Kyrgyzstan declares state of emergency due to energy shortage

The state of emergency due to a shortage of electricity comes into force throughout the territory of Kyrgyzstan from August 1. It will last more than three years – until December 31, 2026. The corresponding decree was approved by the President of the country Sadyr Japarov. The decision was made in connection with the energy crisis in the country associated with climatic conditions, low water inflow, including the Naryn River basin, where the Kurpsai hydroelectric power station is located, and a general lack of generating capacity. According to Zhaparov’s decree, the Ministry of Energy of Kyrgyzstan is endowed with special powers for the period of emergency. This body will coordinate the activities of the Ministry of Agriculture, the Ministry of Natural Resources, various research institutes and local authorities in terms of the development of renewable energy sources. The emergency regime will also allow in a short time to allocate land plots for the construction of renewable energy sources or green generation, to which Bishkek includes its key hydroelectric power stations. By decree of Zhaparov, the Ministry of Energy of Kyrgyzstan is given the opportunity to determine and allocate land plots for renewable energy sources. From September 1, the rights to use land plots intended for the construction of energy facilities, which nevertheless continue to be used for other purposes, will be terminated.

Kyrgyzstan has been experiencing a growing chronic energy shortage for several years now. Back in January 2023, Deputy Prime Minister of the Republic Bakyt Torobaev announced that during the heating period of 2022, electricity consumption in Kyrgyzstan amounted to 15.9 billion kWh, and in 2023 it will amount to 16.6 billion kWh. According to him, according to the results of the current year, it could be 1.9 billion kWh. In May, the head of the National Energy Holding of the Republic, Taalaibek Baigaziev, said that over the past four years, electricity consumption in the country has increased from 12 billion to 16 billion kWh per year. Baigaziev also said that Kyrgyzstan expects to compensate for this year’s electricity deficit of 2.5 billion kWh through imports from neighboring republics and Russia.

Since April 15 this year, the Russian Inter RAO has been supplying electricity to Kyrgyzstan in transit through Kazakhstan: from April 2023 to March 2024, the company plans to supply about 900 million kWh in this way.

HPPs cover the main need of Kyrgyzstan in energy supply. According to the operator “National Electric Grid of Kyrgyzstan”, there are 16 hydroelectric power plants and two thermal power plants with a capacity of 3666 MW in the country, they are capable of generating up to 15 billion kWh per year. For energy independence, the country needs to increase production to 18 billion kWh per year. Deferred demand is 6 billion kWh, the Minister of Economy and Finance of the Republic Akylbek Zhaparov said in October 2021. According to his estimates, electricity consumption in the country is growing by 4-6% annually.

“The situation with energy generation and transmission in general in Central Asia and in Kyrgyzstan in particular is problematic: the wear and tear of Soviet equipment, which still serves as the basis of the energy system, is high,” says Stanislav Pritchin, senior researcher at the Center for Post-Soviet Studies at IMEMO RAS. “This is superimposed by the problem of water shortages, the filling of reservoirs due to the reduction in the volume of glaciers that feed the rivers.” As a result, the only reliable source of energy for the country – hydroelectric power stations – ceases to be one, the expert states. Pritchin notes that tariffs in the country are growing slowly for political reasons, while consumption, on the contrary, is growing dynamically. It is mainly driven by residential consumers due to the Kyrgyz demographics: in 2017 the population of the country was 6.2 million, and in January 2023 it passed the mark of 7 million people.

On July 27, the Ministry of Energy of Kyrgyzstan signed a memorandum of understanding on the construction and investment agreement on the design and operation of the Kazarmansky cascade of HPPs with a total capacity of 1160 MW by 2030. The document was signed with a consortium of Chinese energy companies Power China Northwest Engineering Corporation Ltd, Green Gold Energy (GGE) and China Railway 20th Bureau Group Co Ltd. The total cost of investments is tentatively estimated at $2.4–3 billion. But initially, China’s cooperation with Kyrgyzstan in the field of energy did not mean solving the problems of the republic, but exporting to the neighboring Chinese Xinjiang Uygur Autonomous Region (XUAR) along the Ak-Kiya – Naryn – Torugart power line – China. At the end of March 2023, Bishkek signed a corresponding memorandum with the XUAR authorities.

Russian investors have a negative experience of participating in HPP projects in Kyrgyzstan: in 2012, Moscow and Bishkek signed an intergovernmental agreement on the Upper Naryn Cascade of HPPs and Kambarata HPP – 1 with a total capacity of about 238 MW. In 2016, the agreement was terminated by the Parliament of Kyrgyzstan under the pretext of the absence of “decisions on financing from the Russian Federation”. RusHydro, which invested $37 million in the implementation of those projects, filed a lawsuit with a permanent arbitration court in The Hague. Inter RAO was also supposed to build the Kambarata HPP – 1, but the project did not even begin to be implemented. Inter RAO prepared a feasibility study for the project, but the Russian side needed guarantees for the return of investments, which Bishkek did not provide. In December 2017, Inter RAO withdrew from the project.

The Russian presence in the energy sector will still remain: it is politically necessary for Moscow, which cannot “give China” Bishkek integrated into the EAEU, says Sergey Pikin, director of the Energy Development Fund. Hence, not only the continuation of the discussion about hydroelectric power plants, but also about modular Russian mini-nuclear power plants: in June, Rosatom announced that the first such station would be built in Kyrgyzstan, Pikin recalls. A memorandum on the construction of small nuclear power plants in Kyrgyzstan was signed between Rosatom and Bishkek back in January 2022. If a mini-nuclear power plant is built, Kyrgyzstan’s technological and economic ties with Russia and the EAEU will only get stronger, the expert believes. New large investors, other than Russian and Chinese, are unlikely to emerge for energy facilities in Kyrgyzstan, Pikin said.

The state of emergency in Kyrgyzstan, most likely, should give time to remove unnecessary bureaucracy that hinders the implementation of energy projects, Pikin notes. Many memorandums, including those with Inter RAO, were not implemented largely due to disagreements between the central and regional authorities. “Now the Ministry of Energy of Kyrgyzstan receives previously unprecedented powers and establishes unity of command. These powers will be exercised on the basis of the tasks of hydropower and simplification of external investments in it, and not from the interests of akimats or other ministries,” the expert says. Nevertheless, it would be more rational for Bishkek to turn to small nuclear power plants rather than to the hydroelectric power plants for which it is set: one nuclear power plant could cover up to half of the republic’s needs, Pikin is sure.