Technical Assistance Consultant’s R eport
Project Number: 48030-001 February 2020
Mongolia: S trategy for Northeast Asia Power S ystem Interconnection (Cofinanced by the Climate Change Fund, the People’s R epublic of China R egional Cooperation and Poverty R eduction Fund, and the R epublic of Korea e-Asia and Knowledge Partnership Fund)
Prepared by E lectricite de France Paris, France
For the Ministry of E nergy, Mongolia
This consultant’s report does not necessarily reflect the views of ADB or the Government concerned, and ADB and the Government cannot be held liable for its contents.
TA 9001-MON: Strategy for Northeast Asia Power S ystem Interconnections
EDF References: CIST – DCO – PhL – 18 - 208
This consultant’s report does not necessarily reflect the views of ADB or the Government concerned, and ADB and the Government cannot be held liable for its contents.
Module 4 report on Mongolia Energy Sector Profile and Projections
FOREWORD The project Team would like to thank:
- The Ministry of Energy of Mongolia for easing direct discussions with the National Dispatching Center, TRANSCO and Public Entities in Mongolia
- The ADB’s Country Coordinators of Mongolia, People’s Republic of China, Republic of Korea, Japan for their support: Mongolia: Mr. Byambasaikhan PRC: Ms. Geng Dan (Danna) ROK: Mr. Jung-Hwan Kim Japan: Mr. Omatsu Ryo and Mr. Shota Ichimura
Here is a reminder of the place of the Module 4 in the Project organization:
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Module 4 report on Mongolia Energy Sector Profile and Projections
TABLE OF CONTENTS EXECUTIVE SUMMARY ...... 14 1 OVERVIEW OF MODULE 4 ...... 19 2 MONGOLIA CURRENT POWER GENERATION ...... 20
2.1 CONVENTIONAL EXISTING POWER PLANTS ...... 21 2.1.1 Coal power plants ...... 22 2.1.2 Heat generation ...... 23 2.1.3 Current Mongolia transmission grid ...... 24
2.2 Renewable existing power plants ...... 26 2.2.1 Hydro power plants ...... 26 2.2.2 Wind farms ...... 27 2.2.3 Ground mounted solar PV farm ...... 28
2.3 PIPELINE OF CURRENT POWER DEVELOPMENTS ...... 30 2.3.1 Conventional plants ...... 30 2.3.2 Renewables ...... 31 2.3.2.1 Hydro ...... 31 2.3.2.2 Wind ...... 32 2.3.2.3 Ground mounted solar PV ...... 33 2.3.2.4 Biomass ...... 34 2.3.2.5 Other renewables ...... 36 Geothermal energy resources ...... 36 3 MONGOLIA STRATEGY ON POWER DEVELOPMENT...... 38 4 MONGOLIA EXISTING ENERGY POLICY (2030) ...... 40
4.1 Organizations of Mongolian power sector ...... 40
4.2 Regional energy system ...... 42
4.3 Single Buyer Model ...... 48 5 IMPACT ON MONGOLIAN CONVENTIONAL FLEET WITH ENERGY POLICY 2030 ...... 49
5.1 Targets ...... 49
5.2 Analysis of Existing Generation In Mongolia ...... 52
5.3 Heat forecast in mongolia ...... 52
5.4 Planned Generation Development ...... 53
5.5 Conclusion of Generation Analysis ...... 62 6 DEVELOPMENT OF RENEWABLE ENERGY IN MONGOLIA FOR EXPORTATION ...... 64
6.1 RENEWABLES DEVELOPMENT scenarios FOR MONGOLIA ...... 64
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Module 4 report on Mongolia Energy Sector Profile and Projections
6.1.1 Scenario 0 « MINGW » in 2020 ...... 64 6.1.2 Scenario 1 « +5GW » in 2026 ...... 65 6.1.3 Scenario 2 « +10GW » in 2036 ...... 65 6.1.4 Scenario 3 « +100GW » in the long term ...... 65
6.2 Wind and solar PV resource assessment ...... 65 6.2.1 Previous renewables resource assessment ...... 66 6.2.2 Methodology – GIS tool ...... 70 6.2.3 Hypotheses – Key environmental and regulation constraints ...... 72 6.2.4 Regulatory and land use constraints ...... 72 6.2.5 Wind technology characteristics ...... 75 6.2.6 Solar PV characteristics ...... 80
6.3 gis ranking methodology ...... 84 6.3.1 Multi-criteria decision analysis (MCDA) ...... 85 6.3.2 Weighing of criteria for the different scenarios ...... 86 6.3.3 Multi-criteria decision analysis for the different scenarios ...... 88
6.4 wind power potential ...... 92 6.4.1 Wind resource data ...... 92 6.4.2 Gross wind potential ...... 93 6.4.3 Technical wind potential ...... 94 ...... 94 6.4.4 Scenario 0 – Wind potential ...... 95 6.4.5 Scenario 1 to 3 – Wind potential ...... 98
6.5 solar pv potential ...... 100 6.5.1 Solar resource data ...... 100 6.5.2 Gross solar potential ...... 101 6.5.3 Technical solar potential ...... 102 ...... 102 6.5.4 Scenario 0 – Solar potential ...... 102 6.5.5 Scenario 1 to 3 – Solar potential ...... 106
6.6 wIND AND solar pv potential –Synthesis ...... 108 6.6.1 Wind and solar technical potential ...... 108 6.6.2 Wind and solar ranked potential – Scenario 0 ...... 109 6.6.3 Wind and solar ranked potential – Scenario 1 to 3 ...... 110
6.7 wIND AND solar pv Cost assessment - LCOE ...... 113 6.7.1 100MW wind farm costs ...... 113 6.7.2 50MW solar farm costs ...... 115
6.8 CONCLUSIONS of wIND AND solar pv assessment ...... 118 7 IMPACT OF RENEWABLES DEVELOPMENT ON MONGOLIA POWER SYSTEM ...... 119
7.1 METHODOLOGY ...... 120
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Module 4 report on Mongolia Energy Sector Profile and Projections
7.1.1 Methodology for analyzing impact on transmission system ...... 120
7.2 impact of scenario 0 on current power network ...... 122
7.3 IMPACT OF SCENARIO 1&2 ...... 124 7.3.1 Impact of Scenario 1 & 2 on conventional power on economy, politics & regulation and society & environment ...... 124 7.3.2 Impact of scenario 1 & 2 on current power network ...... 126
7.4 impact of scenario 3 ...... 128 7.4.1 Impact of Scenario 3 on economy, politics & regulation and society & environment ...... 128 7.4.2 Impact of Scenario 3 on current power network ...... 129 APPENDIX 1: SOURCE OF KEY CONSTRAINTS FOR RES ASSESSMENT (GIS TOOL) ...... 132
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Module 4 report on Mongolia Energy Sector Profile and Projections
LIST OF TABLES Table 1. CHPs in operation 21 Table 2. CHPs in operation 22 Table 3. Heat generation by plant 23 Table 4.Hydropower plants (in operation) 26 Table 5. Wind power plants (in operation) 27 Table 6.Wind-diesel power plants (in operation) 28 Table 7.Solar power station (in operation) 28 Table 8.Solar-Wind-diesel hybrid power plants (in operation) 29 Table 9.Power plant construction and enhancement plan are shown in the following table. Some of them are under way. 30 Table 10.Projects of Hydropower plant construction 31 Table 11.Projects of Wind power plant construction 32 Table 12.Projects of Solar power plant construction 33 Table 13.Mongolia strategy on power development 39 Table 14. Functions of related organizations 41 Table 15.The electricity prices for ordinary household 44 Table 16.The electricity prices for enterprises 44 Table 17. Tariffs for the electricity from Renewable Energy plants 47 Table 18. Heat demand forecast in Mongolia (Upscaling Energy Sector Development Plan, ADB report, medium scenario) 53 Table 19. Generation Development in Target 1 (2020) 54 Table 20.Generation Development in Target 2 (2020) 56 Table 21. Impact on Conventional Generation in 2030 58 Table 22. Impact on Conventional Generation in 2036 60 Table 23. Comparison of Generation Analysis Results 62 Table 24. 220kV Substations & Connection capacity 64 Table 25. Wind energy potential of Mongolia (good to very good wind resource at 30 m height) Source: NREL & NREC 66 Table 26. Solar energy resource of Mongolia. Source NREC 2006 68 Table 27. Mongolia solar resource estimate. Source IRENA 69 Table 28. Main constraints for wind and solar – Key hypotheses – Source EDF EIFER 73 Table 29. Wind power density – Source EDF 77
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Module 4 report on Mongolia Energy Sector Profile and Projections
Table 30. Wind turbine Power Curve – Source: Vestas – EDF 79 Table 31. Load factor calculation – Source EDF 80 Table 32 Solar PV load factor – Source EDF 84 Table 33 Scenario 0 – Ranking & Scores. Source EDF 86 Table 34 Scenarios 1 to 3 – Ranking & Scores. Source EDF 87 Table 35. Scenario 0-Wind resource scores. Source EDF 95 Table 36. Scenario 0-Wind resource within 200km substations buffers-All scores. Source EDF 96 Table 37. Scenario 0-Total wind resource within 200km substations buffers. Source EDF 97 Table 38. Scenario 0-Score 4 wind resource within 20-50km substations buffers. Source EDF 97 Table 39. Scenario 1 to 3-Wind resource Scores. Source EDF 98 Table 40. Scenario 1 to 3-Score 4 wind potential areas per Aimag. Source EDF 99 Table 41. Scenario 1 to 3-Score 5 wind potential areas per Aimag. Source EDF 99 Table 42. Scenario 1 to 3-Score 4 wind potential areas within 200km substations buffers. Source EDF 100 Table 43. Scenario 0-Solar resource scores. Source EDF 103 Table 44. Scenario 0-Solar resource within 200km substations buffers-All scores. Source EDF 104 Table 45. Scenario 0-Total solar resource within 200km substations buffers. Source EDF 105 Table 46. Scenario 0-Score 4 solar resource within 20-50km substations buffers. Source EDF 105 Table 47. Scenario 1 to 3-Solar resource Scores. Source EDF 106 Table 48. Scenario 1 to 3-Score 4 solar potential areas per Aimag. Source EDF 107 Table 49. Scenario 1 to 3-Score 4 solar potential areas within 200km substations buffers. Source EDF 107 Table 50. 2020 Wind CAPEX. Source EDF 113 Table 51. 2020 Wind OPEX. Source EDF 114 Table 52. 2020-2026-2036 Wind CAPEX. Source EDF 114 Table 53. 2020-2026-2036 Wind OPEX. Source EDF 115 Table 54. 2020-2026-2036 Wind LCoE. Source EDF 115 Table 55. 2020-Solar CAPEX. Source EDF 116 Table 56. 2020 Solar OPEX. Source EDF 116 Table 57. 2020-2026-2036 Solar CAPEX. Source EDF 117
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Module 4 report on Mongolia Energy Sector Profile and Projections
Table 58. 2020-2026-2036 Solar OPEX. Source EDF 117 Table 59. 2020-2026-2036 Solar LCoE. Source EDF 118 Table 60. Mongolian GDP and renewable energy investment under Scenario 1 124 Table 61. Mongolian GDP and renewable energy investment under Scenario 2 125 Table 62. Mongolian GDP and renewable energy investment under Scenario 3 128
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Module 4 report on Mongolia Energy Sector Profile and Projections
LIST OF FIGURES Figure 1 Installed capacity and Electricity generation in Mongolia in 2016 ...... 20 Figure 2 Transmission line in South Gobi ...... 25 Figure 3 Big Hydropower plants (in operation) ...... 27 Figure 4. Existing wind power plants ...... 27 Figure 5 Bid scale Solar power station (in operation) ...... 29 Figure 6 Mongolian forest resources ...... 36 Figure 7. Location of Mongolian hot springs, Source: Study conducted by REC ...... 37 Figure 8. Overview of related organizations in Mongolian Power sector ...... 40 Figure 9. Four Energy System in Mongolia ...... 42 Figure 10. Procedure for Approval of Tariffs ...... 46 Figure 11. Participants of Single Buyer Model in CES ...... 48 Figure 12. Existing Conventional Generation by Region and Unit Size ...... 52 Figure 13. Monthly RE Curtailment and Energy Not Supplied...... 56 Figure 14. Monthly RE Curtailment and CENS in 2026 ...... 58 Figure 15. Monthly RE Curtailment and EENS in 2030 ...... 60 Figure 16. Monthly RE Curtailment and EENS in 2036 ...... 61 Figure 17. Mongolia – 5000m resolution elevation map. Source: Vaisala ...... 65 Figure 18. Wind resource map of Mongolia. Source NREL & NREC 2004 ...... 67 Figure 19. Map of wind capacity in Mongolia. Source IRENA ...... 67 Figure 20. Annual global solar radiation, kWh/m2/year. Source Energy Authority of Mongolia 2009 ...... 69 Figure 21. Potential assessment phases. Source EDF ...... 71 Figure 22. GIS methodology – Source EDF EIFER ...... 71 Figure 23. GIS methodology & steps – Source EDF EIFER ...... 72 Figure 24. Examples of possible Vestas turbines, suitable in Mongolia (IEC II & I) – Source Vestas ...... 76 Figure 25. Wind farm layout – Source EDF ...... 77 Figure 26. Weibull wind distribution – average wind speed 8 & 9 m/s – Source EDF ...... 78 Figure 27. Turbines Power Curve – Source Vestas & EDF ...... 78 Figure 28. Canadian Solar “Diamond CS6X-315/320/325/330P-FG” module-Source Canadian Solar ...... 81 Figure 29. SunBrush PV panel brushing system (Seih Al-Dahal farm – Dubai) – Souce SunBrush ...... 82
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Module 4 report on Mongolia Energy Sector Profile and Projections
