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Opinion: Kazakhstan Energy Expansion May Not Guarantee a Lasting Surplus

Kazakhstan plans to commission 13.3 GW of power capacity by the end of 2029, including 12.56 GW of entirely new generation, in a build-out the government says will move the country from deficit to sustained surplus. But new industrial projects and large data centers could absorb part of that margin almost as soon as it appears. According to Energy Ministry projections, Kazakhstan expects to eliminate its electricity deficit by the end of the first quarter of 2027 and move to a sustained surplus by 2029. The projected electricity balance for 2029 calls for generation of 162.1 billion kWh against consumption of 144.5 billion kWh, leaving a surplus of 17.6 billion kWh. However, it is difficult to predict exactly how much electricity the country will need three years from now. Therefore the forecast "surplus" will not necessarily become a reserve available for future industrial projects. Energy Hungry Data Centers Kazakhstan is pursuing a swathe of new energy-intensive industrial projects, while data centers are emerging as another major source of electricity demand. The Data Center Valley project is being developed in Ekibastuz, where the government says 300 MW of power capacity has already been secured, with plans to expand to 1 GW. It cites competitive electricity costs and the ability to scale up as advantages of the location. At full scale, such a cluster would itself become a major electricity consumer. If it drew 1 GW continuously, it would consume about 8.76 billion kWh a year – roughly half the projected national surplus for 2029. Kazakhstan’s digital ambitions already extend beyond a single data center. In June, the government announced $10 billion in agreements with U.S.-based Firebird and NVIDIA to build a large AI computing center using 100,000 advanced computer chips. The project will form part of the Data Center Valley initiative. By the end of 2029, Kazakhstan plans to commission 13.3 GW of capacity, of which 12.56 GW will come from entirely new generating facilities and 0.74 GW will replace existing capacity. According to the Energy Ministry, 7.4 GW of the total will be baseload generation and another 5.9 GW will come from renewable energy sources. The full 13.3 GW cannot be treated as spare power for new factories and data centers. Some will be needed to meet rising demand and make the electricity system more reliable. Solar and wind power also cannot produce at full capacity all the time. This is particularly important during periods of peak demand, when the power system must cope simultaneously with high consumption and possible maintenance or outages at generating facilities. A projected annual surplus measured in billions of kilowatt-hours and the amount of capacity available during a particular peak hour are therefore different measures. Upkeep of Current Power Sources The condition of existing generation remains a separate problem. Much of Kazakhstan’s thermal generation is aging and requires modernization. The Energy Ministry reported that 411 billion tenge was allocated to the 2025 repair campaign, during which 10 power units, 63 boilers, and 39 turbines were repaired. It said...

Energy

Kazakhstan Mini-Refineries Eye Russia After Rail Export Restriction Lifted

Kazakhstan has lifted a railway export restriction on petroleum products from mini-refineries. For small plants, many of which operate well below capacity, the decision restores an opportunity to sell their products outside the country. Kazakhstan Temir Zholy (KTZ), the national railway company, revoked the restriction following an August 7 decision by the country’s Chief Transport Prosecutor’s Office. The timing is notable: after a series of strikes on its refineries, Russia is facing fuel shortages and has already begun importing gasoline from abroad, including Kazakhstan. Other restrictions on fuel exports from Kazakhstan remain in force, so the KTZ decision does not fully reopen gasoline and diesel exports. Some fuels remain subject to separate bans, and exports to Russia are treated differently from shipments outside the Eurasian Economic Union. What Mini-Refineries Produce The number of mini-refineries actually operating in Kazakhstan depends on how such facilities are defined. Official documents have referred to roughly 30 small petroleum-product producers. More recent industry data provide a clearer picture: more than 30 mini-refineries are registered, with declared crude-processing capacity of about 4.5 million metric tons a year. Of these, 22 are considered operational, with a combined capacity of about 2 million tons. Actual processing is considerably lower, having increased from roughly 400,000 to 800,000 tons annually over the past five years. These are not smaller versions of Kazakhstan’s major refineries in Atyrau, Pavlodar, and Shymkent. Most mini-refineries lack equipment for deep refining, so their output is simpler. Their main products include fuel oil, heating and marine fuels, naphtha, and other distillates. In 2023, mini-refineries processed 895,000 tons of feedstock and produced 346,000 tons of fuel oil, 145,000 tons of diesel fuel, and 171,000 tons of bitumen. Much of this output was not intended for Kazakhstan’s motorists. Mini-refineries produce semi-finished products, including straight-run fuel oil with a relatively high share of light fractions that can be processed further. Their opportunities on the domestic market are also limited by product quality: Kazakhstan has required K4 and K5 motor-fuel standards since 2018, while official assessments say mini-refineries generally lack the equipment to produce fuel above the K3 standard. Restoring export opportunities could therefore have a tangible economic effect for these businesses. The plants have spare capacity but insufficient domestic demand for much of their current product range. Rail exports once again give them a way to look for buyers outside Kazakhstan. And that inevitably raises the question of Russia. Russia Is Looking Abroad for Fuel There is no direct evidence that KTZ lifted the restriction specifically because of the Russian market. Neither the Kazakh authorities nor the railway company has made such a connection. But the decision comes at a convenient time for potential Russian buyers. Ukrainian drone strikes and unplanned refinery outages have reduced Russian gasoline production and contributed to domestic shortages. Moscow has responded by restricting fuel exports and increasing imports from abroad. Russia has already turned to several suppliers. In July, Belarus shipped a record 212,000 tons of gasoline to Russia, while Moscow has also begun...

