March Electronic Bulletin
USAID’s RESET project to assist AUEC to start up a new Study Course on Power Markets
The USAID Regional Energy Security, Efficiency and Trade Project (RESET) and Almaty University of Power Engineering and Communications have signed a memorandum of cooperation. USAID will provide assistance to the University in developing a new study course on the “Design and Operation of Competitive Electric Power Markets”. The new course will be incorporated into the University’s curriculum in early spring.
This course represents a significant innovation in the education of future power sector specialists. No educational institution in Kazakhstan or any other Central Asian state currently offers a course to prepare specialists whose expertise will directly and specifically relate to the operation, regulation and governance of competitive power markets. This assistance from USAID will contribute to the further development of a competitive electric power market in Kazakhstan and the Central Asia region.
“The integrity of the energy system in Central Asia is currently at risk and we must save it,” said Gumarbek Daukeyev, Rector of the Almaty University of Power Engineering and Communications, during the signing ceremony. “Operating the Central Asian power system is like being in a submarine and all of us aboard have to cooperate together to surface and bring the ship safety into port. I believe that this project will help us to educate and train highly qualified cadres who will be able to save, restore and develop our integrated regional energy system.”
USAID has assembled a team of professional experts in design and operation of competitive electric power markets who will be available to assist Almaty University of Power Engineering and Communications in developing the new study course. USAID will also provide expertise in training the professors who will conduct the courses.
RESET Hosts Successful CASA 1000 Meetings
On January 30-31, RESET brought together more than 60 people in Almaty, Kazakhstan for the second CASA 1000 Round Table. The participants came from the four countries participating in the CASA 1000 Project and the project’s international sponsors.
At the Round Table, official delegations from Tajikistan, Kyrgyzstan, Pakistan and Afghanistan met with project team leaders from the World Bank, the Islamic Development Bank, the International Finance Corporation, and USAID. They discussed a variety of issues related to the development and governance of CASA 1000.
There was lengthy discussion about the delay in receiving a final approval from the Inter-Governmental Council (IGC) to proceed with implementing USAID’s offer (through its RESET project) to hire and provide support to an executive director. This highly qualified individual would be based in Almaty for the next year or so during this crucial phase of project development. The Secretariat and its local staff would remain in Kabul, which is the permanent headquarters of the IGC Secretariat.
On February 1 and 2, immediately following the Round Table, the delegations convened an official meeting of the CASA 1000 Working Groups to receive progress reports from each country and status reports from the World Bank on the ongoing EISA study and CASA’s public Communications Plan. A protocol signed by all four delegations recorded the decisions made at this meeting.
The four-day Round Table and official Working Groups Meeting, which were organized and sponsored by RESET, helped move the CASA 1000 Project along the long list of decisions and recommendations the Working Groups need to make for the IGC’s review and approval.
Renovation of the Power Plants Bus Fleet.
The seven stations of the JSC Electric Power Plants received 17 new 30-seat passenger buses.
After making a round trip visit to the power stations in late spring, Mr. Tentiev, General Director of the JSC Electric Power Plants (EPP) was shocked to see that EPP hadn’t renovated its bus fleet for more than 30 years. Employees of the company had to drive over remote mountainous roads in these unsafe old buses on their daily commute to the plants which produce most of Kyrgyzstan’s electricity. Due to their age and hardware, old buses tend to break down very often and repair work requires not only money and cost benefit, but a lot of time.
After Mr. Tentiev’s trip, EPP’s new Management Modernization Unit prepared financial and benefit analysis to purchase new buses.
JSC “Electric Power Plants” worked on different alternatives and selected the most profitable and affordable option to purchase new buses: JSC “Electric Power Plants” attracted loan funds from the RSK Bank on the favorable terms. According to the tender results, the buses were purchased from JSC AsiaAutocenter, an official dealer of JSC Russia Buses-GAZ Group for the total amount of 28,978,863 som.
The ceremony of bus hand-over took place at the Old Square of Bishkek on December 14, 2011. Minister of Energy A. Shadiev stressed that the new buses replace ones that are 30-40 years old and unsafe for transporting EPP’s employers to the plants. “Now EPP’s employers can be assured for the safety of their lives,” said Minister of Energy.
Central Dispatch Center (CDC) Energia is Connected to Broadband/High Speed Internet Service
Starting November 23, CDC Energia was connected to broadband internet service provided through RESET funding. This upgrade in internet connection was intended to provide all employees with the necessary channel to automatically upload data from several sources that were previously entered manually into the information system. However, so far CDC’s management has limited access to this service to six members of CDC’s management team and the RESET office at CDC. RESET will be working to extend access to all employees in order to meet the original objective of improving the accuracy and ease of handling technical data throughout the CDC’s organization.
All CDC employees, however, do now have access to uninterrupted email service for the first time ever as a result of RESET’s efforts.
RESET Participates in CAREC’s Energy Sector Coordination Meetings in Bangkok
Members of the RESET team travelled to Bangkok in October 24 – 26, to make presentations at a Subcommittee Meeting CAREC’s Energy Sector Coordinating Committee.
Fichtner Company, sponsored by ADB, presented its draft final report on the Power Sector Regional Master Plan. Fichtner’s work included detailed least-cost solutions for the development of energy infrastructure across the Central Asian region based on the assumption of close cooperation in usage of energy resources and installed generation capacity.
