The resource-rich Central Asian country of Kazakhstan has adopted ambitious plans for a clean energy transition, underpinned by its vast renewable energy potential and its long-term decarbonization strategy. In recent years, some progress has been recorded in implementing these plans. However, the transition faces many challenges rooted in history and economics. Kazakhstan is Central Asia’s largest oil producer, and its domestic power system remains heavily dependent on fossil fuels. The central question is whether Kazakhstan can shift to cleaner energy while continuing to rely on oil and gas revenues and on institutions that have shaped its economy for decades.

Solar power plant in Almaty Region (Photo: Nikolai Bulykin / Wikimedia Commons [CC BY-SA 4.0])

Geographical distribution of Kazakhstan’s energy system

Kazakhstan’s geographical and historical background helps explain the structural realities of its current energy transition. Kazakhstan is the world’s largest landlocked country and the ninth-largest country by area, covering about 2.7 million square kilometers. Its population is just over 20 million, and its population density—around 7.4 to 7.6 people per square kilometer—is among the lowest in the world.

In addition, Kazakhstan’s population is concentrated in a limited number of urban centers. Settlements, production hubs and economic activities are dispersed over vast distances. Nearly 60% of the population lives in urban areas that are concentrated in several major cities, such as Almaty, Astana, and Shymkent.

Kazakhstan’s vast size and low population density increase the cost of building and maintaining an integrated national transport and infrastructure network. In practice, this means that roads, railways, transmission lines and other basic systems must connect a very extensive territory to a relatively small and unevenly distributed population. These same conditions help explain why the country’s energy and industrial activities did not concentrate in a single location, but instead developed separately in different regions.

Almaty and Astana are major economic centers, while oil-producing western Kazakhstan forms another economic hub. At the same time, over 90% of proven coal reserves are concentrated in the north and center of Kazakhstan, and metal-based industries—such as copper, lead and zinc—are clustered in Karaganda, East Kazakhstan, and Pavlodar.

History up to the Soviet era

The country’s energy profile is also the result of a long historical legacy. Kazakhstan has a layered history shaped by its vast territory, geography and shifts in political control. Geographically, much of present-day Kazakhstan is part of the Eurasian steppe, a vast grassland zone spanning Europe and Asia. Historically, many communities engaged in nomadic pastoralism (Note 1). By the 5th–4th centuries BCE, trade across what is now Kazakhstan already formed part of the Silk Road. Routes running through the south linked steppe communities and towns, stimulating commerce and cultural exchange.

Over the following centuries, political control over the steppe changed hands multiple times. From the 13th to the 15th century, much of the region was incorporated into the Mongol Empire and its successor states. As Mongol rule weakened due to plague, internal succession struggles and external attacks, the Kazakh Khanate (Note 2) emerged in the late 15th century as a new political force. However, disputes over succession undermined its authority. From the 18th century onward, this decline combined with the gradual expansion of the Russian Empire, bringing more of the Kazakh steppe under the rule of the Russian imperial regime, a process that intensified in the 19th century.

Subsequently, Kazakhstan’s vast territory, uneven settlement and dispersed resource base were reorganized under a new political-economic system, shaping the energy structures that followed.

The Soviet legacy in Kazakhstan’s energy system

In 1920, the Soviet Union established the Kirghiz Autonomous Republic, renamed it the Kazak Autonomous Soviet Socialist Republic in 1925, and in 1936 it transitioned to the Kazakh Soviet Socialist Republic as a union republic of the USSR. Politically, this meant that Kazakhstan was governed under the one-party Soviet system, in which decisions on administration, agriculture, industry and resource use were made through central planning rather than local self-government.

In the early Soviet period, this centrally planned system reshaped both society and the economy. Soviet rule forced the sedentarization of the previously nomadic population and expanded collectivized agriculture. At the same time, the Soviet government began systematically developing Kazakhstan’s mineral resources as part of its industrialization drive.