Figure 30. PV module cleaning robot – Source Miraikikai ...... 83 Figure 31. Ground mounted tilted PV panels – Layout and shading - Source Schettler Gmbh ...... 83 Figure 32. Procedure for ranking suitable areas. Source EDF EIFER ...... 88 Figure 33. Wind speed-Value scores. Source EDF EIFER ...... 89 Figure 34. Solar GHI-Value scores. Source EDF EIFER ...... 89 Figure 35. Proximity to roads-Value scores. Source EDF EIFER ...... 90 Figure 36. Proximity to railways (only for Solar)-Value scores. Source EDF EIFER ...... 90 Figure 37. Proximity to cities/villages-Value scores. Source EDF EIFER ...... 91 Figure 38. Terrain slope (only for Solar)-Value scores. Source EDF EIFER ...... 91 Figure 39. Proximity to 220kV substations (only Scenario 0). Value scores. Source EDF EIFER ...... 92 Figure 40. 30-year (1987-2016) mean wind speed at 100m – Source Vaisala ...... 93 Figure 41. Wind resource in Mongolia. Source EDF EIFER ...... 93 Figure 42. Wind resource in non-excluded areas. Source EDF EIFER ...... 94 Figure 43. Scenario 0 – Wind ranked potential areas – All scores. Source EDF EIFER ...... 95 Figure 44. Scenario 1 to 3-Wind ranked potential areas – All scores. Source EDF EIFER .. 98 Figure 45. Solar resource (GHI) in Mongolia. Source SolarGis ...... 101 Figure 46. Wind resource in Mongolia. Source EDF EIFER ...... 101 Figure 47. Solar resource in Mongolia (non-excluded areas). Source EDF EIFER ...... 102 Figure 48. Scenario 0 – Solar ranked potential areas – All scores. Source EDF EIFER .... 103 Figure 49. Scenario 1 to 3-Solar ranked potential areas – All scores. Source EDF EIFER 106 Figure 50. Wind and Solar potential areas (non-excluded areas). Source EDF EIFER ...... 108 Figure 51. Scenario 0-Wind & Solar potential areas-All scores. Source EDF EIFER ...... 109 Figure 52. Scenario 0-Wind & Solar potential areas-All scores-220kV grid. Source EDF EIFER ...... 109 Figure 53. Scenario 0-Wind & Solar potential areas-Score 4. Source EDF EIFER ...... 110 Figure 54. Scenario 1 to 3. Wind and Solar potential areas. Score 4 only. Source EDF EIFER ...... 111 Figure 55. Scenario 1 to 3. Wind and Solar potential areas. Score 4 only. 220kV grid. Source EDF EIFER ...... 111 Figure 56. Scenario 1 to 3. Best Provinces for wind and solar development (Score 4)-220kV grid. Source EDF EIFER ...... 112 Figure 57. Schematic Diagram of Quarantined VSC-HVDC Transmission Scheme ...... 121
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Module 4 report on Mongolia Energy Sector Profile and Projections
Figure 58.Schematic Diagram of Integrated HVDC Transmission System Design ...... 121 Figure 59. Scenario 1 – Impact on Mongolian Transmission System ...... 122 Figure 60. Schematic Single Line Diagram of Mongolian Transmission System ...... 123 Figure 61. Scenario 2 Quarantined HVDC Transmission Scheme ...... 127 Figure 62. Scenario 2 – Integrated HVDC transmission scheme ...... 127 Figure 63. Scenario 3 – Quarantined HVDC Transmission Scheme ...... 130 Figure 64. Scenario 3 – Integrated HVDC Transmission Scheme ...... 130 Figure 65. Scenario 3 – Integrated AC Transmission Scheme ...... 131
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Module 4 report on Mongolia Energy Sector Profile and Projections
PHYSICAL UNITS AND CONVERSION FACTORS bbl barrel (1t = 7.3 bbl) cal calorie (1 cal = 4.1868 J) Gcal Giga calorie GWh Gigawatt-hour h hour km kilometer km² square kilometer kW kilo Watt kWp kilo Watt peak (solar PV) kWh kilo Watt hour (1 kWh = 3.6 MJ) MBtu Million British Thermal Units (= 1 055 MJ = 252 kCal) one cubic foot of natural gas produces approximately 1,000 BTU MJ Million Joule (= 0,948.10–3 MBtu = 238.8 kcal) MW Mega Watt m meter m3/d cubic meter per day mm millimeter mm3 million cubic meter Nm3 Normal cubic meter, i.e. measured under normal conditions, i.e. 0°C and 1013 mbar (1 Nm3 = 1.057 m3 measured under standard conditions, i.e. 15°C and 1013 mbar) pu per unit sqm Square meter t ton toe tons of oil equivalent tcf ton cubic feet °C Degrees Celsius
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Module 4 report on Mongolia Energy Sector Profile and Projections
ABBREVIATIONS AND ACRONYMS
ADB Asian Development Bank AUES Altai-Uliastai Energy System BNEF Bloomberg New Energy Finance BTB Back To Back CAPEX Capital Expenditure CCGT Combined Cycle Gas Turbine CEPRI China Electric Power Research Institute CES Central Energy System CHP Combined Heat Power COD Date of commission EES Eastern Energy System EENS Expected of Energy Not Supplied ERC Energy Regulatory Commission ESRI Environmental Systems Research Institute GDP Gross Domestic Product GE General Electric GESP Generation Expansion Simulation Programme GHI Global horizontal irradiation GIS Geographical Information System GTI Global Tilted Irradiation/Irradiance GTM Green Tech Media HPP Hydro Power Plant HV High Voltage HVAC High Voltage Alternative Current HVDC High Voltage Direct Current IEA International Energy Agency IEC International Electrotechnical Commission IRENA International Renewable Energy Agency LCoE Levelized Cost of Electricity MCDA Multi-criteria decision Analysis MoE Ministry of Energy (Mongolia) MNT Mongolian NDC National Dispatching Center (Mongolia) NEA North East Asia NREC National Renewable Energy Corporation (Mongolia) NREL National Renewable Energy Laboratory of the USA NTPG National Power Transmission Grid (Mongolia) NWP Numerical Weather Prediction O&M Operation and Maintenance OCGT Open Cycle Gas Turbine OPEX Operational expenditure PRC People’s Republic of China PV Photovoltaic RES Renewable Energy Source SES Southern Energy System
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Module 4 report on Mongolia Energy Sector Profile and Projections
TL Transmission Line TPP Thermal Power Plant UA Unit of Account UNESCAP United Nations Economic and Social Commission for Asia and the Pacific USD United States Dollar VSC Voltage Source Converter WACC Weighted Average Cos of Capital WLC Weighted linear combination
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Module 4 report on Mongolia Energy Sector Profile and Projections
EXECUTIVE SUMMARY
The Module 4 report is focused on Mongolia. The report presents the Strategy on Power de- velopment with the analysis of the electricity sector and the assessment of Renewable poten- tial. The report starts with the descriptions of the current conventional and renewable Power gen- eration fleet, the pipeline of current Power development and the Mongolian existing Energy Policy for 2030. Three planning years are considered for the study presented in the report: 2020 (Target 1), 2026 (Target 2) and 2036 (Target 3). 2030 is added because it corresponds to the target of the “State Policy on Energy 2015-2030. IMPACT ON CONVENTIONAL FLEET WITH ENERGY POLICY (2030) Development of renewable generation has two major impacts on Mongolia power system. Firstly, development of renewable generation will greatly relieve the current tight generation margin and improve power supply reliability. On the other hand, renewable generation, due to its inherent variability and intermittency, will exacerbate the difficulties and increase the com- plexity in operating the power system in Mongolia, extra flexible generation is required to ena- ble the operability of Mongolian power system. Secondly, the development of renewable gen- eration will require significant development and upgrade in Transmission network in Mongolia. This report considers the impact of renewable generation development on conventional gen- eration and also transmission system in Mongolia. In order to assess the impact of renewable generation development on conventional plant under various scenarios, we used the model Generation Expansion Simulation Programme (GESP). GESP is a generation expansion planning tool that minimizes total generation sys- tem costs over the planning horizon taking into consideration of capital investment, emis- sions, renewable energy curtailment, reliability and production costs, as well as technical constraints of different types of generation and also heat demand requirements. Based on the assumption over the next 20 years shown in Module 3 report, Power demand in Mongolia is likely to treble and reach over 4330MW and heat demand to double to 5694Gcal/hour by 2036. The report presents the Power fleet sizing study run assuming no export/import of electricity considering Mongolian Power fleet self-sufficient for the internal de- mand. In the frame of the State Policy on Energy 2015-2030, for meeting government renewable energy target, Renewable generation for Mongolian market consumption will reach 1800MW by 2030, corresponding to 30% of total generation capacity. CO2 intensity falls from 0.40tCO2e/MWh in 2020 to 0.33 tCO2e/MWh in 2036. Significant amount of flexible genera- tion is required to manage renewable generation intermittency and variability as well as in- flexibility of conventional generation as shown in the following table:
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Module 4 report on Mongolia Energy Sector Profile and Projections
DEVELOPMENT OF RENEWABLE ENERGY IN MONGOLIA FOR EXPORTATION Four scenarios are envisaged for the future development of Renewables in Mongolia focused on both onshore wind power and ground mounted solar photovoltaic (PV): Scenario 0: “minGW” capacity in 2020, connected to Mongolian 220kV power grid, only for Mongolia electricity consumption. The “minGW” capacity refers to the availa- ble connection capacity to current 220kV substations. Scenario 1: + 5GW in 2026, mainly for exportation to neighbouring countries. Scenario 2: + 10GW in 2036 (therefore + 5GW between 2026 and 2036) for exporta- tion to neighbouring countries as well. Scenario 3: +100GW in the long term.
WIND AND SOLAR POWER - POTENTIAL ASSESSMENT
A comprehensive Wind and Solar power potential assessment has been carried out, using accurate wind and solar resource data and robust Geographic Information System (GIS) tool, so as to select suitable sites. In particular, key environmental and regulation constraints have been taken into account in order to remove excluded areas incompatible with future Wind or Solar PV development.
Due to the vast wind and solar resource, a dedicated ranking methodology has been implemented in the GIS tool in order to help select preferred potential areas. The ranking methodology is based on a multi-criteria analysis (Ranking applied only to minimum 10 MW Wind farm (10 km2) and 5 MW Solar PV farm (0, 25 km2) :
. Resource (wind speed and Global Horizontal Irradiation): minimum wind speed 6.5 m/s and GHI 1500 kWh/m2.
. Location of potential development areas (cost driver for installation & O&M):
– Proximity to existing roads (paved or unpaved): access to future sites
– Proximity to cities/villages…: key factor for future Operation & Maintenance (Accommodation of O&M staff)
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Module 4 report on Mongolia Energy Sector Profile and Projections
– Proximity to railways/train station for Solar PV equipment supply (Wind equipment supply only by trucks)
• Proximity to existing 220 kV substations for Scenario 0 only (maximum 200 km): reduction of grid connection costs (transmission line length)
• Slope of suitable terrains for PV panel installations < 20° The GIS-based Multi Criteria Analysis using Weighted Linear Combination has provided 5 Scores for Wind and Solar PV potential areas. Preferred areas for future development have the highest score (best resource and best location).
Score 5 is only related for 3GW of wind in Western Mongolia and consequently is not appropriate for exportation toward South East of Mongolia. The main results are for Score 4 Wind and Solar preferred areas:
Wind Capacity Solar Capacity
Score 4 Score 4
Scenario 0 Scenario 1 to 3 Scenario 0 Scenario 1 to 3 Capacity GW 21.7 191.6 483.7 1,165.7 2 Area km 4,340 38,324 12,092 29,142 Number of areas 38 223 599 2,574
Score 4 areas in Scenario 0 are located within 20-50km to existing 220kV substations but their available connection capacity is limited to 350-550MW only. In Scenario 1 to 3, the distance to existing 220kV substations is not a criteria because new grid will be required for the massive Transmission of exportation. The study has confirmed the huge potential for both Wind and Solar Power not only for Mon- golia own Renewables development but also for future exportation. For exportation, Umnugovi, Dundgovi and Dornogovi are the best Aimags. Using efficient and reliable technologies (Wind turbines and solar PV modules) able to cope with harsh site conditions, a cost assessment has been carried out (CAPEX & OPEX) only for preferred sites (Score 4) in order to assess 2020, 2026 and 2036 Levelized Cost of Electricity (LCoE).
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Module 4 report on Mongolia Energy Sector Profile and Projections
Cost assessment for Wind Power:
Cost assessment for Solar Power:
Due to the outstanding resource, Wind power is likely to be cheaper than Solar PV in the short and medium term but PV modules and Balance of System improvements expected could bring down Solar PV LCoE in the long term at the same level as Wind power.
