Energy

Ensuring energy security

Samruk-Energy JSC was established 2007 in order to develop and implement a long-term state policy on modernization of existing and commissioning of new generating capacities.

Key performance results

Power generation

In 2022, electricity generation amounted to 35 884 million kWh, including at Ekibastuz CHPP-1, production amounted to 23048 million kWh, at Ekibastuz GRES-2 – 6002 million kWh, at the AlES – 5099 million kWh, at the Moinak HPP – 973 million kWh, at the Shardara HPP – 518 million kWh, RES – 244 million kWh.

The volume of electricity generation at Ekibastuz GRES in 2021-2022 were the highest on record for the entire period of their ownership by the company.

Ekibastuz energy hub provides up to a quarter of the electricity produced in the country. The group of companies of Samruk-Energo JSC generated 31.8% of electricity from the entire energy balance.

As part of measures to reduce the wear and tear of the main and auxiliary equipment, increase the reliability of electricity supplies to the Almaty energy hub, as well as reduce the environmental load on Almaty, work is underway to transfer Almaty HPP from coal to gas.

Almaty CHPP modernization

A feasibility study was developed on the project of converting Almaty HPP-2 to gas and a positive conclusion has been received from Gosexpertiza RSE.

Also last year, an open two-stage international competition was announced to select an EPC contractor according to the rules of the European Bank for Reconstruction and Development (EBRD). The technical specification for the selection of an EPC contractor and the draft EPC contract were developed according to the “yellow book” of International Federation of Consulting Engineers. On November 25, 2022, a Loan agreement was concluded between Almaty Electric Power Stations JSC (hereinafter - AlES) and the EBRD on financing the project.

A feasibility study has also been developed on the project of converting Almaty HPP-3 to gas and a positive conclusion of the Gosexpertiza RSE has been received.

At the end of 2022, AlES took part in an auction, according to the results of which AlES was announced the winner of the auction with the declared capacity of the station – 480 MW. The contract for the purchase of services for maintaining the availability of electric power during the construction of newly commissioned generating units with maneuverable generation mode with LLP “Settlement and Financial Center for support of renewable energy sources” guarantees a return on investment.

Contribution to the development of renewable energy

In September 2022, a wind power plant with a capacity of 60 MW was commissioned in the Shelek corridor.

In addition, the Board of Directors of Samruk-Energy decided to create a new company on the basis of the Astana International Financial Center (hereinafter -the AIFC) under the name Qazaq Green Power PLC. On November 4, 2022, this company was officially registered at the AIFC site. Work on consolidation of the assets of RES and HPP to prepare for an IPO is in progress.

Bogatyr Komir

Bogatyr Komir LLP is a leading open-pit coal mining company, which is a structure of Samruk-Energy JSC.  The company’s total industrial reserves amount to about 3 billion tonnes of coal.

Currently, the production capacity of the Bogatyr mine is 32 million tonnes of coal per year (with input of Cyclic-Flow technology (CFT) — 40 million tonnes), the Severny mine — 10 million tonnes of coal per year. The company accounts for 66% of the total coal produced in the Ekibastuz coal basin and 38% of the total coal production in the Republic of Kazakhstan.

The Bogatyr Komir LLP company is the largest supplier in the market of thermal coal of the CIS countries. Most of Kazakhstan’s thermal power plants and Russia’s largest power plant, Reftinskaya GRES, operate on Bogatyr Komir LLP coal. The company employs 6.3 thousand people.

Coal production volumes

In 2022, Bogatyr Komir LLP produced 42473.2 thousand tonnes of coal. At the same time, the volume of coal sold last year amounted to 42409.4 thousand tonnes, of which 32324.9 thousand tonnes accounted for the domestic market of Kazakhstan, 10084.5 thousand tonnes for export to Russia.

Technological update

The end of 2022 was marked by a long-awaited event: at the Bogatyr coal mine, a CPT was put into pilot operation. The new technology will increase the production capacity of Bogatyr Komir LLP from the current 42 to 50 million tonnes of coal per year. The full commissioning of the facility is planned for the summer of 2023.

The need for a fundamental change in the technology of coal mining at the Bogatyr mine is associated with the achievement of the depth of mining operations, in which the existing railway scheme of coal transportation is ineffective, and the main mining equipment has exhausted its resource and requires updating.

The CFT project provides for the introduction of auto-conveyor technology of coal mining, which  will increase the capacity of the Bogatyr coal mine from 32 million to 40 million tonnes per year, which allow to increase labor productivity by 25%, reduce the production cost of coal mining by 12%, reduce the average turnover time of wagons from 14.3 to 5.4 hours.

By the end of 2022, the implementation of the CFT project has reached the final stage. The first tonnes of coal, having passed the main technological lines of the complex — from the crusher to loading into wagons, were sent by train to the HPP-2 of Astana.

The main importance of the CFT project for Bogatyr Komir LLP and the economy of the Republic of Kazakhstan is to update the worn-out main technological equipment for guaranteed supply of coal to power plants, and to ensure complete and rational extraction of coal reserves from a depth of 230 meters, which would be impossible when using the old railway technology.

