Integrated Energy-Water Resources Management for Green Industries

The Case of Mongolia

August 2014

Prepared by

Professor Steve Evans

University of Cambridge

Contents

Summary .................................................................................................................................... i

1. Introduction…………………………………………………………………………………1

2. Research Aim and Scope ....................................................................................................... 2

2.1 Research aim .................................................................................................................... 2

2.2 Research Scope in the Aspect of Demand and Supply .................................................... 2

2.3 Research Scope and Key Terms ...................................................................................... 3

3. Main Challenges of Energy and Water in Ulaanbaatar ......................................................... 6

3.1 Challenges from Urbanization ......................................................................................... 6

3.1.1 Energy Supply in Ulaanbaatar .................................................................................. 6

3.1.2 Water Supply and Sanitation in Ulaanbaatar ............................................................ 6

3.2 Challenges in Textile Industry ......................................................................................... 7

3.3 Challenges in Housing and Construction Industry .......................................................... 7

3.4 Resource Demand ............................................................................................................ 8

3.4.1 Textile Industry ......................................................................................................... 8

3.4.2 Housing and Construction Industry .......................................................................... 9

3.5 Importance of Holistic Strategy for Integrated Energy-Water Management ................. 11

3.5.1 Textile Industry ....................................................................................................... 12

3.5.2 Housing and Construction Industry ........................................................................ 13

4. Strategies for Energy and Water Innovation ........................................................................ 14

4.1 Area of Concern 1: Textile Industry .............................................................................. 14

4.2 Area of Concern 2: Housing Development and the Construction Industry ................... 16

4.3 Area of Concern 3: Technology and Infrastructure ....................................................... 18

4.4 Area of Concern 4: Data Collection and Monitoring ..................................................... 19

References ................................................................................................................................ 21

List of Tables

Table 1 Industrial composition of GDP by divisions................................................................. 3

Table 2 Average water consumption for different textile wet processes (l/kg) ......................... 8

Table 3 Water consumption per manufacturing processes (l/kg) .............................................. 9

Table 4 Balance of electricity (min kWh) .................................................................................. 9

Table 5 Balance of thermal energy (thousand Gkal) ............................................................... 10

Table 6 Access to water in Ulaanbaatar by percentage of population ..................................... 10

Table 7 Actual drinking water use ........................................................................................... 11

Table 8 Municipal water demand ............................................................................................ 11

List of Figures

Figure 1 Research scope for energy ........................................................................................... 2

Figure 2 Research scope for water ............................................................................................. 2

Figure 3 Sectoral composition to GDP Growth in Mongolia .................................................... 4

Figure 4 Mongolia Textile Industry Development .................................................................. 13

Figure 5 Mongolia Housing Industry Development ................................................................ 13

Figure 6 The Integrated Goals for the Targeted Industries ..................................................... 14

Figure 7 Consideration Points of Inside and Outside of Industrial Clusters............................ 15

Figure 8 Industrial Symbiosis: the Case of British Sugar ........................................................ 16

i

Summary

By 2050 global industrial output will quadruple in value. In industrialising countries this figure is likely to

be higher. Typical industrial activity consumes approximately 40% of an industrialising nation’s energy and

water and creates similar proportions of waste water and solid waste. It is clear that rapid industrialisation

can quickly exceed the supply system for many nations and for Mongolia this situation is made more likely

by the challenging climate, and by the rapidly urbanising citizens. Together with the common challenge that

early stage industrialisation is often energy intensive while adding little value, we conclude that Mongolia is

close to entering the ‘brown growth trap’.

The ‘brown growth trap’ commonly entails a slow rise up the value chain, with early and significant

demands on infrastructure and significant pollution, while delivering low return in economic value. The

Mongolian government has shown insight and leadership in setting its ambition for ‘green growth’ and this

report is intended to offer knowledge on how industry could play a key role in delivering green growth,

especially in Ulaanbaatar.

The report is based on decades of research and direct work with many industries. Taking these global

lessons about green growth we learn that:

1. Best Available Technology must be combined with Most Efficient Practice

2. Working together, best technology and practice can deliver up to 75% reduction in energy and water

usage in a single factory

3. Most Efficient Practice can only work when staff have the right skill and knowledge

4. Best Available Technology also requires excellent skills to maximise the return on investment

5. Most Efficient Practice also delivers improvement in process control and so improves product

quality and increases added value in the market

The research team spent time in Ulaanbaatar studying the energy-water system and its relationship to

industry. We learnt that:

1. There is insufficient data on the true water capacity

2. Industry energy and water demand is also poorly understood due to lack of reliable data

3. While the re-locating of specific industries away from the centre of Ulaanbaatar will reduce local

pollution it is not clear that it will reduce overall energy and water demand

4. There is strong government recognition of the need for co-ordination of policy across departments

Bringing global knowledge into the very specific Ulaanbaatar context we can conclude that Mongolia is at a

crossroads in industrial development, and that the ‘brown growth trap’ of slowly increasing added value

while rapidly increasing environmental loads would be a major problem for Ulaanbaatar but may happen

through lack of decisive action. We also conclude that ‘green growth’ is still possible for Ulaanbaatar (and,

through building those capacities, also true for wider Mongolia).

ii

Significant investment and development of industrial and utility infrastructure is already happening in

Ulaanbaatar. There is little room for delay if those investments are to support a green growth pathway.

Based on the need to quickly move onto a green growth pathway, we have focused our recommendations on

actions that can be implemented quickly, that provide a very quick return on any investment while also

developing the institutional capacity to deliver in the long term. In particular we propose that the

government focus its efforts on two industrial sectors that have the greatest potential for moving quickly

down the brown growth or green growth pathways. The wool, textile and leather industry has very

significant water usage with poor water waste. The industry is under-going a physical change and

investment and there is a rare opportunity to shape its future economic, environmental and social

performance. The construction industry is undergoing rapid growth and change, and its products will largely

fix the future energy and water performance of Ulaanbaatar for the next 40 years. The most successful

rapidly industrialised countries (such as Taiwan or South Korea) specifically supported their construction

industries early in their economic development due to their contribution to national capacity.

By improving the quality of engineering in both industries it is possible to rapidly increase added value

while reducing energy and water inputs. There is currently much waste of energy and water and improving

the skills of engineers and staff can deliver quick returns, especially if these industries can learn from the

best in the world.

Even with an increasingly efficient industry Ulaanbaatar faces a challenge in managing energy and water

supply and demand. We agree with many local experts on the need for integrated resource management,

where resources are considered as a system and managed as a whole. This includes the detail interactions

between water and energy for example, where more energy supply also increases water demand. Integrated

resource management must include a deep understanding of the challenges and opportunities that industry

place on resources. Integrated resource management cannot happen without data to make better decisions,

and many of our detail recommendations are concerned with improving data on energy and water supply and

demand as part of a planning tool.

