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ENERGY SECTOR OF MONGOLIA,SUSTAINABLE DEVELOPMENT POLICY
Mr. Yeren-Ulzii,Senior-Officer,
Strategic Policy and Planning Department
Ulaanbaatar 2016-05-23
CONTENT
• Current state• Statistics• Challenges
• Legal Environment • State Policy on Energy 2015-2030• Regional Energy Outlook and Cooperation
Possibilities for Mongolia
3
ENERGY DEMAND AND SUPPLY IN MONGOLIA
Structure of Primary Energy Supply by Source(Unit : 1,000 TOE, %)
1990 1995 2000 2005 2010 2012
Coal2,365 1,695 1,798 1,895 2,324 6,884
63.1% 73.1% 70.2% 67.7% 65.6% 80.7%
Oil1,206 345 472 584 879 1,284
32.2% 14.9% 18.4% 20.9% 24.8% 15.1%
Hydro0.00 0.00 0.25 0.28 4.73 8.96
0.00% 0.00% 0.01% 0.01% 0.13% 0.11%
Traditional Fuels & Others175 277 293 321 337 348
4.7% 12.0% 11.4% 11.5% 9.5% 4.1%
Total3,746 2,317 2,564 2,800 3,545 8,526
100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Trend in Supply Share(200020052010 2012, %)
• Coal : 70.2 67.7 65.6 80.7
• Petroleum Products : 18.4 20.9 24.8 15.1
•Hydro : 0.010.01 0.13 0.11
•Traditional Fuels & Others : 11.4 11.5 9.5 4.1
4
Final Energy Demand by Energy Source (Unit : 1,000 TOE, %)
1990 1995 2000 2005 2010 2012
Coal826 201 217 148 326 482
25.8% 12.8% 12.3% 7.5% 12.5% 13.7%
Oil1,092 273 443 570 876 1,281
34.1% 17.4% 25.0% 28.9% 33.5% 36.5%
Electricity228 161 154 216 290 531
7.1% 10.3% 8.7% 10.9% 11.1% 15.1%
Heat 884 658 663 718 782 86927.6% 41.9% 37.4% 36.4% 29.9% 24.8%
Traditional Fuels & Others 174 277 293 321 337 3485.4% 17.7% 16.5% 16.3% 12.9% 9.9%
Total3,204 1,571 1,770 1,973 2,611 3,511
100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
4
Trend in Demand Share(200020052010 2012, %)
• Coal : 12.3 7.512.513.7
• Oil: 25.028.9 33.5 36.5
• Electricity : 8.710.9 11.1 15.1
• Heat: 37.436.4 29.9 24.8
• Traditional & Othrs : 16.516.3 12.9 9.9
ENERGY DEMAND AND SUPPLY IN MONGOLIA
5
2014 Unit Production Import Export Domestic Supply
Coal Million ton 25.2 0.0 14.3
60 % to China
8.3
Oil Million bbl 5.84 0.0 5.64
100% to China
0.0
Petroleum Productions Million ton 0.0
1.60Almost
90% from Russia
0.0 1.60
Electricity billion kWh 5.371.35
20% from Russia and
China
0.0 6.72
Energy production and imports/exports by source
ENERGY DEMAND AND SUPPLY IN MONGOLIA
CURRENT STATE OF POWER SECTOR
Western Power System, 32 MW
Eastern Power System, 63 MW
Ulaanbaatar
Altai-Uliastai Power System, 15 MW
Central Power System, 1115 MW
Power Systems
CURRENT STATE OF POWER SECTOR
538 576729 782 863 910 969 965
2001 2005 2010 2011 2012 2013 2014 2015
Peak Demand Growth in Central System, MW
/Excluding OT mine/
CHP/Coal/88%
Hydro2%
Diesel6%
Renewables6%
CHP/Coal/77.0%
Hydro0.6%Wind Farm
0.8%
Diesel0.6%
Import20.3%
Electricity Production + Import, 2015 by type of sources, total 7.1 billion.kWh,
Total Installed Capacity of Power Plants-1130 MW, by type
88
Recent Challenges:
• Capacity Shortage
CHALLENGES IN POWER SECTOR
79 73
98 98 97 9296
7483
98 9383
CHP 2 CHP 3 CHP 4 CHP Dar CHP Erd CES
Utilization of Installed Capacity in CES,%, /Winter load/
