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Energy Storage System Disparities in Kazakhstan’s RES Regulation
As Kazakhstan actively integrates renewable energy sources (RES) into its power system, a major challenge is their integration into the Unified Power System (UPS), taking into account reliability and predictability requirements. However, the current regulatory practices concerning the installation of energy storage systems (ESS) reveal significant disparities between small and large-scale projects.
Different Standards – Different Opportunities
Under current regulations, RES projects over 499 MW (within IPS or auction mechanisms) are required to include ESS with 30% power and 60% energy capacity. Meanwhile, RES projects below 5 MW are subject to proposed requirements of 50% power and 200% capacity—three times higher than for large-scale projects.
| Project Category | ESS Requirement (Power) | ESS Requirement (Capacity) |
|---|---|---|
| Large RES ≥ 499 MW | 30% | 60% |
| Small RES ≤ 5 MW | 50% | 200% |
Key Issues:
- Lack of Regulatory Framework:
As of publication, there are no approved legal acts mandating small-scale RES to install ESS. Requirements are issued by the System Operator in a semi-directive, semi-recommendatory format, creating legal uncertainty. - Discriminatory Approach:
Small-scale projects bear disproportionately higher investment burdens for ESS, making them economically unviable without additional support. - Threat to Decentralized Generation:
Excessive ESS requirements undermine the development of decentralized energy generation, especially in regions where small SPPs and WPPs can provide sustainable local energy supply. - Investment Barriers:
Small businesses and local investors typically lack access to long-term and affordable financing for ESS installations, which delays projects below 5 MW. - Institutional Barriers:
RES projects without PPA contracts under the auction mechanism are placed in the lowest priority group for electricity sales to the Single Buyer, with minimal opportunity to sell power on centralized markets. Installing ESS does not improve this priority, making expensive ESS investments even more challenging under high technical demands.
Additionally, the DAMU Fund has removed RES-related economic activity codes (OKED) from the list of priority sectors eligible for preferential lending programs. This leads to a significant increase in loan interest rates, up to 21.5% per annum in tenge.
Conclusion:
Without a fair approach to ESS requirements, Kazakhstan risks stalling the development of small-scale RES and missing out on opportunities for localization, energy system decentralization, and SME development in the renewable sector.