IMPACT OF RENEWABLES DEVELOPMENT ON MONGOLIA POWER SYSTEM The impact of renewable generation will also depend on Transmission network configuration and design for large scale renewable generation bases. This report proposed two different design frameworks: quarantined and integrated configurations:
- Under quarantined scheme, renewable generation will be developed in both concentrated and distributed manner. The distributed renewable generation will be connected to the main Mongolian Transmission network, and the large scale renewable energy base
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Module 4 report on Mongolia Energy Sector Profile and Projections
would be collected and transmitted by dedicated network to the neighboring countries, which are physically segregated from the Mongolian main transmission system. - The integrated scheme is where the renewable generation base is physically connected with the main Mongolian Transmission system.
The renewable generation base will have minimal impact on the Mongolian main system under the quarantined scheme but significant impact under the integrated configuration. This report presented different network configurations for 2020, 2026, 2030 and 2036, including quaran- tined HVDC, and integrated HVDC and HVAC schemes.
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Module 4 report on Mongolia Energy Sector Profile and Projections
1 OVERVIEW OF MODULE 4
The Module 4 report is focused on Mongolia. The report presents the Strategy on Power de- velopment with the analysis of the electricity sector and the assessment of Renewable poten- tial. The report presents:
- The descriptions of the current conventional and renewable Power generation fleet, the pipeline of current Power development and the Mongolian existing Energy Policy for 2030. - The impact on conventional fleet with energy policy (2030) - The development of renewable energy in Mongolia for exportation - - The wind and solar power - potential assessment The impact of renewables development on Mongolia power system Three planning years will be considered for the study: 2020 (Target 1), 2026 (Target 2) and 2036 (Target 3). 2030 is added because it corresponds to the target of the “State Policy on Energy 2015-2030. Four scenarios will be envisaged for the future development of Renewables in Mongolia fo- cused on both onshore wind power and ground mounted solar photovoltaic (PV): Scenario 0: “minGW” capacity in 2020, connected to Mongolian 220kV power grid, only for Mongolia electricity consumption. The “minGW” capacity refers to the availa- ble connection capacity to current 220kV substations. Scenario 1: + 5GW in 2026, mainly for exportation to neighbouring countries. Scenario 2: + 10GW in 2036 (therefore + 5GW between 2026 and 2036) for exporta- tion to neighbouring countries as well. Scenario 3: +100GW in the long term.
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2 MONGOLIA CURRENT POWER GENERATION
The overwhelm majority of electricity in Mongolia has been generated by coal fired power plant and the remaining by Hydroelectric Power Plants (HPP), diesel, solar and wind power stations. All Mongolian coal fired power plant are Combined and Heat Power Plants (CHPs).
Figure 1 Installed capacity and Electricity generation in Mongolia in 20161
The total installed capacity is 1,245MW in 2016; 84.26 per cent of the capacity is in CHPs, 2.25 per cent is Hydro, 3.69 per cent is diesel and 1.73 per cent is Solar and 8.06 percent is Wind. The installed capacity of Renewable Energy sources (RE), which include Hydro, Solar and Wind, are only 12.3 per cent of the total. CHPs generated 95.75 per cent of a total elec- tricity generated in 2016 and electricity generated by RE remained 4.18 per cent2. Following elements constitute impediment to promote utilization of RE in Mongolia.
Wind: difficulty in raising money, cubs on electricity buying at night time and oth- ers Solar: Low tariffs and others
1 ERC “Statistic book of energy sector” 2017 2 ERC “Statistic book of energy sector” 2017 20
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2.1 CONVENTIONAL EXISTING POWER PLANTS
Whether the technical analysis will be performed in Module 5: « Grid », this part is assessing the as- sumptions on the technology that would be integrated in the financial business case in order to assess the financial feasibility. On installed-capacity basis, 95.9% of CHPs are located in CES area.
Table 1. CHPs in operation 3
Installed Ca- Available Ca- Location COD pacity (MW) pacity (MW) Grid
CHP #2 21 18 UB CES 1961
CHP #3 198 155 UB CES 1968
CHP #4 683 575 UB CES 1983
Erdenet CHP 36 21 Erdenet CES 1987
Darkhan CHP 48 39 Darkhan CES 1965
Dalanzadgad CHP 9 4.5 South Gobi CES 2000 (South Gobi)
Ukhaakhudag 18 16 Ukhaakhudag CES 2011 CHP (South Gobi)
Sub Total CES 1013 915
Dornod CHP 36 29 Dornod EES 1969
TOTAL 1049 944
Power plants of CHPs are getting older and its efficiency is low. Furthermore, because the coal quality is much below the quality of the design coal for their boilers, most CHPs operate with de-rated capacity4. The CES is unable to generate enough electricity meets the daily demand with its power plants due to their poor peaking capability5. The CES imports electricity from Russia to fill a gap between the demand and electricity generated.
3 ERC, “Statistic of energy sector” 4 Energy Charter Secretariat, “In-depth review of the investment climate and market structure in the energy sector of Mongolia” 2013, p.63. 5 Energy Charter Secretariat, “In-depth review of the investment climate and market structure in the energy sector of Mongolia” 2013, p.61. 21
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Rehabilitation projects on CHPs have been carried out. Some rehabilitation projects have been implemented on CHP #4 by Japan. Thus facilities of CHP#4 have been improved. However, few rehabilitation projects seem to have been implemented on other CHPs. Power plant con- struction and enhancement plan shown in 3 and some of them are under way.
2.1.1 Coal power plants
On installed-capacity basis, 95.9 per cent of CHPs are located in CES area.
Table 2. CHPs in operation 6
Installed Ca- Available Ca- Location COD pacity (MW) pacity (MW) Grid
CHP #2 21 18 UB CES 1961
CHP #3 198 155 UB CES 1968
CHP #4 683 575 UB CES 1983
Erdenet CHP 36 21 Erdenet CES 1987
Darkhan CHP 48 39 Darkhan CES 1965
Dalanzadgad 9 4.5 South Gobi CES 2000 CHP (South Gobi)
Ukhaakhudag 18 16 Ukhaakhuda CES 2011 CHP g (South Gobi)
Sub Total CES 1013 915
Dornod CHP 36 29 Dornod EES 1969
TOTAL 1049 944
6 ERC, “Statistic of energy sector” p.2. 22
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2.1.2 Heat generation
There are 11 major heat generation plants. In 2016, total generation amounted up to 8,727.0 thousand Gcal.
Table 3. Heat generation by plant
Name Generated heat % of total (planned site) (thou. Gcal) generation
Dalanzadgad CHP 26.9 0%
Thermal power station in Nalaikh JSC (TPSND) 123.1 1%
CHP #3 196.0 2%
Baganuur Thermal Power Plant JSC (BNTP) 155.8 2%
Amgalan thermal plant state owned Ltd. (ATP) 374.7 4%
Dornod CHP 36 4%
Dalanzadgad CHP 504.8 6%
License Holder in Rural Areas (LH-RA) 646.6 7%
Darkhan CHP 570.0 7%
CHP #2 2,287.6 26%
CHP #4 3532.3 40%
Total 8,727.0 100%
From the above generated heat, 94% (7676.2 thou. Gcal) is distributed as water while the remaining 6% (496.1 thou.Gcal) is distributed as steam7.
7 Energy Regulatory Commission of Mongolia “2016 Statistics on Energy performance” 2016, p. 17
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Heat end users are concentrated in major urban areas, such as Ulaanbaatar, Darkhan and Erdenet. These cities consume up to 97.4% of heat generated8. As for consumer classification, Residential consumers use 885 of total generated heat.
2.1.3 Current Mongolia transmission grid
Transmission Line (TL)
Mongolia power network comprises:
4,026 kilometers of Transmission Lines (TLs) of which 1,044 km are 220kV TLs and 2,982km are 110kV TLs. 220kV TLs have been only laid in east part of CES area. 5,824km of Distribution Lines which have been laid in CES area9.
TL between EES and Altai-Uliastai energy system has a capacity of 110kV. TL between CES and Russian is of 220kV.
TL from Ulaanbaatar to Oyutolgoi via Baganuur, Choir and Mandalgobi is made for high- voltage transmission (220kV). TL from Choir to Oyutolgoi is operated in 110kV due to facilities at substations. MOE plans to construct TL with 330kV from Ulaanbaatar to Mandalgobi directly.
TL with 110kV (single circuit, capacity of 80MW) has been laid between Dalanzadgad and Tavantolgoi10.
8 Energy Regulatory Commission of Mongolia “2016 Statistics on Energy performance” 2016, p. 30 9 Energy Charter Secretariat “In-depth review of the investment climate and market structure in the energy sector of Mongolia” 2013, p.61. 10 Our hearing survey
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Figure 2 Transmission line in South Gobi 11 Electricity losses
The electricity transmission and distribution losses of CES reached 17.3 per cent12. Because the electricity transmission losses reached approximately 3 per cent, it is seems that the elec- tricity distribution losses were large. In addition to these losses, Power plants of CES use 22 per cent of gross generation for their own use in winter13. The electricity transmission losses of WES reached 21.9 per cent and the distribution losses of WES 17-37 per cent. Total electricity losses in Dornod region in EES reached 8.7 per cent and the losses of Altai-Uliastai energy system are estimated 12 per cent14.
Tariffs and its system
This subsection covers the tariff structure for conventional power source, tariffs for renewa- ble energy sources, Single Buyer Model and the structure of electricity transaction market.
11 National Power Transmission Grid, “NATIONAL POWER TRANSMISSION GRID STATE OWNED STOCK COM- PANY”; Our hearing survey
12 Energy Charter Secretariat, “In-depth review of the investment climate and market structure in the energy sector of Mongo- lia” 2013, pp.63-64. 13 Energy Charter Secretariat, “In-depth review of the investment climate and market structure in the energy sector of Mon- golia” 2013, p.63. 14 Energy Charter Secretariat, “In-depth review of the investment climate and market structure in the energy sector of Mongo- lia” 2013, p.64.
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The movement which considers reduction of and new setting of electricity prices in night time for the purpose of demand boosting in night time, and the movement which increase consumer price for the purpose of subsidy reduction applied to the power sector widely are seen in recent years.
2.2 RENEWABLE EXISTING POWER PLANTS
2.2.1 Hydro power plants
There are nine hydropower plants that are in operation in Mongolia.
Table 4.Hydropower plants (in operation) 15
Name Capacity Grid COD kW
Bogdiin gol 2000 1989
Mankhan 150 1998
Guulin 400 1998
Taishir 11’000 WES 2008
Durgun 12’000 WES 2008 Tsetsen uul 250 2008
Zavkhanmandal 110 2009
Erdenebulgan 200 2006
Tosontsengel 375 2006
Munkhkhairkhan 150
Undurkhangai 200 1989
Uyench 960 2005
Kharkhorin 600
15 Energy Charter Secretariat, “In-depth review of the investment climate and market structure in the energy sector of Mongolia” 2013, p.71. 26
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Figure 3 Big Hydropower plants (in operation)
2.2.2 Wind farms
Two wind power plants are in operation in Mongolia.
Table 5. Wind power plants (in operation)
Name Capacity Grid COD MW
Salhkit 50 CES 2013
Tsetsii 50 CES 2017
Four small wind-diesel power plants are in operation.
Figure 4. Existing wind power plants
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Table 6.Wind-diesel power plants (in operation)16
Name Capacity Grid COD kW
Erdenetsagaan 100 - 2004
Bogd 80 - 2008
Sevrei 80 - 2008
Khatanbulag 150 - 2008
2.2.3 Ground mounted solar PV farm
Some small ground mounted solar power stations and solar-wind-diesel hybrid power plants are in operation in Mongolia.
Table 7.Solar power station (in operation) 17
Name Capacity Grid COD kW
Noyon 200 - 2004
Tsetseg 100 - 2008
Bugat 140 - 2009
Urgamal 150 - 2010
Durvuljin 150 - 2010
Bayantooroi 100 - 2010
Altai 52.4 - 2010
Matad 60 - 2010
Bayantsagaan 200 - 2011
16 T.TSERENPUREV and J.OSGONBAATAR, “INTRODUCTION OF RENEWABLE ENERGY SECTOR IN MON- GOLIA AND THEIR POLICY ENVIRONMENT”,2012.4
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Chinggis Khaan International Airport 443.52 CES 2012
Solar Power International 10,000 CES 2016
Everyday farm 10,000 CES 2017
Table 8.Solar-Wind-diesel hybrid power plants (in operation) 18
Name Capacity Grid COD kW
Manlai 150 - 2008
Tseel 150 - 2008
Shinejist 150 - 2008
Bayan-Undur 150 - 2008
Nalaikh 110 - 2009
Mandakh 200 - 2010
Figure 5 Bid scale Solar power station (in operation)
18 T.TSERENPUREV and J.OSGONBAATAR, “INTRODUCTION OF RENEWABLE ENERGY SECTOR IN MON- GOLIA AND THEIR POLICY ENVIRONMENT”,2012.4
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2.3 PIPELINE OF CURRENT POWER DEVELOPMENTS
2.3.1 Conventional plants
Power plant construction and enhancement plan are shown in the following table. Some of them are under way. Table 9.Expansion projects on CHPs 19 Name Capacity MW Grid COD Status Remarks
Telmen TPP 100 - - Plan Darkhan CHP 35 CES - Construction Extension
Erdenet CHP 35 CES - Plan Extension
CHP #3 2x125 CES - Plan Extension
CHP #5 450 CES - Plan
Baganuur TPP 700 - - Plan
Chandgana TPP 600 - - Plan East region Dornod 50 EES - Plan Extension CHP
Ulaan Ovoo TPP 100 CES 2020 Plan
Tavan tolgoi TPP 450 CES - Plan
Khushuut TPP 12-24 - - Plan
Khotgor TPP 60 WES - Plan
Aduunchuluun TPP 100 EES 2020 Plan
Tevshiin Gobi TPP 600 CES 2020 Plan
Shivee Ovoo TPP 700 CES 2019 Plan
Buuruljuut TPP 600 CES 2020 Plan
19 Ministry of Energy, “Mongolian National Energy Agenda and Policy Measures: Scope for subregional coopera- tion” 2013.4, p.13
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Erdenetsogt TPP 600 CES 2020 Plan
Tsaidan TPP 300 CES 2020 Plan
2.3.2 Renewables
2.3.2.1 Hydro
Some construction projects of hydropower plants have been planned. All the project are de- layed and the scheduled starting commercial operation is unclear.
