“SAMRUK-ENERGY” JSC | Integrated ANNUAL REPORT

“Environmental” category

2018 was the year of the start of a major environmental reform in Kazakhstan – the new Environmental Code is planned to be released in 2020.

As you know, Kazakhstan has chosen the path to sustainable development and joining the 30 most developed countries of the world, respectively, the issue of environmental safety is a priority for us. We recognize that the achievement of environmental safety in the regions where our production enterprises operate is largely dependent on the economic development strategy implemented by the Company.

A responsible attitude towards environmental issues has developed for many years of work at the Company and its subsidiaries. Given the complexity and seriousness of the technologies used, we cannot but recognize the importance of each of the many environmental risk factors typical for power sector, especially from the perspective of well-being of present and future generations, plant and animal life in the regions of operation.

Guided by current legislation, the concept of sustainable development, as well as the best international practices. “Samruk-Energy” JSC has determined an environmental policy for itself. The goals and objectives specified in the Environmental Policy of “Samruk-Energy” JSC are taken into account in the Company’s Long-Term Development Strategy.

The Company has established an environmental management system (EMS) for managing environmental aspects. All subsidiaries and affiliates of the Company engaged in production activities adopted the ISO 14001 standard “Environmental Management”. We consider environmental care as a contribution to the social development of Kazakhstan’s society, therefore, the Company has commenced integrating EMS with the social management system in 2018. Owing to our experience in working with ADB and EBRD, we are planning to improve our management systems taking into account the requirements of the International Finance Corporation.

Environmental assessment of the efficiency of production processes is carried out within the framework of industrial environmental monitoring based on measurements and calculations of the level of emissions into the environment, harmful production factors, as well as the actual volume of consumption of natural, energy and other resources. Industrial environmental monitoring is carried out with the involvement of independent laboratories accredited in the manner established by the legislation of the Republic of Kazakhstan in the field of technical regulation. The objects of production monitoring are atmospheric air, surface and groundwater, soil.

2018 was the year of ecology in Pavlodar region, the region where the largest subsidiaries of the group such as ESDPP-1, ESDPP-2 and Bogatyr Komir are concentrated; these enterprises were actively involved in the activities aimed at improvement of the quality of environmental components, which were developed by the local environmental department.

Financial aspects and other risks and opportunities for the company’s activities related to climate change

The issue of changes in the global climate have been addressed for several decades. The United Nations Framework Convention on Climate Change (UNFCCC) signed in 1992 by more than 180 countries, is an official confirmation of world community’s concern about this issue.

Governments of member countries reviewed the implementation of Paris Agreement on climate change at a regular meeting of parties to the UNFCCC, which was held in Katowice, Poland in December 2018. The scientific basis of this conference was the IPCC (Intergovernmental Panel on Climate Change) Special Report on Global Warming of 1.5°C, which was published the day before the meeting.

The report contains a very alarming conclusion that in order to prevent irreversible climate change, it is necessary to limit global warming to one and a half degrees Celsius compared to the pre-industrial era, for which it is necessary to reduce to zero the net balance between greenhouse gas emissions gases and the absorption capacity of the terrestrial ecosystem by 2050. Kazakhstan is still striving for a goal of –15 % by 2030 relative to 1990, declared as a voluntary contribution in Paris.

Taking into account experts’ opinion, “Samruk-Energy” JSC takes the climate change issue seriously. Therefore, the Company pays considerable attention to the development of renewable energy sources and hydropower plants, implemented energy management systems everywhere, developed comprehensive programs aimed at increasing energy efficiency and energy conservation, and plans to launch a serious project on gasification of Almaty power plants.

Moreover, such subsidiaries and affiliates of “Samruk-Energy” JSC such as “Ekibastuz SDPP-1” LLP, “Ekibastuz SDPP-2 Plant” JSC, “APP” JSC and “Bogatyr Komir” LLP are facilities which are limited by quota installations and have obligations on reduction of GHG emissions in framework of the national GHG emissions trading system.

Particular attention is paid to the new technologies: “Clean coal technologies” research laboratory was established at the premises of “Nazarbayev University” on request of “Samruk-Energy” JSC; a pilot project for the conversion of flue gas CO2 to microalgae biomass using various types of soda solutions is implemented in conjunction with “Microalgae Biotechnology” LLP at “GRES-1” LLP; Energy service agreement for replacement of more than 1.5 thousand of industrial lamps available today with LED ones was signed at “Bogatyr Komir” LLP.