2014.12.2 2015.12.24
0
1000
2000
3000
4000
5000
6000
7000
8000
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Domestic Production and Import, GWh
Domestic Production Import
99
Recent Challenges:
• Aged equipment
5548
33
51
30
47
16
0
10
20
30
40
50
60
ДЦС-2 ДЦС-3 ДЦС-4 ДДЦС ЭДЦС ДоДЦС ДзДЦС
Year
Utilization of Existing Power Plants
3340
0
100
200
300
400
500
600
700
0
200
400
600
800
1000
1200
1400
5-10 жил 15-30 жил 35-50 жил 55-аас дээш
Leng
th, k
m
Aging of Distribution Network in UB
35, 10, 6 кВ-ын ЦДАШ 6, 10 кВ-ын ЦДКШ35/10-6, 6-10кВ-ын трансформатор
Num
ber o
f Tra
nsfo
rmat
ions
CHALLENGES IN POWER SECTOR
1010
Recent Challenges:
• Efficiency
34 4
56
78
10
14
0
2
4
6
8
10
12
14
16
Transmission and Distribution loss, %
CHALLENGES IN POWER SECTOR
11
LEGAL ENVIRONMENT, ITS RECENT AMENDMENTS
11
LAW ON ENERGY– Approved- 2001.02.01,– Last Amendment- 2015.06.19
• Enhance correlation between institution in power sector to prepare the sector into free market• Enhance legal environment for foreign investment• Added methane gas regulation matters
LAW ON RENEWABLE ENERGY– Approved - 2007.01.11,– Last Amendment- 2015.06.19
• Enhance financial situation of single buyer model of Power sector and ensure feeding tariffs in the Law• Enhance legal environment for investors in the sector
STATE POLICY ON ENERGY‒ Approved by parliament order of #63 - 2015.06.19– Purpose:
• Determine the power sector policy up to 2015• Determine expected result of policy by stages and create its creteria
ENERGY CONSERVATION LAW– Approved- 2015.12.26,
• Create institutional mechanism for energy conservation and legal environment of esco business
12
STATE POLICY ON ENERGY 2015-2030
- approved by Parliament in June 2015
STRUCTURE
• Current State andChallenges
• Vision, FundamentalPrinciples and PriorityAreas
• Strategic Goals and itsObjectives
• Implementation Stage,Criteria and Indicatorand Expected Results
SCOPE
• Primary Energy andFuel Supply
• Power Sector• Generation• Transmission and
distribution• Supply
• Privatization andRestructuring
• Human Resource
• Tariff
• Regional Cooperation
TIME FRAME
• Base year - 2015• Vison, Goals and
Objectives - 15 years/2015-2030/
• Implementation Stages- 2015-2030
• 1st stage: 2015-2023
• 2nd stage: 2024-2030
• Medium-term NationalEnergy Program – 8years
131313
STATE POLICY ON ENERGY
SAFETY
EFFICIENCY ENVIRONMENT
PRIORITY AREAS AND STRATEGIC GOALS
• Ensure energy safety and reliable supply
• Develop mutually beneficial cooperation with regional countries
• Develop a human resource
• Transfer the state dominated energy sector into private based competitive market
• Support innovation and advanced technology in energy sector, and implement conservation policy
• Increase the production share of renewables and reduce negative environmental impact from traditional power generation and greenhouse gas
“State Policy on Energy” 2015-2030
STATE POLICY ON ENERGY 2015-2030
1414
Following objectives have been set for Energyefficiency and Renewable development in the policydocument.