Table 10.Projects of Hydropower plant construction 20
Name Capacity Grid COD Status (planned site) MW
MOE /Egiin HPP 315 CES - F/S done (Khutag-Undur soum, Bulgan)
Tuul-Songinо HPP 100 CES - Planning (Ulaanbaatar City) (pumped storage)
MOE /Shuren HPP (Tsagaannuur 300 CES - Conducting F/S soum, Selenge)
MOE Orkhon HPP (Orkhontuul soum, 100 CES - - Orkhon)
MOE Erdeneburen HPP 64 WES - - (Erdeneburen soum, Khovd)
20 Ministry of Energy, “Existing and planned renewable energy project in Mongolia” 2013.12, pp.24-25; Energy Charter Secretariat, “In-depth review of the investment climate and market structure in the energy sector of Mongolia” 2013, p.71; Our hearing survey with ERC 31
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2.3.2.2 Wind
These projects of construction of wind power plants have been already planned, excluding Qleantech project21.
Table 11.Projects of Wind power plant construction22
Name Capacity Grid COD Status (planned site) MW
Qleantech 250 CES:102MW - Construction license (since 2008, until 2017) (Khanbogd soum, Umnugovi) China:148MW PPA signed *basic part (102MW)
Sainshand salkhin park 52 CES 2018 Construction license (since 2011, until 2019) (Sainshand soum, Dornogovi) PPA signed *basic part
AB solar wind (Dalanjargalan 100 CES - Construction license (since 2011, until 2016) soum, Dornogovi) PPA signed *basic part
Aydiner Global (Sumber soum, 50.4 CES - Construction license (since 2011, until 2016) Govisumber) PPA signed *basic part
21 Qleantech splits its project into2 stages. Qleantech plans to construct a 102 MW wind power plant as its first step. 22 Ministry of Energy, “Existing and planned renewable energy project in Mongolia” 2013.12, pp.22,34-25; The Japan research Institute, “Global Warming Mitigation Technology Promotion Project Report”, 2014.8., pp.31,49. (in Japanese); Our hearing survey with ERC
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2.3.2.3 Ground mounted solar PV
Some construction projects of solar power stations have been planned23.
Table 12.Projects of Solar power plant construction 24
Capacity Name (planned site) Grid COD Status (MW)
Monwatt (Baganuur) 20 CES
G Power (Baganuur) 15 CES
Uni-Solar (Tuv, Bayandelger) 30 CES
Moshia Eco Energy (Tuv, Sergelen) 50 CES
Tenuungerel Construction (Tuv, 15 CES Sergelen)
Sergelen Solar Power Plant 50 CES
Solaris Solution (Tuv, Sergelen) 10 CES
Luxtium (Tuv, Zuunmod) 9 CES
Infra Structure Network (Tuv, 50 CES Bayanchandman)
Solar Energy Chandmani (Tuv, Bay- 21 CES anchandman)
Sun Step (Govisumber, Choir) 50 CES 2019
ESB Solar Energy (Govisumber, 10 CES 2018 Choir)
Taij Group (Arkhangai) 30 CES
Soldan Energy (Arkhangai) 20 CES
Mon-Korea Engineering(Uvurkhan- 8 CES gai)
Erchis Undarga (Uvurkhangai) 30 CES
Baruun-urt Energy (Sukhbaatar) 10 CES
Khuvsgul Power (Khuvsgul) 3 CES
23 NDC had known only the project of Sainshand Shalkhin Park (our hearing survey with NDC) 24 Ministry of Energy, “Existing and planned renewable energy project in Mongolia” 2013.12, pp.24-25; Our hear- ing survey with ERC
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under cons- Naranteeg (Dornogobi, Zamiin uud) 15 CES 2018 truction
Desert Solar Power One 30 CES (Sainshand)
Smart (Dornogobi, Airag) 20 CES
Sky Natural Energy (Dornogobi, Ai- 30 CES rag)
Solar Ilch (Omnogobi, Khanbogd) 50 CES
More Green (Omnogobi, Khanbogd) 10 CES
Gobi Electric Power (Omnogobi, 50 CES Manlai)
Khuduugiin Tsahilgaan (Gobi-Altai, 4 WES Taishir)
Saisan My Climate LLC (Gobi-Altai, 10 WES Yusunbulag)
MoE (Khovd, Myangad) 10 WES
MOE(Uvs, umnugovi) 10 WES
Durgun Solar Plant (Khovd, Myan- 10 WES gad
Durgun 10 WES
2.3.2.4 Biomass
Use of forest, saksaul, shrubby plant resources for fuel Biomasses are the accumulated and converted forms of energy derived from the sun and are considered to be one type of renewable energy resources. In addition, they are known as natural resources that can produce energy by burning wood, animal droppings, plants, vege- tation etc. Research findings suggest that about 15.2 million hectares of the total territory of Mongolia are covered with forest; and the resource of standing trees equals to 1.2 x 109, cubic meters of which, 80 percent are represented by coniferous and 20 percent - by broadleaved forests. The Gobi region has abundant resources of saksaul, shrubs, and bushes. The family of fuel- producing plants includes all kinds of woody plants, namely, the saksaul, caragana, saltwart wormwood, ceratoides, willows etc. The saksaul occupies a special place among the others.
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It is estimated that 11.3 million hectares or 74.2 percent of the above-mentioned total forest reserves of Mongolia are represented by tree forests, and 3.9 million hectares or 25.8 per- cent – by saksaul forests. The average annual resource of forests per one hectare of trees is approximately 1.32 cubic meters, and that of saksauls - only 0.001 cubic meters. Therefore, it was concluded that there is a very limited possibility of using the Gobi saksauls and shrubs for fuel production purposes. In 2014, the Government of Mongolia approved the Forest Cleaning program25 which is de- signed to clear the forests of fallen and dead trees. Of the tree forested area, 16% or 1.8 mil- lion hectares have fallen and dead trees for a total resource of 64.2 million cubic meters. The aim of the program is to decrease frequency of forest fires and facilitate regeneration and growth of the forested areas. As part of program, the government will support capability building to process the dead and fallen trees into compressed wood boards, compressed wood fuel, constructions materials and other end products. According to government research, there is annual demand of 3.2 million cubic meters of wood and wood materials of which 2.06 million cubic meters is for fuel needs, 0.95 million cubic meters of dried and processed wood are for household usage and 0.18 million cubic meters for compressed wood fuel. Based on the current resource of 64.2 million cubic meters and barring any major increase in demand for wood fuel, Mongolia could potentially source its wood fuel for a period of 20 years on the household level. However, to date there has been no extensive study done to assess the viability of biomass in Mongolia.
Resources from agricultural waste and livestock dung Mongolia has preserved its nomadic lifestyle and ancient tradition to use biomass fuel origi- nated from livestock. It can be considered as a type of renewable energy resources, such as dried cow or horse dung, pellets, and hardened dung or urine of sheep and goats urine, and other types such as straws, woods, shrubs, and biomass waste of urban settlements as the key sources of fuel, especially in the regions with limited or no forest reserves. Dried cow dung is inexpensive fuel source that is easily available all year round in any region of Mongo- lia.
25 Government of Mongolia Resolution #30 of February 7, 2014
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Figure 6 Mongolian forest resources
As of 2017, Mongolia had 66.2 million heads of livestock, in other words, she has a consider- able amount of biomass resources originated from livestock. These resources were as- sessed in 2003 as sources of renewable energy. Dried cow dung, the main source of fuel used by households living in the steppe and Gobi desert area of Mongolia is significantly decreasing due to the massive loss of livestock en- countered in recent years. The heat emission capacities of dried cow dung, pellets, horse-dung, and hardened dung and urine of sheep and goats vary subject to seasonal and regional features. The minimum heat emission of dried cow dung is 10800-13300 kJ/kg, horse-dung - 8800 kJ/kg, pellets - 16700 kJ/kg, and hardened dung and urine of sheep and goats - 12500-14600 kJ/kg. (Source: Feasibility study on energy production using biomass resources. TU, 1997) Mongolians call the hardened dung and urine of sheep and goats accumulated over a long period of time as khurzun and it has a good and consistent heat emission capacity.
2.3.2.5 Other renewables
Geothermal energy resources
At present, there are about 43 hot springs in Mongolia, and some of them are utilized in pub- lic health sector. No thorough studies have been undertaken so far in this direction, thus these are only identified and exposed geothermal energy resources of Mongolia hidden in the depth of earth. Mongolians are accustomed to call a hot water fount a hot spring; there- fore we used this term in this document. The resources of hot springs are mostly located in the Altai, Khangai, and Khentii mountain ridges, where infrastructure is poorly developed.
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The priority use of hot springs is a non-drug health treatment. Relevant studies need to be undertaken to explore the potential use of hot springs for the purposes of heating the sanato- riums established around the springs; and for building greenhouses and geothermic power stations based on solar and hot spring energy resources. It can be said that almost no re- search were undertaken so far for the above purposes. According to hydrogeology surveys conducted in hot spring basins, the actual reserves can contain enormous amounts of energy resources. The use of underground hot water as a source of energy is becoming one of the applicable practices across the globe. Experts say that the heat of hot springs can be used for heating purposes with no harm to nature and the environment.
Figure 7. Location of Mongolian hot springs, Source: Study conducted by REC
The central facility of Shargaljuut sanatorium is heated by the surface-exposed fount of the Shargaljuut hot spring. The Shargaljuut hot spring is one of the largest hot springs in Mongo- lia; its exposed water temperature and the speed of its fount flow reaches up to 92oC and 25 l/s, respectively. The Shargaljuut sanatorium operates all year round as it uses the natural flow of the hot spring without relying on any special equipment for its heating. This is a practical example of how the natural energy could be used for producing heat without causing harm to the envi- ronment as well as saving fuel costs. Other sanatoriums in the rural areas operate only during summer as they are based on coal and firewood, which are expensive. This proves the fact that renewable energy resources can be beneficial if used properly and effectively for relevant purposes.
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3 MONGOLIA STRATEGY ON POWER DEVELOPMENT
The State Policy on Energy 2015-203026 is a policy document for implementing measures to improve the legal environment, optimize organizational structure of the sector, utilization of energy resources, constituting fuel reserve, electricity and heat generation and its supply ac- tivities, develop public-private partnership, transform the sector into a regulated competitive market and the capability development of the industry personnel. The policy document sets six different strategic goals for the Mongolian energy sector: 1. Create an integrated energy system that is reliable and flexible with sufficient generat- ing capacity reserve to serve the domestic demand 2. Establish a fair long term agreement on power export and import agreement with neigh- boring countries and implement capability to export wind and solar power to the North- east Asian countries on a large scale 3. Improve the quality of local training for engineers and technicians to match international standards and develop an institution focused on energy economy, energy production, testing and adjustment studies 4. Establish a regulated and competitive market where tariff and pricing system is based on real cost which will allow an appropriate profit level to ensure financial soundness of the sector and encourage private investment in the sector 5. Utilize advanced technology in controlling and supervising energy generation, trans- mission distribution and supply activities and reducing the loss thereof and create a nationwide energy efficiency and savings measures. 6. Reduce adverse environmental impacts of conventional power generation, through le- gal and tax measures, by promoting renewable energy investments to increase the share of renewable energy in total installed capacity up to 20% in 2020 and 30% in 2030. Solar, wind, biomass, liquid and gas fuel, geothermal, fuel cell and other new sources should be utilized for power generation while creating a system where surplus energy could be supplied to the grid.
26 Parliament resolution #63 of June 19, 2015
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The above policy is to be implemented in two stages as summarized below:
Criteria 2014 (baseline) 1st stage: by 2023 2nd stage: by 2030 Reserve margin of -10% No less than 10% No less than 20% electricity generation installed capacity Reserve margin of 3% No less than 10% No less than 15% heat generation in- stalled capacity in ma- jor cities Level of profit in -16.22% 0% 5% electricity tariff of Cen- tral region of Mongolia Own usage of 14.4% 11.2% 9.14% thermal power plants Transmission and 13.7% 10.8% 7.8% distribution loss (ex- cluding Oyu Tolgoi) Share of renewa- 7.62% 20% 30% ble energy capacity of total installed capacity Emission of green- Equal to 0.52 ton Equal to 0.49 ton Equal to 0.47 ton house gases for per CO2 CO2 CO2 Gcal energy genera- tion Amount for reduc- 0% 20% 40% ing building heat loss Introduction of High pressure Subcritical tech- Supercritical and technological advance- technology nology, usage of natu- ultra-supercritical tech- ment ral gas, large capacity nology, hydrogen us- battery storage sys- ing technology, tech- tem, pumped storage nology using solar plant thermal energy Table 13.Mongolia strategy on power development
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4 MONGOLIA EXISTING ENERGY POLICY (2030)
The Mongolian Electricity sector has been unbundled into generation, distribution, transmis- sion and dispatching companies. Electricity is supplied through four regional energy systems. The electricity transaction market is operated in the Central Energy System which is the larg- est energy system in Mongolia and covers Ulaanbaatar and 13 aimags or provinces. In 2015, the Mongolian parliament passed the State Policy on Energy, setting the target for the coun- try’s energy sector goals. Coal-fired power plants generate approximately 90 per cent of total electricity generated in Mongolia but they have many problems; low efficiency due to the facilities aging, large elec- tricity losses in a power plant and poor peaking capability. On the other hand, Renewable en- ergy sources including hydro, wind and solar power sources generated 8 per cent of total electricity. In recent years, many projects to construct renewable energy power plants have been advanced. However, the progress has been generally slower than expected. Coal-fired power plants have sold electricity at a lower tariff than real generation cost follow- ing the guidance of government and the national government has been subsidizing the over- all power sector from the national budget every year.
