The Current State of Electricity in Mongolia

|Mongolia

In Ulaanbaatar in July this year, I attended an international conference on the subject of electricity organized by the Ministry of Mineral Resources and Energy of Mongolia. Discussion took place over a broad range of fields regarding the problems which electricity has in Mongolia. Many people attending from overseas were from Europe, centered on concerned parties from Germany (government organs, banks, manufacturers and consultants). One manufacturing company from China took part.

The problems for Mongolian electricity projects are largely in three areas:

  1. The deterioration of facilities
  2. The system of electricity charges
  3. Environmental measures

1. The deterioration of facilities

Approximately half of Mongolia’s 2.7 million people are concentrated in Ulaanbaatar. The problems for electricity in Mongolia are the problems of Ulaanbaatar. Accompanying the transition to the new system in 1991, all the Russian technicians pulled out of Mongolia, and the management of an independent electrical power system was begun (the assistance from Japan at that time was very effective). Regarding the existing facilities, however, such as electricity generating plants, the electrical power transmission system, and the electricity distribution system, many remain that are old and of Russian manufacture. In terms of electricity generating plants there are no new facilities at the core electricity generating plants of Thermal Power Plants Nos. 2, 3 and 4. They are somehow scraping through with repairs and rehabilitation work. The respective thermal power plants are adopting management systems as independent state-owned companies.

Power cuts occur on a routine basis. The cause stems from the deterioration of old electricity distribution facilities in the city. While there are several private-sector electricity distribution companies in Ulaanbaatar, the replacement of facilities has not progressed.

2. The system of electricity charges

Concerning the charges for electricity, the state decides the rate as public policy. Currently it is 68 togrogs/kWh (just over 4 yen), but does not cover the amortization costs of facilities. Therefore, electrical power companies don’t have internal reserves, and are unable to undertake investment in facilities independently.

In addition, starting with the theft of electricity, the rate of uncollected charges is high, and this problem also is large.

3. Environmental measures

Mongolia’s electricity generating plants are basically coal-fired thermal power stations. Via the enlargement of Ulaanbaatar, the electricity generating plants that were in suburban areas have become incorporated into the city. Electric dust collectors have been installed at Thermal Power Plant No. 4 only, but there are no exhaust-gas (NOx and SOx) recovery devices. This, coupled with the smoke from gers, is producing the white evenings of Ulaanbaatar’s winter. There is concern about the further worsening of atmospheric pollution in the future. The problem of the disposal of coal ash has also emerged. At the same time as disposal sites are running out, fears that this could lead to river pollution are also emerging.

Although many proposals were made at the conference, the main ones are as below:

  1. A rise in the charges for electricity and the expansion of state financial assistance
  2. As an emergency measure, the retrieval of various kinds of equipment and the devising of financing for leasing, etc.
  3. The cultivation of personnel over the short and long-term
  4. Raising the energy efficiency of devices for use by consumers
  5. The introduction of renewable energy

This company made proposals toward the long-term building of the electrical power system based on the future for the development of Mongolia’s resources.

  1. The construction of electricity generating plants concentrated in the South Gobi region (Tavan Tolgoi) (efficiently using coal resources)
  2. The connecting of the South Gobi region and Ulaanbaatar via electricity transmission lines
  3. The gradual elimination of electricity generating plants in Ulaanbaatar

In the future the participation of firms from Japan in the project will be indispensible, and the formulation of a well-timed implementation plan is hoped for.

[Translated by ERINA]