Strategy for Northeast Asia Power System Interconnection
OVERVIEW This brochure summarizes the findings from a technical Some countries have overcome similar challenges by assistance (TA) project to define a strategy for a Northeast expanding power system balancing areas and allowing for Asia Power System Interconnection (NAPSI) using substantial cross-border power trade. Currently, the extent of Mongolia’s abundant renewable energy resources. The TA regional power trade in the Northeast Asia region is limited to spanned years and involved a highly consultative process bilateral electricity trade between the PRC and the Russian among a wide range of stakeholders to develop this strategy Federation, between Mongolia and the Russian Federation, and frame the associated technical analysis. The study’s and between Mongolia and the PRC. Previous preliminary approach and main findings are summarized here, and more studies indicated that the development of an interconnected details can be found in the technical reports available at Northeast Asia power grid would allow for cost-effective https://www.adb.org/projects/ - /mainproject- increased use of renewable power supply across the region, documents. with much of the renewable generation coming from southern Mongolia and benefitting countries as far as Japan. This TA INTRODUCTION sought to investigate this possibility through consultations among stakeholder governments and agencies and rigorous All of the Northeast Asian countries are dependent on technical analysis. fossil fuels; coal, natural gas, and oil provided of the region’s electricity generation in . Countries in the region are diversifying their energy mixes to replace higher- STUDY SCOPE cost, fossil fuel generators with solar, wind, and hydropower, The study sought to produce an updated analysis of power which is contributing also to improved air quality and systems and markets in the Northeast Asia region, and reduced greenhouse gas emissions. Notably, the People’s analyze least-cost expansion options considering projected Republic of China (PRC) has emerged as a world leader in demand growth, Mongolia’s renewable resource potential, the manufacture and installation of solar and wind power latest technical and cost data, and local power supply costs systems. Further expansion of renewable power in the within Northeast Asian countries. The Asian Development Northeast Asian countries is somewhat constrained by Bank contracted Electricite de France—in partnership with (i) distances between load centers and the areas with best China Electric Power Research Institute and Hangzhou renewable resources, (ii) existing grid and power generators Dianzi University in the PRC, and Nova Terra LLC in that are not sufficiently robust and flexible for effective Mongolia—to lead the study. The main activities and findings resource management, or (iii) land constraints that prevent are summarized, followed by potential next steps. domestic renewable expansion at levels required to reach climate mitigation goals.
International Energy Agency. Data and Statistics. https://www.iea.org/data-and-statistics/data-tables?countryWORLD (accessed September ).
1 Mongolia Power System Expansion and Renewable Resource Potential
Current situation. Mongolia’s power system is dominated and provides grid services for Mongolia’s Central Energy by coal, accounting for of domestic electricity System, which covers the major load centers, including generation in . The country targets renewable Ulaanbaatar. A kV line from the People’s Republic of electricity-generating capacity to reach of installed China supplies power to the Oyu Tolgoi mining operations capacity by . Mongolia is poised to meet this target in southern Mongolia, and this is isolated from the rest with two -megawatt (MW) wind farms and two MW of the Mongolian grid. Another kV line, operating solar plants already operating, and more under planning at kV, from Chadan–Handagaoly in the Russian and construction. Mongolia imports of electricity Federation, feeds the Western Energy System, which has supply (Figure ). A -kilovolt (kV) transmission line, supplied up to of electricity consumed in that region, with maximum capacity of MW, from Selendeuna though this will decrease once the planned wind and solar in Buryatia, the Russian Federation supplies electricity plants are commissioned (Figure ).
Figure : Electricity Supply Structure of Mongolia,
Wh Nonr G ene w , ab : le t g r e o n p e m r I a t i o Renewable generation: n TOTAL :
,
GWh
, G W
GWh h
Share renewables: Share of nonrenewables: Wind power: GWh Combined heat and power plants: , GWh Solar photovoltaic: GWh Diesel generation: GWh Hydropower plant: GWh
GWh gigawatt-hour. Note: Numbers may not total precisely due to rounding. Source: Energy Regulatory Commission of Mongolia. . Statistics on Energy Performance. Ulaanbaatar.
T. Tumenjargal. . Current Status and Progress for Mongolia Power Interconnection. https://www.unescap.org/sites/default/files/Session -. Mongolian Energy Economics Institute.pdf.