However, the discussion showed that participating countries generally accept in principle the idea of sharing their water resources for generating electricity, but that they are reluctant to replace their expensive electricity with cheaper electricity from abroad, agreeing at best to an in-kind exchange. As to the issue of sharing their installed generating capacity and capacity reserves, the countries prefer to pursue the idea of national energy security which implies have self-sufficient capability in each CAPS country to supply its respective load with its own generators.
RESET’s Transmission Advisor prepared two presentations for this meeting that described RESET’s efforts to strengthen regional transmission planning and dispatch. These presentaions are posted at:
During the meeting Afghanistan’s Deputy Minister of Energy Ghulam Faruq raised a question about what requirements Afghanistan must meet and what procedures it must follow to connect to the Central Asia Power System (“CAPS”). After lengthy discussions, it was concluded that RESET would assume the task of developing a roadmap for connecting Afghanistan to CAPS, identifying problems and proposing solutions in consultation with the various countries involved, as well as the Coordinating Dispatch Center. This would include identifying what would be needed to ensure adequate emergency control in cooperation with appropriate design institutes, and to resolve issues of coordination with Russia.
RESET asked to explain Capacity Markets to Journalists as Deep Background
At KEGOC’s request, Mr. Michael Bekker, RESET’s Power Markets Advisor, developed and delivered a presentation in Astana on August 12 on the technical and economic reasons for organizing and developing a market for installed generation capacity in Kazakhstan. Mr. Valeriy Lee of KEGOC also made a presentation at this workshop, explaining that Kazakhstan already has a deficit of generating capacity today, demand is continuing to grow, and power curtailments could become necessary.
Mr. Bekker explained that maintaining reliable power supply to customers over time depends on long term planning and investment in developing large new generation plants (“capacity”) over many years. Investors therefore need to have some assurance that they will be able to earn their money back over time.
This is why a capacity market, which provides for capacity charges, reliability charges and other related charges, is needed. It creates the conditions that will attract investors into the generation sector to both build new plants and rehabilitate and modernize existing facilities.
This workshop was organized by KEGOC to provide deep background to members of Kazakhstan’s media who will be covering Parliament’s discussions on draft amendments to the electricity law, including the introduction of an installed capacity market in Kazakhstan next year. Mr. Bekker’s presentation can be accessed at: http://www.ca-reset.org/library/presentations/KZInstalledCapacityMarket.pdf
Meeting with MINT Kazakhstan
The RESET team met with MINT’s Vice Minister Mr. Bakhytzhan Jaxaliev on July 26 to discuss the progress of RESET’s activities in Kazakhstan. A significant focus of the meeting was the need for enhancements to Kazakhstan’s power market that would stimulate electricity trade and new investment in generation capacity.
The Vice Minister also requested RESET to prepare a short and compelling “layman’s” presentation for deputies and the public that would clarify the issues surrounding the introduction of a capacity market in Kazakhstan in January 2012.
MOU Signals Extended Cooperation on Modernizing Kyrgyzstan’s Power Generation Company
On June 28, the General Director of JSC Electric Power Plants Company (EPP) and RESET’s Chief of Party signed an MOU on Providing Assistance for the Modernization of Management and Developing Certain Business Systems and Capacities within JSC Electric Power Plants. The Minister of Energy and the Company’s Board of Directors also endorsed this MOU by signature.
Under this MOU, RESET will be recruiting up to 15 local experts highly experienced in procurement, human resources, finance and accounting, integrating business processes, and internal audit. They will work as a team on modernizing the Company’s management systems in accord with RESET’s recommendations from Phase 1 of its Management Diagnostic of the generation Company.
Minister of Energy Askarbek Shadiev (center), Aman Tentiev, Director General of JSC Electric Power Plants (right) and Joellyn Murphy, RESET COP (left) sign the MOU on June 28.
RESET Launches its Initial Work in Turkmenistan
RESET team members held a series of productive meetings between June 7-17 with the Ministry of Energy and Industry, Turkmenenergo (Kuvat), the Academy of Science/GUN (Sun) Research Institute, the Asian Development Bank, UNDP, EBRD, and several private companies in Turkmenistan. A number of areas of potential cooperation were identified, including increasing power exports at favorable prices, strengthening GUN’s capacity to tap into the international sources of funding for research on renewable energy, and the participation of Turkmenistan representatives in RESET’s proposed training on implementing international commercial agreements and on the economics and pricing of renewable energy.
ERRA conference - May 2011
The 10th Energy Regulators Energy Association (ERRA) Energy Investment & Regulation Conference was hosted by the Federal Tariff Service of Russia in St. Petersburg, Russia on May 16-17, 2011.
The conference that attracted more than 300 participants from more than 20 countries (list of participants can be seen here) offered a high level 2 day program including electricity and gas sessions focusing on the CEE, SEE, and CIS regions. The event gathered high level speakers and representatives from the ERRA-member regulators, European institutions, industry, international organizations, producing countries, consumers and press.
Michael Bekker, RESET Electricity Market Senior Advisor, attended conference where he made a presentation on regional electricity market in Central Asia - history, current state and prospects for future. Russian publication "Energy and industry of Russia" in its report from the conference noted Michael Bekker presentation as one of the most interesting at the conference."