IEEJ: August 2012 All Right Reserved

IEEJ : June 2012

NATIONAL DISPATCHING CENTER OF POWER SYSTEMS ,MONGOLIATRAINING AND
DIALOGUE
PROGRAMS OF JICA

www.energy.mn

COUNTRY PRESENTATION:MONGOLIA
ENERGY POLICY (B)IEEJ: August 2012 All Right Reserved

THEME Country profile Current state of energy sector
 Outlook of energy demand and supply
 The energy

policy Documents and its implementation.
 Short term strategy and goals.
 The goals of demand-supply balancing in future Difficulties in energy sector
 The

subjects to study

IEEJ: August 2012 All Right Reserved

Country profile:
Area: 1,564,116 sq km
Population: 3,133,318 (July 2011
estimate)
Capital City: Ulaanbaatar (literally,“Red Hero”) Population:
949,000
People: 94.9% Khalkha Mongols,
5% Turkic (mostly Kazakh),
0.1% other (inc Chinese andRussian)Language(s): Mongolian. (90%),
Kazakh, Russian
Religion(s): (2010): Buddhist
Lamaism 53%, Muslim 3%(primarily in the southwest),
shamanist and Christian 5%,
other 0.4% and none 38.6%.

IEEJ: August 2012 All Right Reserved

Country profile:
Currency: Togrog (MNT)
Government: Parliament, theGreat Khural.
GDP per head: US$3600
Major Industries: Mining,
cashmere, agriculture.
Major trading partners: China,
Russia, United States, Japan.
Currency : Togrogs, US$1 = 1,232
Togrogs (February 2011)
Natural resources: Coal (thermal
and metallurgical), copper,
molybdenum, silver, iron,
phosphates, tin, nickel, zinc,
wolfram, fluorspar, gold,
uranium, and petroleum.

IEEJ: August 2012 All Right Reserved

THE CURRENT STATE OF THE ENERGY SECTOR
Power sector

The current installed power capacity in Mongolia is 1,062 megawatts (MW)but only 836 MW (80%) is available because of aging power plants. The
transmission and distribution network, connecting around 70% of the
population, has been less than reliable—causing frequent blackouts inmajor cities mainly because of aging transmission lines and substation
facilities.


The energy sector of Mongolia consist of four independent electric powersystems:Central Energy System (CES),
Western Energy System (WES),
Eastern Energy System,
Altai-Uliastai energy system
Dalanzadgad combined heat and power plant (CHP) and other diesel fuel and renewable energy sources.
IEEJ: August 2012 All Right Reserved

THE CURRENT STATE OF THE ENERGY SECTOR

Central energy system
80% of all Mongolian electricity

Western energy
systemEastern Energy system
Smaller energy
Small Regional grid
systems

IEEJ: August 2012 All Right Reserved

THE CURRENT STATE OF THE ENERGY SECTORThe main Mongolian electric system is the Central Energy System (CES)
representing 80% of all Mongolian electricity,



The CES power supply is comprised of five coal burning generating plants
and an interconnection Russia. The other two networks – Eastern andWestern Energy Systems (WES and EES) are quite small. WES operates
on imports of electricity from Russia, EES has one Combined Heat andPower Plant (CHP) with installed capacity of 36 MW.

Considering the seasonal variations in electricity demand, imported
electricity is required to meet demand especially during peak demand times
in the winter.



The CES and the WES grid are both connected to the Russian grid. 220 kV
double lines connect CES and the WES is connected at 110 kV.

IEEJ: August 2012 All Right Reserved

THE CURRENT STATE OF THE ENERGY SECTOR
Typically 10 MWs is imported from Russia into the Western Energy System (WES)
and up to 130 MW into Central Energy System (CES) during peak demand hours.
The maximum available capacity from Russia is 250 MW.
The maximum electricity import and export for both systems:

IMPORT

Electrical
Systems





2004

EXPORT

2009

2011

2004

2009

2011

MW

GWh

MW

GWh

MW

GWh

MW

GWh

MW

GWh

MW

GWh

CES

130

108.5

120

132

120

205

21

8.2

25

21

15

21.4

WES

11

40.3

15

60,3

18

75.2

--

--

-

-

-

-

Total

141

148.8

135

190.3

138

280.2

21

8.2

25

21

15

21.4

In addition there are small grid Altai-Uliastai ES interconnected Uliastai, Altai aimag
centers not connected to the three grid systems , and Dalanzadgad, each with apower plant supplying small local networks. Numerous off-grid rural soum centers
have a local diesel power supply (some 600 diesel units with capacities ranging from60 to 1000 kW).
Gross generation capacities of electricity have continuously been expanded in thelast years with rates of 2–4%. In 2011, Mongolia’s total installed electricity generation
capacity was 1,062 MW and the total electricity generated 4,300 GWh.

