Mongolia has enormous potential for the development of renewable energy. After all, it is a country the size of Western Europe, with a population of only three million but with 250 days of sunshine per annum. It is also on the doorstep of both China and Russia. To date, though, development has been faltering. With abundant coal, and many more mineral resources besides, the investment and (subsidization) associated with renewables has been far from the priority of the government of Mongolia. Yet, according to the Asia Nikkei, Mongolia capacity nearly doubled in 2017, albeit from a low base. Here, we consider solar, wind and hydroelectricity capacity and how this could meaningfully help to diversify the Mongolian economy.
- Solar
In 2017, Mongolia installed its first large scale solar power plant in Darkhan. A project by Solar Power International, it has a capacity of 10MW, and was built in conjunction with Sharp Corporation and Shigemitsu Shoji of Japan. A project of this scale- though small when compared with many developed markets- has the capacity to provide clean energy for 20,000 households. This plant is reportedly able to withstand conditions of -40 degrees Celsius. Consequently, if replicable in other large projects, there is enormous potential in Mongolia. Indeed, reconciling very cold temperatures in winter with abundant sunlight was a challenge to overcome, which seems now to have successfully been accomplished.
- Wind
In October 2017, a major wind power project was launched three months ahead of schedule in Mongolia. The 50MW Tsetsii facility, is understood to be the first dollar denominated project financed by the Japanese International Cooperation Agency (JICA), through its private sector investment finance scheme. Whilst this is a significant project in the context of Mongolia, SB Energy has also expressed its hope it will be only one part in its overall Asian Super Grid. The Super Grid is a plan to establish an electrical power transmission network between China, South Korea, Russia and Japan, which to achieve will require active Mongolian participation.
- Hydro
Hydroelectricity has immense potential in Mongolia, however, it has experienced complications which have prevented delivery on scale. Mongolia wanted to use Chinese funding to build a 103-meter dam to help during peak times, and in winter, and to reduce overall imports of power from its neighbours. Due to complaints from Russia as to the perceived effect it could have on Lake Baikal, however, the Chinese withheld funds. The Egiin Dam had the capacity to deliver 315 megawatts of renewable power. At 2017, Forbes stated hydro amounted to only 3% of total generation in Mongolia, and so, the World Bank and others are providing to Mongolia to help assuage Russian concerns.
It is inevitable that with plenty of coal, Mongolia has relied on conventional sources of electricity both for domestic use as well as export. Nonetheless, it relies heavily on its neighbours, whilst possessing some of the most tantalising renewable energy opportunities anywhere in the world. With the support of major NGOs, and development organisations, there is every reason to suppose, Mongolia could transition to supply green energy to its own people, as well as to China. Though a medium term objective, it would be a vital step in helping to diversify the Mongolian economy and being at the vanguard of progress in building a more environmentally stable future.
At APIP, we’re readying ourselves for a very busy summer 2018. We’ve now completed the Olympic, continue presales on the Circus, and have a series of consultancy instructions. If you want to hear more about our services, why not book a meeting with one of our team? In the meantime, enjoy our latest quarterly economic update and the sunshine.