opinion

Turkmenistan and the New Geopolitics of Silicon

Central Asia is not foreign to the emerging geopolitics of silicon and artificial intelligence (AI). Kazakhstan especially has made itself noticed, joining the US-led Pax Silica initiative in June and the Chinese-led World Artificial Intelligence Cooperation Organization (WAICO) in July. Kazakhstan is the only country participating in both initiatives, which is characteristic of Astana’s multi-vector diplomacy. Whilst other Central Asian states have joined WAICO, Turkmenistan, consistent with its permanent neutrality stance, has joined neither. Neutrality, however, does not prevent economic participation, and a case has to be made for Turkmenistan. Two Frameworks for International Cooperation Although both initiatives respond to the same underlying reality - the growing strategic importance of artificial intelligence - they differ in scope and emphasis. Pax Silica is built around the material and economic foundations of AI, focusing on securing and coordinating the physical supply chains that make computation possible and aiming implicitly to reduce reliance on China. WAICO, by contrast, is centered on the political and normative dimension of AI, prioritizing governance, safety standards, and international coordination, where Beijing could push its rhetoric in favour of open-source artificial intelligence as a model for AI development. Taken together, they reflect two complementary but distinct ways of structuring the emerging AI order: one rooted in industrial capacity and supply-chain control, the other in multilateral rules. On that matter, Turkmenistan's possible relevance does not lie in software, semiconductor fabrication or AI regulation, but much further upstream: silicon metallurgy. From Gas to Silicon Silicon is abundant in nature, but transforming it into industrial materials is an energy-intensive process. Quartz or quartzite is used to produce both silicon ferroalloys and silicon metal. Ferrosilicon is principally consumed by the iron and steel industries, where it serves as a deoxidizing and alloying agent. Silicon metal, meanwhile, is used in aluminum alloys and chemical production, while a small share is further purified into the extremely high-purity silicon required by the semiconductor industry. Ferrosilicon should not be presented as a material that goes directly into AI chips. But establishing competitive ferrosilicon production can constitute a first industrial step into the broader family of silicon metallurgy. And Turkmenistan has already begun considering precisely that. In 2020, the Turkmen authorities reported that the Ministry of Industry was studying the production of metallurgical-grade silicon using local resources. Practical tests had already been conducted using quartz sand, metal mixtures and petroleum coke, while the government presented the development of domestic mineral resources as part of a broader strategy of industrialization and export diversification. The ambition became more concrete in January 2024. Turkmenistan's Ministry of Industry and Construction Production launched an international tender for a feasibility study for a ferroalloy plant intended to manufacture ferrosilicon, silicon carbide, and technical silicon. A 2024 feasibility study for such a project envisions a plant in Balkan Velayat capable of producing 15,000 tons of FeSi75 ferrosilicon annually. The proposed complex would operate two 12,500 kVA furnaces. Rather than depending exclusively on domestic raw materials, the study envisages sourcing quartzite from nearby Iran and...