Our broad recommendations for these two sectors and the government are therefore:

1. To collect data on current and predicted water and energy usage of the two sectors

2. To identify global best companies in each sector and establish relationships for rapid training of

Mongolian staff on reducing energy and water usage

3. For government to work across each sector in supporting industrial symbiosis (where resources are

shared or used twice among multiple companies in a cluster, and waste is used as a collective

resource)

4. For government to set ambitious goals for energy and water performance of all buildings based on

global knowledge of what is possible and local plans for building sector technical capacity to highest

quality levels

There is good evidence that these recommendations can work, but they need active government effort and

strong co-ordination across government and with industry itself. Mongolia, and Ulaanbaatar, have shown

great leadership in setting out its ambitions for green growth; the government knows why it must do so and

what it wants to achieve. The next challenge is learning how to achieve it in practical detail.

1

1. Introduction

Mongolia’s recent history has been dominated by the phenomenon of rapid urbanization. By the end

of 2013, 2 million people of the country’s 2.8 million population (around 70%) were living in urban areas.

The majority of the urban population is located in Ulaanbaatar, the population of which is estimated at 1.28

million people (45% of total population and 64.2% of the urban population). These figures are expected to

grow so that urban population and population in Ulaanbaatar will rise to 2.72 million (80% of total

population) and 1.85 million (54.6 % of total population and 68% of urban population) by 2030 (UNDESA,

2014) each. The urban growth rate in Mongolia has, in recent years, exceeded the Asia-Pacific’s overall rate

of urban growth.

While most of the urban population live in Ulaanbaatar, the remaining urban population is growing

in relative proportion, and resides in small to medium sized provincial towns known as Aimag centres.1

Distances between the 21 Aimag centres are vast, yet the centres themselves have only small populations,

usually less than 20,000. These factors in combination limit their ability to attract and sustain business.

Recent urbanization has resulted in heightened demand from both domestic and commercial users for

urban services like energy and water supply, water sanitation, employment and public health. Energy and

water are prerequisite resources for both residential and economic activity. However, over recent decades,

population density in Ulaanbaatar has been increasing, and along with it demand, and the mining industry, a

recent driver of national economic growth, is highly energy and water-intensive. As a result, energy and

water consumption in Mongolia, including its urban areas, has been rapidly increasing.

From 2000 to 2010, final energy consumption in industry and residential use increased from 31% to

34%, and 28% to 30% respectively. In the case of water use, although water withdrawal for domestic use

reduced from 19.9% to 12.9%, its use in industry jumped from 27.1% to 43.2%, in between 1993 and 2009

(UNESCAP, 2013).

Moreover, the energy and water infrastructure in Mongolia is old and faces problems of efficiency.

About 80% of all Mongolian electricity is generated by the Central Electricity System (CES), which consists

of five coal-burning thermal power plants. However, all operating power plants were built between 1960s

and 1980s, and the energy losses from transmission and distribution are significant (Ministry of Mineral

Resources and Energy of Mongolia, 2011). Centralized systems for water supply in Ulaanbaatar and other

Aimags were also constructed in the 1980s, and have not been retrofitted (Batimaa, 2011).

All water resources in Mongolia are derived from surface water (63.5%) and ground water (36.5%)

(Hiroshi, 2011). However, because of extreme weather conditions caused by climate change and other

environmental problems, the number of dried up streams, lakes and springs since 2003 have risen by 30%

(UN WATER, 2013). While water may be abundant in certain areas of the country, the infrastructure to

capture, store and distribute it is limited. Where water is in most demand, natural sources are less accessible.

Increasingly it is becoming more urgent to manage water effectively, including its re-use.

Given the trends in the Mongolian economy and the urban energy and water systems, it is important

to take a holistic perspective for integrating green growth and green urban development in energy and water,

and in their interaction. Mongolia needs to simultaneously meet the increasing demands on energy and water

services in urban areas, whilst Mongolian industry addresses adjustment to more efficient system, in order to

enhance its international competitiveness.

To address both needs of securing sustainable energy and water supply, and enhancing international

competitiveness of its industries, Mongolia now faces significant challenges for: (1) enhancing extensive

knowledge and expertise in energy-water resources; (2) developing holistic strategies for integrated energy-

1 The word “Aimag” refers to a first-level administrative province and there are 22 Aimag including Ulaanbaatar.

2

energy resources management; and finally (3) facilitating sustainable urban industries with improved

energy-water efficiency.

2. Research Aim and Scope

2.1 Research Aim This report has two main research goals: (1) to develop a conceptual framework on integrated resource

management (energy-water) for green industries in Mongolia and (2) to propose integrated strategies on

how to change the paradigm of integrated energy-water resource management to facilitate the development

of green business and industries in Mongolia.

In order to achieve the research aims at:

1) identifying the current situation of energy-water resources under the current situation of rapid

urbanization in Mongolia;

2) examining the current and especially future consumption trend of energy-water resources in urban

industry in Mongolia; and

3) formulating and proposing policy options for decision-makers’ considerations to manage projected

future demand versus scarcity, in order to strengthen the desire for the country to move closer to a

green development model.

2.2 Research Scope in the Aspects of Demand and Supply In order to bring about effective and efficient energy-water resources management, comprehensive

demand and supply analysis is important. However, since the Mongolian government has already set up the

supply plan for energy (Fueg et al., 2011) and water, this report focuses on demand. In addition, this report

partly includes suggestions for the supply of energy and the supply of water. In particular, the energy supply

sides concern the alternative energy supply in an urban environment, and the water supply side deals with

water sanitation. See the Diagram 1.1 for a visual representation of the scope of the research.

Diagram 1.1: Scope of the research

1) Research scope for energy

Figure 1 Research scope for energy

2) Research scope for water

Figure 2 Research scope for water

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2.3 Research Scope and Key Terms There is a need to define the concept of ‘urban’ for this research. In Mongolia, the key urban area is

Ulaanbaatar. In addition to the capital city, there are a few other main centres. This research includes other

major Aimags along with Ulaanbaatar.

The term ‘construction industry’ in this research includes infrastructure construction, housing

development and building material manufacturing. We understand the current energy and water demand

situation of the construction industry is mainly based on Ulaanbaatar housing and infrastructure.

