Kazakhstan is one of the most energy-intensive countries in the world, almost 4 times higher than the world average and 7 times higher than the OECD average. There are various reasons for inefficiencies in Kazakhstan’s energy system: administrative and economic (statistical double counting of energy flows, above normative losses and low profitability), geographic (the extremely continental climate and low population density) and technical considerations (high share of coal in generation mix, high wear on main and auxiliary equipment in energy intensive sectors, high wear on electric lines, dilapidation of housing stock, and an absence of control systems for energy savings) all contribute to the high energy intensity. This study explores energy efficiency potential by analyzing the evolution of the Kazakh energy system. All the technical inefficiencies have been taken into consideration through the explicit representation of existing inefficient technologies/chains in a TIMES-based model. Under the assumptions of a market-oriented development of the economic system, even without specific policies (Business as Usual), the model suggests significant energy efficiency improvement: 22 Mtoe (million tons of oil equivalent) by 2030 and a 40 % reduction in energy intensity of GDP by 2030. The more ambitious policy target of reducing energy intensity of GDP by 40 % by 2020 also appears easily achievable via economically viable solutions.
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