Kyrgyzstan
Striving towards democracy and economic development

Mr. Erik S. Arsaliev

Interview with:
Mr. Erik S. Arsaliev
JSC "National Electric Grid"

"Suppliers of Electricity in Central Asia"

Mr. Bakirdin Sartkaziev
General Director
Contact :
326, Jubek-Jolu Str., Bishkek
720070, Kyrgyz Republic
Tel: (996-312) 661001
Fax: (996-312) 661609,
620669
E-mail: aoek@infotel.kg
 
Presentation

Kyrgyz Republic is rich in power resources. This is especially true for the hydro energy resources, which potential is estimated to be 142 billion kWh per annum by experts, of which only 10 % are used now.
High reserves of energy resources have created favorable preconditions for fast development of a power complex of the Republic, which from the beginning of 1980's became a huge producer of hydro electricity in the Central-Asian region. Up to 50% of the cheap and clean electric power generated here has been delivered to the United Energy System of Central Asia.



Kyrgyzstan's electric power industry is capable of meeting the country's domestic electricity needs while providing surplus electricity for export. Kyrgyzstan has two major electric power plants - a 1.2-gigawatt (GW) hydropower plant at Toktogul, and a 0.76-GW thermal plant at Bishkek, with plans for a major 6.8-GW hydropower station to be built by 2010. In 2000, Kyrgyzstan generated 14.7 billion kilowatt-hours (Bkwh) of electricity, up from 13.0 Bkwh in 1999, while the country consumed only 9.8 Bkwh in 2000.
Kyrgyzstan's abundant water resources give it significant hydroelectric potential. The energy potential of Kyrgyzstan's mountain rivers is estimated at 163 Bkwh per year, of which only about 10% is currently exploited. Hydroelectric energy meets approximately 20% of Kyrgyzstan's primary energy requirements and accounts for nearly 20% of its total exports. With rapidly growing energy demand in neighboring countries, Kyrgyzstan's hydroelectric power potential is becoming more attractive to foreign investors. The long-delayed 450-megawatt (MW) Tash Kumyr Hydroelectric Plant was put into full operation in 2001, and Kyrgyzstan is working to secure financial resources to construct two power-generating units at the Kambar-Ata Hydroelectric Plant.
The Kyrgyz Republic has a real prospect for development of hydropower construction. On the Naryn river alone, the existing cascade of hydropower plants consists of 5 power plants with a total installed capacity of 2870 MW. It is also possible to construct another 7 cascades including 33 hydropower plants with a total installed capacity of 6450 MW and annual generation of more than 22 billion kWh.



Although Kyrgyzstan has excess electricity generation, up to one-third of the power that the country generates is lost due to Kyrgyzstan's deteriorating power infrastructure. A lack of transmission-related equipment and inadequate pricing and cost recovery have contributed to problems in the power sector. The Kyrgyz government allowed Kyrgyzenergo to raise electricity tariffs in March 2002 in an effort to recoup generation costs, but already more than half of residents in the Kyrgyz capital are not able to pay because of previous rate increases.
Since the country's major hydroelectric power stations are located in the south, the north of the country typically depends on supplies of Kazakh electricity in the winter. After Kazakhstan withdrew from the Central Asian power grid in early 2002, northern Kyrgyz districts were left with insufficient electricity, prompting Kyrgyz government official to ask residents in the north to conserve electricity.
Besides the irregular natural gas supplies from Uzbekistan, Kazakhstan's decision to leave the regional power grid has given Kyrgyzstan additional incentive to shore up its power system. Kyrgyzstan already has embarked on a program to make the country self-sufficient in energy by 2005, seeking to increase its electric installed capacity and to modernize its distribution system. Kyrgyzstan has borrowed money from international development banks to build substations, the Alai-Batken, Kemin-Naryn, and Naryn-Torugart power lines, to rehabilitate/reconstruct heat and power grids and the Bishkek heat and power plant, and to buy equipment.



