Energy Fears as Kyrgyz Winter Approaches

Kyrgyzstan faces uncertain times as winter approaches and electricity generation is so low that the government has been unable to honour a pledge to end power cuts.



Since August, the country has suffered rotating power cuts as part of an austerity programme to save water for a time , but the energy ministry promised these would end in October, well before temperatures started falling.



It is now late November, and the power cuts continue, albeit in changed form. Instead of blacking out whole areas for hours at a time, they are designed to kick in if a district gets through the “quota” of electricity assigned to it.



Matters came to a head on November 24 when President Kurmanbek Bakiev sacked the minister for industry, energy and fuel, Saparbek Balkibekov. Rumours of the minister’s impending departure had been circulating since early November, when it became apparent that the power was not, after all, going to be fully back on for the winter.



The new minister is Ilyas Davydov, formerly deputy director of the National Electricity Grid company. At a cabinet meeting the day he was appointed, November 24, he was instructed to reduce energy consumption through December.





The continuing electricity shortages pose significant political risks to Bakiev and his government, both because people might come out into the streets to express their anger, and because the country has to juggle its own plans to release water with the irrigation needs of neighbouring Kazakstan and Uzbekistan,



At one level, the lack of generating capacity has a simple explanation – for months now, the country’s major reservoir, Toktogul, has not been getting enough water from the rivers that feed it to allow it to fill up and keep the turbines spinning. The year started disastrously, too, with a harsh winter that caused a surge in electricity consumption and thus also water use that left the Kyrgyz power industry at a huge disadvantage.



However, that explanation seems inadequate to many of the analysts interviewed for this report, who say it is not just about inflow but also about the flow downstream – how the water has been stored and used over the past few years.



RESERVOIR LEVELS PLUMMET



Ninety per cent of the electricity that Kyrgyzstan produces comes from hydroelectric power stations, the five largest of which are at the Toktogul dam and further down the river Naryn, a major tributary of the Syr Darya, one of the two great Central Asian waterways. Water levels in the giant reservoir are thus of crucial importance.



The Toktogul power station is Central Asia’s largest, and was built between 1975 and 1982.



Changing climatic conditions over the last four years have resulted in a steady decline in the amount of water reaching the reservoir. As energy minister Balkibekov told IWPR shortly before his dismissal, the winter of late 2007 saw the lowest influx of water since Toktogul came into being. In 2008, the reservoir has received only 70 per cent of the average inflows of recent years, so that its volume is less than half what it was in 2005.



According to political analyst Syrgak Abdyldaev, who visited the reservoir recently, the result is a “near-crisis energy situation”.



“Kyrgyzstan is one step away from an energy crisis,” he said. “The water level is lower than the critical mark. So the question of whether we have light and heating this winter, and whether large and small businesses will grow, depends directly on whether the requisite level of water builds up in the reservoir.”



Raghuveer Sharma, team leader for the World Bank’s Central Asia energy programmes, uses more moderate phraseology to describe the cause of the current problems.



“The situation in Kyrgyzstan’s energy situation can be called extraordinary, but not a crisis. There’s been no catastrophe so far,” he said at an October 10 press conference. “What we’re witnessing is the river Naryn going through a cycle of drought which began in summer 2007. Kyrgyzstan went through a similar period in 1001, but seven years ago there wasn’t the kind of cold winter we had last year, when large amounts of accumulated water had to be released from the Toktogul reservoir to provide consumers with energy.”



As temperatures plummeted last winter, rising demand for electricity to keep the population warm literally drained Toktogul of its resources. In just four months, water levels in the reservoir dropped by an astonishing 30 metres.



When the weather improved in March, the authorities imposed limits on electricity use so as to conserve water. However, it was not until August that regular, planned power cuts lasting several hours at a time started, working on a rolling basis, district by district.



The plan was to end the power cuts before it got cold, the assumption being that enough water would have been saved to generate electricity until spring. Minister Balkibekov told the 24.kg news agency on October 27 that the blackouts were about to end. “The winter heating season starts from November 1, and there should be no interruptions in the power supply,” he said.



