6 th International Scientific Conference on Energy and Climate Change

1. 6th International Scientific Conference on Energy and Climate Change Kazakhstan Climate Change policy mixtures of PROMITHEAS-4 project: key issues of national report Prof. Sergey INYUTIN, Head of the PROMITHEAS-4 Project in Kazakhstan Athens 9-11 October 2013

2. Content • Introduction • Climate Change policy mixtures in Kazakhstan - Developing three scenario(BAU,OPT and PES) with LEAP - Results, assessment of the policy mixtures - Best policy mixture 3. Future opportunities - 2 -

3. SRC KAZHIMIMVEST, Team members • JSC Scientific Production Firm (1992). The Department of scientific research and innovative clean environment technologies (DSRICET) deals with scientific research and consultancy in optimization of technological processes taking into account innovations, environment saving, technologies in various areas of Energy Conservation and Climate Change. • The institution leads the collaboration of partners such as Scientific-Research Institute of Economy, Information, Transport, Telecommunications (EITT), Turan-Astana University, Aulie-Ata State University of Taraz City, Kaz Scientific Reseach Institute for Ecology and Climate (KAZNIIEK) and established the Climate Change Working Group (CCWG) to contribute in the development of reliable policy portfolios for effective adaptation/mitigation actions in support of the implementation of Climate Change Policy on national and regional levels • The members of CCWG has broad experience in providing analytical works, international coordination, project activities, education ,knowledge dissemination, Legislative activities, sc • scientific research, logistics, work in close cooperation with key ministries on related issues. • Key Team members: • Dr. Y.Kalashnikov -President of SRC KAHIMINVEST • Prof. S. Inyutin- Head of the Project in Kazakhstan ,Member of SC PROMITHEAS-4,Head of CCWG • Dr.I. Yesserkepova- member of CCWG, Deputy Director of “KAZNIIEK”under MEP • Dr.L. Inyutina-member of CCWG, Head o the Department DSRICET, KAZHIMINVEST Other Young scientists: Salyutina, Sultankulova, etc. - 3 -

4. National Workshop “Development of Mitigation/Adaptation Climate Change Policy Portfolios for Kazakhstan” 14 June 2013, Astana - 4 -

5. National Workshop “Development of Mitigation/Adaptation Climate Change Policy Portfolios for Kazakhstan” - 5 -

6. Kazakhstan nominators in PROMITHEAS-4 • The Seminar on “Developing National Climate Change policy mixtures – Case Study” is thesecond part of the Training process of PROMITHEAS – 4.(December 2012) • Kaz participant: SultankulovaAygoz, MS, • Turan-Astana University Teacher • The Training session on LEAP organized by IHS was successfully completed in Vienna. Instructor was Dr. Charlie HEAPS and representatives from all the 12 beneficiary countries, as well as from Greece and Austria participated.( Viena, September 2011) • Kaz participant: Salyutina Yekaterina, MS, Turan-Astana University • Inna Kim ( “Institute Energya”), MS, engineer, has received Certificate on Training Course (E-learning) in 2012

7. National Workshop “Development of Mitigation/Adaptation Climate Change Policy Portfolios for Kazakhstan” • Session on National report "Development and assessment of Mitigation/Adaptation climate change policy portfolios for Republic of Kazakhstan“ • PROMITHEAS-4 project in Kazakhstan: goal, tasks, implementation" • Ass.Prof.,S. Inyutin, Scientific Head of the Project, Turan-Astana University A pathway to Mitigation/Adaptation policy portfolios • PROMITHEAS – 4 A pathway to M/A policy portfolios • Ms. Eleni-Danai Mavraki, MSc. Project Manager, KEPA, Hellas • Spectrum of CC policy measures and instruments, model and key assumptions • L. Inyutina Head of experts group, MSc.,KAZHIMINVEST • Interpretation of three scenarios developed with LEAP • A. Sultankulova, MSc., teacher of Turan-Astana University • Conclusions, observed needs and gaps • L. Inyutina, KAZHIMINVEST, I.Yesserkepova, Deputy Head of KAZNIIEK, MEP • PROMITHEAS – 4 as a tool for policy makers • Eleni-Danai Mavraki, MSc. Project Manager, KEPA, Hellas • Round table discussions - 7 -