The term manufacturing cluster is used in in this report to describe a set of closely located industrial

units. More specifically, ‘industrial clusters’ is used as a term when the location of multiple manufacturers is

a deliberate act of policy or planning. Based on a vision grounded in Mongolia’s unique geographic location,

the Mongolian government has increasingly recognised the advantages of developing specific industrial

cluster initiatives (World Bank, 2009).

The Mongolian economy has been driven by mining and quarrying industries. However, this high

dependence on mineral-based revenues entails serious sustainability challenges for Mongolian economy,

since world price fluctuations for mineral-based commodities can destabilize the nation’s economy.

Moreover, intensive mining activities demand not only intensive energy-water resources but also have

severe environmental impacts (East Asia Forum, 2014). In this context, Mongolia’s recent economic growth

which was driven by the robust performance of the non-mineral sector has significant meaning in terms of

showing Mongolia’s effort for creating balance with conventional industrial structures.

Despite slower growth of mineral exports, steady growth of the non-mineral sector has made

Mongolia a rapidly growing economy, and the main drivers of this economic growth have been agriculture,

manufacturing, transportation, and construction. While the mining and quarrying sector has declined its

GDP composition from 2006, agriculture, manufacturing, and transportation has shown constant growth.

The textile industry is the second largest manufacturing industry, which is only surpassed by food products

and beverages. From 2006 to 2009, the percentage share of textile industry has risen from 4.8% to 7.2%

(NSO, 2009) (noting that the textile industry in Mongolia makes few textiles and is dominated by other

materials such as wool).

Table 1 Industrial composition of GDP by divisions

Industry Division (GDP) 2006 2007 2008 2009

Agriculture, forestry, hunting, and fishing 19.5 20.5 21.6 21.2

Mining & quarrying 30.0 29.5 22.5 22.5

Manufacturing 5.5 6.1 6.2 5.9

Electricity, gas, and water supply 2.8 2.5 2.4 2.6

Construction 2.1 2.2 1.9 1.2

Wholesales & retail trade, repair of motor vehicle,

motocycle & personal household good

14.1 13.6 15.0 12.2

Hotels & restaurants 0.8 0.7 0.8 0.7

Transport, storage & communication 9.9 10.0 10.0 11.2

Financial intermediation 2.9 3.3 3.5 3.0

Real estate, renting & other business activities 6.8 5.9 8.1 9.1

Public administration & defense, compulsory social

security

3.2 3.1 4.2 4.5

Education 3.3 3.7 4.5 4.9

Health & social work 1.5 1.6 2.1 2.2

Other community, social & personal service

activities

1.0 1.0 1.2 1.4

FISIM -3.3 -3.7 -3.9 -2.6

4

Table resource: Mongolian National Statistical Yearbook 2009 (National Statistical Office)

Construction industry has also shown strong performance from 2010 (see figure 3 below). During

2012, the construction industry grew at 25.6 percent, mainly because of continuous public infrastructure

investment, and increased public construction activities, including facilities such as schools and hospitals

(World Bank 2013).

.

Figure 3 Sectoral composition to GDP Growth in Mongolia

From the statistical data above, it is evident that agriculture, transportation, textile and

construction industries are gaining greater importance as sources of potential industrial diversification,

thereby offsetting current high dependence on exports of mineral products. However these sectors face

challenges in their efficiency and environmental impact. In the case of greening transportation industry,

highly developed technology is lacking, especially for reducing carbon emission (NSO, 2009).2

Compared to agriculture and transportation, the textile and construction industries provide higher

strategic feasibility and opportunity for more sustainable outcomes. The textile and construction industries

are already developed in Ulaanbaatar and its industrial clusters. In terms of enhancing energy-water use

efficiency, the Ulaanbaatar City government have already examined the technical feasibility of rehabilitation

measures in public and private apartment buildings (Ulaanbaatar City Government, 2013). In the textile

industry, it is not necessary to possess high technology for examining energy and water losses and

improving energy-water efficiency in textile processing facilities (Ozturk, 2005; Shaikh, 2009).

The wool, textile and leather industry has very significant water usage with poor water waste. The

industry is under-going a physical change and investment and there is a rare opportunity to shape its future

economic, environmental and social performance. The construction industry is undergoing rapid growth and

change, and its products will largely fix the future energy and water performance of Ulaanbaatar for the next

40 years. The most successful rapidly industrialised countries (such as Taiwan or South Korea) specifically

supported their construction industries early in their economic development due to their contribution to

national capacity.

2 In 2009, imports of auto, air and water transport vehicles and their spare parts accounted for 19.8% of total Mongolian imports.

(This represented the third largest imports group.)

5

By improving the quality of engineering in both industries it is possible to rapidly increase added

value while reducing energy and water inputs. There is currently much waste of energy and water and

improving the skills of engineers and staff can deliver quick returns, especially if these industries can learn

from the best in the world. In order to advance the development of a conceptual framework toward the

greening of industries, therefore, this paper focuses on the textile and construction industries as main targets

with a particular emphasis on: (1) recent strong economic performance in the industries; and (2) strategic

feasibility for greening these industries. This research paper, as input to a national workshop, especially

focuses on policy options.

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3. Main Challenges of Energy and Water in Ulaanbaatar

3.1 Challenges from Urbanization 3.1.1. Energy Supply in Ulaanbaatar

Most housing and office buildings in Ulaanbaatar are low efficiency in terms of energy and water

(Koch-Mathian, 2013). Although Central Electricity System (CES) provides most of electricity and heat to

Ulaanbaatar, these coal-burning power plants are considered largely outdated and inefficient. As winter

average temperature in Mongolia is -20°C, CES cannot meet energy demands of electricity and heating over

the winter season, so that most households depend on low efficiency coal-burning stoves (Ariuntungalag et

al., 2003). According to a study by Allen (2013), household burning of coal is the main cause of

Ulaanbaatar’s air pollution during the winter, and causes many public health problems in Ulaanbaatar. The

cause of one in 10 deaths in Ulaanbaatar can be attributed to air pollution.

In Ulaanbaatar, less than 50% of all housing are fitted with meters for electricity. The lack of energy

and water meter installation leads not only to inequality of taxation on energy and water, but also to shortage

of investment for energy and water in Ulaanbaatar (vanTrotsenburg et al., 2014). In addition Aimags lose up

to 50% of revenue due to the following reasons related to metering: (1) Low accuracy of their test equipment

for testing electricity meters and current transformers, (2) Low accuracy of the electricity meters, (3) Low

accuracy of the current transformers in the field, (4) Incorrectly connected meters in the field, and (5)

Misreading of the meter registers in the field.

