COVID-19 and Kazakhstan’s Electricity Requirements30.06.2020
COVID-19 and Kazakhstan’s Electricity Requirements
GSPP Associate Professor Peter Howie and GSPP PhD student Daulet Akhmetov
Daulet Akhmetov and Peter Howie published the article “COVID-19 and the Power Industry Response: the Case of Kazakhstan” in the International Association of Energy Economics’ “Energy Forum” The article discusses the Kazakhstani energy sector’s response to the COVID-19 pandemic. The “Energy Forum” is a quarterly newsletter of the International Association of Energy Economics that covers timely thematic energy matters such as COVID-19, renewable energy, continental energy issues in China, India, Russia, electricity, natural gas and nuclear matters.
Similar to all industries, the COVID-19 pandemic is affecting the power industry in all countries. While the short-term effects of COVID-19 pandemic has had minimal supply-side effects with no reports on related power supply disruptions, the sector has experienced major demand-side effects through rapid contraction of economic activities. Additionally, the coronavirus pandemic may have substantial long-term impacts on the development of the world’s power industry because of the reassessment of traditional concepts such as of the role of government in the power sector, energy security, climate change, and energy saving. In the article “Coronavirus and power industry response: the case of Kazakhstan” published in the International Association of Energy Economics’ Energy Forum, Daulet Akhmetov and Peter Howie, from Nazarbayev University’s Graduate School of Public Policy, examine the Kazakhstani power industry’s response to the COVID-19 pandemic. The authors provide interesting insights to a power industry operating within new global challenges. They also highlight how the COVID-19 pandemic has both short- and long-term impacts on the country’s power industry.
One of the distinctive short-term features of Kazakhstan’s power industry response to the coronavirus outbreak is the need to address simultaneously two critical priorities of power infrastructure: 1) to ensure the safety of its employees; and 2) to provide reliable energy supply to all customers. While modern electronic systems of operation and control could potentially decrease the level of physical presence in the power industry, the existing technologies operated in Kazakhstan, dominated by Soviet-designed coal-fired generation, has low levels of digitalization that prevent remote working practices by the majority of workers in the power industry. Therefore, virus-related shutdowns due to workforce contagion represents a major threat to reliable electricity supply and need be avoided at all cost during the COVID-19 pandemic. The authors also stress that a critical issue raised by of the coronavirus is the recognition by both policymakers and society that electricity is a “public necessity”. The coronavirus pandemic has resulted in about a half of the world’s population being lockdowned at one time or another. The combination of self-isolation of a majority of the population and social order can only be achieved if the power industry can provide a reliable electricity supply. Kazakhstan’s public healthcare battle with the COVID-19 pandemic as well as its emergency communication, entertainment and social interactions of people during coronavirus outbreak have become heavily dependent on digital infrastructure that is based on a reliable electricity supply.
The long-term impacts of the COVID-19 pandemic for Kazakhstan’s power industry depend upon assumptions of the public health capacity to control the spread of the coronavirus, government measures to stimulate economic activity, public support of quarantine measure, and global economic response. The increased importance of electricity supply during an emergency, such as the coronavirus outbreak, and recognition by society and government of electricity as “public necessity” may result in delays with Kazakhstan’s planned privatization of its power sector. As a result, Kazakhstan’s electricity sector could remain under strict government price regulation or there could be an increased role of the government to maintain control over prices and disconnections by the energy supplier.
Kazakhstan’s power industry needs to be ready for a fast transformation to meet the new requirements of the post-COVID-19 world.