Strong link

 Asel Askhatova

Kazakhstan the first in CIS began a structural reform of electric power industry. And till now Kazakhstan remains a more “advanced” in this area among the CIS states. It is possible to dispute about the mechanisms of realization of these transformations. But as a whole the structure of the Kazakhstan market of the electric power created on today satisfies to the model accepted in many developed European countries.

Passed in 2004 the Law of the Republic of Kazakhstan “On power industry” has included fundamentally new norms determining the status, the rights and the duties of KEGOK Company. According to this document, all participants of an energy production and transfer market have to carry out the orders of the UPS Operator. They also must regulate and support a standard frequency of the unified power system jointly with KEGOC, and the generating companies have to provide the power reserves. On a discriminatory basis, the System Operator renders the following services to the wholesale market entities:
• transmission of electric power via the National Power Grid
• technical dispatching
• power control
• maintenance of a balance of an electric energy production-consumption in the unified power system.

In addition, KEGOC
• cooperates with the power-industry of the neighbouring states to provide stability of modes of parallel work.
• supervises a creation of the unified information system and the automated commercial metering system (АСКУЭ).

The reforms in the industry began in 1995. During some years the power industry has undergone the following changes:
1. The industry was divided in two sectors – a competitive and a monopolistic. The first    consists of production, consumption and trading of an electric power. The second includes transfer and distribution.
2. Major power stations were sold to the strategic investors. Thermal Power Stations of industrial purpose were sold to the industrial complexes, and usual municipal Thermal Power Stations were bought by service utilities and private companies.
3. “Kazakhstan Electricity Grid Operating Company” (KEGOC) was created to control the National Power Grid.
4. The regional distribution electric network companies were created.

In first half-year of 2000 the powermen have gone on. They have studied an international practice. They have analysed the work of electric power markets in the developed countries. And they have invited the international advisers from Norway, Finland, Great Britain. They have estimated a possibility to apply their experience in Kazakhstan, considering our fuel-energy and water resources, location and the types of the power stations, the transport opportunities of electric networks, a growing demand and other factors.
As the result today the system of parallel electric power markets is formed in our state. In other words, a unified market is divided in several sectors. First of them and the largest one are the dealings based on bilateral purchase-and-sale contracts. Sellers and buyers conclude such contracts independently, without intermediaries. In the second sector the centralized exchange trade conducts in hourly volumes of electric power in a mode “day-ahead”. From the beginning of following year a balancing market will start to work, it means that the industrial enterprises having a surplus capacity on a certain moment, can sell an energy in real-time mode to whoever needs it on this moment. Besides a market of system and auxiliary services are developed.
Such a branch structure makes it as a competitive and market environment. The competition between the energy producing organizations to have the rights to supply en electric energy to the wholesale customers, has allowed to bring down the prices from 4,0 cents per kWh (in 1994) to 1,2 - 1,3 cents per kWh (in 2006) and to stabilize the prices. At that KEGOC Company, as a system operator, provides equal access for all participants of the market to the National Power Grid. What is included in this NPG (power grid)? It includes all substations, distribution devices, interregional and intergovernmental transmission lines and other high-voltage lines which are not subject to privatization. 
Besides providing an access to the National Power Grid, KEGOC assures its reliable and quality operation. Here are many problems yet. To try to characterize in one sentence could say: while demand for electricity grows – the equipment of stations and networks become out of date, and nobody wants to invest its renewal, because the low tariffs don’t give hopes for return of investments. At the same time, necessary volume of investments to the sectors of generation, transmission and distribution of electric energy amounts to 1.8 trillion KZT ($ 14.8 milliards) only for the period since 2007 till 2015.
The National operator, that is responsible for the work of whole grid, can not be limited only to the reasons of commercial benefit. Therefore it looks for the different ways to finance its projects, using the opportunities of a founder on behalf of the state. To attract investments to modernization and development of the National Power Grid, KEGOC obtains the funds of the international financial institutions and the Bank of Development of Kazakhstan on the terms of co-financing, also KEGOC uses the mechanisms of state-private partnership. The main project of the company, demanding constant flow of the funds, is the modernization of National Power Grid, which is realized since 2000. During this period, more than 5 thousand units of modern high-voltage equipment have been installed. More than a half of 74 substations of the Company have been modernized. Communication networks have been developed. Particularly, a satellite network and a corporate information network of the company have been created. A system of dispatch control and management SCADA/EMS have been putted in operation. The Automated Commercial Metering System (ACMS) has been taken-over.
Other significant projects are a construction of second transmission line of North-South transit of Kazakhstan and the line “North Kazakhstan – Aktubinsk region”. We plans a construction of several more transmission lines: Atyrau-Kulsary-Tengiz; Makat-Kandyagash; Atyrau-Kenkiyak-Ulke SS.  
To provide reliability of electric energy deliveries to the consumers, KEGOC was a member of the Pool of electric power reserve of Kazakhstan (ПУЛРЭМ), created by energy producing organizations of our republic. Sense of that association that the participants could provide to each other the power reserves in case of random breakdown of the generators and the transmission lines. Besides the national operator, the participants of the pool are the generating companies and RECs (РЭКи).
According to the powermen, today KEGOC is most successful link of the industry.  This is confirmed that an International Rating Agency “Standard & Poor’s” has assigned to the company a credit rating «ВВ+», «Positive». And an International Rating Agency “Moody’s Investors Service” has assigned to KEGOC an investment credit rating «Baa1», «Stable».

Alexander Ozerec, Minister of Power Industry of the Republic of Byelorussia:
“10 years of experience of the company on the market pleasantly surprises me. There is a lot to see. We come to share the experience, and we see the progress. As we can see, the management of KEGOC pays maximum attention to re-equipment of power systems, renewal of fixed assets and introduction of latest technologies. It ensures that all of the company’s difficulties will be resolved.
At this anniversary, I’d like to wish the company a good luck, so that the creative approaches of KEGOC are realized, and I’d like to wish the personnel and the management to be healthy.”