The blackouts duly ended on November 3, and the country had a full power supply – but only for the next ten days. On November 10, Balkibekov gave a press conference at which he said the power supply would be uninterrupted "if we use electricity only for lighting and household devices, and not for heating”.



By November 15, the authorities were assigning a notional ration of electricity to each district, and imposing cuts once this quota was exceeded.



Talant Raimjanov of the Severelektro power company announced that those districts of the capital Bishkek that continued using ignoring the set quotas would find themselves in the dark at nighttime. As during earlier power cuts, hospitals and other essential services are not affected.



POOR MANAGEMENT, OR WORSE



However, critics say it is not good enough to blame unusual natural conditions and thriftless consumers.



Some analysts say the power industry has suffered from misguided policies, while others go as far as alleging serious corruption.



World Bank expert Sharma says the situation is the result “not only of a period of water shortage, but also of poor management of the sector, or rather of the water resources that Kyrgyz energy depends on”.



He believes that water-saving measures should have begun between September and November of last year.



“The energy sector has been running on air since 1998. There have been no reforms, the state hasn’t supported it [the sector] financially, yet charges remained unchanged for a long time while energy production costs went up and the price of gas and coal rose,” he said. “In other words, the problems in the sector have been building over the last ten years and now we’re seeing the culmination.”



The government’s longer-term solution has always been privatisation.



President Bakiev reiterated his commitment to selling off the power sector in an October 17 speech to parliament, but the process is effectively stalled – not least because of wide-scale suspicions in Kyrgyzstan that privatisation would result in a hike in electricity charges for consumers without any increase in efficiency.



In the view of political analyst Nur Omarov, “Privatisation won’t solve the problems. Any investor who buys into this sector is going to try to recoup his money as quickly as possible. He’ll raise charges and re-sell [energy to foreign buyers]. That will cause immense unhappiness among ordinary people.”



However, questions about the way the hydroelectric system is run go deeper than just management issues. There are persistent rumours that water has been released and sold on the quiet to neighbouring states.



“I think there’s been squandering and possible theft going on,” said Abdyldaev, who questions whether the disappearance of nearly half the water in the Toktogul reservoir over the last four years is entirely the work of nature.



“Where’s it gone? It begins to become apparent – and you don’t have to be an energy specialist to get it – that the water has simply been siphoned off. Now, if it has been siphoned off, that means it’s been paid for. Then the question arises of how much money reached the [government] budget, and how much went into certain people’s pockets,” he said.



Abdyldaev is not alone – rumours that water has been drawn off and sold to other countries have been circulating for some time, and were cited in an International Crisis Group report from August.



ECONOMIC PERFORMANCE HIT



Even before the cold weather really takes hold, the power cuts are wreaking havoc on people’s lives, and on the economy as a whole.



Anarbek Kudaykulov owns a bakery in Bishkek and says his business is now in dire straits.



“I’m practically ruined because of the rolling blackouts,” he said. “There have been many times when I’ve made the dough mixture to bake buns and the lack of electricity has meant it’s gone to waste. I took out a loan a year ago and things were picking up steadily. But I’ve suffered badly from the lack of power. I have to pay interest and every month I just can’t work out where I can get the money.”



Madina Japarkulova’s sewing business has suffered similarly. “We’re now working at 30 per cent of last year’s capacity,” she said. “Our business parters are cross with us because we’re falling down on delivery agreements. We don’t know how we can repay our loans.”



Like many residents, Japarkulova asked, “How is it that a country so rich in water resources has got to a point where the electricity is switched off for six to eight hours a day?”



According to Abdyldaev, all businesses from the largest to the smallest are losing out massively.



“All manufacturing depends on electricity, so everyone has suffered,” he said. “The rolling power cuts are increasing the level of discontent among all social strata, and there are more and more unhappy people.”



President Bakiev and his government raised hopes by pledging that electricity would be available this winter, and since this is manifestly not going to happen it makes people even angrier.



“A social explosion is in the offing. It all depends on who organises the protesting masses. If it’s the opposition, nothing will come of it…. The trade union movement should become the main engine for protecting people’s rights,” said Omarov.