IEEJ: August 2012 All Right Reserved

THE CURRENT STATE OF THE ENERGY SECTORIEEJ: August 2012 All Right Reserved

THE CURRENT STATE OF THE ENERGY SECTORAll coal fired power stations are cogeneration plants for production of base load
electricity, hot water for district heating and process steam for industry.
Because of the cold winters, heating is especially important in Mongolia—it isnecessary for survival.
In terms of heat supply sources for central or district, systems, Mongolia has
combined heat and power (CHP) thermal power plants in major cities.

Heat consumption by sector

Electricity consumption by sector
Export0.2%

Industry & Construction
42.0%

Station internal use
18.1%

Losses intransmission anddistribution
13.8%

Communal housing
41.3%

Losses intransmission anddistribution
2.5%

Transport &Communication
2.8%
Other
5.9%

Agriculture
0.7%Communal housing
16.3%

Other
20.2%

Agriculture
1.1%
Transport &Communication
5.4%

Industry & Construction
29.6%

IEEJ: August 2012 All Right Reserved

THE CURRENT STATE OF THE ENERGY SECTOR

Total installed capacity
7 coal fired combined heat and power plants
600 small diesel generators by 60-1000 kw
13 hydroelectricsolar/wind hybrid system

1062 MW
828.8 MW74.34 MW27.5 MW
6.65 MW.

IEEJ: August 2012 All Right Reserved

THE CURRENT STATE OF THE ENERGY SECTOR
Electricity market
After the implementation of the Energy Law of Mongolia in 2001, the power
sector unbundled according to the Government Decree No 164. This
resulted in 18 state-owned companies involved in generation, transmission
or distribution, and operating under the framework of the ‘Single-Buyer
Model’:
Generation: Five generation companies arranged around Thermal
Power Plants (TPPs): UB, Darkhan TPP and Erdenet TPP
 Transmission Central Regional Electricity Transmission Company(CRET) Dispatch: National Dispatching Centre Company (NDC)
 Distribution:
 Regional electricity distribution network companies (EDNs) including:UB, Darkhan-Selenge, Erdenet-Bulgan, Baganuur and South-Eastern
Region District Heating Network Companies (DHN) including UB and Darkhan.
IEEJ: August 2012 All Right Reserved

THE CURRENT STATE OF THE ENERGY SECTOR

Coal sectorCoal accounts for 73 percent of total national energy consumption in
Mongolia.
There are 200 coal deposits within 15 coal basins in Mongolia
There are more than 30 surface (or open cast) mines in Mongolia, providing
almost 99 percent of Mongolia’s coal production.
Total
Total estimated reserve162.33 billion tonnes
Estimated economically recoverable
reserve by preliminary and detailed
22.3 billion tonnes.
exploration activities.
Proved coal reserve12.2 billion tonnes,
Annual Coal Production in 2011.

32,99 million tonnes

Cokingcoal

Thermalcoal.

2 billion
tonnes10.1 billion
tonnesIEEJ: August 2012 All Right Reserved

THE CURRENT STATE OF THE ENERGY SECTORIEEJ: August 2012 All Right Reserved

THE CURRENT STATE OF THE ENERGY SECTOR

Oil sector

Total estimated reserve
Proved oil reserve

Total
1,6 billion tonnes.
199,2 million tonnes,

Annual Oil Production in 2011.

2,549 million barrels

 So

95 % of the oil is imported from Russia, withstrong dependency on the Russian petroleum
company ROSNEFT, and the remaining 5 % originate
from China.