With the international funder, Kreditanstalt für Wiederaufbau, a pilot study, ‘Automatic Meter Reading

System in the Central Energy System in Mongolia’, was conducted to improve the metering systems

including meters, interfaces, between meters and central station, and metering data collection facilities

(Bekker, 2005). Another recent project, ‘Energy Sector Project’, installed 119,075 meters and 23,762 boxes

of meters enabling the reduction of the billing collection days, breaches and wrong usage (vanTrotsenburg et

al., 2014). However, the improvement of the meter reading and billing system in Ulaanbaatar is still on-

going.

3.1.2. Water Supply and Sanitation in Ulaanbaatar

The population increase of Ulaanbaatar has also placed great strain on water resources. The main

water sources of Ulaanbaatar are four well fields along the Tuul River. USUG, the main water supplier in

Ulaanbaatar has 176 wells at 4 water sources, 3 boosting stations and 348 km water distribution pipes

(USUG, 2013). Nevertheless, it is estimated that a large volume of water from the city’s aquifers is obtained

outside the formal system (Jacopo, 2014).3

746,766 citizens who are living in Ulaanbaatar’s Ger districts, have difficulty to get direct access to

water and sanitation. Their domestic water use hardly reaches 10 liters per day which are far below the 50 to

100 liters per day that the World Health Organization (WHO) identifies as the threshold to ensure basic

needs are met). These gaps in coverage are compounded by gaps in revenue from service delivery and a

corresponding lack of investment in water supply systems.

3 According to USUG, some 160,000 cubic meters a day of water are distributed by its formal system for domestic use. However,

there another 130,000 cubic meters a day a drained from the aquifer by private wells run by industries and individuals.

7

Currently public water supplies are available for 77% of Ulaanbaatar population, but sewerage for sanitation

is available only for 35% of the city’s population. This lack of sanitation facilities has resulted in increased

water pollution of the Tuul River, with impacts on public health in the city (Hiroshi, 2011). Moreover, many

of the sewage treatment plants and collection systems have been built before 1995, and face operation and

maintenance problems. As a result, wastewater is often simply discharged into a river or discharged directly

onto the ground. Collection networks are in equally poor condition. Consequently, raw sewage leaks from

buried pipes into the soil can potentially contaminate local groundwater. In Ger areas, sewage treatment is

generally non-existent, and most residents use unimproved open pit latrines or open field defecation, both of

which pose public health hazards.

As with water supply, a main challenge in wastewater treatment is that the public urban service

organizations are generally not allowed to set tariffs at a level sufficient to ensure full cost recovery.

Complicating the situation is the fact that full cost recovery in the wastewater sector is difficult to assess,

since services, connections and treatment systems vary among the Aimag centres. Aside from the tariff issue,

other important challenges include improving planning and construction of wastewater treatment plants and

collecting more data on the costs and benefits of constructing sewage collection networks to allow easier

assessment of the costs and benefits of wastewater treatment.

3.2 Challenges in Textile Industry

In Mongolia, the textile industry is one the key industries in terms of national revenue. Mongolia,

the second largest textile producing country, accounts for a quarter of world’s raw cashmere (Popescu,

2007). However, it is hard to find any integrated symbiosis of the industrial cluster for integrated urban

development. Nevertheless, the concept and practice for green urban development has much potential.

Additionally the Mongolian government and the Ulaanbaatar municipal government have limited practical

experience either in devising feasibility studies for energy and water demands of industry clusters or

designing industrial clusters.

According to the Ulaanbaatar city government and the Ulaanbaatar city Master Plan 2020, the city

has encouraged industry facilities located in Ulaanbaatar to move to outside of the city in order to reduce air

pollution. However, although the city made the decision to create an industry cluster around Ulaanbaatar, no

specific study for future energy and water demand has been conducted to date. Also, there remain further

opportunities for other industry clusters that should be fully considered, such as the cost of building roads,

energy supply systems, new water supplies, wastewater treatment facilities and the possibility of

infrastructure to facilitate commutes between Ulaanbaatar and the industry clusters.

Therefore there remain opportunities for: (1) how to enhance current domestic energy-water resource

management for industrial cluster, and (2) how to strategically plan for future demand on energy-water

resources for sustainable industry development.

3.3 Challenges in Housing and Construction Industry

Under the current situation of air pollution in Ulaanbaatar, the city has almost no choice but to move

its industry facilities, thus shifting air pollution outside Ulaanbaatar. However, in order to create high

efficiency in energy and water clusters, decrease air pollution, and build a worker-friendly workplace,

greater research needs to be conducted. Also, reuse of wastewater systems in industry cluster has not been

fully developed in Ulaanbaatar. Water efficiency of buildings both in Ulaanbaatar and industry clusters is

very low. This applies not only for local housing, but also most business buildings that have no facilities to

use rain water. Likewise, while waste water recycling systems can lead to better water provision for housing

8

in Ulaanbaatar in the long term, it is hard to find any modern house equipped with such systems.

Additionally, the labour skills quality in construction industry including that of local architects,

engineers and construction workers, is relatively low. Citizens’ complaints regarding the poor quality of

insulation quality and window and performance are very common (Mongolia Economic Update, 2013).

3.4 Resource Demand

3.4.1 Textile Industry

Water demand Around the Ulaanbaatar area, there will be a significant increase in water demand for light industry,

heavy industry and energy in the future. Of many light industries, textiles are Mongolia’s largest industry.

According to the World Bank Statistics (2013), Biochemical oxygen demand (BOD) originating from the

textile industry in Mongolia is high, accounting for 52.8% (2003), 54.2% (2004), 54.8% (2005), 43.6%

(2006) and 41.6% (2007) of total emissions. The majority of the Mongolian textile industry is wool

manufacturing. This wool industry demands a relatively higher quantity of water (see Table 2)

Table 2 Average water consumption for different textile wet processes (l/kg)

Material Process Consumption (l/kg)

Cotton Desizing 3-9

Scouring or Kiering 26-43

Bleaching 3-124

Mercerizing 232-308

Dyeing 8-300

Wool Scouring 46-100

Dyeing 16-22

Washing 334-835

Neutralisation 104-131

Bleaching 3-22

Nylon Scouring 50-67

Dyeing 17-33

Acrylic Scouring 50-67

Dyeing 17-33

Final scour 67-83

Polyester Scouring 25-42

Dyeing 17-33

Final scour 17-33

Viscose Scouring and dyeing 17-33

Salt Bath 4-13

Acetate Scouring and Dyeing 33-50 Table resource: (AquaFit4Use, 2010)

With the plan of creating a higher value textile industry, the Mongolian industry needs to build more

factories that can produce consumer-end products, such as wool clothing. New factories for higher value

added processes demand more water supply and water treatment (see Table 3). Table 3 also highlights the

importance of ensuring that any industry is efficient in energy and water usage, with factories ranging in

performance by 100% or even 1000%. Ulaanbaatar must not encourage industries that operate at the worst

end of global energy or water performance.