8. Kazakhstan Climate Change Policy Kazakhstan’s CC Policy is based on the Strategic Development Plan of the Republic of Kazakhstan 2020;The Intersectoral Program “ZhasylDamu 2010-2014”; The MEP Concept” Green Economy” Voluntary CC obligations to reduce GHG emissions 15% by 2015 and 25% by 2050 RES support law(2009) National ETS in place since 2013 (Ecological Code 2011)

9. Kazakhstan CC Policy: Status in KP-CP2 Kazakhstan emitted 290 Mt CO2 eq. in 2009 (6% of the EU total output; 23% below 1990 country level) KP was ratified in 2009; Law on Amendments (2010) enhanced the country’s ability to participate in carbon markets (facilitates JI by excluding from environmental licensing procedures; GHG emissions inventory on annual basis. Source : CDC Climate Research Notes: Carrying-over calculation is based on 2008-2010 emissions. 1A positive percentage indicates that the average annual emissions for the 2008-2010 period (including credits and debits under LULUCF) are above the permitted emissions under the KP-CP2. The year 2010 is the latest year for which data have been validated in the framework of the UNFCCC. 2Amendments including Belarus and Kazakhstan for the KP-CP1 have not been ratified so far. 3 Croatia and Iceland will fulfill their commitments jointly with the EU in accordance with Article 4 of the Kyoto Protocol. 4The EU-27 countries have differentiated commitments under the KP-CP1. The provided data therefore aggregates those of the concerned countries. According to the European Climate and Energy Package, countries are not allowed to use their surplus of AAUs for 2013-2020. 5EIT: Economies in transition. Here, only non-European countries are included: Belarus, Kazakhstan and Ukraine - 9 -

10. Data collection • Economic data:national statistics, forecast MEDT RK, protocol No.29 dated 28.08.2012, http://www.minplan.gov.kz/economya; GDP growth: according to the IMF, 2011, World Economic Outlook, http://www.imf.org/external/pubs/ft/weo/2011/01/pdf/text.pdf ; growth of the population of Kazakhstan, according to the “2010 World Population Prospects” of the United Nations (http://esa.un.org/wpp/unpp/p2k0data.asp) • Energy data: UN statistics (energy balances and energy profiles of countries, adapted from the national statistics, including by sector. http:// un.org / UNSD / energy / balance / ebep_pdf.htm,http://unstats.un.org/unsd/pubs • National LEAP Model Construction: given the general approaches and requirements for all countries and national characteristics • National characteristics, taken for consideration for the model:climate (temperature, precipitation, etc.), water resources, land / forests, the potential renewable energy sources; energy efficiency, global trends (fuel prices), national (the price of electricity, heat), measures national policies (subsidies, the price of carbon, etc.), types and costs of technology

11. Developing of ВAU scenario • Climateis continental; in the North, winter-summer from -18 ° C to -19 ° C in the South, winter-summer -3 ° C to 29 ° C (Source: SNC 2,2009) • Precipitation2000-2010: from 200 mm(2000) to 369mm (2003,2004) and 120 mm( 2010), (Source: MEP Newsletter / Kazgidromet, 2011) • Floods - according to the Ministry of Emergency operational data (2010), an increase to 2050 of up to 3 per year • Hot days: from 21(2000) to 15(2010) (source:MEP operational data), the trend continues • Frost- varies greatly depending on the location of construction, in particular in Astana the five-day temperature is -35 ° C, and the average annual temperature is 1.8 ° C (source : local regulation) Warming is assumed and decrease the number of frost days per year. • Policy and measures: Fix-in-Tariff, ETS are expected to come in 2013, the subsidies- according to legislation (source: govermnetal operational data) . • Desertification: according to Program “Zhasyl Damu” , land degradation by 2014 is expected to 0.05 hа; afforestation to increase to 65 hectares (an increase of at least 1% per year), source: MEP Program “Zhasyl Damu” • Fuel prices (coal, gas oil) and carbon prices- according to the IEA Outlook 2010 • Water use : in general, the trend will continue, for irrigation of 10 years was reduced by 17% (MEP operational data) • Policy portfolio does not include measures for adaptation - 11 -