IEEJ: August 2012 All Right Reserved

THE CURRENT STATE OF THE ENERGY SECTORIEEJ: August 2012 All Right Reserved

OUTLOOK OF ENERGY DEMAND AND SUPPLY OF
MONGOLIA.
Electricity Load Forecasts,
The Energy demand increases at an annual average growth rate of
2.9 percent between 2005 and 2020 . (by GWh)

Systems

2005

2010

2015

2020

CES

3450.53868.24559.0 5400.9

Western ES

41.2

45.8

51.7

58.8

Eastern ES

65.6

73.0

82.3

93.1

Isolated aimag centres (Altai, Uliastai, Dalanzadgad)

26.6

29.6

33.4

37.8

Total

3483.84016.64726.45590.6IEEJ: August 2012 All Right Reserved

OUTLOOK OF ENERGY DEMAND AND SUPPLYOF MONGOLIA.

GWh

Electricity Demand Development of Electricity Systems
6000
5000
4000
3000
2000
1000
0

1990

1993

Central ES
Eastern ES

2000

2005

2010

Western ES
Isolated aimag centres

2015

2020

year

IEEJ: August 2012 All Right Reserved

OUTLOOK OF ENERGY DEMAND AND SUPPLY OF
MONGOLIA.
The dramatic and continuing rise in Mongolia's energy demand is being
driven by the rapid development of the country's mining based
economy. Power demand in South Gobi region is expected to growrapidly as a result of both the existing and new mining developments.

IEEJ: August 2012 All Right Reserved

OUTLOOK OF ENERGY DEMAND AND SUPPLYOF MONGOLIA.
 Power demand in the South Gobi is expected to grow sharply(around 400 MW) by 2020 as a result of various mining
developments including gold and copper and coal mines,

Coal mining development in the South Gobi could also provide an
opportunity for Mongolia to add power supply capacity and enhancerevenues through power export via cross border power trade with
the China.
In 2005, the government signed memorandums of understanding with
the State Grid Corporation of the People’s Republic of China, jointly
developing power plants (3,600 MW) in Siveovoo, South Gobi; andinterconnected transmission line.

IEEJ: August 2012 All Right Reserved

THE ENERGY POLICY DOCUMENTS AND ITS
IMPLEMENTATION.
The government has initiated various energy sector reforms anddevelopments since 2001, including sector commercialization, energy
efficiency, and renewable energy.
2001

Energy Law

2002

Energy Sector
Development
Strategy
Renewable
Energy Law

2007
2008

State Policy ofMongolia on
Fuel and Energy

 To unbundle the energy sector , To establish a sector regulatory agency,
 To focus on sector restructuring, energy conservation,planning and operational capacity enhancement, andenergy access for all.
 To target increasing the share of renewable energy in total
primary energy sources up to 3%–5% by 2010 and 20%–
25% by 2020.
 To identify sector strategies, priorities, and actions from2008 to 2015.
o The priorities include enhancing energy security,
improving the efficiency of the sector and creating
favorable conditions for operation in the market
environment, developing coal processing and clean
coal technologies, and building energy exporting
capacity.

IEEJ: August 2012 All Right Reserved

THE ENERGY POLICY DOCUMENTS AND ITS
IMPLEMENTATION.
The State Great Khural ( Parliament ) and the Government of Mongolia
approved following documents:
“Program on Integrated Energy System of Mongolia”,
“the National Program on Renewable Energy”
“the Comprehensive Policy on National Development”

Implementation of the Program on Integrated Energy System of Mongolia:

Currently, all 21 aimags and 318 soums are supplied by centralized energy source
while 15 soums are supplied from renewable sources and other hybrid systems.
The first phase or short-term (from 2007 to 2012) action plan of “the Program on
Integrated Energy System of Mongolia” is currently being implemented successfully.

Implementation of “the National Program on Renewable Energy”:

Currently, use of renewable energy sources for power generation has become areality as a result of which about 100,000 nomadic (“100,000 Sun Lights” national
program) and 15 soums have access to electricity using a renewable energy
sources.

IEEJ: August 2012 All Right Reserved

MONGOLIAN INTEGRATED POWER SYSTEM.

