A Potential Destination for Turkish-American Energy Contractors

and an area of 200,000 km2. It is located in the eastern part of Central Asia and shares borders with China, Kazakhstan, Tajikistan and Uzbekistan. Mountains occupy 94% of the territory of Kyrgyzstan.

Energy is the basic sector of Kyrgyz economy, providing the domestic needs of the national economy and population with electricity and heat energy. The wellbeing of the Kyrgyz people and successful economic development of the country largely depends on a stable and reliable operation of the energy sector. Expected reserves of 70 main coal deposits in the Kyrgyz Republic are estimated at more than 2.2 billion tons while in-place reserves are 1,317 million tons.

According to forecasts, undiscovered reserves of oil and gas resources make up about 289 million tons of fuel oil equivalent. Fifteen oil and gas fields are being exploited in the south of the country with recoverable reserves of industrial oil totaling 11.6 million tons and 4.9 billion cubic meters of natural gas.

The main source of energy in the country is water resources, the energy potential of which is estimated at 142.5 billion kW-hrs of possible generation of power per year, only 10% of which is currently used.

The water and power potential of our republic is ranked third among the CIS countries after Russia and Tajikistan. Development of Kyrgyzstan's water and power potential is the main target strategy for the energy development program of the republic. On the whole, the power system operates 18 power stations with a total installed capacity of 3,666 MW, of which the power installed in hydraulic power plants (HPPs) is 2,950 MW and there are two thermal power plants (TPPs) with an installed capacity of 716 MW. The cascade of the Toktogul hydropower plants, with a powerful water basin that is the Toktogul reservoir with the capacity of 19.5 billion cubic meters of water, makes up the basis of power generation in hydro-power plants and provides Kyrgyzstan and the neighboring states of the Central Asian region, not only with electricity but also with irrigation water for irrigation of the most important crops.

A UNIFIED ENERGY SYSTEM
When designing and creating a unified energy system for Central Asia, the cascade of Toktogul HPPs was planned to work in the irrigation regime. And this means maximum discharges of water from the cascade of Toktogul HPPs in vegetation seasons, in spring and summer, in exchange for fuel resources for TPPs in the winter. By now, this technological scheme has been violated due to lack of power in Kyrgyzstan, which resulted in a change in the mode of operation of the cascade from an irrigational one into a power mode. Consequently, the water discharge is intensified not only in spring and summer, but in winter too, in order to meet Kyrgyzstan’s domestic needs in electricity. This affects noticeably the volumetric capacity of the water reservoir.

In this context, water resources cannot be considered separate from issues of energy, since the main hydro-systems of interstate importance in the basins of the Naryn-Syr Darya and Amu Darya rivers not only regulate the flow of water in these rivers, but also generate the lion's share of electric power in the joint power system in Central Asia.

Due to the fact that the volume of the existing hydro-systems of interstate importance allow the regulation of the flow of transboundary rivers, there is no need to build basins for irrigation purposes only.  

For these purposes, there are a sufficient number of existing hydro-systems of interstate importance. Only new generating stations are necessary, operating in parallel with the united energy system of Central Asia, through which discharges of water could be regulated effectively for the benefit of the entire region, respecting the environment.
In Kyrgyzstan, only on the Naryn River and on its tributaries, 22 hydropower stations can be built with an annual power output of about 30 billion kilowatt-hours.

KAMBARATA HPP-2
In 2007, Kyrgyz President Kurmanbek Bakiyev made a strategic decision to resume construction of Kambarata HPP-2 with the capacity of 360 MW and to allocate  funds from the budget for this purpose.  The start of putting into operation of the first aggregate of this power plant is expected in the first six months of 2010, while a unique large-scale explosion on the construction of the dam is going to be implemented in December 2009. However, the greatest efficiency of Kambarata HPP-2 is going to be achieved in the presence of a reservoir at Kambarata HPP-1. For this reason, at present, the Government of the Kyrgyz Republic is working on practical implementation of the project of construction of Kambarata-1 with the capacity of 1,900 MW. Construction of Kambarata HPPs will make it possible to use the Toktogul hydropower site, both in energy and in irrigation mode in the interests of all Central Asian republics with the possibility to export electricity up to 9 billion kWh annually.

For the purpose of ensuring  connection of Kambarata HPPs to the power system and serving out power, construction of 500/220 kV “Datka” power substation and 220 kV networks in the south of the republic is planned.

To improve reliability of the main electrical power networks of the republic and to increase the capacity of transmission lines to the north of the republic, it is planned to build a 500 kV transmission line entitled  “Datka-Kemin”, that is going to be 410 km long, and 500 kV “Kemin” substations.
In order to solve the problem of improvement of reliability and sustainable power supply to consumers in the south of Kyrgyzstan, to use its own power network, and to improve interaction between the energy systems of neighboring countries in 2010-2011, it is planned  to build transmission lines of 110 kV entitled “Aygultash-Samat”, which are going to be 140 km long.