Lithuanian political prisoners working at a mine in Kazakhstan, undated (Photo: Europeana / Wikimedia Commons [CC BY 4.0])

From the 1920s onward, the government expanded coal, copper and iron production and intensified gold and lead mining. It built new fossil fuel (Note 3) and mining industrial centers in places such as Karaganda in central Kazakhstan, the copper-producing areas of Balkhash and Jezkazgan, and Öskemen in the east. This development further reinforced the geographic dispersion of Kazakhstan’s energy and industrial economy, leaving major resource and industrial centers located in different parts of the country.

Large-scale coal mining in Ekibastuz in Pavlodar Region accelerated after the railway reached the area in 1953, and by the 1970s it had become the third-largest coal mining site in the Soviet Union. In this way, Kazakhstan’s energy development became a key source of fuel, minerals and industrial output for the broader Soviet economy.

This Soviet-led development left Kazakhstan with an economy centered on fossil fuels, mineral extraction and large-scale industrial networks. Coal remained at the heart of power generation, while oil and gas played major roles in fuel production. Industrial centers grew around resource deposits, and infrastructure was designed to serve production systems at the scale of the entire Soviet Union.

Independence and the start of the clean energy transition

Kazakhstan became independent following the collapse and dissolution of the Soviet Union in 1991. During the 1990s, the country remained heavily dependent on the Soviet-era economic structures it had inherited. Under President Nursultan Nazarbayev, the immediate priority was not renewable energy but the stabilization of the economy and securing state revenue from fossil fuels.

In the early 1990s, the government opened the oil sector to foreign investment, and in 1993 it reached an agreement with the U.S. oil major Chevron on developing the Tengiz oil field, one of the key energy deals of the post-independence period. According to estimates from 2001, more than 80% of cumulative foreign direct investment since 1993 had flowed into the oil sector.

Oil field in Zhanaozen (Photo: ekipaj / Shutterstock.com)

However, Kazakhstan’s energy system was starting to age. In 2024, the International Energy Agency (IEA) reported that the country’s coal-fired power plants were on average 55 years old. Meanwhile, growing global awareness of the threat of climate change and policies aimed at reducing fossil fuel use prompted Kazakhstan to reconsider its dependence on coal and oil.

Confronted with these issues, the government began to look for renewable alternatives. Analysts pointed out that Kazakhstan has significant renewable energy potential that could support a broader shift to cleaner energy. Taking its geographic conditions into account, estimates suggest wind potential of about 920 billion kWh per year, around 3,000 hours of sunshine annually, and hydropower potential of 62 billion kWh per year available.

Government deliberations led to a series of national policy commitments. The policy pathway toward clean energy began with the 2009 Law on Supporting the Use of Renewable Energy Sources, which established the basic legal framework for backing renewable power projects.

In 2012, the government adopted the Kazakhstan 2050 Strategy (Note 4), which set an ambitious target of generating half of the country’s electricity from alternative and renewable energy sources by 2050. The 2013 Concept for Transition to a Green Economy translated that vision into interim goals, targeting a 3% share for renewable energy by 2020, 10% by 2030, and 50% by 2050. Beyond energy, it addresses challenges related to water, agriculture, air pollution, and waste management.

Further steps toward clean energy

In 2019, the resignation of President Nursultan Nazarbayev and the inauguration of Kassym-Jomart Tokayev marked a second phase in the renewable energy transition. Under the rules of succession, then-Senate Speaker Tokayev became acting president and subsequently won the presidential election in June 2019. Tokayev expanded Nazarbayev’s renewable energy framework.

Parliament of Kazakhstan (Photo: Mazhilis of the Parliament of the Republic of Kazakhstan / Wikimedia Commons [CC BY 4.0])

In 2021, Kazakhstan adopted a carbon neutrality goal of net-zero carbon dioxide emissions by 2060. It also raised its 2030 renewable energy target from 10% to 15%. Separately, its Nationally Determined Contribution (NDC) submitted under the Paris Agreement process confirmed a target of reducing greenhouse gas emissions 15% below 1990 levels by 2030. Kazakhstan uses 1990 as its base year, a reference point commonly used in earlier UN climate frameworks, though the Paris Agreement does not require all countries to use the same base year.