IEEJ: August 2012 All Right Reserved

THE ENERGY POLICY DOCUMENTS AND ITS
IMPLEMENTATION.
Implementation of “the Comprehensive Policy on National Development”The energy sector has spend following developmental phases,

Period2002-2008

2008-20112011-2016

Policy and objectives
 Structural changes into the energy sector was made, State policy on providing electricity were implemented, all aimags
and soums in the countryside were connected to electricity.
 nomads were provided with small scale renewable energy sources.
 Equipment and technologies were upgraded and renovated andwhen preparatory works for supplying sources to regional electricity
systems went underway.
 new development era in which large scale energy supply networks
and main power lines will be built to establish an Integrated Energy
System which will meet the country’s ever-growing energy demand.

In 2011 updates and amendments will be made to legal framework and main policy
documents:
“Law of Mongolian on Energy”
“Integrated Energy System of Mongolia” National programme,“Master plan of Energy sector”

IEEJ: August 2012 All Right Reserved

SHORT TERM STRATEGY AND GOALS.








According to Power consumption prognosis of conducting large
industrialized and settlement regions and cities the estimated energy
consumption rate will reach 1,500 to 3,000MW between 2015 and 2030.
The government’s policy and legal environment are favorable in supporting
the public-private sector cooperation and investment .
In order to meet Mongolia’s energy consumption growth for 2015- 2030
and to export electricity, it is necessary to build power stations near mining
deposits and big capacity hydropower, wind parks, and solar systems.
In the near future, Mongolia’s Ministry will implement the following principles
and strategies towards the development of the energy sector, including:
Conducting a well-grounded estimate and revision of energy consumption
rate, and drafting an action plan based on these data; Providing financial and economic opportunities to build new sources ofenergy supply networks and developing energy sector;
 Supporting the construction of new energy supply networks by the private
sector, developing the legal environment of energy prices and tariffs, anddeveloping a public-private sector partnership;IEEJ: August 2012 All Right Reserved

SHORT TERM STRATEGY AND GOALS.
Developing and expanding power line networks under the review of the Governmentin accordance with the consumption and energy supply sources projections;
Increasing the efficiency of the energy sector, providing its financial sustainability,
implementing economically feasible regulations, and fully transferring the energy
sector and prices to market regulations.

Preconditions of transfer the energy sector to market regulations consist ofactivities such as:






Making energy tariffs and the legal environment attractive to investors,
Developing public - private partnership, and establishing ,Exploiting new energy sources with the participation of the private sector,
Privatization of the current energy supply networks and the building of new
private energy supply networks.
Improve power lines networks under Government purview, and expand anddevelop it in line with the construction of new energy supply networks inaccordance with the law .

IEEJ: August 2012 All Right Reserved

THE GOALS OF DEMAND-SUPPLY BALANCING
IN FUTURE.
The folowings are the mid term priorities of the Energy sector :









Form the Integrated Power System by connecting the Western, Central andEastern Energy Systems with power transmission lines.
Construct 220kV transmission line in order to supply increasing electricity
demand in the Eastern, southern Gobi regions and build the power plant with aminimum capacity of 300MW,
Start utilization the first blocks with 450 MW capacity in order to supply
increasing heat and electricity demand of the Capital city.
Construct totally 70 MW Power plant based on coal mines in order to supply toelectricity demand of the Western region and Altai-Uliastai energy system.
Construct Wind farms with total capacity of 100 MWs in Tuv and Dornogovi
provinces with a support from Government.
Increase the share of renewable energy on the total capacity of power sector
until 10 percent.
Improve legal environment of energy sector and introduce market structure.

IEEJ: August 2012 All Right Reserved

THE CURRENT MAJOR DIFFICULTIES IN
ENERGY SECTOR.
 The lack of power generations.
Power demand since 2003 in industry, transportation,
agriculture, and households have increased 31% (459.2GWh),
30% (30.2 GWh), 22% (7 GWh), and 31% (174.7 GWh)
respectively. The installed capacity growth has increased by
53.7 MW since 2003, a modest increase (6.8%).



Mongolia is in danger of a serious energy shortfall as early as
2012, at which point the maximum imported capacity of 255
MW from Russia may not meet demand. In addition, Russian
power has become more expensive. This shortfall will growwith rapid expansion of the country’s mining sector. The GoM
will need to attract private investment to build new power
facilities and to upgrade and improve existing capacity.