The main directions and goals for reducing the carbon intensity of the Company’s processes and products are described in the long-term Development Strategy and the Company’s Environmental Policy.

SWOT analysis of Samruk-Energy’s standing in terms of the matter of state regulation of greenhouse gas emissions

It should be noted that if some technologies are actively progressing owing to the global spread sustainability ideology (for example, renewable energy), then it is feasible to treat other technologies, which encourage the same principles of sustainability, patiently and excitedly. This explains the modest pace of retrofit and reconstruction of conventional generation in Kazakhstan.

Materials used

As of year-end 2018, distribution by types of generation (conventional, HPP and RES) was as follows:

  • conventional generation accounted for 91 % of the total power generation of the group of companies, which is 3 % more than in 2017.
  • the share of “clean” energy sources accounted for 9 %, of which 8.5 % is produced by HPP and 0.5 % – RES, in other words, in 2018, the share of output from HPPs decreased by 2 %, while the share of renewable energy remained approximately at the same level.

The volume of electricity generated at fuel plants increased by 13 % in 2018 as compared to 2017, so the consumption of materials such as coal and fuel oil considerably increased. Along with this, the Aktobe power plant was withdrawn from the Company’s asset portfolio, which led to an almost threefold decrease in gas consumption.

Generation

Сonsumed materials

Water use and water consumption

Water is a renewable natural resource, which has a potential energy that we convert into electricity.

We use the energy of water mass as a source of energy in hydropower plants, and also use water as a heat carrier at thermal power plants, for recharge of reservoirs, irrigation of ash beaches, for maintaining water levels in ash dumps, for household needs.

Total volume of water withdrawn broken down by sources

 

Measurement unit

Volume

2016

2017

2018

Total volume of water withdrawn

thous. m3

9,671,594

10,313,409

10,546,314

From surface water bodies

thous. m3

9,619,606

10,261,611

10,498,150

From underground sources

thous. m3

6,817

6,858

7,341

Waste water from other organizations

thous. m3

406

399

274

From municipal and other systems

thous. m3

44,765

44,940

40,577

Water is consumed and used in accordance with the current legislation of the Republic of Kazakhstan: “Samruk-Energy” JSC subsidiaries collect water in accordance with the available permits: 98 % of the volume of water taken is classified as water use at hydropower plants, and 2 % as water consumption.

 

Measurement unit

volume

2016

2017

2018

Total volume of water withdrawn, incl.

thous. m3

9,671,594

10,313,409

10,546,314

Water use (HPP)

thous. m3

9,497,020

10,121,167

10,345,085

The share of water use

%

98.2

98.14

98.1

Water consumption

thous. m3

174,574

192,242

201,229

The share of water consumption

%

1.8

1.86

1.9

Water use and water consumption

Recycled and reused water

Circulating water supply systems are used at all fuel power plants of the Company in order to reduce water consumption.

 

Measurement unit

Volume

2016

2017

2018

The volume of recycled and reused water

thous. m3

2,921,806

2,663,002

2,959,034

Discharge of sewage water

Wastewater is not discharged into natural objects at first category industrial facilities; wastewater is used in hydraulic ash disposal systems and goes together with ash and slag wastes to ash dumps. At the same time, the volume of wastewater is insignificant relative to the volume of water taken.

 

 

2016

2017

2018

The volume of sewage water

thous. m3

64,842.095

60,144.078

77,001.4

“Samruk-Energy” JSC group of companies conduct analytical monitoring of surface water environments, sewage water monitoring, monitoring of changes in the water and temperature regimes of groundwater on a regular basis through a network of observation wells, repair of equipment and pipelines in HAR system.

Waste

The volume of ash and slag waste (ASW) in 2018 amounted to 7,663.95 thous. tons (while the standard is 9,166.9 thous. tons), which is almost 20 % more than in 2017 due to an increase in coal production volume and specific fuel equivalent.

The work on the disposal of accumulated ASW is underway, but still at a slow pace. Dry ash handling plant (hereinafter – DAHP) was put into operation at Ekibastuz SDPP-2. According to updated information, circa 10 thous. tons of dry ash was shipped in 2018. ASW of Ekibastuz SDPP-1, 2 power plants are used in the construction of roads in Pavlodar region.

At the same time, the annual reclamation covers more than 30 hectares of the waste areas of the ash dumps.

Volume ASW

Specific indicator of ash and slag waste formation with regard to Fuel generation sector

Emissions into the atmosphere

At year-end 2018 compared with 2017, the volume of electricity generated at fuel plants increased by 13 %, and accordingly, the total emissions of pollutants increased. Gross emissions across the group of companies amounted to 323.8 thous. tons, which is 23 % more than in 2017.

