within the European photo voltaic market. That’s when a government-backed pilot photo voltaic challenge, tied to the World Expo in Kazakhstan’s capital metropolis of Astana, emerged, with a challenge developer from the Czech Republic in search of an EPC and an investor. A 100 MW photo voltaic plant on an space of 160 hectares close to the city of Karaganda in northern Kazakhstan was commissioned by the top of 2018. In 2019, Goldbeck Photo voltaic constructed and commissioned the 50 MW Akadyr photo voltaic plant within the Karaganda area underneath the identical inexperienced tariff, later including one other 26 MW by public sale in 2020.
In accordance with Chukin, Chinese language corporations have largely received in Central Asia on account of a spread of aggressive benefits. “Costs for Chinese language gear are approach decrease. For a 100 MW challenge, prices of apparatus from China are within the vary of $50 million to $60 million, and from Europe $70 million to $80 million. One other benefit is geography. The price of large-size cargo transportation accounts for about 15% of a 100 MW challenge and the distinction reaches $20 million to $30 million,” Chukin says. However Chukin says that European corporations are strongly represented when it comes to know-how and knowhow, together with key technical options for transformers.
Goldbeck’s Schüßler says to foster renewables, a number of hurdles must be eliminated, together with bureaucratic obstacles for project-related imports. As well as, native vitality suppliers anticipate day by day electrical energy forecasts and deal with PV vegetation like coal vegetation, regardless of photo voltaic era functioning as an intermittent supply.
In the meantime, Goldbeck Photo voltaic sees different prospects arising with trade, which is in search of methods to lower the carbon footprint of energy-intensive merchandise. “We see that the demand for company PPAs is growing. Extra corporations are involved in securing low-cost electrical energy from renewable vitality, straight from a PV system into their very own manufacturing facility, whether or not for hydrogen manufacturing or with the intention to scale back electrical energy prices. There are first inquiries underneath approach in addition to clients and banks which can be wanting into this space”, Schüßler mentioned. In accordance with him, photo voltaic vitality is already cheaper than the native vitality tariffs. In 2019, the vitality tariff was KZT 34/kWh ($0.07), whereas the bid for the second photo voltaic plant Akadyr was KZT 17.
By Komila Nabiyeva