STATE POLICY ON ENERGY 2015-2030
1515
Objectives:In the frame of the fifth strategic goal for introducing
innovation, advanced technique and technologies;implementing energy conservation policy:• Fully transferring the control, supervision and data system
used in energy generation, transmission, distribution andsupply activities to a digital system and create an integratedsmart network;
• Introducing innovation, advanced techniques and technologiesin the energy sector;
• Reducing losses in energy generation, energy transmissionand distribution networks;
STATE POLICY ON ENERGY 2015-2030
1616
Objectives:In the frame of the fifth strategic goal for introducing
innovation, advanced technique and technologies;implementing energy conservation policy:• Create a nationwide legal environment for regulating energy
efficiency and saving’s measures to improve management atconsumer level
• Fully provide metering systems on mechanisms for computingenergy consumption.
STATE POLICY ON ENERGY 2015-2030
1717
ObjectivesIn the frame of the sixth strategic goal for scaling up of
energy generation by using renewable energy resources,reducing adverse environmental impacts of conventionalpower system and emission of greenhouse gases:• Conducting measurement campaigns assessing available
renewable energy resources (solar, wind, hydro, geothermaland biomass etc.) in Mongolia to create a database ofresource information; developing an organization to conductstudies on new technique, technologies and relevant analysis;
• Increasing the share of Renewable Energy in total installedenergy generating capacity of the energy sector up to 20% in2020 and 30% in 2030;
STATE POLICY ON ENERGY 2015-2030
1818
Objectives:In the frame of the sixth strategic goal for scaling up of
energy generation by using renewable energy resources,reducing adverse environmental impacts of conventionalpower system and emission of greenhouse gases:• Creating a favorable legal and tax environment to increase
renewable energy investments and establish a financingmechanism for promoting Renewable Energy based powergeneration;
• Utilizing solar, wind, biomass energy, liquid and gas fuel,geothermal energy, fuel cell and other new sources for powersupply of households, entities, remote towns, bag centers andindividual consumers; promoting them to supply the surplusenergy to the grid;
STATE POLICY ON ENERGY 2015-2030
19
STATE POLICY ON ENERGY 2015-2030
19
Objectives:In the frame of the sixth strategic goal for scaling up of
energy generation by using renewable energy resources,reducing adverse environmental impacts of conventionalpower system and emission of greenhouse gases:• Reducing environmental adverse impacts of energy
generation, transmission and distribution activities; reducingnegative impact on ecology;
STATE POLICY ON ENERGY 2015-2030
IMPLEMENTATION STAGES AND RESULTS
First stage /2015-2023/: period for establishing required capacity reserve marginof fuel and energy sources, establishing a foundation for renewable energydevelopment, accomplishing normative documents of the energy sector,introducing and localizing international standards; improving the legalenvironment.
Outcome of the first stage: to double the installed energy generating capacity ofMongolia, start using highly efficient equipment with high parameter (e.g.supercritical), create a condition for intensive development of Renewable Energyby creating not less than 10% of hydropower capacity in the total installedcapacity and having 10% of capacity reserve margin. A real cost reflecting tariffand pricing system will be created thus enable the energy sector to operate in afinancially autonomous way.
STATE POLICY ON ENERGY 2015-2030
IMPLEMENTATION STAGES AND RESULTS
Second stage /2024-2030/: Period for exporting electricity and sustainabledevelopment of Renewable Energy.
Outcome of the second stage: Energy generating capacity’s security reservemargin of Mongolia will have reached to no less than 20% and the share ofinstalled renewable energy capacity in the total installed energy generatingcapacity will be at 30%. Regions will be connected by high capacity high voltageelectricity transmission overhead lines and an integrated smart power systemwith complex unified information, control and supervision system. Distribution andsupply networks will be fully privatized and the energy sector will be operated bya regulated and competitive principle. Mongolia will be connected withneighboring countries through a high capacity direct current electricitytransmission lines and exporting electricity to abroad.