However, the traditional methods of mining on Bogatyr Komir LLP have not yet been abandoned. In May 2022, the EKG-12K excavator was successfully put into operation. This model of the machine is equipped with a modern control system that allows full control of the operation of the equipment and parameters of the main drives of the excavator. Also last year, a new EKG-15M excavator No. 1903, manufactured by P.G. Korobkov IZ-KARTEX LLC, was put into operation to work in conjunction with dump trucks with a lifting capacity of 130 tonnes. Along with excavators, three Caterpillar-777E heavy-duty dump trucks, five HITACHI dump trucks, and one Caterpillar-785D dump truck were put into operation in 2022.

A powerful reinforcement was the heavy truck crane of the Sany brand. The new machine is characterized by mobility and the ability to lift loads weighing up to 130 tonnes. The crane is intended for use during the repair of mining equipment. At the moment, the main mining equipment involved in the shipment of coal are seven rotary excavators SRs(K)-2000, manufactured by the German company TAKRAF. The Bogatyr Komir Production and Technical Department is armed with five PRO TANDEM DER-300 tractor robots manufactured by the German company Vollert.

The equipment and the CFT put into operation will allow to release the old equipment that has worked out its resource and increase the productivity of miners.

However, the update affected not only the equipment, but also the laboratory equipment. In 2022, Bogatyr Komir acquired an integrated MicroLab 40 Series oil analyzer. The device is designed for the analysis of oil samples of internal combustion engines and hydraulics. Its appearance in the company will allow determining the condition of parts and assemblies of technological machines in advance.

TRAINING OF PERSONNEL OF CFT COMPLEX

THE MAIN OBJECTS OF ACQUISITION IN 2022

The Bogatyr Komir LLP has successfully implemented an Automated Dispatching Control System for Open-pit Mining Operations (ADCS), which has proven its effectiveness in practice.

Salary increase for miners

Since January 1, 2022, tariff rates (salaries) have been increased by 15% at all enterprises of Bogatyr Komir LLP. The company did this despite the fact that the cost of coal was reduced to the level of last year. Nevertheless, the company, taking care of the quality of life of employees, increased wages.

The company’s enterprises also increased wages by 10 % to 1212 employees of the company in low-paid professions.

SALARY INCREASE

Plans for 2023

In 2023, Samruk-Energy JSC plans to implement the following issues:

• commissioning of power unit No. 1 at Ekibastuz GRES-1 with an installed capacity of 500 MW;
• conclusion of EPC contracts on gas conversion projects of Almaty HPP-2 and HPP-3;
• preparation for the IPO of Qazaq Green Power PLC.

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Kazakhstan Electricity Grid Operating Company JSC (hereinafter – KEGOC JSC) is a company managing the National Electric Grid of the Republic of Kazakhstan (NEG) and has the status of the System Operator of the Unified Electric Power System of the Republic of Kazakhstan (UEPS).

Key performance results

Factors affecting activities

2022 was the anniversary year for KEGOC JSC. Over the years, the company has created a strong foundation for stable operation and successful implementation of projects on modernization of the NEG, construction of new power transmission lines and substations.

The fulfillment of the planned volumes of services provided directly depends on the stability and development of the company. Thus, by the end of 2022, the volume of electricity transmission through the NEG reached 58.6 billion. kWh, which is higher by 7.2% compared to last year. According to technical dispatching, the supply to the grid and electricity consumption amounted to 104.3 billion kWh. Organization of balancing of production-consumption of electric energy KEGOC JSC - 203.1 billion kWh.

By the end of 2022, net profit amounted to KZT26.7 billion. It should be emphasized that the unbalanced operation of the UES caused by a shortage of capacity had a significant negative effect on financial indicators. Thus, the loss from operations for the purchase and sale of electricity from the Russian Federation in 2022 is KZT17.9 billion. In addition, as a result of the revaluation of fixed assets in December 2021, depreciation charges increased by an order of KZT24.3 billion. Excluding these negative factors, the financial result amounted to KZT 51.1 billion.

High qualification and experience of employees is the key to further successful development of the company, solving complex technical and technological problems. That is why the main focus of 2022 was the policy aimed at improving the social well-being of employees. In the reporting period, staff salaries and tariff rates were increased, quarterly bonuses were increased, due to which the total annual income of working personnel increased by 28 -48%, engineering and technical workers and specialists by 15-36% and middle managers by 10-15%.

Investment activity

During 2022, the implementation of projects for the development of network infrastructure of social importance for the country was continued. The company has completed the project “Strengthening the external power supply scheme of Turkestan.  Construction of electric grid facilities”, within the framework of which the 220 kV substation “Ortalyk” was put into operation.

The reconstruction of 220-500 kV overhead power lines in the branches of Aktobe, Western and Sarbai intersystem electric networks continued.  Among the projects being implemented is “Strengthening the electric grid of the Western zone of the UEPS. Construction of electric grid facilities”, scheduled for completion in 2023. All the company’s projects are implemented at the expense of own and borrowed funds without budget financing.

