ORDER OF THE GOVERNMENT OF THE KYRGYZ REPUBLIC

of February 13, 2008 No. 47

About the draft of the National energy program of the Kyrgyz Republic for 2008-2010 and strategies of development of fuel and energy complex till 2025

For the purpose of ensuring effective work of fuel and energy complex and development of energy industry of the republic, according to the Law of the Kyrgyz Republic "About power" the Government of the Kyrgyz Republic decides:

1. Approve the enclosed draft of the National energy program of the Kyrgyz Republic for 2008-2010 and strategies of development of fuel and energy complex till 2025.

2. Direct the draft of the National energy program of the Kyrgyz Republic for 2008-2010 and strategies of development of fuel and energy complex till 2025 to approval in Jogorku Kenesh of the Kyrgyz Republic.

3. Appoint the Minister of Industry, Energy and Fuel Resources of the Kyrgyz Republic the official representative of the Government of the Kyrgyz Republic to consideration of the draft of the National energy program of the Kyrgyz Republic to 2008-2010 and strategies of development of fuel and energy complex till 2025 by Jogorku Kenesh of the Kyrgyz Republic.

4. Declare invalid:

- the order of the Government of the Kyrgyz Republic of July 16, 2001 No. 353 "About the draft of the National energy program of the Kyrgyz Republic till 2005";

- the order of the Government of the Kyrgyz Republic of February 15, 2006 No. 71-r;

- the order of the Government of the Kyrgyz Republic of June 10, 2006 No. 310-r.

5. To impose control over the implementation of this resolution on department of power and mineral resources of Government office of the Kyrgyz Republic.

 

Project

Approved by the order of the Government of the Kyrgyz Republic of February 13, 2008 No. 47

The national energy program of the Kyrgyz Republic for 2008-2010 and the strategy of development of fuel and energy complex till 2025

The Kyrgyz Republic has sufficient inventories of fuel and energy resources. However, potential opportunities of fuel and energy complex (further - energy industry) are implemented insufficiently, and the industry experiences certain financial and economic difficulties. Dependence of the republic on import of energy carriers which share constitutes about 50% of general energy consumption exerts negative impact on condition of energy industry and other industries of economy.

For the purpose of increase in efficiency of energy industry, modernization and development of energy industry by the Government of the Kyrgyz Republic the decision on development of the National energy program of the Kyrgyz Republic for 2008-2010 and development strategies of energy industry till 2025 is made (further - the New Economic Policy).

The New Economic Policy it is developed according to the laws of the Kyrgyz Republic regulating activities of energy industry of the country based on orders of the Government of the Kyrgyz Republic of February 15, 2006 No. 71-r and of June 10, 2006 No. 310-r and provides complete and reliable power supply of consumers on the basis of raising of own power supply sources, implementation of innovative technologies, essential increase in efficiency of functioning and achievement of qualitatively new condition of energy industry.

The New Economic Policy is the document determining the purposes, tasks and the main directions of medium-term and long-term energy policy of the state and establishing mechanisms of its realization.

Purposes provide the New Economic Policy:

- scientific reasons for conditions of effective, safe and steady functioning of energy industry;

- forming of system of relations of subjects of energy industry, consumers and the state in the conditions of formation of the market relations;

- forming of role and the place of power in creation of premises for national economy conclusion to way of sustainable development and social stability of society.

The realization of main goals the New Economic Policy shall be enabled in coordination with functioning of all industries of economy, taking into account resource and scientific technological capabilities of the country, possible negative effects from projects implementation, set of the macroeconomic and geopolitical factors exerting impact on development of relations of public authorities, financial and economic structures.

The main means for goal achievement and realization of priorities the New Economic Policy is forming of civilized energy market and economic relations of his subjects based on enhancement of the regulatory legal base.

1. Priorities of strategic development of energy industry and fundamentals of the state energy policy

The main priority of the energy strategy of the Kyrgyz Republic is rational and effective use of natural fuel and energy resources, the available technical, scientific and personnel capacity of energy industry for ensuring energy security of the country, sustainable development of economy and improvement of quality of life of the population.

Realization of priority tasks shall be based on medium-term and long-term state energy policy.

Main objective of medium-term energy policy - financial improvement and technological modernization of energy industry.