At a more detailed level, policy progress is also visible. For example, with support from the United Nations Development Programme (UNDP), the government introduced a site-specific renewable energy auction mechanism in 2019. Instead of investors having to identify their own land, they bid for projects at pre-assessed sites, reducing uncertainty and preparation costs. Projects are also being pursued through state-linked financing: by 2024 the state-affiliated Damu Entrepreneurship Development Fund was reported to have supported 140 green projects nationwide. The government also amended the 2009 Law in 2024 to strengthen the legal environment for new projects.

Some results are evident. According to the government, in the first nine months of 2024, electricity generation from renewables in Kazakhstan increased by 18% compared with the same period in 2023, with renewables accounting for about 6.7% of the national energy mix. These figures show momentum, but they also highlight the size of the gap. To reach the 15% target by 2030, the pace of the transition will need to accelerate further.

International cooperation on renewable energy

Kazakhstan is building and expanding partnerships with actors at home and abroad. Foreign companies are increasing their investment in renewable energy projects. For example, the German firm Goldbeck Solar and Solarnet Investment are developing a large-scale solar power project in Karaganda Region in cooperation with the government.

Meeting between the chair of Samruk-Kazyna and the ADB president (Photo: Masato Kanda / Flickr [CC BY 4.0])

Regional institutions are also involved. In 2022, the European Bank for Reconstruction and Development (EBRD) supported a site-specific auction for a 150-megawatt wind power plant, and in 2024 the Asian Development Bank (ADB) launched a pre-feasibility study for hydropower projects, conducting initial assessments before moving to the tender stage.

Kazakhstan is also seeking to situate its transition within a broader regional framework. In April 2026, the Senate approved a trilateral agreement with Azerbaijan and Uzbekistan to deepen cooperation on renewable energy. The agreement aims to support the production, transmission and trade of green energy—including green hydrogen and green ammonia—and to improve cross-border power transmission. This framework is expected to strengthen the clean energy corridor in Central Asia and could, by connecting to the planned Black Sea submarine cable, make it possible to export green electricity to European markets.

Challenges in Kazakhstan’s renewable energy transition

As we have seen, Kazakhstan has planned and begun a shift from fossil fuels to renewable energy, but the transition is still at an early stage. As of 2025, about 85% of Kazakhstan’s power generation still comes from fossil fuels. Coal alone supplies more than 70% of the country’s electricity. Clearly, the energy sector is structurally tied to conventional fuels. According to the Extractive Industries Transparency Initiative (EITI) report, oil and gas accounted for 14.1% of GDP in 2021, and the extractive sector made up almost 43% of total tax revenue. A government report for 2025 also noted that raw material exports still represented 63.5% of total exports in 2024. In other words, fossil fuels are not only an energy source but also a major source of export revenue for Kazakhstan.

There are several structural reasons for the slow pace of the transition. For example, Kazakhstan’s dependence on hydrocarbons was institutionalized in the 1990s through long-term production sharing agreements with foreign oil companies and consortia such as Chevron, ExxonMobil, Eni, Shell, TotalEnergies, CNPC, Inpex, and Lukoil. These agreements brought investment and international support to the state amid the fiscal crisis of the post-independence period, but at the same time they locked in decades of reliance on oil revenues.

These structural issues are reinforced by governance and pricing problems. In 2014, Kazakhstan merged its energy and environmental bodies into a single Ministry of Energy, temporarily centralizing fossil fuels and renewables under one authority, but later reorganized responsibilities again, linking environmental mandates to a new ministry focused on resource extraction.

Underground coal mine in Pavlodar (Photo: primeminister.kz / Wikimedia Commons [CC BY 4.0])

Moreover, the main renewable energy targets have weak binding force. The 2009 Renewable Energy Law does not mandate annual actions; the 2013 Green Economy Concept is ambitious but not enforceable; and the 2021 carbon neutrality goal merely states a target without attaching legal penalties.

