KEGOC expects increase in energy consumption in Kazakhstan
KEGOC, the national operator of the power grid in Kazakhstan, is expecting an increase in energy consumption in the country. This increase is going to reflect the overall development of the national economy, according to a presentation KEGOC made at the company’s Issuer Day.
KEGOC believes that energy consumption will reach 121 billion kilowatts per hour this year, which is a 7% increase over 113 billion kilowatts per hour in 2022. In 2024, the consumption is expected to reach 125 billion kilowatts per hour. By 2028, this rate is going to reach 142 billion kilowatts per hour. In other words, the growth will be 25.6% compared to 2022.
The company says that the current energy-generating capacity in Kazakhstan isn’t enough to cover the demands of the people and businesses within the country. The government should put more effort into creating new generating capacities. KEGOC has estimated that all existing electric power stations should expand their capacities by 8,700 gigawatts.
At the same time, the company’s top managers do not doubt that the growing electricity market will let KEGOC improve its financial results. For instance, the company is expecting an EBITDA of $222.8 million this year. However, this rate may increase by 45.6% ($101.6 million) by 2025 thanks to regulatory effects and an effect of the growing amount of rendered services. By 2027, the EBITDA rate is expected to reach $367.8 million.
The amount of services rendered by KEGOC will grow from 54 billion kilowatts per hour in 2022 to 91.3 billion kilowatts per hour (+69%) in 2028. This growth will be driven by the appearance of a single buyer in the electric market and the splitting of the base service of KEGOC into two parts: the transmission of energy and the use of the national power grid.
The company has already prepared a plan for several investment projects, including the reconstruction of overhead lines in several of the country’s regions. This project will cost $984 million and should be completed by 2031.
The lack of energy is a long-standing problem for Kazakhstan. The country has been importing energy from Russia for the past several years. In order to solve the problem, the government came up with the idea of a single buyer of energy and designated the Financial Settlement Center under the Ministry of Energy as the single buyer. The enterprise conducts trades at the online trading platform by Kazakhstan Electric Energy and Capacity Market Operator and buys all energy generated in the country to sell it to customers through open bids.
In addition, the government wants to take control of energy consumption by digital miners. On many occasions, miners were accused of creating an extra load for the power grid and overconsumption of energy. Since July 2023, they have a right to buy energy on the bulk energy market through the single buyer. However, this is possible only if energy is proficient in the system.