STATE POLICY ON ENERGY 2015-2030
PLANNED POWER PROJECTS
STATE POLICY ON ENERGY 2015-2030
EXPECTED RESULTS - CRITERIA
Indicators 2014 он/Base year/
1st stage/by 2023 /
2nd stage/by 2030/
Reserve Capacity for Electricity Generation -10% 10 % ≤ 20% ≤Reserve Capacity for Heat Generation in Cities 3% 10 %≤ 15 % ≤
Profit Share on Tariff Structure in Central Region -16.22 % 0% 5%Own Use of CHP’s 14.4 % 11.2% 9.14 %
Transmission & Distribution Loss /excluding Oyutolgoi/ 13.7% 10.8% 7.8%
Share of Renewables on total Installed Capacity for Domestic Supply 7.62% 20% 30%
Greenhouse Gas Emission per 1 Gcal Power Generation
0.52 ton СО2equivalent
0.49 ton СО2equivalent
0.47 ton СО2equivalent
Reduction of Building Heat Loss 0% 20% 40%
Technological Achievements that have to be utilized in Energy Sector CFB
Sub CriticalCoal Bed Methane,
Battery Energy Storage,
Pumped Storage
Super Critical,Ultra S/Critical,
Hydrogen,Concentrated
Solar Plant
24
SUBREGIONAL ENERGY OUTLOOK, COOPERATION POSSIBILITY FOR MONGOLIA
25
REGIONAL ENERGY COOPERATION POSSIBILITIES
ONGOING INNITIATIVES ON POWER GRID INTEGRATION AND ENERGY CONNECTIVITY IN ASIA & PACIFIC
26
Ази, номхон далайн бүсийн орнуудын хүрээнд эрчим хүчний нэгдсэн систем байгуулах санаачлагууд
2015 2030
126 159257 310
406506
69 103
RUSSIA
2015 2035
1708
2240
500
787
164
552400
754
CHINA
2015 2035
111 129185
152101
12986 92
JAPAN
2015 2035
67 7694 9343 3940 49
KOREA
2010
66 45
DPRKOREA
2015 2035
39
1 30 01 2
MONGOLIA
COAL OIL NATURAL GAS ELECTRICITYUnit: MtoeSource: ADB 2013
Currently NEAsian region use 1/5 of world energy supply
REGIONAL ENERGY COOPERATION POSSIBILITIESENERGY DEMAND OUTLOOK IN NORTH EAST ASIA
Coal Coal bed Methane Oil Oil shale Uranium
Renewables
Hydro Solar Wind
Proven 172Billion ton
5-10 trillionм3
332 million ton
788 billion ton 75000 ton 6200 MW 4.5-6.0
kW/meter2 1100 GW
Utilizationin 2015 24 mln ton - 1 mln ton - - 62.2
Gwh0.96GWh
152.6GWh
PRIMARY ENERGY RESOURCE STATISTICS
COAL URANIUM
HYDRO WIND SOLAR
28
Recourse Based Power Trade
Renewable based
• Rich Solar and Wind Rich Resources in Gobi Area /Southern part of Mongolia and Northern part of China/
• Green and Sustainable Energy
– Gobi Tec and Asia Super Grid Initiative
28Resource: “GOBITEC AND ASIAN SUPER GRID FOR RENEWABLE ENERGIES IN NORTHEAST ASIA” Report 2014
REGIONAL COOPERATION INITIATIVES ON ENERGY
REGIONAL COOPERATION INITIATIVES ON ENERGY
29
– Gobi Tec and Asia Super Grid Initiative
29Resource: “GOBITEC AND ASIAN SUPER GRID FOR RENEWABLE ENERGIES IN NORTHEAST ASIA” Report 2014
THANK YOU