Dividends and payments

KEGOC JSC paid dividends in the amount of KZT13.2 billion at the end of 2021 in June 2022.

KEGOC JSC fulfills all obligations to financial institutions in a timely manner. Moreover, in September 2022, KEGOC repaid the loan of the International Bank for Reconstruction and Development in the amount of USD46.3 million ahead of schedule. This was done in order to reduce currency risk, debt burden and the cost of servicing loans in foreign currency. The funds were raised in 2010 for the implementation of the investment project “Construction of the 500 kV Alma substation with connection to the NEG of Kazakhstan with 500, 220 kV lines”, for a period of 25 years with the date of the last repayment in 2035. That is, the Company repaid it in full 13 years ahead of schedule.

Issue of “green bonds”

KEGOC JSC issued the first “green” bonds. The funds from their placement will be used to implement the company’s projects related to the construction of the necessary network infrastructure for large-scale involvement of renewable energy sources in the energy balance, ensuring the energy security of the country, as well as improving the efficiency of electricity transmission. The volume of the issue amounted to KZT35 billion at the rate of 35 million coupon bonds without collateral, with a nominal value of KZT1,000 per piece.

One of the important events for KEGOC JSC in December 2022 was the successful placement of “green” bonds of KEGOC JSC on the trading platform of Kazakhstan Stock Exchange JSC (KASE) with a total volume of KZT16.1 billion with a margin of 3%.

The Year of Occupational Health and Safety

In October 2022, KEGOC JSC held the first forum on occupational safety and health, which was attended by representatives of the Ministry of Energy of the Republic of Kazakhstan, managers and experts in the field of HSE (Health Safety Environment) of the Fund and companies within its structure, KEGOC JSC, as well as representatives of companies from the countries CIS.

At the forum, held under the auspices of the “Year of Occupational Health and Safety - 2022”, profile specialists and leaders in the HSE field shared best practices in ensuring safe working conditions, talked about industrial medicine and modern means of protection at work.

At the event, the Chairman of the Business Council of Vision Zero Kazakhstan presented KEGOC JSC with a certificate confirming that the company is a participant in the international zero injury movement - Vision Zero (the Vision Zero concept, based on three main aspects of work at all levels – safety, health and well-being, unites leading manufacturing companies around the world).

Another significant event at the forum was the signing by the heads of the branches of KEGOC JSC of personal obligations in the field of Health & Safety, according to which any employee of the company is entitled to stop the work if they identify unsafe working conditions.

Future prospects

Due to the influence of global trends related to the energy transition, especially decarbonization, geopolitical instability and changes in the country’s macroeconomic environment, it became necessary to update the company’s Development Strategy. At the same time, the company will continue to work to achieve the goal of increasing long-term value by strengthening the financial stability of KEGOC JSC, defining a portfolio of projects and initiatives, investing in profitable projects, implementing large infrastructure projects, improving corporate governance and ensuring sustainable development.

The Ministry of Energy of the Republic of Kazakhstan has developed a draft Concept for the development of the electric power industry until 2032, the adoption of which is planned in 2023. The adoption of the Law “On Heat Power Engineering” is expected in the near future, which will focus on solving the problems of heat supply in the regions, determine long-term plans and systematize the relationship between central and local executive bodies.

In addition, the change in legislation provides for the transition to a new target model of the market - a single buyer who will carry out centralized purchase and sale of electric energy. The bill also provides for the introduction of a balancing market in real time.

The introduction of a Single Buyer model will allow:

• to ensure the return on investment for the construction of a new generation, including basic and maneuverable generation, taking into account environmental requirements;
• to provide an opportunity for consumers to declare a curve consumption schedule, which will reduce their imbalances (deviations of actual values from planned ones);
• to ensure the distribution of expensive electricity from renewable energy sources and from new generation, as well as expensive electricity imports during electricity shortages in the energy system.

When introducing the balancing electricity market (BEM) in real time, it is provided:

• targeting the responsibility of wholesale market entities for hourly deviations from the approved dispatch schedule;
• encouraging consumers to shift their load schedule from peak hours to another time of day (the price of BEM during the “peak” of consumption is much more expensive than during the so-called “failure” of consumption), which will reduce the need for the construction of new regulatory capacities;
• as a consequence, the possibility of reducing deviations of actual consumption from the planned one at the border with adjacent power systems.

KEGOC JSC will continue to work actively to create conditions for the development of generating capacities, including traditional and maneuverable generation, actively participate in the development and discussion of a new model of the electric energy market, preparation of legal acts on the connection of wholesale market entities to the National Power Grids of Kazakhstan.

Based on the analysis of industry development trends in Kazakhstan and in the world, the current state of production and corporate processes, KEGOC JSC has formed key areas of technological development and digitalization, including the main ones: development and application of energy storage systems for the provision of system services and integration of renewable energy, consideration of the use of digital substations.

In order to ensure effective support of the core business, the company will develop a Program for the development of the information and telecommunications complex of KEGOC JSC, reflecting the priorities of the development of the information and telecommunications complex, as well as the technologies of innovation and technological development of Smart Grid.