The main components of energy policy for 2008-2010 are the following blocks of tasks:

- ensuring reliability and certainty of supply of energy, first of all to internal consumers;

- implementation of cardinal reform of management system by creation of market institutional framework and the corresponding regulatory legal base, and also completion of structural reform of energy industry;

- ensuring the realization of the balanced tariff and price policy providing covering of real costs of the energy companies and excluding cross subsidizing of consumers;

- achievement of reducing losses and termination of plunders of energy;

- development of the rule of access to networks and sales of energy from alternative energy sources and mechanisms of their subsidizing;

- improvement of financial and corporate management of energy industry, strengthening of commercial and financial discipline and achievement of profitability of subjects of industry;

- development of the program of modernization of industry;

- enhancement of conditions of investment attraction in development of energy industry;

- implementation of measures for development of competitive advantage of the Kyrgyz Republic on regional electricity market;

- development of the program for energy efficiency and energy saving taking into account agreement obligations with the State Parties of the Commonwealth of Independent States;

- development of the program of substitution of hydrocarbon fuel local alternative energy sources for the purpose of decrease in dependence on the imported energy resources and emission reduction of greenhouse gases;

- ensuring monitoring of financial position in electric utility sector for the purpose of annual decrease by 1-2% of the gross domestic product (further - GDP) target indicator of quasifiscal deficit (further - KFD).

The long-term energy policy of the Kyrgyz Republic is directed to protection of the rights and legitimate interests of citizens and business entities, ensuring defense and safety of the state, effective management of state-owned property, achievement of qualitatively new condition of energy industry and is performed on the principles of the sequence of actions of the state for realization of the major strategic reference points of development of power and questions of privatization of power facilities.

Strategic reference points of long-term energy policy are the energy and ecological safety, and also energy and budget efficiency. Achievement of the specified reference points, increase in controllability development power engineering specialists require forming of the main components of the state energy policy. It first of all ensuring effective use of the state fund of energy resources, development of the domestic fuel and energy markets, forming of rational fuel and energy balance.

The main instrument of implementation of energy policy is the package of measures of the state economic regulation: price (tariff), tax, customs and anti-monopoly.

When carrying out energy policy the state fully shall use the rights of the owner of subsoil and assets of energy industry, at the same time to perform restructuring of state-owned property with preserving efficient state control, is preferential in backbone sectors of energy industry and on objects of the increased danger (hydropower and others).

Energy security - the most important component of homeland security of the Kyrgyz Republic which shall provide reliable fuel - and power supply.

The current situation in energy industry demonstrates that these threats have real character. Takes the technical important place and lack in technology in toplivodobyvayushchy sectors accompanied with sharp fall of production of coal, oil and gas and steady dependence on import of hydrocarbonic raw material. In power industry the disproportion in structure and placement of the generating capacities, the insufficient development of backbone power networks limiting their handling capacity and increasing risks of restriction of consumers is observed. The provision is aggravated with the financial and economic crisis connected with non-payments and plunders of the electric power, poor control of industry, and also lack of alternatives to the existing practice of warm and energy saving.

The purpose of policy of energy security is consecutive improvement of its following main characteristics:

- it is reliable to capability of energy industry to provide economically reasonable internal and external demands with energy carriers of the corresponding quality and acceptable cost;

- it is effective to capability of consumer sector of economy to use energy resources, preventing irrational costs of society for power supply;

- resistance of the energy sector to external and internal economic, technogenic and natural threats, and also its capability to minimize the damage caused by manifestation of the different destabilizing factors.

The most important principles of ensuring energy security are:

- security and reliability of power supply of economy and the population of the country in full in usual conditions and in minimum necessary amount - in case of threat of emergence of emergency situations;

- control from the state and local authorities of management behind reliable power supply of the objects ensuring safety of the state;

- diversification of the used types of fuel and energy;

- accounting of requirements of ecological safety, environmental protection and use of renewable energy resources (further - RES);

- prevention of irrational use of energy resources (interrelation with policy of energy efficiency);

- creation of the economic conditions (first of all at the expense of tax and customs measures) providing equal benefit of supply of energy resources to the internal and external markets and rationalization of structure of export;

- creation and production of the competitive domestic energy equipment, attraction in energy industry of ecologically safe and cost-efficient technologies.

For ensuring energy security it is necessary to perform upgrade in many respects obsolete and physically the energy industry worn-out technological base and to provide reproduction of its produced resource base, and also change of structure of consumption and placement of production of fuel and energy resources. At the same time, increase in use of hydroenergy resources and RES is provided.

The basic principles of the state energy policy in budget efficiency of industry are:

- steady perspective of determination by the state of necessary forecast amounts of direct receipts in the budget from the organizations of the energy sector;

- complex assessment of the current and perspective results of change of structure and cost of state-owned property (state assets in energy industry);

- balance of growth of capitalization of the energy sector and amount of the budget receipts provided to them;

- the sequence and targeting in use of public funds, and also the investments performed under control of the state.

