To Be or Not to Be: What Could Come of Exporting Green Energy to Europe?

Kazakhstan plans to export green energy to Europe, but experts have expressed different views on the matter.

The energy ministers of Kazakhstan, Azerbaijan and Uzbekistan at a meeting in Baku discussed the prospects of exporting electricity from Central Asian countries to Europe through the territory of Azerbaijan. The heads of departments agreed to develop terms of reference and create a joint venture to export green energy to Europe. According to the press service of the Ministry of Energy of the Republic of Kazakhstan, the countries plan to receive electricity from solar and wind power plants and use green hydrogen and ammonia.

An Orda correspondent found out experts' opinions about this.

Is Territory The Key to Success?

The concept's essence that the Ministry of Energy plans to implement is that Kazakhstan should use its vacant territories as a base for renewable energy sources — wind and solar power plants. Having increased capacity, they can engage in exporting, laying the Trans-Caspian energy cable first to Azerbaijan and then to Türkiye and onward to Europe.

Director of the public fund Energy Monitor, Nurlan Zhumagulov, said this idea is interesting and promising. According to him, unlike Europe, Kazakhstan has a huge resource potential from the sun, wind and earth.

The construction of the Trans-Caspian power cable is a feasible project. Azerbaijan joined the Black Sea Energy project on the bottom of the Black Sea in December 2022. In the long term, it is possible to export green energy made in KZ to the European market. In principle, Europe urges us to do this, Zhumagulov wrote on Facebook.

KEGOC’s former president, Asset Nauryzbayev, also sees prospects in the development of this area in international cooperation, but notes that today it is impossible to call the agreement signed in Baku a project. So far, it is just an idea.

Kazakhstan, as a country with a huge amount of renewable energy, can become an exporter. In order to export energy to Europe, it is necessary to connect Kazakhstan with Azerbaijan, Azerbaijan with Türkiye, and Türkiye with Europe by an underwater cable. This is a very big job, it's difficult to call it a project now: rather, it's just an idea,  Nauryzbayev says.

According to him, it is the territorial advantage over the EU countries that gives Kazakhstan a chance to become a green energy exporter.

This corridor is very important. In addition to the access to Azerbaijan, we need access to China. Then we will be able to produce energy both ways because we have a lot of land and a large desert area. Renewable energy is successfully developing in Kazakhstan today, we have companies that are engaged in this. The country buys solar panels and wind farms from China.

As for investments, tens of billions of dollars will be needed to implement such a large-scale project, according to the expert. The return on investment rates for such projects are on average 12% per year. A potential investor will therefore be able to make a profit of $1.2 billion annually.

There is money in the world for the development of such projects, but whether investors will want to come to our country depends on our government. It is important to exclude corruption here, because no one will want to invest money if it is simply stolen in the future, the expert summed up.

Sell What You Don’t Have

Vadim Ni, Chairman of the Board of Trustees of the Socio-Ecological Foundation, looks at the idea differently. He is skeptical about plans to export green energy to Europe. According to Ni, Kazakhstan does not have the necessary resources for this yet.

I don't see any prospects for this idea. We don't even fully provide ourselves with electricity from renewable sources, what can we say about exports, the expert says.

He noted that, according to the Paris Agreement, adopted in order to combat climate change and its negative consequences, Kazakhstan should increase the share of renewable energy sources to 15% by 2030, to 50% by 2050 and green energy should be implemented by 2060.

Today, this figure barely exceeds 5%, we are barely reaching our modest plans. It will be good if Kazakhstan increases the share of renewable energy to 15% by 2030. But I think that we will reach this indicator stretching the limit of our capabilities. Therefore, first it is necessary to fulfill the obligations that we have already assumed, and only then to think about exports, Ni believes.

As for the production of green hydrogen, which was also discussed by energy ministry heads in Baku, it will be even more difficult for Kazakhstan to implement this plan, member of the National Kurultay under the President of Kazakhstan, Honorary Power engineer of Kazakhstan, Arman Kashkinbekov believes.

The project looks a little questionable because water is needed for green hydrogen’s production, and there are not as many water resources in our country as in Europe or Russia. Therefore, the question arises where we will get water for these purposes. 

He noted that taking water from the Caspian Sea, which is already shallow, could damage the environment.

Unfortunately, the Caspian Sea is getting shallower, so you need to calculate how much water you need to spend to produce hydrogen. Will we also cause enormous damage to the ecology of the Caspian Sea and will we drain it completely? These are very important questions that need to be answered before starting a project.

The expert noted that the project can indeed generate several billion dollars in profit for an investor. In turn, this will contribute taxes to Kazakhstan’s treasury. The expert therefore believes that the authorities want to sell energy abroad at international prices.

However, Kashkinbekov himself does not consider this approach suitable. He believes that  Kazakhstan should prioritize providing energy and heat supply for its citizens and then sell what’s left.

I believe that we should first of all think not about someone, but about ourselves, about 20 million Kazakhstanis. There is no need to use this old principle of "let's build for export, earn money". Of course, it also has its place, but, in my opinion, it's time to look at our own country, at our internal problems, the expert summed up.

RMB: In November, the country's green economy was discussed in the assembly hall of the Kazakh-British Technical University. Foreign experts suggested closing coal mines and transitioning to the development of alternative energy.

Original Author: Ksenia Nikiforyak

DISCLAIMER: This is a translated piece. The text has been modified, the content is the same. Please refer to the original article in Russian for accuracy.