Scenario description

Four pathways/scenarios for future household energy consumption have been developed to explore the implications of taking additional measures, compared with a business-as-usual (BaU) case. Existing government plans to provide wider regional access to gas pipelines is an important measure that will certainly reduce coal consumption. However, greater efforts could be needed to realise a more effective, fuller (i.e. covering all regions) and fairer energy transition, such as energy efficiency intervention programmes for households and targeted aid to purchase alternative sources of heat. The scenarios are therefore designed to test the implications of such additional actions on energy consumption and emissions. The aim of the measures explored in these scenarios was primarily to reduce emissions of pollutants (and greenhouse gases) from the household sector. Each consecutive scenario contains measures additional to the previous one. The table below presents each scenario’s assumptions and the policy implications of those assumptions.

Scenarios For Future Household Energy Consumption In Kazakhstan

Scenarios For Future Household Energy Consumption In Kazakhstan
Scenarios For Future Household Energy Consumption In Kazakhstan
Scenarios For Future Household Energy Consumption In Kazakhstan

Scenario assumptions and policy implications

Scenario name

Scenario assumptions

Policy implications

Business-as-usual (BaU) scenario

Current shares of fuel use by house type remain unchanged to 2030.

Energy efficiency improvement rate same as in the past.

Existing policies

Fuel-switching scenario

Gas network expands to connect Nur-Sultan city, Akmola region and Karaganda region (as currently planned by the government with construction of the new Saryarka pipeline connecting northern and southern Kazakhstan). All households using coal in Nur-Sultan city, the Akmola region and the Karaganda region switch to natural gas by 2030.

In urban apartments in all regions, coal consumption is fully phased out by 2030 through the expansion of district heating systems.

Three regions remain without gas network access: North Kazakhstan, East Kazakhstan and Pavlodar. They will switch from coal stoves (47% efficiency) to improved coal boilers (75% efficiency) in rural houses.

Gas provides the remaining energy needed for heating in all regions (except North Kazakhstan, East Kazakhstan and Pavlodar) for all house types (except urban apartments).

  • Implementation of current government plans to extend the gas pipeline to Central and North Kazakhstan.
  • Tariff reforms for gas, electricity and district heating to create favourable investment conditions for the supply sector.
  • Gradual household coal ban in cities with gas pipeline network.
  • Subsidisation of connections to gas pipelines or gas boiler purchases for low-income and vulnerable households.
  • Launch of the Coal Stove Replacement Programme in regions without a gas pipeline.

    Urban planning policies should consider providing MABs in cities with district heating systems.

Fuel‑switching + energy efficiency (EE) scenario

In addition to the assumptions of previous scenario, improved energy efficiency of heating systems.

For district heating:

  • Emissions efficiency increases from the current 90% to 95% by installing thermostatic valves on radiators.
  • Automatic control efficiency increases from 90% to 98% by installing automatic heat control points (to regulate indoor temperature).
  • Procedures for operations and maintenance and energy monitoring during operation of the building will be put in place, raising energy monitoring efficiency from 90% to 97%.
  • Distribution efficiency rises from 90% to 100% by insulating heating pipes and valves.

For individual heating systems:

  • Emissions efficiency increases from 90% to 95%.
  • Procedures for operations and maintenance and EM during operation of the building will be in place, boosting EM efficiency from 90% to 97%.

Gas boiler efficiency increases from the current 75% to 85%.

Energy demand (in both district heating and individual heating systems) falls 15% by 2030 (from 2017 levels) thanks to energy efficiency measures in buildings (e.g. window replacements, wall insulation, etc.).

In addition to the measures above:

  • Launch of energy efficiency intervention programmes for households, such as retrofit grants, loans or tax incentives (targeted and non-targeted).
  • Strict compliance with building insulation standards to be ensured.

    Awareness-raising campaigns for energy efficiency.

Fuel-switching + EE + heat pumps scenario

Coal is fully phased out in all regions and all house types by 2030.

Heating system energy efficiency improvements are the same as in the “fuel switching + EE” scenario.

Heat pumps provide 25% of heating energy for all house types (except urban apartments) in all regions (except western regions with inexpensive and abundant gas, where heat pumps provide 15%). Heat pump heating efficiency is assumed to be 3, as the IEA-ETSAP (2012) estimates the heating efficiency of domestic heat pumps to be 2.5 to 3.6.

