ENERGY SECTOR OF MONGOLIA, SUSTAINABLE DEVELOPMENT POLICY · ENERGY SECTOR OF MONGOLIA, SUSTAINABLE DEVELOPMENT POLICY Mr. Yeren-Ulzii, Senior-Officer, Strategic Policy and Planning

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


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


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


1010

Recent Challenges:

• Efficiency

34 4

56

78

10

14

0

2

4

6

8

10

12

14

16

Transmission and Distribution loss, %


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


1414

Following objectives have been set for Energyefficiency and Renewable development in the policydocument.


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;


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.


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;


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;


19


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;


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.


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.


PLANNED POWER PROJECTS


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



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

Documents

ENERGY SECTOR OF MONGOLIA, SUSTAINABLE DEVELOPMENT POLICY · ENERGY SECTOR OF MONGOLIA, SUSTAINABLE DEVELOPMENT POLICY Mr. Yeren-Ulzii, Senior-Officer, Strategic Policy and Planning