12. Kazakhstan: BAU (2000 – 2050)population, GDP real, income- growth T Тable 1: United Nations projections for Kazakhstan population (UN, 2010)http://esa.un.org/wpp/unpp/p2k0data.asp Table 2: Projection for the Kazakhstan GDP (IFM, 2011) GDP growth rate until 2050 remains at this level, the structure by sector varies according MEBP assumptions, in particular the growth of the manufacturing sector will reach 13% of GDP by 2017, the growth of the mining industry will grow from 19% (2012-2014) to 48% after 2017. The growth of income received similar GDP growth / capita - 12 -

13. Developing BAU Energy consumption, mln. t.o.e. Energy production by types of fuel, mln. t.o.e. Energy demand by Housing sector (Housholds), mln. t.o.e. Energy consumption by sectors, mln. t.o.e. - 13 -

14. BAU: GHG emissions per sectors and in Energy sector, mln. tons CO2 eq. - 14 -

15. Developing of OPT scenario • The main characteristics of the OPT are further wide promotion of RES development, the introduction of energy efficiency measures in all sectors of economy. Nuclear power plant is taken into consideration for construction by 2030 according Strategic Plan 2020. • - Mitigation (This policy portfolio sets stringent mitigation targets in all sectors. It is oriented towards the principles of the EU climate change policy and adjusted according to the needs of Kazakhstan) • Policy portfolio includes measures for adaptation (water use for irrigation is expected to increase by 1,5% annually ) • Key assumptions: Demographics: “medium variant” as presented in the table 1. Economy: the growth of GDP, GDP distribution per sector as set a in BAU. GDP per capita: projections are based on those of GDP and population Precipitation: Annual precipitation in Kazakhstan ranges from 120 to 250 mm for the Opt scenario slight decrease by 0.6%. Temperaturetemperature reaches +0.3oC, in comparison to the reference time period. Frequency of extreme events, Flash floods, Heat waves, Frost days: The assumption is the same as in BAU. Water resources: Since no other information is available the assumptions for the Opt scenario is that the growth rate for surface waters will follow the growth rate of precipitation in the same scenario. P& Ms: FIT, Quota- since 2013; subsidies-according to legislation; Fuel prices :as in BAU. - 15 -

16. OPT(2000 – 2050) Generating Capacities(MJ) Energy Demand in Households, M.toe Losses,% (heat, coal, electricity) Energy Demand in Industry, M.toe

17. Developing OPT (2000 – 2050) GHG emissions per sectors, Global warming potential Mtons.CO2eq.

18. Developing of PES scenario • The development of policy portfolio for this scenario co insist with policy instruments applied after December 2010 and are characterized by more smoothly implementing climate change and energy efficiency improvement policy, according to the goals indicated by the Strategic Plan 2020 and GOK programs mentioned in previous sections. It is assumed that targets set in GPFIID are achieved by 2015 accordingly. The efforts are focused more on the energy sector, including modernization and expansion of existing Power Plants and construction of new ones as set in the governmental plans. At the same time a lot of pilot projects will be implemented in the Housing sector to improve Energy Efficiency, energy audits will cover more that 50% of households, introduction of ISO 50001 is assumed in industry, some fuel switch to gas and electricity in transport sector. • RES technologies are developing, but not still competitive to coal.RES share is more than 3% in energy mix. • For this scenario the increase of energy efficiency is considered as an energy policy component rather than a climate change policy one. The development and modernization of the energy sector will not only allow reduction of GHG emissions, but will also create a more preferable framework for foreign investments in the country. • The efforts of the country will focus on the energy sector development and energy saving in households. No Nuclear is assumed to be introduced, but RES will be introduced according to the set indicators. • Implementation of climate change policy is not so strict under this scenario and will not help to achieve the obligation target to decrease GHG emissions 5% towards 1990.The installed capacity is increased 14 GW in total , GHG emissions in 2020 exceeds the 1990 level 1%. • No adaptation policy is implemented. - 18 -