In regions without a gas network (North Kazakhstan, East Kazakhstan and Pavlodar), remaining energy for heating is provided by propane (85% boiler efficiency) for all house types (except urban apartments).

Energy demand for heating is assumed to decrease 15% owing to wall insulation and window replacements.

In addition to the measures above:

Targeted aid to purchase alternative sources of heat (e.g. heat pumps, solar thermal installations, propane).

Scenario results

Residential energy consumption for heating rises from 419 344 terajoules (TJ) in 2018 to 514 299 TJ in 2030 in the BaU scenario – an increase of 23%. In the fuel-switching scenario (i.e. from coal to gas), total residential energy consumption for heating amounts to 414 777 TJ in 2030, 19% lower than in the BaU scenario (because switching from coal stoves to gas boilers raises efficiency). Introducing energy efficiency measures further reduces residential energy consumption for heating to 270 574 TJ in 2030 in the fuel-switching + EE scenario, putting it 47% lower than the BaU level. In the fuel-switching + EE + heat pumps scenario, total residential energy consumption is 234 198 TJ, which is 54% below the BaU scenario. Thus, greater heating system energy efficiency, combined with higher generation efficiency, demonstrably results in substantially lower residential energy consumption. 

Kazakhstan residential energy consumption for heating, by scenario


Kazakhstan regional residential natural gas consumption for heating by scenario, 2018-2030


Kazakhstan regional residential coal consumption for heating by scenario, 2018-2030


Natural gas consumption increases in all scenarios, but by differing amounts. Without energy efficiency measures (in the fuel-switching scenario), natural gas consumption for heating rises from the current 80 082 TJ to 223 227 TJ in 2030. With energy efficiency measures (fuel-switching + EE scenario), only 147 163 TJ are required to satisfy heating demand in 2030. In the fuel-switching + EE + heat pumps scenario, even less gas is needed – just 112 893 TJ in 2030. The figure below depicts natural consumption for heating according to scenario (in bcm). Energy efficiency improvements can clearly reduce natural gas consumption, which, considering availability and cost uncertainties, is likely to benefit Kazakhstan.

Kazakhstan natural gas consumption for heating by scenario, 2018-2030


China became a major importer of gas in 2018, receiving 5.2 bcm from Kazakhstan (Kazenergy, 2019). That year, Kazakhstan signed a five-year contract to export 10 bcm of gas annually via the Central Asia-China gas pipeline system. After 2023, exports are expected to fall to 8 bcm per year until 2040 to accommodate lower production volumes. Because Kazakhstan’s commercial gas supplies are limited, it may be challenging to increase domestic gas consumption and also continue exporting.

Due to Kazakhstan’s low regulated gas prices, KazTransGas – the national operator for gas and gas supplies, and responsible for expansion – had financial losses in 2015, which were compensated for by exports to China (Kazenergy, 2019). Therefore, any future export reductions would likely create further financial losses for the company. The gas price for residential consumers was USD 49.24 per million cubic metres (/Mcm) (KZT 18 710/Mcm) in May 2019, down from USD 56.17/Mcm (KZT 18 440/Mcm) in May 2018 (Kazenergy, 2019).

According to Kazenergy (2019), Kazakhstan has one of the world’s lowest household expenditure levels for energy services (e.g. gas, electricity). At 3% of average household income in some regions, it is substantially lower than in Europe (22-23%), the Russian Federation (5-8%) and India (10‑12%). Gas prices must therefore rise to incentivise greater production and provide funds for additional investment in gas transportation and distribution infrastructure (Kazenergy, 2019). Higher tariffs are also needed to encourage greater energy efficiency.

However, although higher prices would allow for development of the domestic gas pipeline infrastructure, raising the cost of gas may also encourage households to continue relying on coal. Additional measures to regulate the transition from coal to gas are therefore necessary, such as a coal ban in the cities and support for low-income and vulnerable populations to cover energy expenditures. Strict control of compliance with coal bans in cities should be ensured by local authorities to eliminate illegal coal trading; the coal ban must be announced in advance; and a transitional period should be provided for households to switch to other options.