The fall in production has already led economic development minister Akylbek Japarov to warn of a shortfall in tax revenues this year. At a November 11 press conference, he added that economic growth for 2008 was estimated at 6.9 per cent, three percentage points down on what it would have been with a constant electricity supply.



KYRGYZ STRUGGLE TO COPE WITH COMPETING DEMANDS



Kyrgyzstan’s options are made even more limited by the fact that the way it uses its water is of vital concern to two big neighbours, Kazakstan and Uzbekistan, both of which depend on water from the Syr Darya river which flows from the Toktogul for their irrigated agriculture.



Both these states complain that Kyrgyzstan runs off too much water to generate power in the colder months, causing flooding in their fields, and then leaves them short of this precious resources when they need it most, in spring and summer. For their part, the Kyrgyz are unhappy that they have to curtail energy generation and pay for the upkeep of water management systems, and get nothing in return except natural gas and other fuels for which they have to pay nearly the standard world price.



In July, the Uzbek agriculture and water minister, Shavkat Hamroev, accused Kyrgyzstan of letting too much water out of the Toktogul dam to generate power in winter 2007-08, thus creating a shortage in the warmer months when his own country’s farmers need to irrigate their crops. A Kyrgyz power company denied the charge and said water release levels were the same as usual.



However, this kind of dispute illustrates the political tensions that result from the very different interests of upstream countries like Kyrgyzstan and Tajikistan, which want hydroelectricity in winter, and the downstream ones – Uzbekistan, Kazakstan and Turkmenistan – which have few energy problems with their rich oil and gas resources but a great need for water given their arid terrain.



In September, it looked like the Central Asian states were at last about to overcome this problem, which has plagued their relations since they went their separate ways in 1991 and the old Soviet system where fuel and water were exchanged free of charge broke down.



At a meeting of the Eurasian Economic Community, EurAsEC, in Bishkek, a verbal agreement was reached on using the region’s water and energy resources to mutual advantage, and sharing out the costs. But the finalised agreement has not been approved, because of Uzbekistan’s reluctance to sign up to it. The Uzbeks, who have traditionally pursued isolationist policies and prefer to deal with their neighbours one-on-one, have since announced that they are leaving EurAsEC.



Duyshen Mamatkanov, director of Kyrgyzstan’s Institute for Water and Energy, warns that things cannot go on as they are.



“Every country is going to suffer immense damage. The situation could lead to ‘cold wars’ – for example, Kyrgyzstan being forced to release less water in summer so as to save it up for winter, and Uzbekistan responding by cutting gas supplies,” he said. “That can only make the situation worse in the region.”



Mamatkanov favours the kind of compensation system that was envisaged in the EurAsEC draft agreement.



BLEAK OUTLOOK



Kyrgyzstan thus looks in poor shape to face up to the coming winter, even if turns out not to be quite as harsh as last year’s.



Valentin Bogatyrev, who heads Perspektiva, a local think-tank, warns that even with power cuts of eight to ten hours a day, water levels are going to be so low by spring 2009 that Kyrgyzstan will struggle to cope with the various competing pressures.



“We are not going to have the water to supply Uzbekistan with its irrigation needs, and if that happens there will be no other option but to halt the Toktogul power station. In other words we’ll reach a point when we can run it [power station] only when there’s a need to let water through for irrigation. This is about agreements with Tashkent that we cannot renege on,” Bogatyrev said in an interview for the Bishkek Press Club on November 25.



The only way of filling the gap, he said, was to rely more on Bishkek’s local power station, which burns natural gas, and other alternatives for domestic heating such as coal and firewood.



Such solutions are unlikely to be enough, and Energy Minister Davydov faces the unenviable task of mitigating the pain of further power outages.



He told the 24.kg news agency on November 26 that there would be no selective power cuts on New Year’s Eve. “At least, the country’s energy industry workers will make every effort not to darken the holidays for the population,” he added.



Gulnara Mambetalieva is an IWPR-trained journalist in Bishkek. Mirgul Akimova is the pseudonym of a reporter in Kyrgyzstan.