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Monday, November 30th, 2020

Kazakhstan plans to consolidate energy transmission providers


The Senate of the Parliament of the Republic of Kazakhstan considered in two readings and adopted the Law On Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Electrical Energy Industry.

The qualification requirements were developed by the working group with participation of Atameken and all state bodies. Fulfilling these requirements will not be as easy as it seems. Thus, we’ve allotted 5 years to fulfill them. That is why many capital investments are needed. To date, there are about 160 such organizations in Kazakhstan. Of them, only 19 RECs and the KEGOC grid operator meet the requirements. Among the medium-sized and small companies, about 14 conform, and 99 companies do not conform to these requirements. We must fix this. We expect that by 2019, around 27 companies are to join those organizations which meet these requirements, � Minister of Energy Kanat Bozumbayev said.

The Minister explained that measures against companies that do not meet new requirements will be taken by the authorized body in the sphere of tariffs by regulating tariffs so that it would not be profitable for these RECs to function. That is, they will be compelled to join with large companies which do conform to the requirements.

As the Minister noted in his report, after the abolition in 2012 of the licensing of RECs, there was an additional increase in their number. Two groups of issues were identified in the process of drafting the bill, on which solution mechanisms were developed. First �medium and short spread transmission providers, second �ownerless electrical grids. The bill covers the sale of owned electrical grids, as well as gratuitous transfer of ownerless power grids.

K. Bozumbayev notes that qualification requirements will be introduced gradually and assume the companies to have: dispatch and process management in the period until January 1, 2018; services that operate and maintain electrical grids, equipment, mechanisms, equipped with trained and certified personnel, provided with individual and collective protection equipment, overalls, tools and devices – no later than January 1, 2020; a contract with the grid operator for the provision of services – no later than January 1, 2020; automated systems of commercial accounting, telecommunications systems that ensure their unification with the systems installed by the grid operator and the regional electric grid company – until January 1, 2022.

The bill also provides for the exemption of energy transmission providers from corporate income tax and property tax when receiving ownerless electrical grids and the removal of prohibitions provided for in legislation on natural monopolies.

Source: Government of the Republic of Kazakhstan