Hydroenergy

Kyrgyzstan Hydro Energy Sector Overview

Central Asia is abundantly endowed with energy resources. It also stands between two of the world's largest markets for energy: Europe to the west and Asia to the east.

Following needed improvements, such as extensive repair and expansion of the transport infrastructure, Kyrgyzstan could become an important player in the regional market for trading, transport, and sales of energy.

The Kyrgyz government took steps in 1998 and 1999 to set the legal foundation for the development of Kyrgyzstan's energy market, with the intention of leading to the commercialization and privatization of Kyrgyzstan's energy sector. Kyrgyzstan's energy policy is heavily weighted toward development of its large hydroelectric power resources and expansion of its electricity grid.

Energy sector reform in Kyrgyzstan will more or less mirror similar reforms that have already taken place in countries in Central and Eastern Europe -- reduction of energy use by removal of state subsidies (and, therefore, greater cost to the consumer), promoting the financial health of utility companies through better billing practices, and promotion of private sector participation that will inject needed capital into the system. Removal of tariff subsidies has been and will continue to be gradual.

Kyrgyzstan has 3.6 gigawatts (GWe) of generating capacity, about 80% of which is hydroelectric. The Kyrgyzstan electricity grid consists of more than 10,000 kilometers of power transmission lines of 35-kilovolts or greater and more than 58,000 kilometers of high voltage lines of 0.4-10 kilovolts. There are more than 500 operating substations of 35-500 kilovolt capacity.

Key Players

Kyrgyz power sector was constructed and operated as a part of the Soviet Central Asian unified power grid. After the collapse of the Soviet Union and prior to 2001 Kyrgyzenergo, vertically integrated state-owned enterprise, was in charged of power generation, transmission and distribution. In 2001-2002 under heavy pressure of World Bank and other development partners Kyrgyzstan partitioned power generation, transmission and distribution processes by restructuring Kyrgyzenergo into several independent organizations. The Figure below shows the current makeup of the sector.

Legislative and regulatory frameworks governing the power sector in Kyrgyzstan are somewhat cumbersome and complicated as the sector is steered by Jokorku Kenesh, unicameral national parliament, president and various governmental agencies.

Prospects

The development of hydro electric potential is singled out by the government as the strategic task for the next several decades. According to Prime Minister Chudinov the hydroelectric power sector in Kyrgyzstan has production potential of 142,000 Gwh ranking third in the CIS after Russia and Tajikistan. As of today the sector employs only 10 percent of these hydro resources.

Long term prospects of the power sector in Kyrgyzstan are driven by potential exports. Current major export markets include Kazakhstan, Tajikistan, China and Uzbekistan. In 2006, country delivered for export around 3.0 billion Kwh of electrical power. Growth potential of the sector is primarily linked with the exports to the rapidly growing and affluent markets in Southern Kazakhstan and Western China. In recent years South Asia has also emerged as feasible destination for the Kyrgyz power.  Country secured participation in the  Central Asia/South Asia Regional Electricity Market (CASAREM) initiative which aims to deliver Kyrgyz and Tajik electrical power to the energy deficient South Asian markets like Afghanistan, Pakistan and, maybe India in the longer term.

[1] Source: Business Recorder, Pakistan