Energy Security

Central Asia Rethinks Energy Security After the 2026 Fuel Crisis

The summer of 2026 marked a turning point for energy security in Central Asia. In July, drone strikes temporarily halted crude oil receipts and loadings at the Caspian Pipeline Consortium’s (CPC) marine terminal in Novorossiysk. Although CPC resumed normal operations on July 27, the incident exposed the vulnerability of one of the region’s principal export routes to external security risks. Russia, which for decades has been Central Asia’s principal supplier of refined petroleum products, has also faced prolonged pressure in its domestic fuel market. Reduced utilization at some refineries and rising domestic demand have created longer-term challenges. Restrictions on gasoline and diesel exports have added to the pressure, affecting the Russian economy and neighboring states that have traditionally relied on Russian supplies. For three decades, Central Asia’s system for supplying refined fuels remained relatively stable. Russian refineries covered shortages in local markets, providing fuel that was both comparatively affordable and predictable in volume. The events of 2026, however, reaffirmed a basic principle of national security: during large-scale crises, governments tend to prioritize domestic stability over external trade commitments. For Central Asian states, this has prompted a fundamental reassessment of long-established approaches to energy security. Any strategy dependent on a single external supplier ultimately becomes vulnerable to disruptions beyond its control, regardless of their origin. The current crisis has also revealed significant differences in how well prepared the region’s governments are to protect their domestic fuel markets. Kyrgyzstan has proved the most vulnerable. The country consumes around 1.6 million metric tons of fuel annually, with 90-95% of supplies imported from Russia. Faced with a sharp reduction in available supplies during May and June 2026, the Kyrgyz authorities were forced to begin urgent negotiations with alternative suppliers, including Kazakhstan, Uzbekistan, Turkmenistan, Azerbaijan, and Belarus. Uzbekistan has been in a somewhat stronger position. Until recently, Russian companies dominated the country’s imported gasoline market. During the first five months of 2026, Uzbekistan spent more than $1 billion on imports of crude oil and petroleum products, while spending on motor gasoline imports increased by 85.1% compared with the same period a year earlier. Tashkent has responded by prioritizing strategic fuel reserves. Ahead of the coming autumn and winter season, the government has begun building a 120,000-metric-ton reserve of motor gasoline. Kazakhstan, meanwhile, enjoys a considerably higher degree of energy self-sufficiency thanks to its developed refining sector, centered on the modernized refineries in Atyrau, Pavlodar, and Shymkent. It is therefore unsurprising that Bishkek turned first to Astana when seeking emergency fuel supplies. Kazakhstan’s potential to serve as a regional supplier nevertheless has clear limits. The country’s domestic fuel market periodically comes under structural pressure during the spring and autumn agricultural seasons and when planned maintenance is carried out at its refineries. As a result, Astana must balance support for its regional partners with maintaining stability at home. Although Kazakhstan annually agrees with Russia on duty-free import quotas of up to 1.12 million metric tons of Russian petroleum products under the indicative fuel balance mechanism, the current...