In 2001, Kyrgyzstan embarked on a restructuring of Kyrgyzenergo, splitting off the company's distribution networks and leaving the former monopoly as just an electricity generating company. In July 2001, the Kyrgyz parliament approved a government restructuring plan for Kyrgyzenergo, the state electricity company, which is aimed at preparing the company for privatization this year. The plan calls for the company to be divided into eight independent divisions. However, the new companies are still saddled by their own debts to Kyrgyzenergo and by consumers' failure to pay their electricity bills. Kyrgyzstan plans to privatize these regional electricity distribution companies as the next step in the reform process.
History of "National electric grid "

Nowadays, the energy sector is divided into three function-wise blocks divisions. The first division consists of structures, which generate electricity and thermal energy. To be more detailed, these are Toktogul, At-Bashy, Kurpsai, Shamaldy-Sai, Tash-Kumyr, Uch-Kurgan Hydro Electric Power Stations and two thermal stations in Bishkek and Osh. The second division includes transmitting companies, which control the high-voltage electricity transmission lines for electricity supply to the regions of the Republic. The third division consists of the switching companies: "National electric grid", and four switching companies: "Sever Elektro" (Chuy and Talas provinces and Bishkek), "Vostok Elektro" (Issyk-kul and Naryn provinces), "Osh Elektro", and "Jalal-abad Elektro". Today, instead of one company "Kyrgyzenergo" there are seven companies. All of them are subject to privatization after the Parliament will issue a corresponding resolution. The "SeverElectro" is the first to be privatized because it is the largest and most attractive company for the investors.



National Power Grid, which is charged with transporting electricity, includes high-voltage power grids in Chuisk, Issyk-Kul, Naryn, Tallask, Osh, and Dzhalal-Abad regions. It includes some station lines from 110 kilowatts up to 500 kilowatts.

The system of transmission lines includes 110, 220 and 500 kV lines. The North and South areas of Republic are connected with 500 kV line and have a connection with the united electric power system of the Central Asia. The nearest existing 500 kV transmission line goes in 46 km. from Kambarata HPP-2. The Republic power system has connection with Central-Asian states through main networks of 500 kV and it functions in uniform energy mode. Connection with the power system of the Russian Federation is available through the electric grid of Kazakhstan.

The length of electric grid is 69,049 km. Power transmission lines of 35 kilovolt and higher capacity are 10,920 km long, and high voltage lines of 0.4-10 kilovolt are 58,352 km long. As of 1.01.2001 the number of electrical substations of voltage 35 kV and higher has reached 514 with total capacity of 10447 MVA.

"National electric grid' is a joint stock company. 80,5% of total shares belong to Kyrgyz Government, 13% belong to the Social Fund, the rest 7,5 % belong to the private investors: physical and legal entities, minor shareholders, all together they make up 15. Naturally, 93,5% of total shares could not be privatized without the permission of the Government. National grid only makes the transmission of electricity within the Republic and also exports it.

Partners

Power engineering is Kyrgyzstan's strategic sector. Every year a great number of project proposals come from foreign investors. Given the current economic situation of the republic and the company proposals containing the most privileged credit terms and conditions are selected.
However further foreign investment in power engineering is becoming more and more problematic due to the following reasons:
· for a range of reasons, Kyrgyzenergo economic situation worsened in 1999;
· loan payback began in 2000.
To obtain loans for building new hydro power stations and high voltage power transmission grids to export electric energy, long-term electricity export agreements with adjacent countries are necessary - but they do not exist so far.

Since 1999, Kyrgyzenergo began to intensively develop technical cooperation programs with international organizations. The company specialists have undergone training and practical training in western energy companies within the frameworks of various cooperation programs.
During the last 5 years, the Kyrgyz Republic has become a key member of the Central Asian power system due to the availability of high power capacities of the hydropower plants. This allows the Republic to export electricity to the neighbouring countries and to provide frequency regulating services in the united energy system of Central Asia.

Products

According to state electricity company Kyrgyzenergo, the country generated 9.314 billion kilowatt-hours of electricity in the first eight months of 2001, 9.8 percent less than in the same period last year (10.328 billion kilowatt-hours). Kyrgystan plans to produce 13.2 billion kilowatt-hours of electricity in 2001, compared with 14.844 billion kilowatt-hours in 2000. Expansion of electricity output has been hindered by inadequate domestic production of transmission-related equipment, limited fiscal resources, and inadequate pricing and cost recovery. Currently the infrastructure to export large amounts of energy is lacking. Kyrgyzstan is studying the possibility of constructing transmission lines to China.



The expert group representing Kyrgyzstan, Kazakstan and Uzbekistan has developed a draft of an agreement on mutual supplies of energy sources. According to this document, the Kyrgyz Republic should receive 600 million cubic meters of gas and 750,000 tons of coal for its heating and power plants. In exchange for these products, Kyrgyzstan would supply 2.2 million kWh of electric power. In 1998, Kyrgyzstan imported 999.3 million cubic meters of gas, 810,017 tons of different coals and exported 998.4 million kWh of electric power.

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