In the 1970s, excessive regulation of natural gas producers resulted in gas supply shortages in the United States. The first step in deregulating the gas market was adoption of the Natural Gas Policy Act in 1978 (Waheed and Malik, 2009). In 1985, a Federal Energy Regulatory Commission order was issued to begin deregulating the transmission industry, and in 1992 the Federal Energy Regulatory Commission passed an order that opened access to transmission lines and unbundled pipeline merchants and transportation functions. As a result, the United States now has the most deregulated gas market and prices are based on the supply­-demand balance (Waheed and Malik, 2009).

The United Kingdom followed the US example to successfully establish a fully deregulated, competitive and mature market by 1998. The UK spot market is mature, restructuring of the transmission segment is enforced by short-term contracts, and gas prices are determined by the supply-demand balance. During 1999–2005, UK gas prices rose at an average annual rate of 43% (Waheed and Malik, 2009).

In Australia as well, gas transmission has been undergoing substantial deregulation and restructuring since the 1990s (Waheed and Malik, 2009).

China has also taken steps towards gas market liberalisation in recent years. It has already achieved progress through some price deregulation and by allowing third-party access and unbundling infrastructure (IEA, 2019).

Energy efficiency measures reduce district heat consumption 38% more in 2030 in the fuel-switching + EE scenario than in the fuel-switching scenario, which implies reductions in supply-side emissions (i.e. from co‑generation and heat plants). Consumption of district heating in 2030 is estimated at 135 502 TJ in the fuel-switching scenario and 83 679 TJ in the fuel-switching + EE scenario.

The bulk of district heating (74%) is currently generated by large plants with capacities of more than 100 gigacalories per hour (Gcal/h), mainly co‑generation units and HOBs. HOBs in a few cities in western and southern Kazakhstan use gas (UNDP, 2007), but all the others rely on coal. Therefore, most district heating (65%) in 2014 was based on coal, the remaining on natural gas (32%) and oil (3%) (Kerimray, Kolyagin and Suleimenov, 2018). Unfortunately, more recent data are not available on heat generation according to fuel. Furthermore, as the supply side of power and heat generation falls outside the scope of this study, future reports need to research scenarios for supply-side emissions reductions.

Electricity consumption rises 21% from 2 451 TJ in 2017 to 2 977 TJ in 2030 under the BaU and fuel-switching scenarios. With energy efficiency measures in the fuel-switching + EE scenario, however, it decreases to 2 224 TJ – a reduction of 10% from 2017. Heat pump use in the fuel-switching + EE + heat pumps scenario increases electricity use by five times the current level, raising it to 12 841 TJ in 2030. This implies the need for additional electricity generation by power plants.

Pollution from coal-fired power plants in Kazakhstan is considerably higher than from those in Europe: by 900% for PM, by 20% for NOx and by 150% for SOx (Decree of the President of the Republic of Kazakhstan, 2013). Coal combustion at power plants could, however, be made more efficient and less emissions-intensive through the installation of emissions control technologies. Additionally, greater renewables-based generation would help meet future electricity demand without increasing pollution or emissions. 

In the BaU scenario, emissions levels rise from 2018 to 2030 for PM2.5 (+15%), CO (+16%), NOx (+36%), SOx (+16%), and NMVOC (+16%), while the alternative scenarios demonstrate that substantial reductions can be achieved. A simple switch from coal to gas and increased efficiency (through using coal boilers instead of coal stoves in three regions) reduce emissions of PM2.5 88% from the 2018 level by 2030, as well as CO (‑78%), NOx (‑41%), SOx (‑77%) and NMVOC (‑91%). Additional energy efficiency measures (fuel switching + EE) would further reduce emissions of PM2.5 by 91%, CO by 84%, NOx by 60%, SOx by 83% and NMVOC by 94%. Full coal phaseout and the use of heat pumps (fuel switching + EE + heat pumps) results in nearly zero pollutant emissions from residential heating.

Kazakhstan pollutant emissions from residential heating by scenario, 2018-2030


NOX emissions reductions in the alternative scenarios are smaller than for other pollutants (PM2.5, CO, SOx and NMVOC) because natural gas combustion generates some NOx emissions but virtually none of the other pollutants. In 2018, nearly all (99%) of PM2.5, CO, SOx and NMVOC emissions were generated from coal burning, whereas 88% of NOx emissions resulted from coal and the remainder from natural gas (12%).