4.1 ORGANIZATIONS OF MONGOLIAN POWER SECTOR
Figure 8. Overview of related organizations in Mongolian Power sector
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The Ministry of Energy (MOE) is in charge of policy making for this sectors and Energy Reg- ulatory Commission (ERC) is of the regulation of the generation, transmission, distribution, dispatching, and supplying energy. This sector has been unbundled into generation, distribu- tion, transmission and dispatching companies and facilitated privatization of them since new energy law was approved in 2001. And generation, distribution, transmission and dispatching companies have been converted to joint stock corporations. The functions of related organizations are indicated below.
Table 14. Functions of related organizations MOE ● In charge of policy making for energy sector ● The policy area includes the development of energy resources, energy use, the import and export of energy, the construction of power plants, lines and networks, energy conservation, the use of renewable energy sources, the monitoring of the sector, the ap- proval of rules and regulations for the sector and international co- operation ERC ● ERC is an independent regulation authority, self-funded by the li- cense fees and in charge of the regulation of the generation, transmission, distribution, dispatching, and supplying energy ● The main functions are to issue the operational licenses, to re- view and approve the tariffs of the licensees, to protect equally the rights of the consumers and licensees as well as to create condition for fair competition among the generators and suppliers Dispatching ● National Dispatching Center (NDC) is in charge of dispatching ● NDC has been granted a dispatching license by ERC. The Func- tions are permanent control, operative coordination and regula- tion of the voltage in the grid, temperature and pressure of indus- trial stream and water distribution lines ● NDC operates the electricity wholesale market on “Single Buyer Model” monopolistic basis Transmission ● National Power Transmission Grid (NPTG) is in charge of trans- mission ● NPTG is a state-owned stock company conducting the activity in electricity transmission among generators and distribution com- panies, export and import from neighboring country, serves of maintenance, installation, testing, calibration and incidental ser- vices of transmission lines and substations Generation and ● There are 10 electricity generation companies including 2 wind Distribution farm, 2 solar PV and 16 distribution companies ● Even privatization of generation and distribution companies has been facilitated, only Darkhan-Selenge Electricity Distribution Network has been privatized
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4.2 REGIONAL ENERGY SYSTEM
Electricity is supplied through four regional energy systems; Central Energy System (CES), Western Energy System (WES), Eastern Energy System (EES) and Altai-Uliastai Energy System (AUES).
Figure 9. Four Energy System in Mongolia27 CES is the largest energy system in Mongolia. CES covers 13 aimags including big cities such as Ulaanbaatar, Eldenet, and Darkhan. Umnugobi aimag where our site is located is also included in CES. CES has an electricity demand of around 729MW which is equivalent to approximately 95% of the total electricity demand in Mongolia. The total generation capac- ity in CES area is 1049MW28 and the shortage is covered by electricity import from Russia. In this area, developments of Tavantolgoi coal mine and Oyutolgoi copper mine in south Gobi region lead to a larger increase in a demand of electricity29. WES covers Uvs aimag, Bayan-Ulgiy aimag and Khovd aimag with a total electricity demand of 20MW30. EES covers two aimags in eastern part of Mongolia with a total demand of 36MW14. Altai-Uliastai energy system covers Gobi-Altai in Zavkhan Province with a total demand of 13MW14.
27 National Power Transmission Grid, “NATIONAL POWER TRANSMISSION GRID STATE OWNED STOCK COMPANY” 28 ERC “Statistic book of energy sector” 2017. 29 World Bank, “SOUTHERN MONGOLIA INFRASTRUCTURE STRATEGY” 2010, p.56. 30 Energy Charter Secretariat ,“In-depth review of the investment climate and market structure in the energy sec- tor of Mongolia” 2013, p.61.
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CES has been connected with EES, Altai-Uliastai energy system and Russian electricity net- work. Transmission Line (TL) between EES and Altai-Uliastai energy system is a capacity of 110kV31. TL between CES and Russian is of 220kV.WES is also connected Russian electric- ity network32. About 7.4 per cent of the electricity is imported from Russia. One industrial mine in south part of Mongolia directly imports electricity from China33. Because CES has approximately 95% of the total electricity demand in Mongolia and Um- nugobi aimag where our site is located is also included in CES, Power generation, transmis- sion and, Tariffs and its system in CES are described as follows.
Tariffs
Tariff structure for conventional power source
Tariffs are determined separately for each licensed activity by ERC; generation, transmis- sion, distribution, dispatch and supply. The law of Mongolia on energy regulates the following principles for setting tariffs34.
● tariffs should be based on real costs of operations ● costs should be allocated to different consumer categories to their requirements on elec- tricity and heat supply ● tariffs should enable regulation of energy consumption ● tariffs should ensure price stability ● tariffs should ensure that revenues of licensees are sufficient to support their financial viability ● the tariff structure for electricity and heat should be clear and understandable for consum- ers
The Consumer prices are shown below.
31 National Power Transmission Grid, “NATIONAL POWER TRANSMISSION GRID STATE OWNED STOCK COMPANY” 32 CEA, “THE ENERGY SECTOR IN MONGOLIA” p.2. 33 Energy Charter Secretariat, “In-depth review of the investment climate and market structure in the energy sec- tor of Mongolia” 2013 34 Energy Charter Secretariat, “In-depth review of the investment climate and market structure in the energy sec- tor of Mongolia” 2013, pp.55-56.
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Table 15.The electricity prices for ordinary household35 Type Unit Price (VAT excluded)
1. Single A Monthly usage within 150 kWh MNT/ kWh 110.3 meter B Monthly usage over 150 kWh MNT/ kWh 130.1
2. Double A Daytime (06:00-21:00) MNT/ kWh 116.2 meter (hourly) B Night time, midnight (21:00- MNT/ kWh 89.0 06:00)
C Basic charge MNT/month 2,000.00 Type Unit Usage
3. Fixed Ordinary household kWh Avg. monthly usage price (no meter) within 350
Table 16.The electricity prices for enterprises36 Type Unit Price (VAT excluded)
1. Mine, processing plant
(mining and processing/ refinement of coal, petroleum, gas, iron, other mineral)
1.1 Normal meter MNT/kWh 167.8
1.2 Triple meter (hourly)
a Daytime (06:00-17:00) MNT/kWh 167.8
b Nighttime (17:00-22:00) MNT/kWh 287.9
c Midnight (22:00-06:00) MNT/kWh 89.0
2. Ordinary corporation, factory, legal entity
2.1 Normal meter MNT/kWh 140.4
2.2 Triple meter (hourly)
35 Energy Regulatory Commission tariff set as of July 31, 2017 36 Energy Regulatory Commission tariff set as of July 31, 2017
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a Daytime (06:00-17:00) MNT/kWh 140.4
b Nighttime (17:00-22:00) MNT/kWh 221.7
c Midnight (22:00-06:00) MNT/kWh 89.0
2.3 Electric trolleybus MNT/kWh 89.00
3. Street and public area lighting in Ulaanbaatar or aimag center
3.1 October-March
a Daytime (06:00-19:00) MNT/ kWh 140.4
b Night-time (19:00-06:00) MNT/ kWh 89.0
3.2 April-September
a Daytime (06:00-22:00) MNT/ kWh 140.4
b Nighttime, midnight(22:00-06:00) MNT/ kWh 89.0
ERC reviews and approves the tariffs of the licensees, and develop and publish tariff deter- mination methodology and procedures for review and examination of tariffs37. According to the law of Mongolia on energy, the tariffs shall be based on the real cost of operation. However, it is pointed out that CHPs have sold electricity at a lower tariff than real generation cost following the guidance of government38. Subsidy from government applied to the power sector widely (method of determination of subsidy is shown in figure below). In the 2015 Gov- ernment Budget, subsidies amount 200.5 billion MNT which is equivalent to 46.8% of total expenditures in energy sector (428.5 billion MNT). There was a plan to introduce a so-called “indexation” method for tariff setting to take into ac- count inflation of cost component39. Mongolian energy sector will start to operate under mar- ket prices from 2014 based on parliament regulation N72 approved in 2010. However, noth- ing started in 2014. The movement which considers reduction of and new setting of electricity prices in night time for the purpose of demand boosting in night time, and the movement which increase con- sumer prices for the purpose of subsidy reduction applied to the power sector widely are seen in recent years40.
37 The Law of Mongolia on Energy, Article 9.1.4 38 The Japan research Institute, “Global Warming Mitigation Technology Promotion Project Report”, 2014.8., p.23. (in Japanese) 39 Asian Development Bank, “ENERGY SECTOR POLICY REVIEW”, Mongolia: Updating the Energy Sector De- velopment Plan, 2013.9., p.18.
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Figure 10. Procedure for Approval of Tariffs 41
Tariffs for renewable energy sources
Tariffs for renewable energy sources have been regulated by the Law on Renewable Ener- gies. ERC shall set tariffs of energy generated and supplied by renewable energy source connected to a grid within the tariff range shown in the following table. For energy of gener- ated and supplied by independent renewable energy power source, regulatory boards of aimags and the capital city shall also set tariffs within the tariff range shown in the following table. The Mongolian government revised the Law on Renewable Energies in July 2015, but the tariffs for the electricity from renewable energy sources remain the same.
41 Source: prepared by author base on various materials
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Table 17. Tariffs for the electricity from Renewable Energy plants42
Source Type Capacity Tariff range (USD/kWh)
～ Solar Grid-connected 0.150 0.180 ～ Independent 0.200 0.300 ～ Wind Grid-connected 0.080 0.095 ～ Independent 0.100 0.150 Hydro Grid-connected ~ 5,000kW 0.045～0.060
Independent ~ 500kW 0.080～0.100
501 ~ 0.050～0.060 2,000kW
2,001 ~ 0.045～0.050 5,000kW
According to the Law on Renewable Energies, a transmission licensee shall purchase elec- tricity supplied by a generator at tariffs approved43. In Salhkit wind farm case, however, NDC sometimes restricted supply of electricity for the purpose of mitigation a negative impact on CES in nighttime44.
42 The Law on Renewable Energies
43 The Law on Renewable Energies, Article8 44 In the CES, a nighttime electricity demand is often smaller than a nighttime electricity generation. In that case, NPTG sells electricity to the Russian network at 1.5cent/kWh which is lower than generators’ tariffs. Continu- ous purchase of electricity generated from renewable energy sources will only compound NPTG’s losses dur- ing night-time.(our hearing survey)
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4.3 SINGLE BUYER MODEL
In the CES, the electricity transaction market is operated with Single Buyer Model (SBM) in which one organization buys electricity from generators and sells to distributors45. SBM has been implemented since 2002. In the CES, the Single Buyer is NPTG, which purchases electricity from 10 generating com- panies at regulated tariffs and through imports from Russia and sells it to 16 electricity distri- bution companies at the regulated tariff46.
Figure 11. Participants of Single Buyer Model in CES47
The Special condition of SBM in the CES is that ERC approved the Cash flow regulation as a main principal of SBM48. In the CES, payments from consumers are collected into the “Zero balance” account of distribution companies and further collected into the “Zero balance” ac- count of NTPG. Then according to the predefined formula and coefficients, payments are dis- tributed to generating companies49. Spot and auction market also have been in place in the CES since 2005 and 2007. The regu- lator is NDC.
45 SBM has been in place in developing countries. Ganjuur Radii et al., “EVOLUTION OF THE POWER MAR- KET STRUCTURE IN MONGOLIA” 2005, p.8. 46 Energy Charter Secretariat, “In-depth review of the investment climate and market structure in the energy sec- tor of Mongolia” 2013, p.64.; Ganjuur Radii et al., “EVOLUTION OF THE POWER MARKET STRUCTURE IN MONGOLIA” 2005, p.5. 47 National Power Transmission Grid Web site
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SBM is a transition operational model for Mongolia. ERC plans to develop necessary rules and regulations to transit to a new electricity market structure50.
5 IMPACT ON MONGOLIAN CONVENTIONAL FLEET WITH EN- ERGY POLICY 2030
5.1 TARGETS
Four planning years are considered for the study. They are: 2020 (Target 1), 2026 (Target 2), 2030 and 2036 (Target 3). 2030 is related to “State Policy on Energy 2015-2030. We assume the Mongolia na- tional peak demand will reach 3470MW (total consumption 20000GWh, see Module 3 report: Assump- tions for studies §2.2.2) and renewable generation increases to 30% of installed generating capacity.
