RENEWABLE ENERGY

OPPORTUNITIES AND THEIR

POTENTIAL FOR SUCCESS in

MONGOLIA

by

Bolor J. Artan

Deputy CEO, Newcom Group

Topics

1. Newcom Group Introduction

2. Case Study: Salkhit Wind Farm

3. Combined Heating Power Plant #5

– Government’s role in future infrastructure

developments

4. Mongolia as power house to clean energy

future

Newcom Group

• Completed Projects

– MobiCom: First mobile operator in Mongolia

– Eznis Airways: Leader in domestic airline

– Salkhit Wind Farm: First ever wind farm in

Mongolia

– Newcom Properties: Real estate management

• Pipeline Developments

– CHP5: Fifth central heating power plant

– Clean Energy Asia: Renewable energy export to

the Asian Super Grid

Case Study: Salkhit Wind Farm

• As of today, Mongolia’s only operational renewable energy generator to central grid: Salkhit Wind Farm

• Net electricity generation: 168.5M kWh/year • Supplying 4% of Central Grid Energy

Production (100,000 households)

• Every year Salkhit Wind Farm will:

– Cut CO2 emissions by 180 thousand tons

– Reduce coal burning by 122 thousand tons

– Save 1.6 million tons of fresh water

• Capacity 50 MW

– 1.6 MW x 31 WTGs

• Investment USD

120 mln

• Wind Speed

Measurement

(since 2004) – 8.2

m/s

• Operations since

June 2013

Salkhit Wind Farm (cont.)

• First IPP

• First PPA

• First new power

generation since

1984

• Largest renewable

energy source

• First utility with

private investment

Salkhit Documentary

Growing Energy Demand

• On 21 July 2010, the Government of Mongolia

passed a resolution #198 approving certain

concession projects, in it:

Project

Name

Project

Description

Type of

Concession

Concessionaires

responsibilities

Tendering

Process or

Contract

Combined

Heat and

Power

Plant 5

(CHP 5)

Build CHP 5 to

meet the

growing

demand of

Ulaanbaatar’s

electricity and

heat

Build-

Operate-

Transfer

To build power

plant, production

of heat and

electricity,

operate the plant

Tendering

process

CHP5

• Capacity: Gross 450MW electricity and

505 Gcal/hr thermal .

• Technology: Circulating Fluidized Bed (“CFB”)

boilers

• Total Investment Cost: USD 1.2 billion

• Financial Close: July 2015

• First Boiler: 150MW, February 2018

(tentatively)

• Second Boiler: 150MW, June 2018 (tentatively)

• Third Boiler: 150MW, October 2018

(tentatively)

Current Status

• The Consortium is working in

collaboration with various

ECAs, Multilateral and

commercial banks for USD 975

million debt financing. Thus far,

ECAs and Multilaterals have

provided letters of support and

strong commitments from

commercial banks.

• The bankability of CHP 5 project relies on the successful negotiation of the following agreements:

- Concession agreement

(negotiation is ongoing)

- Power purchase agreement

- Heat purchase agreement

- Land use agreement

- Coal supply agreement

- Water purchase agreement

• Various site studies are being conducted including Environmental Social Impact Assessment

PPP Projects in Mongolia

• Concession agreement signed: – 100MW Telmen CHP (BOT)

– Tuul Songino Hydro Power Pumped Storage (BOT)

– Nariinsukhait- Shiveehuren paved road project (BOT)

• Projects that will be signed near future: – 450 MW Combined Heat and Power Plant 5 (BOT)

– 435 km Tavantolgoi-Khanbogd-Khangi paved road (BOT)

– 35 km New airport-UB highway (BT)

– 997 km Altanbulag-UB-Zamiin Ud paved road (BOT)

– Coal pipeline connecting Tavantolgoi and Gashuusukhait border posts with China (BOT)

Government Guarantees

• Tax stabilization certificate

• Currency conversion guarantee

• Change in Law

• Availability of foreign currency

Rising Problem: Air Pollution

• One of the world’s most polluted cities

• “Harmful Dust” 6-7 times higher than the

most lenient WHO standards

• Severe respiratory illnesses

• Sources: desert, unpaved roads and open

soil surfaces, lack of vegetation, ash and

emissions from coal stoves, power plants,

boilers, and vehicles

* http://worldbank.org*

Pollution in Ulaanbaatar, Mongolia

Credit: Einar Fredriksen

Energy Plan of Mongolia

2010 2020 2030

Coal PP MW 689 1,610 2820

production TWh 3.42 9.28 14.28

Hydro MW 25 200 500

production TWh 0.088 0.7 2.75

Wind MW 4 205 450

production TWh 0.01 0.62 1.3

- China 2380GW(on land)*** installed 76GW**

- Mongolia 1130GW*** installed 50MW

* http://globalatlas.irena.org/ ** NREL

- 320 sunny day**

- Mongolia 4’774TWh

China 3’826TWh

Mongolia

946TWh

Japan 34TWh

China 27’374TWh*

Mongolia

4’774TWh

Japan

809TWh

South Korea

309TWh

WIND RESOURCE* SOLAR RESOURCE*

RENEWABLE ENERGY POTENTIAL

- Mongolia is the least densely

populated country in the world.

* http://globalatlas.irena.org/

400’000 km2 land suitable for wind and solar

in Mongolia. (Japan area is 377’944 km2)

- Low GDP per capital but rapidly expanding

economy

- Near from electricity consumers (China)

- No extreme weather

- Lots of land, low population density

- 1.7 people per km2

- Good wind resource

- 946TWh/annual

- Good solar resource

- 1300kWh/sq.m, 320 sunny days

- Plat land cover

- Low construction cost

- Low average temperature

- High efficiency for PV

POPULATION DENSITY*

MONGOLIA IS SUITABLE FOR RENEWABLE

ENERGY IN ASIA

Gobi-tech

HVDC systems planned for commissioning

by region, 2012-2020

China & India Global

Number of systems 33 97

Overhead line & cable (km) 60’561 118’445

Total capacity (MW) 266’700 399’180

HVDC infrastructure by 2020 in China

Economic Benefits Social Benefits Environmental Benefits

•Cost advantage

from cheap RE-

based electricity

•Increase

flexibility,

maximize RE

potentials in

grid systems

•Create jobs

•Diversify local

economy

Participating

Countries Mongolia

Participating

Countries Mongolia

Participating

Countries Mongolia

•Enhance

regional

relationships

•Increase

national energy

security

•Alleviate

poverty

•Improve

infrastructure

•Reduce CO2

emissions

•Reduce air

pollution

•Protect natural

environment

Technology Transfer

Benefits of Regional Grid Integration

http://www.encharter.org/

Thank you for your attention.

Анхаарлаа хандуулсанд баярлалаа.