19. Developing of PES scenario Final energy demand in Industry Final energy demand In households GHG emissions per sectors, Mton CO2 eq. - 19 -

20. Results of 3 scenarios according to LEAP RESULTS of LEA modeling: for the BAU in 2020 GHG emissions amounted to 386,1 MtCO2eq., Total primary energy consumption by 75.56 Mtoe (2020), an increase of 2.2 times compared with a year 2009.Dolya renewable energy in the total energy mix to 2020 0.28%. for OPT in 2020 share of RES - 10.1% in the total energy mix by 2020. Total primary energy consumption is reduced by 7, 5% compared with BAU in 2020 due to the measures implemented. GHG emissions with direct effect in 2020 amounted to 335,8 MtCO2eq, a decrease of 50,3 MtCO2eq relative to BAU (13%) For PES in 2020 share of RES - 3.5% in the total energy mix in 2020, and 2.07 times increase in the total primary energy consumption in comparison with 2009 (74.34 million tons of oil equivalent by the result LEAP). GHG emissions in 2020 - 372,4 MtCO2eq (more OPT, less than BAU by 13.7 Mt CO2 eq) 1990г. 362.7 млн. т СО2 экв. Source: table P3, page 15,National Report on GHG emissions inventory for 1990-2009 (NIR), available at : http://www.eco.gov.kz, eco.gov.kz/files/o_kadastre.doc

21. Assessment of the policy mixtures in OPT - 21 -

22. : Score of best aggregate performance. Kazakhstan: Best policy mixture - 22 -

23. Future opportunities • Comments received (next slide) • Needs and gaps observed • Future cooperation with GOK for policy mix improvement • Possibilities for cooperation(ADB project on CC) • Need for further training on CC policy, assessment, business and investments ( transition to “Green economy” assessment is about 2% of GDP, during 2010-2049-av.0.7% of GDP) - 23 -

24. Goal on transmission to Green Economy is added to existing goals (MEP) • Additional goals Goal description 2020 2030 2050 Sector • Decrease of water deficit on national level By2020 water supply providing of population By2020 provide water to agriculture Solve water problems • Water resources • Water resources deficit decrease in the basin Max provide water to the basin(by2025) By2030 absence of water deficit in the basin • Productivity 3-4 times increase • Agriculture • Crops (ton./ha) 1,4 2,0 2,0 • Irigation costs (m3/ton) 450 330 250 • Energy intensity of GDP decrease towards 2010 level 25% (10% by 2015) 30% 50% • Energy Efficiency • Share of alternative resources for power production: • Alternative sources, Солнечных и ветряных: не менее 3% к 2017 г. ~30% 50% • Power Sector • Gas power plants • Gasification o regions 20%2 Аkmola, Karaganda 25%2 Northen and East Oblasts 30% • GHG emissions decrease in Power sector towards recent level 2012 level -15% -40% • Air contamination • PollutantsSOX, NOX into environment EU level • Solid Wastes disposal 100% 100% • Wastes utilization • Landfields ~95% 100% • Share of utilized wastes 40% 50% 1 Solar, Wind, hydro, Nuclear 2 CHP fuel switch to gas Source: MEP WG

25. THANK YOU FOR ATTENTION!S.inyutin@mail.ruKAZHIMINVEST - 25 -