The state energy policy and mechanisms of its realization shall meet the requirements of social orientation and be carried out on the following basic principles:

- ensuring equal availability of energy carriers to consumers;

- maintenance of price parity (rates) for energy carriers when carrying out price reform at the level, available to consumers;

- carrying out targeted support of needy segments of the population in case of price increase (tariff charges);

- ensuring social protection to employees of energy industry when reforming the companies (closing of the companies, reducing number);

- provision of compensations for the caused damage to the population connected with construction of power facilities according to the legislation of the Kyrgyz Republic.

2. Condition and main directions of perspective development of industries of energy industry of the Kyrgyz Republic

2.1. Power industry

The electric utility sector (further - EES) energy industry structurally consists of seven joint-stock energy companies with the state controlling stock, including one generating (JSC Elektricheskiye stantsii), one power grid transferring (JSC Natsionalnaya elektricheskaya set Kyrgyzstana), four power grid distribution (JSC Severelektro, JSC Vostokelektro, JSC Oshelektro and JSC Zhalalabatelektro) and one heatnetwork (JSC Bishkekteploset), and also joint stock companies with private kapitalomoao "Chakan of hydroelectric power station", Bystrovsky and Kalinin hydroelectric power station.

The EES production base includes 17 total power plants installed capacity of 3680 MW, including, 15 hydroelectric power stations (2950 MW) and two combined heat and power plants (730 MW), more than 70 thousand km of the power transmission line tension of 0,4-500 of kV, from them 546 km - lines of 500 kV, 1714 km - lines of 220 kV and 4380 km - lines of 110 kV, and also about 490 transformer substations of 35-500 kV, total capacity more than 8000 MBA.

Now EES, having production system, transfers and distributions, in general need of the country for the electric power and centralized heat supply of the cities of Bishkek and Osh provides, keeping stable production volumes of the electric power at the 14,486 level of one billion kWh in 2006 and to 14,601 of one billion kWh - in 2007.

EES exerts the determining impact on condition and perspectives of development of national economy: 10% of the income in the republican budget fall to its share about 3,9 of % of GDP and 16% of industrial output. The developed electrical power network provides access to the electric power practically for the vast majority of the population. At the same time, on electric power consumption per capita (1351 kWh), the republic lags behind universal indicator (2343 the kWh/persons), and also indicators of neighboring states: Kazakhstan (3312th kWh/persons), Tajikistan (2172 kWh/persons) and Uzbekistan (1796 kWh/persons).

In recent years in the republic events for strengthening of energy independence of the country due to development of internal high-level power networks and the generating sources were held. Considerable amount of works on modernization and development of the systems of commercial accounting of the electric power providing forming of the wholesale market of electric power and energy is executed. Reforming of production structures of EES on functional basis for the purpose of adaptation them to market methods of managing is carried out, incorporating and partial privatization of the companies are carried out. The levers of state regulation of activities of EES adequate to conditions of market economy, with transfer of function of corporate management by joint-stock companies to the State committee of the Kyrgyz Republic on management of state-owned property and creation of regulating body - since 2007 to State department on regulation of fuel and energy complex are created under the Ministry of Industry, Energy and Fuel Resources of the Kyrgyz Republic.

Number of the regulatory legal acts regulating relations in EES is developed and accepted, forming of the regulatory legal base for realization of energy saving policy is begun.

However, these actions were insufficient, and the industry experiences the following difficulties:

- the restructuring of the vertically integrated exclusive electric utility company which is carried out in 2001 on functional basis did not provide the expected positive results due to the lack of necessary market mechanisms and the corresponding legislation;

- the financial condition of the energy companies, especially distribution companies continues to remain heavy: in 2007 collection of payments for the consumed electric power on invoices of distribution companies constituted % 85,7; cumulative receivables of consumers before REK reached 3528 million som that holds down activities of the energy companies and their relation with other business entities, and also create problems of settlement of the credit and tax liabilities before the budget of the republic;

- reducing system losses of the electric power in distribution networks which steadily exceed the level of 40% from the developed electric power in recent years is not provided, at the same time, considerable losses fall on raspredkompaniya in which in 2007 losses constituted 36,2 of % of its general receipt in REKI;

- resolute actions for improvement of management and hardware of systems of commercial accounting are not taken, not enough attention is paid to creation of the automated system of commercial accounting of electrical energy (ASKUE);

- state bodies and the energy companies do not perform purposeful and consecutive actions for creation of energy market and introduction of market mechanisms;

- the situation is aggravated with the low fares on the electric power which are not covering cost for its production, transfer and distribution;

- imperfection of accounting of real electric power consumption and the existing practice of cross subsidizing in JSC Elektricheskiye stantsii complicates investment attraction and development of the competition in energy industry;

Disclaimer! This text was translated by AI translator and is not a valid juridical document. No warranty. No claim. More info