EXPORTING ELECTRICITY
An issue for electricity export to South Asia in the international project CASA-1000 is being worked on too. In order to develop the Central Asian and the South Asian Regional Electricity Market ("CASAREM"), a Memorandum of Understanding between Kyrgyzstan, Tajikistan, Pakistan and Afghanistan was signed on 16 November 2007 in Kabul. In accordance with the project, upon completion of the transmission line 500 kV "Datka-Khudjand (Tajikistan)", it will be possible to export electricity from Kyrgyzstan in the amount of up to 2 billion kWh starting from 2013.

Development of the power industry should be the top priority in the formation of the fuel-energy complex in the country, taking into consideration great importance of meeting the demand for power at the energy market in Central Asia.

The share of the power industry accounts for about 5% of the GDP, 16% of industrial production volume, and 10% of state budget revenues. Production of the electric power industry plays an important role in ensuring the development of the republic's economy, covering the republic industries and population’s needs in energy, and generating hard currency from its export.

Development and efficient operation of the fuel-energy complex of the republic depends, to a great extent, on solving problems, providing an agreed mutually beneficial cooperation of Central Asian countries with respect to formation of a balanced, rationally functioning energy market in the region. This will allow the optimization of the routine work of hydroelectric and thermal power plants, oil refineries and coal mines, to ensure the efficient use of generating capacities of plants, both in a daily and annual mode.

Activities are conducted to strengthen the country’s energy independence through development of generating sources.

The development priorities in the short-term period are to increase electricity output through rehabilitation of the existing power generating facilities.  First of all, that means reconstruction of Bishkek TPP-1 by bringing its electrical capacity to 400 MW, reconstruction of Uch-Kurgan HPP and At-Bashy HPP, by attracting investments. Further development of  the hydropower capacity of the Naryn River is going to take place as well.  Currently, a study is being undertaken to assess options for development of hydro potential in the upper reaches of the Naryn River as well as technical and economic characteristics of first-priority HPPs.

KARA-KECHE THERMAL POWER PLANT
Strengthening of the basic capacities of the power system is also expected through construction of Kara-Keche thermal power plant of over 600 MW, in the coal fields of Kara-Keche.

Work on the formation and development of the electric energy and power market is underway. A significant amount of work on development of commercial electric power accounting systems has been completed, ensuring the formation of a power and electricity wholesale market.  Industrial structures of the energy sector have been reformed on the functional basis for the purpose of adapting them to market methods of management. In addition, incorporation and partial privatization of enterprises have been conducted.

In order to develop the energy sector, the state paid sufficient attention to building and improving the legal framework in the fuel-energy complex.  Research on new mechanisms that combine primarily state and legislative regulation with market methods of economic stimulation were conducted constantly. Over the past few years, the management structure and the fuel-energy complex facility regulation in the Kyrgyz Republic have been significantly modified, and principal laws regulating the energy industry have been adopted.

In turn, analysis of legal and regulatory framework allows us to conclude that Kyrgyzstan has one of the most liberal legislations in the field of energy among the countries of Central Asia, and it has the necessary legal framework to attract direct foreign investments into the energy industry.

The Ministry of Energy attaches great importance to the issue of energy conservation and use of renewable energy sources. Some steps have been taken already to increase the production of energy-saving lamps and light-emitting diode (LED) bulbs, to master production of electronic electricity supply meters, as well as natural gas, water and heating meters. "Short-term strategies and priorities for the development of the energy industry for 2009-2012" have been instituted, as well as the Program of "Energy conservation in the Kyrgyz Republic for 2009-2015" and the Program of Small Waterpower Engineering Development in the Kyrgyz Republic.   These documents, as well as the adopted National Energy Program of the Kyrgyz Republic for 2008-2010, the  Development Strategy of Fuel-Energy Sector until 2025, the Law of the Kyrgyz Republic "On Renewable Energy”, and Regulations on procedure of construction, acceptance and technological connection of small hydro power plants to the electrical networks, make up a strong legal and regulatory basis of development of energy conservation and renewable energy sources.  

WATER-ENERGY RESOURCES
An important issue is protecting Kyrgyzstan`s interests in the framework of rational use of the water-energy resources of Central Asia.  At the meeting of presidents of Central Asian States that took place on 28 April 2009, President Kurmanbek Bakiyev raised issues of working out mutually acceptable solutions in the fields of securing water-energy resources in Central Asia, conservation of the area of formation of the largest rivers, which are the Syr Darya and the Amu Darya, reduction of glaciers, reforming of the International Fund for Saving the Aral Sea,  compensation for services on water accumulation, and creation of multilateral commissions on integrated water resources management.

In these issues, the main efforts of the Ministry are targeted at the development of a new long-term draft agreement on using water-energy resources in the Central Asian region with reflection of issues of balanced use of water-energy resources, creation of a financial mechanism to regulate using of water-energy resources, development of coordinated pricing rules, and distribution of costs and revenues with an equal benefit for all participants.

Hydropower engineering development in Central Asia representing a single water-energy system can have a positive impact on the environment, maintaining a healthy natural environment for future generations.

* Burcak Akduman is TurkofAmerica Advisory Board Member.