Electricity Shortages

Tajikistan Prepares for Another Winter Power Shortfall

Tajikistan is preparing for another autumn and winter in which electricity demand may outstrip supply. Network losses have fallen, and investment in hydropower continues, but officials say the seasonal imbalance between generation and consumption will persist. Mahmadumar Asozoda, chairman of state-owned power company Barki Tojik, said the imbalance would persist through the colder months. Asked whether electricity rationing would return, he did not rule it out. Tajikistan generates almost all of its electricity from hydropower, leaving supply tied to seasonal river flows. Output rises during the warmer months, when the country can meet domestic demand and export surplus electricity. In winter, river flows decline as electricity use increases for heating, creating a recurring shortfall. To cover part of the winter shortfall, Tajikistan plans to import electricity from Uzbekistan again. The two countries use a seasonal exchange: Uzbekistan supplies power in autumn and winter, and Tajikistan returns an equivalent volume during summer. Tajikistan imported 306 million kilowatt-hours (kWh) last winter, down from 350 million kWh a year earlier. Asozoda said the countries expect to sign a new agreement before the next autumn-winter season. Imports can ease the shortage, but they do not remove Tajikistan's dependence on hydropower or the winter drop in output. The seasonal arrangement with Uzbekistan gives Tajikistan access to power when domestic generation is lowest. As previously reported by The Times of Central Asia, Kazakhstan has signed a 20-year agreement to buy electricity from Tajikistan. Deliveries are expected to depend on additional generating capacity at the Rogun Hydropower Plant. The Nurek Reservoir stood at 888.21 meters on July 13, but Energy and Water Resources Minister Daler Juma said Tajikistan was experiencing low water levels. The country has reduced electricity exports and is retaining more water in its reservoirs for winter. Losses in the electricity system fell during the first half of 2026. At Barki Tojik's generating facilities, losses were 0.32% of output, down 0.07 percentage points from a year earlier. Losses in high-voltage transmission networks fell to 2.96%, while distribution losses dropped from 17.93% to 12.42%. Barki Tojik generated 8.89 billion kWh during the period, 2.7 million kWh less than in the first half of 2025. Hydropower plants supplied 7.93 billion kWh, while thermal plants produced 964 million kWh. The utility also bought 2.7 billion kWh from independent producers in Tajikistan and abroad, with Sangtuda-1 supplying 1.48 billion kWh. Rogun and Sangtuda-2 supplied 667.2 million kWh and 474.2 million kWh, respectively. Demand continues to rise as Tajikistan's population grows and industrial production expands, President Emomali Rahmon said in December 2025. The World Bank expects Rogun to help meet domestic needs and reduce recurring winter cuts. Rahmon has said rationing should end in 2027, when the third generating unit is scheduled to enter service, although the World Bank projects full completion in 2033. For the coming winter, Tajikistan is conserving reservoir water and arranging imports from Uzbekistan, but Asozoda's comments leave open the possibility of renewed rationing.

Energy Security

Putin Visit Puts Nuclear Power and Oil Transit at Center of Russia-Kazakhstan Ties

Russian President Vladimir Putin’s state visit to Kazakhstan is becoming more than a diplomatic event. It is increasingly being seen as a demonstration of how Russia and Kazakhstan are shaping one of Eurasia’s key energy and logistics axes amid the restructuring of global markets, sanctions pressure, and the continued shift of economic flows toward Asia. Symbolically, ahead of the visit, Putin published a programmatic article in Kazakh media titled “Russia-Kazakhstan: An Alliance at the Heart of Eurasia,” in which he outlined a new framework for bilateral relations. The Russian president focused on nuclear energy, oil and gas cooperation, transport corridors, and Eurasian integration, describing the partnership between the two countries as a factor of stability and development for the wider continent. For Moscow, the current visit carries particular significance. It is Putin’s second state visit to Kazakhstan during a single presidential term. A rare occurrence in international diplomatic practice. Kremlin aide Yuri Ushakov said the move was intended to emphasize the “unprecedentedly high level of relations between our two countries.” The main outcome of the talks is expected to be the signing of agreements related to the construction of Kazakhstan’s first nuclear power plant with the participation of Russia’s state nuclear corporation, Rosatom. According to Ushakov, the two sides are expected to finalize “the main parameters for the creation of the nuclear power plant and financing of the project through a Russian state export credit.” For Kazakhstan, the nuclear project is about far more than electricity generation. The country faces growing domestic power demand, aging infrastructure, and the need to ensure long-term energy security. At the same time, the project reflects a broader geopolitical calculation. Nuclear energy has traditionally been one of the most sensitive forms of strategic cooperation. A country building a nuclear power plant enters into a long-term technological partnership involving fuel supplies, engineering maintenance, personnel training, and technical support lasting for decades. Russia’s role in constructing Kazakhstan’s first nuclear power plant would therefore allow Moscow to preserve a deep technological presence in Central Asia despite its growing international isolation. For Astana, however, cooperation with Russia in the nuclear sector remains a pragmatic choice rather than a purely political one. Kazakhstan is the world’s largest producer of uranium, yet it still lacks its own nuclear power generation sector. Amid intensifying competition between global power centers, Kazakhstan appears less interested in choosing sides than in strengthening its resilience and turning its geography into a strategic advantage. The same logic is evident in the oil and gas agenda surrounding Putin’s visit. Moscow and Astana are discussing increasing the transit of Russian oil to China through the Atasu-Alashankou pipeline from 10 million to 12.5 million tons annually. Ushakov said prospects for the negotiations were “optimistic” and noted that the legal framework for the agreements was already in its final stages. According to KazTransOil, approximately 832,000 tons of Russian oil were transported to China through the route in April alone, while first-quarter transit volumes reached 2.5 million tons. Kazakhstan’s dependence on Russian...