2 Figure : Electrical Interconnections and Domestic Power Generation in Northeast Asia,
RUSSIAN FEDERATION (�,���.� TWh)
(Chadan) (Amur) (Buryatia) �.� TWh �.� TWh �.� TWh (��� kV AC) (��� kV �C� ��� kV AC� ��� kV AC) (��� kV AC)
Western grid system Central grid system (Heilongjiang) (Not integrated domestically)
MONGOLIA (6.6 TWh) Oyu Tolgoi mining (Not integrated domestically)
�.� TWh (��� kV AC) (Inner Mongolia Autonomous Region)
PEOPLE'S REPUBLIC OF CHINA JAPAN (�,���.� TWh) (�,���.� TWh) REPUBLIC OF Grid interconnection N Power supply for limited areas only KOREA (���.� TWh) Boundaries are not necessarily authoritative.
This map was produced by the cartography unit of the Asian Development Bank. The boundaries, colors, denominations, and any other information shown on this map do not imply, on the part of the Asian Development Bank, any judgment on the legal status of any territory, or any endorsement or acceptance of such boundaries, colors, denominations, or information. �������b AV
kV AC kilovolt alternating current, kV DC kilovolt direct current, TWh terawatt-hour. Source: Energy Regulatory Commission of Mongolia. . Statistics on Energy Performance. Ulaanbaatar.; BP. . Statistical Review of World Energy . London; Inter Raoues. n.d. Trading. https://www.interrao.ru/en/activity/trading (accessed Oct ).
Renewable potential. The study assessed the economic Mongolia power system expansion. Expanding potential for solar and wind development in Mongolia renewable electricity generation in Mongolia beyond considering a wide range of constraints, such as excluding what is in planning stages currently is constrained by areas near to natural protection areas, far from roads and the limited flexibility of the current power system and transmission infrastructure, and with steep slope or high the capacity of the transmission network. Though elevations. The remaining areas with strong resource Mongolia has hydropower potential that could provide potential, measured as irradiance and wind speed, and both electricity and grid services, these resources have contiguous land area sufficient for either a MW wind not been developed for a variety of reasons, including farm or MW solar photovoltaic farm, were then ranked watershed protection. Under the study, Mongolia’s based on resource strength and proximity to infrastructure. power system expansion was modeled out to and Even considering these constraints, the study found ample considered projected growth rates of in the s renewable resource for both domestic use and potential and in the s, targeted renewable penetration of export. High-quality resources located within – by , and a minimum reserve margin of by kilometers from existing kV substations total . The least-cost expansion scenario to meet these gigawatts (GW) of wind and GW of solar photovoltaic. targets resulted in a total of . GW each of wind and solar The total economically viable resources were estimated at on the power system in . However, the results also GW of wind and , GW of solar photovoltaic. The showed that the system flexibility remains an impediment, majority of these resources are located in the south of the and substantial renewable electricity would be curtailed country near the Gobi Desert and close to the border with without investment in flexible generation assets and the PRC. transmission system upgrades.
3 Evaluating the Potential Benefits of Regional Power Trade
Modeling regional power system expansion. Potential • Regional interconnection with development of renewable electricity generation in the South Gobi region the South Gobi renewable resources. This analysis of Mongolia is well beyond domestic power demand, even includes build-out of South Gobi’s renewable many years into the future. To evaluate the potential resources at gigawatts (GW) and GW for for regional benefits from developing these resources export. for export, several scenarios for regional power system expansion were modeled for the period – , The study evaluated the costs of these three options, including: including capital and operating expenses for electricity generation and cross-border interconnections. The • Domestic least-cost expansion. All countries model used an idealized view of the transmission are modeled individually to identify the least-cost interconnections, where flow was driven by marginal cost generation expansion to meet growing domestic differences and does not consider geopolitical factors power demand. that might impact actual energy trade. The modelled • Regional interconnections. The region was modeled interconnections across the region under the renewable in aggregate to find the least-cost generation energy development scenario are presented (Figure ) expansion to meet growing regional demand, showing the number of interconnections and line including through cross-border power trade. capacities increasing as the renewable generation in the South Gobi expands.
Figure : Modelled Transmission Capacity between Regions in Scenario with South Gobi Renewable Expansion and Regional Power Trade
: . GW Renewable capacity connected at the GOBI RSI RFE JPN node . MG . . Transmission capacity in GW between countries GOB . or areas
C-W C-E ROK
: GW RSI RFE JPN MG GOB C-W C-E ROK
: GW : GW RSI RFE JPN RSI RFE JPN MG MG GOB GOB C-W C-E ROK C-W C-E ROK
C-E China East; C-W China West; GOB Mongolia-GOBI; GW gigawatt; JPN Japan; MG Mongolia-Ulanbaar; RFE Russia-Far East; ROK Republic of Korea; RSI Russia-Siberia. Source: Adapted from: ADB. . Strategy for Northeast Asia Power System Interconnection. Consultant Reports. Manila. (TA -MON).