The study is run assuming no export/import of electricity considering Mongolian Power fleet self-suffi- cient for the internal demand.
For each planning year, GESP is run twice to assess the impact on conventional generation and identify requirements of conventional and also flexible generation. Results are described below.
Methodology for analyzing Mongolian generation system with GESP model In order to assess the impact of renewable generation development on conventional plant un- der various scenarios, we used Generation Expansion Simulation Programme (GESP) which is used by State Grid Corporation of China for generation expansion planning purposes. GESP is a generation expansion planning tool that minimizes total generation system costs over the planning horizon taking into consideration of technical constraints of different types of generation. It can be used to study the expansion planning of coal, gas, nuclear, hydro and renewable generation.
Firstly, GESP is used to assess the conventional generation requirement assuming 100% of renewable generation integration from economic and security of supply point of view. This will identify the amount of conventional plant that needs to be built in order meet rising demand with assumed amount of renew- able generation. Secondly, using the results obtained in the above step, GESP is re-run, considering operational and technical constraints of existing and new conventional plant, such as ramp rate, minimal on-grid time and minimal off-grid time, minimal output, etc. This will identify requirements of additional flexible gen- eration required to operate the system with intermittent renewable generation.
The optimisation objectives and constraints factos are given below : Objective function of GESP. The objective of GESP is to minimize total costs over the period of the planning horizon. Its objective function is described as follows
50 Energy Charter Secretariat, “In-depth review of the investment climate and market structure in the energy sector of Mongolia” 2013, pp.66. 49
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(1) Where � : ∑ = � + ∑ = ∑ = � + ∑ = ∑ = � + ∑ = � +
, , � = � � � = + + � = �� � = �{max { , ∑ = + ∑ = − − �} CI: annualized ≠ investment� for =new� generation plant, such as coal, wind and solar plant CO: annual operating costs of generation including fixed and variable costs EM: annual emission costs CT: costs of renewable curtailment ： cost of energy not supplied : number of new plant invested m: number of hours in the year and is equal to 8760 n: total number of generating plant including newly invested ones PA – generator capital annual recovery factor PU unit cost of type p generator PGX generator installed capacity Fixed operating cost of generator type p , variable operating cost of generator type p PG generator output at hour j cost of CO2 emission factor of producing 1MWh of power PGM minimum output of conventional generators PL load at hour j TC maximum export capacity Constraints Major constraints are listed below 1) Power balance constraint At any moment of time, generator output must be in balance with the demand, therefore, at hour j, we have the following power balance equation
Where∑ = = − �
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TCj is power export at hour j 2) Ramping constraints For conventional generators, change in its output from one hour to the next should not exceed that determined by its ramp rate, e.g.
For renewable − − generation, = � its hourly variation is determined from historical data. 3) Generator output constraints For conventional generators:
For renewable generators, � their output should not exceed its installed capacity 4) Capacity reserve constraints In order to maintain a secure and reliability power supply, a minimal level of capacity re- serve is required, this is expressed as follows:
Where∑ = PL��j is the −system � demand + � at PLhour j, RPM is the reserve plant margin expressed in percentage, and CC is the capacity credit of generator i. It is assumed that for conven- tional plant its capacity credit is 100%, and for RE generation, it is calculated from histori- cal data. 5) Transmission line constraints Export from the Mongolia to neighboring countries at hour j should not exceed its total in- terconnection capacity or agreed maximum export. That is :
6) Minimal on-time and off -time constraints ∑ = − � Most of conventional coal fired plant are combined heat and power plant and have a rigid operating regime, especially in the winter when the heating requirements are high. All conventional generators have a minimal on-grid time before they can be shut down and minimal off-grid time once they are off the grid. They are modelled below :
∑ � � = �� Where∑ = � denotes generator �� i becoming generating at hour k, takes the value of 1 when generator i is producing at hour j, denotes generator i ceasing generating � � from hour k, equal 1 when generator i is off the grid at hour j. Honi and Hoffi are min- imal on-grid time and off-grid time, respectively. � It should be noted that once a generator �� starts producing at hour k, it will continue to run until its minimal on-grid time are reached, similarly, once the generator is instructed to desynchronize, it will remain so until its mini- mal off-grid time have reached. The above optimisation problem is then solved by Cplex optimisation software.
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5.2 ANALYSIS OF EXISTING GENERATION IN MONGOLIA
At present, generation in Mongolia is dominated by coal-fired power plant, with majority of plant located in Central Electricity System (CES) area. East, South and West Electricity Systems primarily consists of small generators. Total installed capacity is around 1GW. Figure 12 shows the composition of conven- tional generation by region.
Share of Existing Generation No of Generators by Unit Size by Region
2% 3% 3% 5 2
23
17 92%
CENTRAL EASTERN WESTERN Altai-Uliastai 100+MW 50~80MW 15-50MW <23MW
Figure 12. Existing Conventional Generation by Region and Unit Size
In addition, over 85% of generation capacity are coal-fired CHP plant for the distribution of hot water (94%) and steam (6%) for end users living in the major urban areas. The generation system has been very tight, for example, the plant margin (as measured by installed capacity in excess of peak demand) was -10% in 2014. Therefore, load shedding is common practice. In addition, a majority of existing conventional generators are quite inflexible with very long minimal grid-on time and grid-off time, such as CHP4-G7 which has a minimal on-time of 8375 hours. This means that the generator is almost never shutdown throughout the year except for maintenance. One reason for this is that as there is a general shortage of supply in Mongolia, generators are required to run whenever available. In addition, many generators have a very long minimal grid-off time, such, as CHP4-G6 which has a minimal grid-off time of 1307 hours.
5.3 HEAT FORECAST IN MONGOLIA
Mongolia’s population depends largely on centralized heating systems as a matter of survival during the long and very cold Mongolian winters. Majority of heat demand in Mongolia is provided by combined heat and power (CHP), especially for large cities such as Ulaanbaatar, Erdenet, etc. Therefore, it is imperative that the generation planning considers the development of CHPs. In addition, there are many small heat only boilers (HOBs), independent boilers and water-heaters that are used in the Mongolian countryside for space heating and domestic hot water production, and to provide steam to Industry. In this study, only heat demand that are met by CHPs are considered as the heat requirement has a sig- nificant impact on CHP operating regime, hence the impact on electricity system.
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In 2013, Asia Development Bank undertook studies on “Mongolia: Updating the Energy Sector Devel- opment Plan” and published their findings in September 2013. The report provides an inventory of heat supply systems, including assets and historical asset performance, and heat demand forecasts for up to 2030.
Table 18 below summarizes forecast heat demand in Mongolia which is derived from the aforemen- tioned ADB report. Table 18. Heat demand forecast in Mongolia (Upscaling Energy Sector Development Plan, ADB report, medium scenario)
Cities/Major 2020 2026 2030 2036 Towns kGcal Gcal/h kGcal Gcal/h kGcal Gcal/h kGcal Gcal/h
UB 8211 2411 10826 3178 12910 3789 16812 4934
Erdenet 560 212 676 256 766 290 925 350
Darkhan 556 182 645 211 712 233 826 270
Choibalsan 196 76 237 92 269 104 324 126
Dalanzadgad 17 7 22 9 26 11 33 14
Total 9540 2888 12406 3746 14683 4427 18920 5694
Notes: 1) Forecast heat demand for 2020 is obtained from the ADB report
2) Forecast hear demand for 2026, 2030 and 2036 are calculated from annual growth rate given by the ADB report
Existing CHPs in Mongolia have a heat to power ratio of 0.4 ~ 0.9, and modern CHPs generally have a heat to power ratio of 0.6 to 1. In this study, we assumed an average ratio of 0.6.
It should be pointed that GESP currently does not specifically models CHPs separately and does not optimize CHP fleet separately either. The CHP fleet is therefore estimated from forecast heat demand using heat to power ratio of CHPs.
5.4 PLANNED GENERATION DEVELOPMENT
Mongolian government has ambitious energy policy to address the power shortage issues. In 2015, Mongolian government published State Policy on Energy document, setting out plans to medium and long term goals of electricity energy development. By 2023, the plant margin would be increased to no less than 10%, and by 2030 no less than 20%. Renewable generation capacity will account for 20% and 30% of installed generating capacity by 2020 and 2030, respectively.
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To meet the government goals, there are a number of projects being planned, these include CHP5 in Ulaanbaatar (450MW), TPP in Baganuur (700MW), TPP in Tavantolgoi (450MW), Egiin river HPP (220MW-310MW), TPP in Western Region of Mongolia (100MW), HPP on Khovd river (64MW) and TPP in Eastern region of Mongolia (Dornod Province-50MW).
In addition, about 300MW of wind and PV generation are currently planned or under construction, spe- cifically, a 50MW wind farm will be installed near Ulaanbaatar, a 50MW wind farm will be connected to Tavantolgoi, and a 50MW wind farm is now under construction in Sainshand.
For solar PV generation, a 10MW is connected to Darkhan, some 200km north of Ulaanbaatar, a 10MW is operating in Ulaanbaatar, a 15MW is under construction in Zamiin Uud. In Choir, 2 projects with a total of 60MW are planned. In Ulaanbaatar, 2 projects totalizing 50MW are also planned.
These 300MW wind and PV farms are connected to existing 100kV or 220KV transmission system.
The model takes the assumption that existing fleet will operate until 2036 as no date of retirement of the existing plant is envisaged. If some existing units have to retire in the future (which is probable), it is assumed that they would be replaced in volume by new units.
2020 – Target 1 In 2020, the national peak demand in Mongolia is expected to reach 1390MW. Total installed capacity of wind and solar PV generation is 430MW. Reserve margin is set to obtain at least 5%. The model is firstly run assuming 100% absorption of renewable generation. The purpose of this study is to identify optimal amount of additional conventional generation required to meet rising demand taking into consideration of government target of achieving 20% renewable gener- ation (in installed capacity). The GESP model was run taking no consideration of operational and technical constraints of existing and new generating plant. However, plant breakdown is considered. The purpose of this study is to analyse the generation system to ensure that the generation can meet the demand (if the generator operational constraints are ignored).
Results showed that there is a small amount of curtailment in renewable generation and the supply reliability is 2.1%, which is considered adequate. The amount of additional conventional generation re- quired is 100MW.
Next, the GESP model is executed again taking into consideration of operational and technical con- straints of existing and new generating plant. Because of inflexible generation as described previously, results showed that without additional flexible plant, the expected unsupplied energy is about 20%.
Results are shown in Table 19:
Table 19. Generation Development in Target 1 (2020)
Year 2020 Peak Demand (MW) 1388 Total Generation 2150 Existing Generation (MW) 1120 Wind Generation (MW) 215
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PV Generation (MW) 215 New Con. Generation on Security (MW) CHP (MW) 100 Non-CHP (MW) New Flexible Generation for Operability (MW) CHP (MW) 500 Non-CHP (MW) Reserve Margin (excl. Renewable Generation) (%) 24% Share of Renewable Generation (%) 20% Total investment in Conventional Gen ($m/year) 103 Total Electricity Production (GWh) Existing Generation (GWh) 4442 Wind Generation (GWh) 623 PV Generation (GWh) 389 New Con. Generation on Security (GWh) CHP (GWh) 513 Non CHP (GWh) New Flexible Generation for Operability (GWh) CHP (GWh) 1957 Non-CHP (GWh) Consumption (GWh) 8000 Heat Production (kGcal) 9540 Total operating costs ($m)
Total Emissions Electricity + Heat
CO2 Emissions(ktCO2e) 12278
CO2 Intensity (tCO2e/MWh) 0.644 Renewable Generation Curtailment (%) 2.1%
It can be seen from Table 19 that reserve margin excluding renewable generation is about 24%, which is significantly higher than Mongolia government’s target of 10%. A higher re- serve margin is required because of inflexibility of the existing generation and also increased amount of intermittent renewable generation.
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Please note that total investment cost includes annualized capital/debt servicing costs and OM costs, but exclude variable fuel costs for power and heat.
Figure 13 below shows monthly renewable generation curtailment and expected energy not supplied.
Scenario 1 - RE Output and Expected Energy Not Supplied 40000 120% 35000 100% 30000 25000 80%
20000 60% % MWh 15000 40% 10000 5000 20% 0 0% 1 2 3 4 5 6 7 8 9 10 11 12 Month
RE Curtailemtn EENS RE Output Load
Figure 13. Monthly RE Curtailment and Energy Not Supplied
2026 – Target 2 In Target 2, the peak demand in Mongolia is expected to increase to 2600MW. It is reasona- ble to assume that in order to meet government renewable energy target of 30% by 2030 the renewable 2026 should have a renewable energy target of 26%. Like for target 1, the GESP model was run twice to determine the amount of additional con- ventional generation required to meet the rising demand and that of flexible generation in or- der to ensure operability of the system taking into consideration of existing generation inflexi- bility and renewable generation intermittency.
Results are shown in Table 20.