Greenhouse gas emissions, including CO2, were also analysed in this study. Emissions of CO2 from household heating are estimated to rise from 25.5 mln t in 2018 to 29.8 mln t in 2030 in the BaU scenario. Meanwhile in the other scenarios CO2 emissions fall by 93%, 96% and 98% in fuel-switching, fuel -switching + EE, and fuel-switching + EE + heat pumps, respectively.

The figure below presents PM2.5 emissions by region and scenario. Due to high coal consumption, the Almaty, South Kazakhstan and East Kazakhstan regions had high PM2.5 emissions in the base year. Three remote regions (North Kazakhstan, East Kazakhstan and Pavlodar) would need additional measures (e.g. propane, heat pumps) to fully eliminate PM2.5 emissions from the residential sector. 

Kazakhstan PM2.5 emissions from residential heating, by scenario


Providing access to clean alternatives by constructing gas pipeline infrastructure is a key step in the household heating energy transition. The government plans to extend the gas pipeline to central regions (Nur-Sultan city first), but further extension to remote regions (North Kazakhstan, Pavlodar and East Kazakhstan) remains uncertain. Three of the alternative scenarios assume that rural detached households in all regions (except three) switch from coal to gas by 2030, implying that current government actions to construct and extend gas pipeline networks to the regions must be sustained and supported by additional measures.

However, even with gas pipeline availability, households may choose not to switch from coal to gas due to higher connection, boiler and gas costs. Additional policy measures are therefore needed to facilitate the switch from coal to gas in the areas supplied with gas. In urban areas, a gradual ban on coal sales to households would reduce air pollution in cities. For low-income and vulnerable households, specific support measures to subsidise the cost to connect to a gas pipeline or to purchase a gas boiler should be implemented.

Given the scarcity of domestic gas resources in Kazakhstan, raising energy efficiency is vital to the energy transition. Gas price deregulation is first necessary to stimulate investment and efficient gas use to ensure adequate future supplies. Given Kazakhstan’s contractual export obligations to China, the potential to import gas from the Russian Federation, Turkmenistan or Uzbekistan should be studied further.

Energy efficiency potential in buildings is very high in Kazakhstan, as substantial heat is lost though walls, windows and heating systems. Dilapidation of the housing stock, inefficient district heating systems and overheating all contribute to high energy consumption in the residential sector. However, administrative and economic barriers hamper energy efficiency improvements: low energy prices and a lack of metering result in low homeowner interest to pay for renovations and few incentives for building maintenance and refurbishment. Energy efficiency interventions such as retrofit grants, loans and tax incentives (targeted and non-targeted) could therefore produce substantial energy savings. Additional measures could include strict enforcement of building insulation standards, awareness-raising campaigns and heating tariff reforms.

Many countries have either banned or severely restricted the household use of coal to reduce emissions and minimise the impacts of air pollution.

  • Since Dublin banned coal use in 1990, studies have confirmed significant reductions in black smoke concentrations and fewer respiratory illness-related deaths.
  • Krakow prohibited the burning of coal and wood in 2019 to address severe air pollution, with fines imposed for breaking the ban (Radio Poland, 2019).

Beijing has implemented a programme to ban coal and subsidise electric heat pumps and electricity expenditures in 3 700 villages surrounding the city (Barrington-Leigh et al., 2019). 

The availability of relatively inexpensive coal from local mines and the lack of reliable and affordable supplies of cleaner alternatives continue to impede the energy transition. A survey on attitudes towards green energy in Kazakhstan identified the key factors preventing a switch to new sources of heat: insufficient knowledge regarding both the environmental and economic benefits of renewables; insufficient familiarity with available technologies; doubts about the economic viability of installation projects; and lack of understanding of the practical obstacles involved in implementing and maintaining renewable energy projects (Karatayev et al., 2016). Kazakhstan has only a handful of heat pump and solar water heater suppliers, and knowledge and awareness of alternative heat technologies is weak. To address this barrier, support measures for producers and suppliers of clean heating technologies should be adopted in tandem with efforts to provide clear, accessible information to consumers.