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Table 3 Water consumption per manufacturing processes (l/kg)

Desizing Scouring Bleaching Dyeing Printing

Wool 4-77,5 40-150 280-520

Cotton 2,5-43 30-50 38-143

Synthetic 17-67 38-143

Not specified 12.5-35 20-300 Table resource: (AquaFit4Use, 2010)

With the goal of reducing the export of raw materials made of wool, the Erdenet Khivs Carpet Company,

the second largest textile factory, has tripled its production volume since 2008 (Khash-Erdene, 2013). The

Mongolian government recently declared its industrial revolution for re-establishing its higher value added

production by creating Mongolian domestic manufactured products and by stopping the export of its raw

materials in the wool industry (Khash-Erdene, 2013). For this, the Mongolian textile industry created its own

domestic supply chain from wool raw materials, thread, and yarn to final products such as cashmere

sweaters and carpets (Khash-Erdene, 2013).

3.4.2 Housing and Construction Industry

Energy

Three main resources of heating are provided to urban areas in Mongolia: (1) ‘combined heat and power

plants, which provide electricity, heat and hot water to Ulaanbaatar and a few other cities’; (2) ‘heat-only

boilers, which meet the heating and hot water needs of a small central network of several building’; and (3)

‘individual heat stoves, which burn coal and/or wood to meet residential heating needs in peri-urban areas’

(2008 ADB).

Electricity and thermal energy consumption trend can be found in Table 4 and Table 5.

Table 4 Balance of electricity (min kWh)

2006 2007 2008 2009

Total distribution 3,713 3,896 4,198 4,195

Gross generation 3,544 3,701 4,001 4,039

Import 168 195 198 157

Consumption 2,620 2,829 3,093 3,034

Industry and construction 1,627 1,746 1,918 1,883

Transport and communication 109 117 129 126

Agriculture 24 26 33 32

Household 629 695 742 728

Other 230 246 272 265

Losses in transmission and distribution 442 442 436 494

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Station internal use 630 615 653 649

Export 21 10 16 18

Source: Mongolian Ministry for Mineral Resources and Energy (2011)

Table 5 Balance of thermal energy (thousand Gkal)

2006 2007 2008 2009

Gross generation 7,850 7,724 7,760 8,321

Power and thermal station internal use 435 415 397 335

Total distribution 7,721 7,165 7,238 7,829

Industry and construction 2,019 2,068 2,168 2,002

Transport and communication 289 286 279 264

Agriculture 39 38 40 38

Household and service 4,923 4,773 4,752 5,524

Losses in transmission and distribution 145 144 125 157

Source: Mongolian Ministry for Mineral Resources and Energy (2011)

Water demand

Thanks to Ulaanbaatar’s urban development, it is expected that the central water system connecting

to apartments is 51.3 per cent, while the water demand in Ger districts supplied from kiosks remains at 24.9

per cent (see Table 6).

Table 6 Access to water in Ulaanbaatar by percentage of population

Access to water in Ulaanbaatar 2005 2008 2010 2015 2021

Central water

system

Apartments connected n.a 37.7 38.3 48.2 51.3

Ger districts supplied from kiosks n.a 21.4 22.3 24.1 24.9

Water

transportation

Ger disctrics supplied from kiosks or

direct from water vendors

n.a 40.4 39.3 27.7 23.7

Other sources Wells, springs n.a 0.5 0.1 0.0 0.0

Data source: City statistical office and USUG

Table resource: (Dolgorsuren et al., 2012)

In order to calculate future water demand, current water demand norms should be understood (see Table 7).

11

Table 7 Actual drinking water use

Drinking water use Use

(l/head/day)

2010

Central water system Apartments connected to water

supply and sanitation with hot

water supply

Ulaanbaatar 250

Erdenet 250

Darkhan 226

Other 200-400

Central water system Apartments connected to water supply and

sanitation without hot water supply

175

Central water system Ger districts supplied from kiosks 9.2

Water transportation Ger districts supplied from kiosks or direct from

water vendors

8.4

Protected wells, rivers,

springs, ponds etc.

Soum centers, rural population and herders 6

Unprotected wells, rivers,

springs, ponds etc.

Soum centers, rural population and herders 6

Including water not accounted for/Data source: PUSO and USUS Table resource: (Dolgorsuren et al., 2012)

The detailed water demand of municipal water can be understood by public utilities and services (see

Table 8).

Table 8 Municipal water demand

No. Aimag

Public utilities Services Total

Water Use

Schools Health Offices Total Total Thousand

m3

1 Ulaanbaatar 2116.3 776.4 349.0 3241.7 3,590.1 6831.8

2 Total 3,345.8 1,145.6 717.3 5545.4 3,873.7 9419.1

Table resource: (Dolgorsuren et al., 2012)

Also, the water system installed in a building is more important than the water system employed in

the construction of the building. Accordingly, current water conditions of construction industry in

Ulaanbaatar are analysed from two perspectives: water efficiency of current housing and infrastructure

construction for wastewater treatment in Ulaanbaatar.

3.5 Importance of Holistic Strategy for Efficient Water-Energy Management Like other developing countries, Mongolia is currently experiencing large scale housing

development (Shiilegmaa et al., 2013) and has a national industry strategy for textile industry, one of the key

industries in terms of its GDP contributions (Popescu, 2007). In order to integrate/harmonise the different

levels of demand between industry competitiveness growth and high energy-water efficiency, it is important

to hold integrated perspectives between its national industry strategy and energy-water supply strategy.

Industry clusters based upon integrated and efficient energy-water management processes have the

potential to provide greater benefit for Ulaanbaatar’s urban development.

First, the authorities will be able to monitor the energy and water use of the manufacturing facilities,

as well as water treatment, far more easily than at present. In particular, physical location based on

12

proximity of manufacturers has potential benefits in terms of increasing the added value through cluster

actions, as well as reducing costs through cluster actions, reducing water use, water processing and energy

use.

Second, building energy-saving systems and water reuse systems in such a cluster is likely to provide

greater opportunities to increase energy and water use efficiency in the area. The second way of energy-

water resources saving is sharing – where the output of one factory may become an input for a second

factory in the same cluster. Warm water waste from one factory can be used to pre-heat products in another

factory. These arrangements are often called industrial symbiosis and work best with mature factories; the

active search for such actions should become part of the government support when the cluster is established.

(see Gibbs and Deutz, 2005).