Table 20.Generation Development in Target 2 (2020)
Year 2026 Peak Demand (MW) 2600 Total Generation 4280 Existing Generation (MW) 1120
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Wind Generation (MW) 530 PV Generation (MW) 530 New Con. Generation on Security (MW) CHP (MW) 1600 Non-CHP (MW) New Flexible Generation for Operability (MW) CHP (MW) Non-CHP (MW) 500 Reserve Margin (excl. Renewable Generation) (%) 24% Share of Renewable Generation (%) 26% Total investment in Conventional Gen ($m/year) 362 Total Electricity Production (GWh) Existing Generation (GWh) 3934 Wind Generation (GWh) 1536 PV Generation (GWh) 958 New Con. Generation on Security (GWh) CHP (GWh) 6821 Non CHP (GWh) New Flexible Generation for Operability (GWh) CHP (GWh) Non-CHP (GWh) 1605 Consumption (GWh) 15000 Heat Production (kGcal) 12406
Total Emissions Electricity + Heat
CO2 Emissions(ktCO2e) 15054
CO2 Intensity (tCO2e/MWh) 0.512 Renewable Generation Curtailment (%) 4.3% Figure 14 shows monthly renewable generation curtailment and expected energy not sup- plied in 2026.
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Scenario 2 - RE Curtailment and EENS In 2026 70000 120%
60000 100% 50000 80% 40000
60% %
MWh 30000 40% 20000 10000 20% 0 0% 1 2 3 4 5 6 7 8 9 10 11 12 Month
RE Curtailemtn EENS RE Output Load
Figure 14. Monthly RE Curtailment and CENS in 2026
2030 In 2030, peak demand in Mongolia would reach 3470MW.The renewable energy target set by the government is 30%. Results are shown in Table 21.
Table 21. Impact on Conventional Generation in 2030
Year 2030 Peak Demand (MW) 3470 Total Generation (MW) 5920 Existing Generation (MW) 1120 Wind Generation (MW) 900 PV Generation (MW) 900 New Con. Generation on Security (MW) CHP (MW) 2000 Non CHP (MW) 500 New Flexible Generation for Operability (MW) CHP (MW) Non-CHP (MW) 500 Reserve Margin (excl. Renewable Generation) (%) 18.7% Share of Renewable Generation (%) 30% Total investment in Conventional Gen ($m/year) 517
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Total Electricity Production (GWh) Existing Generation (GWh) 3844 Wind Generation (GWh) 2609 PV Generation (GWh) 1627 New Con. Generation on Security (GWh) CHP(GWh) 8432 Non CHP (GWh) 2108 New Flexible Generation for Operability (GWh) CHP (GWh) Non-CHP (GWh) 1525 Consumption (GWh) 20000 Heat Production (kGcal) 14683
Total Emissions Electricity + Heat
CO2 Emissions(ktCO2e) 17340
CO2 Intensity (tCO2e/MWh) 0.474 Renewable Generation Curtailment (%) 8.5%
It can be seen from Table above that a total of 3000MW new conventional power plant is re- quired to meet the increasing demand, of which 500MW is flexible generation required to en- sure the operability of the system. Total investment required is some $517m per year. The renewable generation share of installed capacity is 30% that meets the government renewa- ble target for 2030. The average CO2 emission per MWh generated is 0.72. The reserve margin (excluding renewable generation) is 18.7%, which is lower than 20% of government target. This is because renewable generation is assumed to have zero capacity credit in calculating the reserve margin. However, in practice, the renewable generation con- tributes to the improvement in system supply reliability, which is why the reserve margin re- quired is lower than in 2020, 2026 and also government target.
Figure 15 shows monthly renewable generation curtailment and expected energy not sup- plied in 2030
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RE Curtailment and EENS In 2030 100000 120% 90000 80000 100% 70000 80% 60000
50000 60% %
MWh 40000 30000 40% 20000 20% 10000 0 0% 1 2 3 4 5 6 7 8 9 10 11 12 Month
RE Curtailemtn EENS RE Output Load
Figure 15. Monthly RE Curtailment and EENS in 2030 2036-Target In 2036, peak demand in Mongolia is forecast to reach 4338MW. However, it is assumed that the share of renewable generation within the main system would be kept at the same level as for 2030, i.e. 30%. Results are shown in Table 22.
Table 22. Impact on Conventional Generation in 2036
Year 2036 Peak Demand (MW) 4338 Total Generation (MW) 7120 Existing Generation (MW) 1120 Wind Generation (MW) 1100 PV Generation (MW) 1100 New Con. Generation on Security (MW) CHP (MW) 2720 Non CHP (MW) 680 New Flexible Generation for Operability (MW) CHP (MW) Non CHP (MW) 400 Reserve Margin (excl. Renewable Generation) (%) 15% Share of Renewable Generation (%) 30%
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Total investment in Conventional Gen ($m/year) 651 Total Electricity Production (GWh) Existing Generation (GWh) 4432 Wind Generation (GWh) 3189 PV Generation (GWh) 1989 New Con. Generation on Security (GWh) CHP (GWh) 11619 Non CHP (GWh) 2900 New Flexible Generation for Operability (GWh) CHP GWh Non CHP (GWh) 1217 Consumption (GWh) 25000 Heat Production(kGcal) 18920
Total Emissions Electricity + Heat CO2 Emissions(ktCO2e) 21671
CO2 Intensity (tCO2e/MWh) 0.471 Renewable Generation Curtailment (%) 7.1% For the same reason stated in the case of 2030, the reserve margin (excluding renewable generation) is 15%. Figure 16 shows monthly renewable generation curtailment and expected energy not sup- plied in 2036.
Scenario 3 - RE Curtailment and EENS In 2036 160000 120% 140000 100% 120000 80% 100000
80000 60% % MWh 60000 40% 40000 20% 20000 0 0% 1 2 3 4 5 6 7 8 9 10 11 12 Month
RE Curtailemtn EENS RE Output Load
Figure 16. Monthly RE Curtailment and EENS in 2036
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5.5 CONCLUSION OF GENERATION ANALYSIS
National peak demand in Mongolia is expected to increase from 1388MW in 2020 to over 4338MW 2036. This, coupled with significant renewable generation development, requires major development and investment in generation, especially flexible generation, in order to ensure security of supply and manage variability and intermittency which are inherent in re- newable generation. Table 23 compares generation development in Mongolia against the 4 cases studied.
Table 23. Comparison of Generation Analysis Results
Year 2020 2026 2030 2036
Peak Demand (MW) 1388 2600 3470 4338
Total Generation 2150 4280 5920 7120
Existing Generation (MW) 1120 1120 1120 1120
Wind Generation (MW) 215 530 900 1100 PV Generation (MW) 215 530 900 1100
New Con. Generation on Security (MW)
CHP (MW) 100 1600 2000 2720 Non-CHP (MW) 500 680
New Flexible Generation for Operability (MW)
CHP (MW) 500
Non-CHP (MW) 500 500 400
Reserve Margin (excl. RE Generation) (%) 24% 24% 18.7% 15%
Share of Renewable Generation (%) 20% 26% 30% 30%
Total investment in Conventional Gen ($m/year) 103 362 517 651
Total Electricity Production (GWh)
Existing Generation (GWh) 4442 3934 3844 4432
Wind Generation (GWh) 623 1536 2609 3189 PV Generation (GWh) 389 958 1627 1989
New Con. Generation on Security (GWh)
CHP (GWh) 513 6821 8432 11619 Non CHP (GWh) 2108 2900
New Flexible Generation for Operability (GWh)
CHP (GWh) 1957
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Non-CHP (GWh) 1605 1525 1217 Consumption (GWh) 8000 15000 20000 25000
Heat Production (kGcal) 9540 12406 14683 18920
Total Emissions Electricity + Heat CO2 Emissions(ktCO2e) 12278 15054 17340 21671
CO2 Intensity (tCO2e/MWh) 0.644 0.512 0.474 0.471
Renewable Generation Curtailment (%) 2.1% 4.3% 8.5% 7.1%
It is observed from Table 23 that:
1) Over the next 20 years, demand in Mongolia is likely to treble to over 4338MW. This requires significant investment in both conventional and renewable generation in order to maintain an adequate level of security of supply. The annualized investment in con- ventional generation is estimated at $651m per annum by 2036. 2) Due to inherent uncertainty and intermittency of renewable generation, flexible genera- tion are required to ensure operability of the system. However, as the generation sys- tem increases in size, the requirement for dedicated flexible plant falls as a proportion of total new generation, as the flexible resources required can be provided in large pro- portion by new conventional generation. 3) Government renewable generation target of 20% and 30% in 2023 and 2030, respec- tively, as a share of total installed capacity can be met provided that sufficient new and flexible generation is built. 4) As the new and more efficient generating plant is added to the system and also in- creased share of renewable generation, the CO2 intensity will reduce from 0.644tCO2e per MWh in 2020 to 0.471tCO2e per MWh in 2036.
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6 DEVELOPMENT OF RENEWABLE ENERGY IN MONGOLIA FOR EXPORTATION
6.1 RENEWABLES DEVELOPMENT SCENARIOS FOR MONGOLIA
Four scenarios are envisaged for the future development of Renewables in Mongolia focused on both onshore wind power and ground mounted solar photovoltaic (PV): Scenario 0: “minGW” capacity in 2020, connected to Mongolian 220kV power grid, only for Mongolia electricity consumption. The “minGW” capacity refers to the availa- ble connection capacity to current 220kV substations. Scenario 1: + 5GW in 2026, mainly for exportation to neighbouring countries. Scenario 2: + 10GW in 2036 (therefore + 5GW between 2026 and 2036) for exporta- tion to neighbouring countries as well. Scenario 3: +100GW in the long term.
6.1.1 Scenario 0 « MINGW » in 2020
Scenario 0 refers in particular to the development of wind and solar for Mongolia own devel- opment in 2020, connected to 220 kV power network (including ongoing upgrade and con- struction of new 220kV lines, scheduled to be commissioned in 2019). This scenario complies with Mongolia’s strategy on renewables development and comprises the following sub-scenar- ios. The total capacity (MinGW) will be based on the remaining 220kV substations connection ca- pacity. To minimize future connection costs, in particular construction of lengthy new transmis- sion lines, a 200km maximum distance between future renewables farms and available sub- stations is set up.The following 220kV substations and there maximum remaining connection capacity are as follows: Table 24. 220kV Substations & Connection capacity 220kV Substation Name Min MW Max MW Mandalgovi 50 100 Songino & IKHB-4 150 250 Ulaanbaatar 50 100 Baganuur 50 100 Choir 150 200 Darkhan 50 100 New Oyutolgoi 50 100
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Erdenet 150 200 Tavantolgoi 100 150 Total 800 1300
6.1.2 Scenario 1 « +5GW » in 2026
In this Scenario 1, + 5GW new wind and solar PV are developed by 2026 and the whole electricity generated is exported to neighboring countries via either new HV transmission lines or upgrade of existing ones; new substations or upgrade of current ones are also envis- aged. A 2GW interconnection with Russia and a 2GW one with China are envisaged.
6.1.3 Scenario 2 « +10GW » in 2036
In Scenario 2, an additional +5GW of wind and solar PV are developed between 2026 and 2036 and also 100% exported (therefore total wind and solar capacity is 10GW).
6.1.4 Scenario 3 « +100GW » in the long term
Scenario 3 is only a long term +100 GW development of wind and solar PV and the current study should confirm the potential for future exportation.
6.2 WIND AND SOLAR PV RESOURCE ASSESSMENT
Mongolia total land area is 1,566,000km2.
Figure 17. Mongolia – 5000m resolution elevation map. Source: Vaisala
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6.2.1 Previous renewables resource assessment
Wind potential In cooperation with the Renewable Energy Corporation and the National Institute of Meteorology of Mongolia, the National Renewable Energy Laboratory of the USA elaborated a wind energy resource map for Mongolia in 2001. This map clusters six categories of potential wind power regions. According to this more general system of wind measurement, a total area of more than 160,000 km² is convenient for installing high capacity wind power plants with a potential to connect them to the national electricity network. Adding on the regions with moderate wind energy resources, which are convenient for rural energy consumers or for installation of low capacity wind generators, the area of windy regions sums up to 620,000 km², representing almost 40% of the total country.
