Kazakhstan Power Report Q3 2010
July 20. PR-inside
BMI forecasts that Kazakhstan will account for 3.71% of Central and Eastern European (CEE) regional power generation by 2014. CEE power generation in 2009 was an estimated 2,534 terawatt hours (TWh), representing a decline of 2.9% from the previous year’s level. We are forecasting a rise in regional generation to 2,969TWh by 2014, representing a 2010-2014 increase of 14.4%.
Regional thermal power generation in 2009 was around 1,284TWh, accounting for 50.7% of the total electricity supplied in the CEE. Our forecast for 2014 is 1,455TWh, implying 11.6% 2010-2014 growth that reduces only slightly the market share of thermal generation to 49.0% – in spite of environmental concerns promoting renewables, hydro-electricity and nuclear generation. Kazakhstan’s thermal generation in 2009 was an estimated 72.3TWh, or 5.63% of the regional total. By 2014, the country is expected to account for 6.57% of thermal generation.
Coal is the dominant fuel source in Kazakhstan. In 2009, it accounted for an estimated 51.1% of primary energy demand (PED). Coal is followed by gas at 29.5%, oil at 16.3% and hydro with a 2.6% share of PED. Regional energy demand is forecast to reach 1,546mn toe by 2014, representing 13.8% growth over the period 2010-2014. Kazakhstan’s estimated 2009 market share of 4.96% of regional demand is set to rise to 5.67% by 2014. Kazakhstan has longer-term plans for nuclear power generation, but will not contribute to nuclear consumption during the forecast period.
Kazakhstan is now ahead of Romania in BMI’s updated Power Business Environment ratings, having this quarter retaken outright regional leadership. There is a combination of unrivalled power consumption growth outlook, region-topping energy demand growth, steady privatisation progress, and relatively low level of energy import dependence. Country risk factors offset some of the industry strengths, but the country should remain ahead of Romania and Turkey at the top of the regional ladder.
BMI is now forecasting Kazakh real GDP growth to average 6.0% per annum between 2010 and 2014, following an assumed rise of 1.2% in 2009. The population is expected to expand from 15.5mn to 15.7mn over the period, and GDP per capita and electricity consumption per capita are forecast to increase 96% and 22% respectively. The country’s power consumption is expected to increase from an estimated 66.7TWh in 2009 to 84.6TWh by the end of the forecast period, while theoretical surplus generation is expected to rise from an estimated 13.3TWh in 2009 to 25.5TWh in 2014, assuming 6.6% average annual growth in power generation in 2010-2014. In fact, system wastage and transmission weaknesses mean that Kazakhstan has to import some power, as well as export electricity to Russia.
Between 2010 and 2019, we are forecasting an increase in Kazakh electricity generation of 83.8%, which is the second highest projected growth rate for the CEE region. This equates to 40.3% over the 2014-2019 period, up from 31.1% between 2010 and 2014. PED growth is set to increase from 28.0% between 2010 and 2014 to 37.7% in 2014-2019, representing 76.2% for the entire forecast period. An increase of 115% in hydro-power use during the period 2010-2019 is a key element of generation growth. Thermal power generation is forecast to rise by 79% between 2010 and 2019. More detailed long-term forecasts can be found later in this report.