In addition, institutional restructuring and revenue structures have shaped the political economy of the energy sector, concentrating wealth and influence in a narrow elite and state-linked companies with strong political ties. Within this framework, renewables have not emerged as an independent alternative; instead, they have been incorporated into the same state-led system.

By 2012 this trend became even clearer, with the creation of Samruk-Green Energy as a subsidiary of Samruk-Energy under the state asset holding fund Samruk-Kazyna. Samruk-Kazyna manages major state-owned enterprises and strategic assets in sectors such as energy, transport and industry. This means that decisions on tariffs, grid access and investment continue to depend on institutions whose interests are tied to the dominance of fossil fuels.

Kazakhstan’s export infrastructure also reinforces its dependence on fossil fuels. The structure of oil exports shapes short-term incentives. The IEA reports that the country exports about 80% of its crude oil, with major buyers in Asia and Europe. Kazakhstan plans to supply 2.5 million tons of oil to Germany in 2026, up from over 1 million tons in 2023 and 2.1 million tons in 2025. This indicates that oil exports remain a strategic priority and a key driver of the energy economy. As a result, a dual reality emerges: Kazakhstan is building renewable energy projects while simultaneously deepening its oil ties with major external markets.

The IEA notes that Kazakhstan’s energy market still favors fossil fuels. Coal continues to appear cheaper than cleaner alternatives, making it difficult for renewables to compete in the power market. The IEA has also pointed out that energy prices are politically sensitive, making large-scale price reforms challenging.

Astana skyline (Photo: Susan / Flickr [CC BY-NC-SA 2.0])

The future of Kazakhstan’s renewable energy transition

The prospects for a more substantial transition depend on whether Kazakhstan can seize upcoming institutional turning points to change the terms of its energy model. Several of the production sharing agreements for key oil and gas projects signed in the 1990s are approaching expiry. One potential turning point may come when the state reviews the long-term field agreements for the Tengiz, Karachaganak and Kashagan oil fields. In 2025, Reuters reported that President Tokayev had instructed the government to seek better terms in these contracts. These agreements have long been regarded as the core of the fossil fuel model that shaped Kazakhstan’s post-independence economy and politics. If they are renegotiated, the state may gain room to reduce its dependence on that legacy model.

The IEA has recommended broader measures that take energy prices into account. It calls for reducing dependence on coal, adding generation that can quickly respond to rising demand or falling supply, diversifying export routes to lessen reliance on a small number of channels, and gradually adjusting energy prices while protecting vulnerable households through compensation and subsidies.

Overall, the evidence suggests that Kazakhstan’s progress is not being held back by a lack of plans or renewable resources. What is holding it back is a political economy and historical legacy that still reward the continuation of fossil fuels. A meaningful transition will require not only expanding wind, solar and cross-border projects but also building more transparent institutions, adopting more binding rules, and mustering the political will to loosen the structures that made hydrocarbons central to state power in the first place.

Note 1: Nomadism refers to a way of life in which people move seasonally with their livestock, such as horses and sheep, instead of living in settled farming communities.

Note 2: The Silk Road refers to the network of long-distance trade routes linking China with Central Asia, the Middle East and parts of Europe, along which goods, people and cultures moved across Eurasia.

Note 3: The Kazakh Khanate was a nomadic political entity formed on the Central Asian steppe in the late 15th century, generally dated to 1465–1466 and associated with the leadership of Kerei Khan and Janibek Khan. It emerged after Kazakh groups separated from the Uzbek Khanate and later came to control much of the steppe east of the Caspian Sea and north of the Aral Sea. It is widely seen as an important historical foundation for Kazakh statehood and national identity.

Note 4: Fossil fuels are natural, non-renewable energy sources—mainly coal, oil and natural gas. When burned, they release carbon dioxide and other greenhouse gases, making them a primary cause of climate change and air pollution.

Writer: Mohammad Istiaq Jawad

Graphics: Sara Matsumoto

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