Third, manufacturing clusters can increase profitability and productivity by reducing the logistical

activities of manufacturing supply chains in the textile industry (Humphrey and Schmitz, 2002). If the textile

industry factories are located in a proximate and defined space, companies can save the time and money. An

opportunity will also exist for the companies to co-operate in terms of delivering added value to the final

product. This trend is emerging in the South Asian textile industry with companies in the supply chain being

located closely together (even placing equipment into each other’s factories).

Fourth, industry cluster can enhance knowledge spill-over effects in the regional economy (Bathelt et

al., 2004). The accumulated skills and knowledge regarding energy and water management will spread

beyond the manufacturing cluster into other sectors. Ultimately this will benefit energy and water efficiency

overall.

3.5.1 Textile Industry

Mongolia has set a national goal to create high-value finished products in order to increase its national

GDP and industrial competitiveness (Popescu, 2007). With its national industry strategic plan, Mongolia

faces the increase of production facilities for making finished products. These production facilities for

finalised textile products include many chemical processes which can be harmful for the environment if the

process is not treated properly and which demand additional energy and water consumption within

Mongolian territories.

In order to implement its national industry plan regarding textile industry innovation in terms of high

value industry, the Mongolian textile industry needs to consider several aspects: logistics of wool materials,

chemical materials and finished products, the final quality of products in terms of design and wool finish,

energy and water supply, environmental treatment and international issues. Mongolia needs to establish its

international competiveness in product quality in wool quality and design, production cost and price, as well

as logistic issues in cost and speed.

In terms of the industry-wide complex of Mongolian economic development, how the textile industry, as

the one of the major manufacturing industries in Mongolia, creates its international industry competitiveness

and establishes its best practice in energy and water efficiency is critical. The transformation of its textile

industry to high economic value, high environmental protection including high energy and water efficiency

and high social development in production processes in its industry transition is of great importance for

Mongolia as a whole, and is essential to the Government of Mongolia’s aspiration to be a regional leader in

green development.

13

Figure 4 Mongolia textile industry development

3.5.2 Housing and Construction Industry

Under the new plan, ‘the Ulaanbaatar Master Plan 2020 (UBMP 2020)’, the Mongolian government

recognised the importance of housing quality and urban development and set national programmes in place

related to housing and urban development (Housing Development in the UBMP 2020). With the UBMP

2020, Mongolia plans to provide better housing, better office buildings, raise the well-being of citizens,

reduce air pollution, and utilise the urban housing and building innovation as an economic opportunity to

create a comparative construction industry.

In order to investigate energy and water issues relating to housing in urban development, it is necessary

to include wider systems. Housing issues as part of urban development are complex problems related to

public economy, the quality of living, energy and water, crime, education, pollution and health. These

housing issues should be explored from the perspective of nationwide industry systems. The housing and

building developments are closely related to construction industry. Although the construction industry and

construction materials industry are two of the major industries in Mongolia, the industries have rarely

contributed to the creation of a sustainable housing system for high energy and water efficiency.

It is important to recognise large housing development as the national opportunity for creating

competitive and strong construction firms and construction material firms in Mongolia in economic terms.

Also, it is critical to see that this transition period of Mongolian housing situations can be an important

chance to establish high energy and water efficient and green construction ecosystems in Mongolia.

Figure 5 Mongolia construction and housing industry development

14

4. Strategies for Energy and Water Innovation

4.1 Area of Concern 1: Textile Industry Overarching Recommendation 1: To create a consistent plan for the textile industry in terms of

economic performance and energy-water nexus.

Recommendation 1.1 To define the characteristics and strategies of the industrial cluster.

Recommendation 1.2 To undertake detailed feasibility research on the development of the

clusters and to collect information regarding the future demand for energy and water for the

cluster.

Recommendation 1.3 To create the new manufacturing cluster in terms of industry symbiosis.

Recommendation 1.4 To create wastewater reuse systems for the factories in the clusters.

In order to be able to provide effective policy suggestions, it is important to set an industrial

development strategy for the textile industry and the construction industry. For example, within next ten

years, the Mongolian textile and construction industries should establish world-class competitiveness in

terms of producing high value, energy and water efficient goods, supported by agreements and supports

from the central government and local people (see Figure 6). Due to the lack of existing reliable quantitative

data, the goals relating to quantity are excluded from this research.

Figure 6 Integrated goals for the targeted industries

To achieve these goals, the industries’ strategies need to be discussed in two contexts: inside the new

manufacturing clusters and outside the new manufacturing clusters (see Figure 7). The main issues for the

new textile industry clusters are to develop methods for enhancing energy and water efficiency in all

manufacturing processes in industrial clusters, whereas the focal points for outside the clusters are how to

design and establish high energy and water efficiency for domestic households and business buildings in

Ulaanbaatar.

15

Figure 7 Consideration points of inside and outside of industrial clusters

Governmental consideration of the goals and nature of cluster development and its relationship to

green development policy and green economy is important. The government of Mongolia can use the

industrial cluster as an opportunity to develop capabilities that will help across other industries. The

potential exists to increase the country’s ability to use water and energy more efficiently, to support green

development and to add higher value to exported products.

Eventually, the government would be able to establish the characteristics of the cluster with these

objectives included. In terms of R&D and manufacturing features, there are mainly three types of industry

clusters: ‘a manufacturing cluster without R&D functions’, ‘a R&D cluster’, and ‘a cluster for R&D, design

and manufacturing complex’. Also, the other institutions in the cluster, such as universities or national R&D

centres, can have an important role in the context of public policy (Boekholt and Thuriaux, 1999). Complex

synergy between universities, industry and national R&D centres, especially for new clusters could increase

in added value.

For this, the number of firms, their facilities and factories, the likely demand for water, the amount of

wastewater, the amount of solid waste, amount of toxic chemicals and of air emissions will need to be

identified and evaluated (see Roberts, 2004). In this process, future cluster expansion as well as

environmental impacts should be considered. In a cluster, there are many interest groups, such as national

firms, private firms, environmental firms, power supply companies, logistics companies, marketing

companies and solid waste service firms. Thus, the role of Ulaanbaatar city government will be critical in

ensuring that different groups work more effectively together.

From these above considerations, the Mongolian government will be able to create the industry

cluster in a way that encourages industrial symbiosis. Two examples of industry symbiosis are British Sugar

at Wissington Factory (see Hitchcock, 2013) and Guitang Group (see Zhu and Cote, 2004) . In all cases of

successful industrial symbiosis there is an initial investment in data collection and facilitation that is often

16

supported directly by the government. British Sugar created overall environmental advantages from the

perspective of energy and materials efficiency, waste heat reuse, and waste and CO2 emission reduction

(Figure 8). Furthermore, this symbiosis cluster brought competitive advantage through cost competitiveness,

risk reduction and business diversification and new business opportunities.

