Arask Distribution Grid Corporation
50,000
Frequency in UES, Hz
Arask Distribution Grid Corporation
KEGOC, the country's leading power grid company, has improved its key performance positions after cardinal changes in the electricity market, the introduction of the Sole Electricity Purchaser mechanism.
The introduction of a new market model on 1 July this year led to changes in the list of regulated services and the current tariffs. In addition to electricity transmission services, KEGOC started to provide consumers with the service of using the national power grid, which expanded the list of consumers and, accordingly, improved the company's profit forecasts.
In other words, if previously some enterprises or regional distribution networks bought energy from the nearest power plants with the necessary capacity at prices dictated by the supplier, now a subordinate enterprise of the Ministry of Energy (Financial Settlement Centre for RES LLP) buys energy from all energy producers at fixed prices and delivers it to these consumers through KEGOC networks, also at fixed prices. Previously, the prices were highly dependent on the region, on the supplier, on seasonality, on load, over- or underproduction of energy, while the innovations average the price, make it fairer for all consumers in the country, optimise supply costs, and reduce losses, downtime and overloads for producers.
For comparison, the previous tariff for electricity transmission service for the period from 1 October 2022 to 30 June 2023 was 2.848 KZT/kWh. The new tariff for this service changed insignificantly (3%) and amounted to 2,935 KZT/kWh. At the same time, the new service, which involves exclusively the use of the national electricity grid, is almost twice as cheap (-42%) at KZT 1,651.
The new tariffs approved by the Committee for Regulation of Natural Monopolies of the Ministry of Energy of the Republic of Kazakhstan ensure that KEGOC covers maintenance costs and the cost of modernisation of networks and equipment, and generates profit for implementation of the company's investment programme.
At the same time, it is important to note that the adjustment of tariffs for the company's services will not practically affect the final cost of electricity for consumers. This is due to the fact that the share of the price for energy transmission in the total cost of production is insignificant. In addition, the new market model seeks to average tariffs and provide equal conditions for all companies and consumers. For some of them, who due to their location had to buy at prices dictated to them, the tariff will be reduced almost more than twice. For example, some consumers were forced to buy from Russian producers at exorbitant prices during certain periods due to capacity shortages.
KEGOC will be able to calculate upcoming loads for many years to come as a result of the developments allowing for more precise development and modernization of its networks and equipment.
Currently, in accordance with the current legislation of the Republic of Kazakhstan, the Company provides regulated services at tariffs approved for the forthcoming five-year period.
On 1 July 2023, changes regulating the operation of the wholesale electricity market came into force: mechanisms of the Sole Purchaser and real-time balancing electricity market were introduced.