4 Economic value of the increased power trade. The First step in building an interconnected Northeast investment costs and savings from use of lower cost Asia power grid. The first investments in a Northeast Asia generation were evaluated for the three scenarios, all of power grid include (i) GW of solar and wind capacity which assumed that Mongolia’s domestic grid would be in Mongolia’s South Gobi region, (ii) transmission line harmonized and strengthened outside of the NAPSI. between Mongolia’s South Gobi region and the northern Compared with the domestic least-cost expansion part of the PRC, and (iii) an undersea connection between scenario, the interconnection scenario resulted in net the eastern part of the People’s Republic of China (PRC) savings of about billion annually. Adding the GW and the Republic of Korea (ROK). The NAPSI study results renewable energy development in the South Gobi would suggest that these should be commissioned by as the require substantial investment in renewable energy capacity first step in reaching a fully integrated regional grid by additions and high-capacity, long-distance transmission (Figure ). Given the power shortages in the Seoul region, lines. But the net savings in this scenario is about the link between the eastern part of the PRC and the ROK billion annually compared with the isolated grid case. is the most pressing. A bilateral agreement to develop This high-renewables scenario changes the composition this link led to negotiations between Korea Electric Power of the region’s power generation fleet, substantially Corporation and State Grid Corporation of China on joint reducing power supplied from coal and natural gas plants, development of the project. To help the ROK in reaching resulting in an estimated annual avoided carbon dioxide climate mitigation goals, the development of GW emissions of million tons. These greenhouse gas renewable capacity in South Gobi and associated power emission reductions and improved public health from transmission to the ROK would ideally be undertaken at reduced air pollution add to the value of this scenario for the same time. This investment is also a critical first step to the Northeast Asia region. realizing the full benefits of NAPSI identified in the study.
Figure : Mongolia’s Existing Transmission Network, Areas with Economically Viable Wind and Solar Resource, and Proposed First Phase in Developing an Interconnected Northeast Asian Power System
RUSSIAN FEDERATION N Buryatia
Darkhan Erdenet Umnugovi
ULAANBAATAR
MONGOLIA
Solar and Wind Power � GW Tavan Tolgoi New Oyu Tolgoi Oyu Tolgoi
HVDC ��� GW
HVDC � GW
Wind Resources Solar Resources PEOPLE'S REPUBLIC OF CHINA JAPAN Substations ��� kV AC: existing ��� kV AC: existing REPUBLIC OF ��� kV AC: existing KOREA Proposed interconnections International Boundary Boundaries are not necessarily authoritative. This map was produced by the cartography unit of the Asian Development Bank. The boundaries, colors, denominations, and any other information shown on this map do not imply, on the part of the Asian Development Bank, any judgment on the legal status of any territory, or any endorsement or acceptance of such boundaries, colors, denominations, or information. �������d AV
Note: The three components of this first phase are a build-out of renewable generating capacity in the South Gobi, an interconnection to export power to the northern part of the People’s Republic of China (PRC), and an undersea transmission line to connect the eastern part of the PRC with the Republic of Korea. Source: Adapted from: ADB. . Strategy for Northeast Asia Power System Interconnection. Consultant Reports. Manila. (TA -MON)
5 NEXT STEPS The NAPSI TA has refined estimates of renewable energy South Gobi and transmission links between Mongolia and resources in Mongolia that could be developed for both the PRC, and between the PRC and the ROK. In addition, the domestic and regional use, defined scenarios for staged commercial and regulatory structures should be evaluated development of the renewable resources and the associated and used to develop draft transmission and power purchase regional transmission grid development, and aggregated agreements for phase , including provisions to ensure benefits at the regional level. These are valuable additions financial benefit to Mongolia from power exports, and to the body of work on regional power system integration commercial structuring arrangements for transboundary in Northeast Asia. However, further analysis is needed prior transmission lines. Also, it will be beneficial to develop a to investment. The current analysis assumed simplified and more granular analysis of benefits of regional power system idealized grid conditions to model scenarios at the regional integration to articulate benefits for each of the participating level. A feasibility study of the first phase would need to be countries beyond those aggregated at the regional level. undertaken to analyze these components in more detail, These activities would build on the analysis supported by the including GW of renewable generation development in the study to move the initiative closer to investment readiness.
Authors: Shannon Cowlin and Sakari Oksanen Notes: In this publication, “ ” refers to United States dollars. For further information, please contact Shannon Cowlin via [email protected]. ADB recognizes “China” as the People’s Republic of China, “Korea” as the Republic of Korea and “Russia” as the Russian Federation. Photo credits: ADB.
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