Figure 8 Industrial symbiosis: the case of British Sugar

In relation to creating a better water efficiency system for the new manufacturing cluster,

consideration on cluster design which can maximise water reuse and use of rain water is important (see

Ehrenfeld and Gertler, 1997). According to UN-Water (UN-Water, 2013), about 38 per cent of water

withdrawal flowing into the central waste water treatment facilities in Mongolia comes from industry.

Accordingly, it will be desirable for the new manufacturing clusters to build their own waste water treatment

facilities with the capacity to accommodate at least the equivalent of 30 per cent of the daily waste water of

Ulaanbaatar. Various toxic chemical substances are used for processes in the leather industry (which is a

subset of the Mongolian clothing sector and likely to be located in the textile cluster), including slaughtering

and dying (AquaFit4Use, 2010). Therefore consideration on how toxic chemical substances can be purified

within the boundary of the clusters is important. The scale of water processing in the cluster makes

economic processing of difficult waste water more feasible.

4.2 Area of Concern 2: Housing Development and the Construction Industry Overarching Recommendation 2: To encourage the development of high quality housing, which will

lead to a better construction industry and to reduced demand for energy and water.

Recommendation 2.1. To apply high performance insulation for all housing and business

buildings in Ulaanbaatar.

Recommendation 2.2. To produce high skilled construction labourers and technicians from

architects to construction workers.

Recommendation 2.3. To install alternative energy sources for the industrial cluster and to

encourage high-performance insulation and double-glazing windows for all housing and

factory buildings in the new industrial cluster.

In winter, the average temperature in Mongolia is -20°C. The average monthly temperatures in winter are

0°C in October; -13°C in November; -22°C in December; -25°C in January; and -22°C in February. In order

17

to overcome winter coldness and energy shortages, many households in Ulaanbaatar use individual old-

fashioned winter stoves which are responsible for 60-70 per cent of Mongolia’s winter air pollution

(Branigan, 2013). The most important requirement for energy demand improvement is the use of high-

quality insulation construction materials for roof and walls and highly insulated windows. It seems an

obvious solution for Mongolia’s cold environment. Better insulation for households can lead to reduced

need for individual winter stove heating and less pollution in Ulaanbaatar, and also encourage new sub-

sectors of the construction industry to emerge.

The construction skills of labourers need to be improved to support new construction and also the

implementation of cluster and symbioses approaches to industry development. Again, this is not only to

increase energy and water efficiency, but also to improve the capabilities of Mongolian construction firms in

the international market in the long term. To improve firms’ capabilities, national certificate system for

architects and construction engineers has to be systematic. As well as an improved qualification system

administered by the authorities, the Mongolian National Construction Association has important role of

provide various educational and training courses in energy and water efficiency.

The construction industry is a complex subcontractors industry: without quality control of small- and

medium-sized firms in the construction industry, it is impossible to raise competitiveness in terms of value-

added such as energy efficiency and water efficiency (Eccles, 1981). In order to raise the capabilities of the

subcontractors in the Mongolian construction industry, the Mongolian Construction Association needs to

take the initiative in terms of providing education for many types of skilled labour for construction. Also,

safety guidelines and relevant training are necessary. Mongolia needs to provide a tough environment for

testing of energy efficiency technologies in the construction industry. This can benefit Mongolia by offering

a test environment and encouraging global companies to create test facilities in Ulaanbaatar. More

importantly the use of Mongolian materials could be combined with Mongolian expertise to create a new

industry in insulation and energy materials. Cooperation with local universities can identify possible

materials and create programmes (potentially with international partners) to develop these toward a new

industry (for example, the development of a wool-based construction system is currently underway in the

United Kingdom). Eventually this is intended to create innovations both in construction materials and in new

designs which can be exported.

With the aim of 20-25% share in 2020, the Mongolian government (NREP, 2010) initiated their

‘National Renewable Energy Program’ and the Government policy documents called the Government Action

Plan, Millennium Development Goals, Sustainable Development Program of Mongolia for 21st century,

Regional Development Concept, Consolidated Energy System Program of Mongolia and Sustainable Energy

Development Strategy of Mongolia for 2002-2010. Thus, it is also important for the authorities to link this

excellent effort on planning for a future energy supply system with that part of the planning for energy

demand that comes from new industries. The potential for solar panels to be installed on the roofs and

external walls of the buildings in the industrial cluster should be investigated. According to the National

Renewable Energy Centre (NREP, 2010), Mongolia has 270-300 clear sky days across the year and annual

average sunny daylight time is calculated as 2,250-3,300 hours; therefore solar panels are an effective way

of generating energy in Ulaanbaatar.

As stated in the wind energy atlas of Mongolia, 10 percent of the total territory, or 160 thousand

square kilometers, is estimated as suitable for wind energy application. It is estimated that 13 aimags have

more than 20,000 megawatts of wind potential, and 9 aimags have more than 50,000 megawatts of wind

potential; Omnogobi aimag alone has wind energy potential of over 300,000 megawatts. There are over 40

indications of geothermal manifestations on the territory of Mongolia and from these sites Tsenkher, Khujirt

and Shargaljuut, located in the Khangai region, may be used for energy production purposes. Long term

industry cluster planning should consider placing industry close to these sources of energy to improve

18

transmission losses. Obviously, in order to reduce energy loss, providing high-quality insulation materials

will be very important for all buildings in the new clusters.

4.3 Area of Concern 3: Technology and Infrastructure Overarching Recommendation 3: To promote new technology supporting the energy and water

systems

Recommendation 3.1 To measure the energy and water use by using Information and

Communication Technologies (ICT).

Recommendation 3.2 To support technology development aiming at co-ordinated action across

the areas of education, research and industry.

Recommendation 3.3 To create new Ulaanbaatar municipal wastewater treatment facilities.

When it comes to measuring energy and water usage, the application of information and

communication technologies should be considered. The current number of internet service users is relatively

low in Mongolia. It is estimated that there are approximately 459,200 users and 100,800 broadband

subscribers in Mongolia (UNESCAP, 2013). However, given that a large proportion of its population is

concentrated in the Ulaanbaatar areas, and the dramatic growth of the domestic Internet market, it is

desirable to introduce the new remote meter reading system to Mongolian households and business buildings

in Ulaanbaatar. With Internet technology linking energy and water meters to central government, the

Mongolian government can control ‘a portfolio of measures to improve energy system at the side of

consumption’ through a ‘smart energy tariff with incentives for certain consumption patterns’(Palensky and

Dietrich, 2011). Data on consumption is critical to development of good policy. Also, with this ICT

infrastructure, Mongolia can create a platform for a fair energy and water taxation scheme and for less

labour-intensive measuring. Through this new system, the Mongolian authorities can design possible taxes

on all energy and water users based on accurate recordings of real-time consumption. This system may well

also reduce the conflict between tax collectors and tax payers, and reduce the labour costs for meter readings

for energy and water.

