Post-crisis support to the government’s reform initiatives: coal phase-out, gas infrastructure and just transition in Kazakhstan

The UNDP aimed to support the efforts of the Kazakhstan Government with the analysis of the socio-economic risks and benefits of country decarbonization with a coal phase-out and the possibility of bridging this process with the expansion of gas generation through a just transition lens. ESMIA was selected to quantify the risks and benefits of expanded access to network gas (including gas infrastructure in the process of decarbonization) as well as the impact of reduced coal production and consumption on different sectors of the economy and industrial competitiveness of the country (Report). ESMIA was also tasked with investigating the potential impacts on the poor and vulnerable, people in rural areas, jobs, and living standards. ESMIA developed a customized model to project the impact of coal-to-gas transition on gas and electricity prices under different price regulations, quantified the impact on residential bills and energy burden by income deciles in different regions. ESMIA estimated annual subsidies required to support residential consumers in switching from coal to gas (capital investment), as well as in payment of their energy bills, to keep energy poverty under a defined threshold. The project was focused on providing development recommendations for the mid-term Road Map 2030 for phasing out coal with an Action Plan for just transition, including recommendations for a pilot city with a coal-based economy in Kazakhstan. This was done in accordance with the provisions included in the draft Carbon Neutral Development Strategy 2060. The project was performed in collaboration with a team of national experts, and relied on hybrid model TIMES-CGE Kazakhstan, and other socio-economic modelling and analysis tools.