Even with construction of a gas pipeline to Central Kazakhstan, many remote locations in the North and East regions will still lack access to cleaner alternatives to coal. A Coal Stove Replacement Programme can be implemented in rural and remote regions, with subsidies offered for efficient boilers. The programme should require the exchange of old stoves as one of the subsidy conditions, with stove replacements being carefully monitored and programme effectiveness regularly evaluated. A Stove/Boiler Emissions and Efficiency Testing Laboratory could be established to test boiler models and develop eligibility criteria.

Many alternative heating technologies remain unaffordable for most households. For instance, the capital cost of a heat pump in 2013 ranged from EUR 1 100 per kilowatt thermal (/kWth) to EUR 1 700/kWth, depending on the type of heat pump (e.g. water-source electrically driven, ground-source electrically driven, air-source electrically driven), which is too expensive for many coal users, especially in rural areas. Kazakhstan’s per capita monthly household income in 2018 was only USD 400 (The Bureau of National Statistics, Agency for Strategic Planning and Reforms, 2019), with that of coal users generally lower yet. Additional targeted aid to purchase alternative sources of heat (e.g. heat pumps, liquefied petroleum gas [LPG]) is therefore needed, particularly in the three remote regions that remain without gas pipelines (Pavlodar, North Kazakhstan and East Kazakhstan). 

China’s Coal-to-Electricity and Coal-to-Natural Gas programmes

In 2016, Beijing announced an ambitious Coal-to-Power Programme and a parallel Coal-to-Natural Gas Programme (Barrington-Leigh et al., 2019). The programmes ban coal burning in certain areas and offer subsidised night-time electricity tariffs as well as subsidies to purchase and install heat pumps instead of traditional coal stoves (Barrington-Leigh et al., 2019).

Mongolia Clean Stoves Initiative

In 2011, Millennium Challenge Account–Mongolia (MCA-Mongolia) financed a stove-switching project in air pollution reduction zones in five districts of Ulaanbaatar (World Bank, 2013). The Mongolian Clean Air Fund (CAF) provided additional subsidies, and 97 877 stoves had been sold by 2012, reaching 55% of all households living in the central ger##anchor1## areas of Ulaanbaatar. The low-emission stoves were sold through dedicated distribution centres called “product centres” at 60-75% below the market price (not taking the cost of chimneys and heating wall connecters into account) (World Bank, 2013).

The goal of the Heat Roadmap Europe (HRE) project is to collect the scientific data needed to effectively support emissions reductions in Europe’s heating and cooling sector. The project has drawn several conclusions:

  • In the vast majority of cities, district heating is technically and economically more viable than individual heating systems. District heating can have zero emissions when renewable energy sources, heat pumps, excess industrial heat and co‑generation are used.
  • Greater energy efficiency on both the consumption and supply sides is essential to reduce emissions in the heating sector. Additional support is required to achieve energy efficiency goals to renew the existing building stock.
  • Thermal grid expansion is important for energy system transformation and for better integration of renewable energy sources and surplus heat.
  • Recovering excess heat from industry is the key to having an efficient and sustainable heating sector. These sources can cover at least 25% of district heating production.
  • District heating sources should be more varied and flexible and could include biomass boilers; various renewable energy sources; various types of excess heat; co‑generation and large-scale heat pumps.
  • Individual heat pumps will be a key technology in areas where district heating is not available. As heat pumps require substantial investment, often by building owners, the focus should be on policies and strategies that encourage a shift from individual boilers and inefficient electric heating to more efficient alternatives in suburban areas.
  • Thanks to the HRE project, natural gas consumption in Europe’s heating sector is expected to be 87% lower by 2050. The project’s strategies also make citizens significantly less vulnerable to high heat prices. 
Roadmap timeline

The roadmap for Kazakhstan’s residential sector to transition to cleaner and more energy-efficient heating was developed based on the insights of the preceding analysis. The roadmap’s measures cover a ten-year period and several activity categories: policy and strategy; data and statistics; technology; awareness-raising; and tariff reform.

Kazakhstan Roadmap For Household Transition To Cleaner More Efficient Energy Use