IEEJ: August 2012 All Right Reserved

THE CURRENT MAJOR DIFFICULTIES IN
ENERGY SECTOR.
2010

2011 2012 20132014 2015

3 Demand

776
120
711

776
120
768

776 776758 758
120 120120 120964 1.166 1.297 1.375

4 Existing Peak load

734

782

829

896

967 1.045

6

135
188

272
390

330 330
539 617

24
79
24
55
55
243

24
126
26
100
102
492

24
149
29
120
125
664

CENTRAL ENERGY SYSTEM
1 Generation capacity
2 Import

5 New Potential Customer
6 Deficit of capacity

EASTERN ENERGY SYSTEM
7 Generation Capacity
8 Demand
9

Existing Base load

24
21
21

24
23
23

68

9

10 New Potential Customer
11 Deficit of capacity
TOTAL DEFICIT

24
151
31
120
127
744

IEEJ: August 2012 All Right Reserved

THE CURRENT MAJOR DIFFICULTIES IN
ENERGY SECTOR.
The aging of Coal fired power plants 1) loAs the primary source of energy for Mongolia, the coalindustry is critical to the operation of Mongolia's energy system.
The 7 thermal power plants generates approximately 80% of theMongolia's electricity power generation capacity.


The aging of the existing power plant infrastructure results inenergy inefficiency and electricity loss due to: lower actual available power capacity and load factors
Higher self-electricity consumption in power plants.

IEEJ: August 2012 All Right Reserved

THE CURRENT MAJOR DIFFICULTIES IN
ENERGY SECTOR.
 Diesel generators - unstable diesel supply and high cost

The diesel generators are popular in rural areas with noconnection to the grid. In the South Gobi region, the Tavan
Tolgoi mine is building a 20MW diesel power plant as atemporary electricity solution. Two major problems need to besolved for diesel power plants to be viable long-term:
1) The unstable supply of diesel.
 Mongolia sources over 90 percent of its fuel from Russia. These

imports are unstable as Russia may suddenly curtail its fuel exports
as it has done in the past. This has the corollary effect of driving up
domestic prices.

2) The high operating cost for using diesel to generate power.
 Because Mongolia is forced to import diesel to offset its

domestic energy needs, the selling in that country is higher thanChina, Kazakhstan and Russia.

IEEJ: August 2012 All Right Reserved

THE SUBJECTS TO STUDY

Nowadays Mongolian Energy sector development plan are updating byMineral and Energy Ministry in assistance ADB. Therefore we The
National Dispatching Center, Power systems Mongolia need toinclude some our offers that plan. There are:
To extend our activities in nationwide range, so establish some branchcontrol centers in Eastern and Western Energy systems,
 To ensure national energy security and efficient utilization resources inorder to establish comprehensive energy Policy and supply-demand
forecasting, To implement Energy Policy based on energy supply-demand
forecasting as well as energy balance,
 To implement Market Oriented Operation on Energy sector.
IEEJ: August 2012 All Right Reserved

THE SUBJECTS TO STUDY

Our organization would like to achieve some items described in below.
There are:
To learn experiences of Japanese enterprises,
 To establish good relationship with same or similar organization in Japan,
 To establish connection to invite Japanese experts for implementing
Energy Policy, especially at establishing new control centers in Westernand Eastern Energy systems,
 To gain acknowledge about market oriented system operators, (to study
experiences of Japanese power companies)
 To gain knowledge Energy demand forecasting in World, especially inJapan,
 To gain experiences for formulation of future activities for energy policy
making based on energy supply-demand forecasting as well as energybalance.
 To study for planning perspectives of ensuring national energy security andefficient utilization of resources in order to develop energy supply-demand
forecasting.
IEEJ: August 2012 All Right Reserved

THE SUBJECTS TO STUDY

The areas of Interesting in:
Energy demand forecasting Knowledge on energy situation and its policy
 Formulation of future activities for energy policy making based onenergy supply-demand forecasting as well as energy balance.
 The perspective of ensuring national energy security and efficientutilization of resources in order to develop energy supply-demand
forecasting.
 Deregulation or liberalization of Energy sector
 Smart grid EMSIEEJ: August 2012 All Right Reserved

NATIONAL DISPATCHING CENTER OF POWER SYSTEMS ,MONGOLIA

Contact : report@tky.ieej.or.jp