Monitoring of emissions into the atmosphere includes pollutants such as nitrogen oxides, sulfur oxides, carbon monoxide, fly ash.

Following the results of 2018, the specific emission of pollutants amounted to 10.2 g/kWh, which is 7 % higher than 2017 figure. As regards “Generation” sector, specific emissions of nitrogen oxides were reduced owing to maintenance activities after installation of low-emission burners, which led to a decrease in the concentration of nitrogen oxides in flue gases to 650 mg / nm3 at some power units. However, specific emissions of sulfur dioxide increased for a variety objective reasons.

The main reasons for an increase in specific emissions of SO2:

  • an increase of sulfur content in coal at “SDPP-1” LLP and “SDPP-2” JSC from 0.48 % in 2017 to 0.57 % in 2018;
  • firing of residual coal at CHP-1 of “Almaty Power Plants” JSC in connection with liquidation of coal warehouse, as well as an increase in the consumption of fuel oil due to limitations in the supply of natural gas;
  • an increase in the share of output at fuel plants (from 88 % in 2017 to 91 % in 2018);
  • a decrease in the share of hydropower generation (from 11.3 % in 2017 to 8.6 % in 2018).

There is a positive trend towards reducing ash emissions after the commissioning of advanced electrostatic precipitators at all power units of ESDPP-1 and ESDPP-2, as well as wet ash trap emulsifiers at APP plants.

The volume of gross emissions across "Samruk-Energy" JSC group of companies

Total emissions of SA of “Samruk-Energy” JSC

Specific emissions of pollutants across "Samruk-Energy" JSC group of companies, g/kWh

 

Measurement unit

Volume

2016

2017

2018

NOx

thous. tons

54.7

66.4

76.11

SO2

 

132.9

160.4

202.4

Dust (ash)

 

28.0

34.4

41.4

POP

tons

VOC

tons

115.4

245.6

297.2

СО2

thous. tons

24 150.66

29 839.62

33 743.68

At the end of the year, an analysis was conducted of the effectiveness of existing programs to reduce specific emissions of pollutants and greenhouse gases; corrective measures were developed to improve energy efficiency: repair of burners, maintaining nominal temperatures and pressures of steam and industrial reheat, eliminating suction cups, etc.

The monetary value of significant fines and the total number of non-financial sanctions

State inspections for compliance with the requirements of environmental legislation were conducted in 2018. The amount of significant fines made 722 thousand tenge.

 

Payments, thous. tenge

2016

2017

2018

Significant fines. amount of money

10,587

12,596

721.5

The number of cases of non-financial sanctions application

0

0

0

Total expenses and investments in Environmental Protection broken down by types

In accordance with current legislation of the Republic of Kazakhstan, each 1st category company of “Samruk-Energy” JSC (“Ekibastuz SDPP-1” LLP, “Ekibastuz SDPP-2 Plant” JSC, “APP” JSC, “Aktobe CHP” JSC and “Bogatyr Komir” LLP) has an environmental protection action plan approved by the authorized body, the implementation of which is an obligatory condition for special nature management.

Expenses and investments in environmental protection across “Samruk-Energy” JSC group of companies amounted to 6.63 bln. tenge in 2018.

 

Expenses, thous. tenge

2016

2017

2018

Total

1,197,259.2

2,213,407.5

6,629,260.84

expenses associated with waste management and emissions purification, as well as the elimination of environmental damage

825,732.8

1,825,147

6,556,645.24

Expenses for prevention of environmental impact and environment management system

371,526.4

388,260

72,615.6

Biodiversity

The Company operations and proposed projects may affect local biological diversity. We strive to minimize any impact on the biosphere.

In this vein, 1,346.7 km of “AZhC” JSC power grids were reconstructed over a period of 2009–2018 by equipping them with self-supporting insulated wires (SIW) in order to prevent birds from electric shock.

To mitigate the impact on aquatic ecosystems, the modes of hydropower plant operations are agreed with city mayor administrations, water resources committees of the Ministry of Agriculture of the Republic of Kazakhstan, as well as with the management of Specially Protected Natural Areas (for example. in the case of “Moynak HPP” JSC).

“Moynak HPP” JSC cooperates with UNDP experts in Kazakhstan on the project for preservation of relic aspen grove, which is located downstream of the Charyn River in the territory of the Charyn National Park.