Technology road-maps are a proven way to build a picture of which future technologies are

important and when they will influence practice, and helps to identify what governments can do to help the

local impact of those technologies. Technology road maps provide a bridge from short-term efforts to better

understanding of actual system limits and encouraging efficient use of resources, towards the long-term

development of new frugal technologies. For the key national industry sectors (such as leather, meat and

wool) the government can work with industry and citizens to produce descriptions of the key technologies,

as well as when and how they may be introduced into Mongolia. Such road-maps are useful guides to many

policy areas, for example, education, land-use planning, utility planning, etc. In addition, there is an

emerging global trend in new ‘frugal’ technologies that use less water or energy or material to create new

products. Mongolia is potentially well-placed to take advantage of this global trend as new forms of frugal

technology could emerge from the unusual biomes of Mongolia. The biotechnology sector is particularly

important for this kind of technological development worldwide and unusual biomes under resource stress

(such as the Mongolian steppe) offer a number of biological start points (the most obvious example being

the excellent insulation properties of many Mongolian products). This implies developing a research base on

such possible future technologies. The specific case of the growing Mongolian mining sector offers a test

location that would benefit from frugal technologies that could build new processes for extraction and

processing. This would also help Mongolia to accelerate along the typical economic trajectory of adding

value to minerals by gradually building processing facilities by importing processing technologies.

19

In order to improve the generic water quality for people living in Ulaanbaatar, the Mongolian

government and the Ulaanbaatar municipal government will be required to construct new or expanded

wastewater treatment facilities in the near future. This new construction for wastewater treatment is the only

way to reduce concerns regarding water quality and environmental impact – including on local communities.

For this, research on the calculation of the future water demand for the city based on the national and

regional plan on economic and industrial development will be important. Also, Mongolia may wish to

research how to use the current wastewater facilities, while a new wastewater system is being built and to

study the best wastewater treatment technologies and systems for Ulaanbaatar situations. More importantly,

Mongolia will be required to create long-term collaboration strategies with the Ulaanbaatar Water

Authorities, foreign water quality control consulting companies and local academics to transfer technology

and expertise into Mongolia and to run the world’s best water quality control system by itself within ten

years.

4.4 Area of Concern 4: Data Collection and Monitoring Overarching Recommendation 4: To enhance governance in planning and monitoring of energy and

water consumption.

Recommendation 4.1. To increase its capacity to collect data regarding its key environmental

resources – water, air quality, energy efficiency and land productivity.

Recommendation 4.2. To identify and learn from international examples of successful

integrated resource management.

Recommendation 4.3. To share information and improve the coordination of strategies across

ministries and industry.

Recommendation 4.4. To establish a strong supervision and monitoring system for all

construction activities from material quality testing to construction quality examinations.

A step in improving management of a resource is to establish good data about that resource.

Collecting data systems for energy and water use in both households and industry should be activated

immediately, including energy-use meters and water-use meters. Extensive housing development is expected

in Ulaanbaatar. This is therefore the perfect time to establish a better monitoring system for energy and

water consumption by both households and businesses. Without access to extensive data and statistical

trends on the current situation, it is difficult to assess how close a particular system is to its practical limit,

and therefore it is very difficult to make decisions about investing in infrastructure or development projects.

The role of energy and water pricing for both homes and industry has not been fully examined here but was

often referred to by local experts as a possible source of improvement. By doing so, the Mongolian and the

Ulaanbaatar local governments can expect an appropriate level of tax income based on the quantity of use,

and this tax income can be used for short-term subsidies for imported construction materials, or for subsidies

to potential house owners to stabilise the housing market.

Here, an integrated approach is suggested. The Integrated Resource Management (IRM) approach is

“a planning and decision making process that coordinates resource use so that the long-term sustainable

benefits are optimized and conflicts among users are minimized. IRM brings together all resource groups

rather than each working in isolation to balance the economic, environmental and social requirements of

society” (Jennifer A. Bellamy, 1999). The Mongolian government clearly recognises the need for an

integrated approach but must improve its capacity to manage such an approach. Active data collection,

monitoring and management are needed and, by doing so, the Mongolian government will be able to

establish integrated resource management. An increased assessment capacity will help avoid poor short-

term decisions and will encourage better use of resources in the long-term. The recent development of a

20

Water Council is a positive development but its emphasis on the consumer use of water may miss that 84%

of water in Ulaanbaatar is used in the industrial rather than domestic sector. The new Water Basin Council

system is intended to deal with this reality and should be supported. As UN-Water (UN-Water, 2013)

indicated, similar to other natural resources, the current lack of water data in Mongolia leads to difficulties

for water management and investment for infrastructures. Therefore, establishing a reliable database of

energy and water for government, foreign donors and private investment capitals is required (UN-Water,

2013). This would include visits to the best examples of energy efficiency in the key industries, e.g. the most

energy/water- efficient textile makers (such as Brandix in India/Sri Lanka). The result would be a shared

agreement on targeting efficiency levels in various parts of the Mongolian industrial and utility systems.

Action to implement many of the above recommendations could be accelerated through careful

collaboration with outside experts. These experts could be located through government relationships, or

through direct commercial collaborations with carefully chosen partners. Detailed planning or guidance for

such a policy needs to be further developed.

In this report, ‘construction supervision’ refers to the inspection of labour activities or preparation for

the pre-construction, construction and post-construction process, including examining action concerning the

installation of high-quality energy and water facilities. Highly rigorous construction supervision on the

construction process and all construction materials has to be conducted regularly as part of the process.

Efficiency laws are in place, but evidence of their enforcement is limited. International leaders have

typically either set very challenging future targets for improving efficiency and directly supported their

industries in achieving them, or have worked jointly to set timetables to ensure delivery of the targets

(including action on education, pricing, tax, equipment, etc.). As opposed to other parts of the construction

process, supervision by a third party is crucial for the complete delivery to customers (Al-Jibouri, 2003,

Arditi and Mochtar, 2000), and monitoring experts will be asked to have extensive experience of

construction knowledge and standards. For the upcoming re-development of the capital city, high quality

insulation and windows should be competently installed to reduce heat loss significantly

21

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