Table 25. Wind energy potential of Mongolia (good to very good wind resource at 30 m height) Source: NREL & NREC
Category Wind at 30 m height Total area coverage Total Energy to capacity be Power W/m² Wind speed m/s km² % MW produced GWh/yr 3 300-400 6.4-7.1 130,665 81.3 905,500 1,975,500 4 400-600 7.1-8.1 27,165 16.9 188,300 511,000 5 600-800 8.1-8.9 2,669 1.7 18,500 60,200 6 800-1000 8.9-9.6 142 0.1 1,000 3,400 Total 160,641 100 1,113,300 2,550,100
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Figure 18. Wind resource map of Mongolia. Source NREL & NREC 2004
Figure 19. Map of wind capacity in Mongolia. Source IRENA
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Mongolia’s wind power electricity generation potential was estimated at 2,550 billion kWh (around 1,100 GW installed capacity). This assessment was based on 2001 “state of the art” 500kW wind turbines using a conservative turbine density of 7MW/km2 and wind resource assessment at 30m height. Now, wind turbine size has significantly increased in terms of capacity (from 1MW to 4MW), height (100m and more) and rotor diameter (from 80 to 145m). Turbine manufacturers have also developed machine for low wind speed with a higher rotor diameter and therefore, the Mongolian’s wind power potential capacity and energy yield should be greater. The 2016 IRENA report on Mongolia Renewables Readiness Assessment, points out this previous assessment is underestimated due to improvement in wind technology. Particularly, wind speed shear is a key parameter and there are various assessments of wind speed vs altitude. A simplified calculation is set out:
where, Vi = horizontal wind speed (m/s) at hi height (m) and α = terrain roughness (0.08<α<0.4). Therefore, wind speed at 30m height and wind speed at 100m height ranges as follows:
V30m*1.1 Due to improvement in wind resource assessment, data used by NREL in 2001 are likely to be out of date. A new set of wind data at 100m height, including additional 2001-2016 historical data, should provide a better wind resource assessment. Solar potential National Renewable Energy Center carried out in 1990 an estimation of solar ground mounted PV generation (4,774 TWh – 1,500 GW) based on National Renewable Energy Laboratory (NREL) solar resource assessment. An average 66MW/km2 solar PV panel density was applied on suitable areas. The total solar energy resources evaluated as annual solar radiation on the entire national territory has been calculated to potentially achieve 2.2*1012 kWh. The table below shows the potential solar energy, from Low (1200 kWh/m²/y) to High (1600 kWh/m²/y) in four regions in Mongolia. Approximately 42% of the country lies within the “Moderate-High” or “High” solar energy regions. Table 26. Solar energy resource of Mongolia. Source NREC 2006 Region Solar energy amount kWh/m²/year Area km² % of territory Western Up to 1200 109,900 7 Khangai 1200-1400 800,700 51 Central 1400-1600 392,500 25 Eastern 1600 and more 266,900 17 68 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections This previous NREC analysis does not provide any detailed information on potential areas for ground mounted solar PV development. The solar resource table sets out at least 659,400, km2 of areas with a minimum GHI>1400 kWh/km2 (Central & Eastern regions). If we consider 100% of this area is suitable for solar power development (very optimistic scenario), using the same power density (66MW/km2), the total capacity should be: 43,520GW (instead of 1,500GW announced in NREC study). If we use a 40MW/km2 solar power density, the results should be: 26,376GW. The following table sets out a selection of land areas vs average solar irradiation per day (from 3.4 to 5.4kWh/m2/day (therefore from 1241kWh/m2/year to 1971kWh/m2/year). Unfortunately the way land areas have been calculated is not available and the total 23,461 km2 suitable for ground mounted solar PV development is considered to be very low (with a 66MW/km2 solar power density used in this study, the total capacity is 1,548GW). Table 27. Mongolia solar resource estimate. Source IRENA Figure 20. Annual global solar radiation, kWh/m2/year. Source Energy Authority of Mongolia 2009 69 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections 6.2.2 Methodology – GIS tool Geographical Information System (GIS) has proved to be effective for assessing areas in terms of suitable locations for constructing wind and ground mounted solar photovoltaic (PV) farms. A dedicated GIS tool for Mongolia has been developed by EDF R&D EIFER (European Insti- tute for Energy Research – Karlsruhe – Germany). The GIS-based assessment of potential sites for onshore wind and ground mounted solar PV in Mongolia is carried out in 4 main phases: Phase 1: Assessment of available areas for wind and solar development. The first step of the analysis is the investigation of areas unlikely to be available for wind and solar energy development, because of their cultural, historical, ecological importance (e.g. pro- tected areas). Siting limitations are also related to the land use and urban development. These elements constitute a list of constraints which lead to restricted areas including a buffer around them for future wind and solar developments. The constraints reflect the key environmental and regulation constraints in Mongolia. Dedicated buffers around specifics areas like proximity to protected areas, settlements, power lines, airports are applied. At this stage, social ac- ceptance is not included. Given the large scale of digital datasets available (GIS compatible format) and their quality (missing data), small settlement units and sites of scattered rural buildings, individual objec- tives for cultural heritage, some roads (unpaved) as well as wetlands are not fully represented. For that reason, the assessment at such scale allows only for a preliminary selection of avail- able site locations, but not for wind and solar project development. Phase 2: Wind and solar resource assessment. Implementation in the GIS tool of wind resource data (average wind speed: m/s) and solar resource data (Global Horizontal Irradiance – GHI: kWh/m2 per year). Updated wind and solar data set for Mongolia have been used. Phase 3: Global capacity assessment on suitable areas. Selection of available areas for wind and solar development, taking into account resource data, excluded areas and main en- vironmental and regulation constraints. The capacity per area is based on wind turbine density (MW/km2) or solar PV panel density (MW/km2). The power density depends on technology choice (e.g. Turbine size and rated capacity). In this stage, the Technical Potential is assessed (GW). Phase 4: GIS-Ranking methodology based on a multi-criteria analysis so as to select pre- ferred areas (best resource, best location, proximity to existing power grid…) for future wind and solar PV developments. A final Phase, not implemented in the GIS tool, will consist is estimating the levelized cost of electricity (LCoE) of preferred wind and solar areas, according to various technical (load factor) and costs assumptions (CAPEX, OPEX). 70 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections Figure 21. Potential assessment phases. Source EDF The following pictures describe the various GIS methodology steps, based on ArcGIS and Python sofwares. Figure 22. GIS methodology – Source EDF EIFER 71 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections Figure 23. GIS methodology & steps – Source EDF EIFER 6.2.3 Hypotheses – Key environmental and regulation constraints Due to the vast wind and solar resource in Mongolia (assessed from previous works), the scope of the current analysis is limited to following resource level: Minimum average wind speed: 6m/s Minimum GHI: 1500 kWh/m2/year Below these levels, we consider wind and solar PV projects are unlikely to be competitive and not attractive to investors and developers. 6.2.4 Regulatory and land use constraints The assessment of Technical Potential for renewables in general, requires an analysis of key regulatory, environmental and land use constraints so as to “remove” unsuitable areas for de- velopment or to define “buffer” around specific areas. GIS tool can easily implement these constraints, provided the information is available, in particular at the right GIS format (csv, tif, shape files…). The main constraints for wind and solar PV implemented in the GIS tool are as follows: 72 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections Table 28. Main constraints for wind and solar – Key hypotheses – Source EDF EIFER Site constraints Comments Area constraint for Area constraint wind for solar PV Minimum average wind Only windy sites are considered Excluded if wind NA speed: 6m/s speed<6m/s Minimum Global Horizontal Only sunny sites are considered NA Excluded if Irradiance: 1400 kWh/m2/y GHI<1400 kWh/m2 Elevation above 2500 m Access and construction constraint in high Excluded Excluded mountains Terrain slope >20° Access and construction constraint in Excluded Excluded steep areas Permafrost area Only continuous permafrost areas are Excluded NA considered for wind power due to possible foundation issues Military zone When known Excluded within Excluded within 500m buffer 500m buffer Water land, river, lake, wa- Excluded within Excluded within ter spring 200m buffer 200m buffer Cities, villages, nomad set- Excluded within Excluded within tlement 1km buffer 1km buffer Railways Excluded within Excluded within 300m buffer 300m buffer Roads (paved, unpaved, Data incomplete Excluded within Excluded within tracks) 100m buffer 100m buffer Forest No wind farm implemented in forest Excluded within Excluded within 100m buffer 100m buffer Data incomplete Agriculture area Possible social acceptance criteria (% of No exclusion No exclusion suitable area) in phase 2 Pasture of livestock Lack of data No exclusion No exclusion Pasture and hay land Lack of data No exclusion No exclusion Power lines and substa- Data incomplete Excluded within Excluded within tions 200m buffer 200m buffer Airport Tavantolgoi airport: 25 km buffer for wind. Excluded within Excluded within Other small airports : 5km buffer for wind 25km/5km buffer 5km buffer & PV 73 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections Radar (airport) Data incomplete Excluded within NA 5km buffer Radar (communication) Excluded within NA 500m buffer Industrial site Existing and future site (e.g. power plant) Excluded within Excluded within 1km buffer 1km buffer State border Excluded within Excluded within 15km buffer 15km buffer Strictly Prohibited Area 24 areas (e.g. Goviin Baga Darkhan Excluded within Excluded within Gazar « A » & « B » in Omnogovi and Dor- 300m buffer 300m buffer nogovi aimags) National Park 27 areas (e.g. Dariganga in Sukhbaatar Excluded within Excluded within aimag 1km buffer 1km buffer Natural Reserve 51 areas (e.g. Sharga in Golvi Altai aimag) Excluded within Excluded within 1km buffer 1km buffer Tourist camps (per lodges) Wind and solar PV farms should not be Excluded within Excluded within areas seen from these tourist areas. Larger 10km buffer 5km buffer buffer for wind. Holiday/Children camps When data available Excluded within Excluded within 1km buffer 1km buffer National protected area Monument (temple, ancient tomb or Excluded within Excluded within ruin…) 1km buffer 1km buffer Data incomplete Important Bird Area Total 70 IBAs – 69812 km2 Excluded within Excluded within 2km buffer 1km buffer Quarry Excluded within Excluded within 1km buffer 1km buffer Mine Possible foundations issue (underground Excluded with 2km Excluded within mines) buffer 1km buffer Sacred mountain When data available Excluded within Excluded within 1km buffer 1km buffer Spatial data sets representing the outlined constraints are not 100% available due to the lack of detailed and comprehensive source of information or because GIS format (tif, csv, shp…) or geo-referenced data does not exist. Buffers around protected or constrained areas are derived from previous RES potential as- sessment studies carried out by EDF R&D and EIFER in various countries. They come from feedback from existing worldwide wind and solar projects. 74 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections At this stage, due to the huge wind and solar resources and as investors and developers are likely to focus first on areas without any major constraint, whenever a regulatory or environ- mental constraint is known and applicable, the area is considered as an excluded zone for development. Dedicated buffers around specifics areas (e.g. roads, protected areas…) are applied. There- fore, only very local constraints should remain (e.g. social acceptance, local land use conflict, soil characteristics unfavorable for wind turbine foundation…) and at this stage, they cannot be taken into account for the selection of preferred areas. Only feasibility studies carried out prior to project development should confirm the selection of the sites. 6.2.5 Wind technology characteristics Wind turbines In order to cope with harsh weather conditions, wind turbine should features « Low Tempera- ture Options » (i.e. Vestas turbines), allowing to operate at -30°C at least (-40°C for non-oper- ation). IEC Class I (wind speed 8.5 – 10 m/s) or Class II (7.5 – 8.5 m/s) turbines models are required, as best Mongolian sites have an average wind speed > 8 m/s. Generic 2 MW turbines (Ø 110 m diameter) are chosen for 2020 development and according to the onshore wind industry trend, 3-4 MW (Ø 120-130 m) and 4-5 MW (Ø 140-150 m) models could be installed respectively in 2026 and 2036. Turbine models, rated at 2-3MW with a rotor diameter Ø 100-120m are considered to be the right choice in terms of performance for windy sites but these models are unlikely to be still commercialized by 2036 at least by non-Chinese turbine manufactures as the trend in Europe or in the USA is to increase both capacity and rotor diameter. 5MW models with up to 150m diameter are already on the onshore market and thanks to feedback from the offshore wind industry (now 9MW-plus capacity and Ø 180m rotor diameter ; 12MW – Ø 220m rotor models are about to be on line in 2020), onshore wind turbines are becoming bigger… Only social acceptance (visibility) and logistics issues (nacelle weight, tower height requiring big cranes, long blades…) could prevent from installing these future big machines in very re- mote areas. Wind turbine should be robust, reliable with a comprehensive service contract from the manu- facturer to reduce operation & maintenance (O&M) costs and guarantee a high availability factor. EDF study relies on Danish Vestas experience in cold and windy conditions, as Vestas is amongst EDF Energies Nouvelles key wind turbine supplier. Vestas owns a manufacturing facility in China (Tianjin). 75 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections Figure 24. Examples of possible Vestas turbines, suitable in Mongolia (IEC II & I) – Source Vestas Regarding cold climate conditions, feedback from cold countries (e.g. China, Canada, Den- mark…) have help turbine manufacturers develop specific ice detection (e.g. sophisticated sensors on blades which monitor their natural frequency flow oscillation and therefore detect unbalance effect due to ice) and de-icing systems (e.g. air heater on blades). There are still on-going R&D and demonstration project on this topic as the impact of ice on blade could significantly decrease he performance of the turbine and increase aging effect. Wind power density The wind power density depends on the rated capacity and rotor diameter of the turbines. The wind farm layout optimization helps developers reduce the impact of wake effect, in par- ticular for large farms with several wind turbines rows. The complexity of terrain (hills…) is also a key parameter for the implementation of wind turbines. At this stage, the density of turbines on a suitable area for development is based on a classi- cal farm layout where machines are arranged in a quincunx. The spacing depends on the ro- tor diameter (D in meters) and generally for large wind farm, the crosswind spacing equals 5*D and the downwind spacing is 9*D. 76 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections Figure 25. Wind farm layout – Source EDF According to this layout, the power density is: where P is the rated capacity of the wind turbine; x = 5 and y = 9 in our case. � According to the various rated capacities of the ∗ turbines,∗ ∗ the results of power density are as follows: Table 29. Wind power density – Source EDF x y P D (m) Density 2 (MW) (MW/km ) 5 9 2 100 4.4 5 9 3.5 125 5 5 9 5 145 5.3 Therefore a 5MW/km2 wind power density will be considered in this study and will be applied to suitable areas for wind development as a potential assessment. Wind load factor The wind load factor depends on the turbine model (power curve), availability of the farm and above all on wind distribution. New and accurate wind data have been provided by Vaisala and wind assessment is based on a conventional Weibull wind distribution. As we focus on wind sites where the average wind speed is above 8m/s, the Weibull wind distribution parameters are : k=2.3 and A=~9m/s (for mean wind speed 8m/s) or A=~10m/s (for mean wind speed 9m/s). Wind speed probability density function (Weibull): (V: wind speed m/s; k: shape parameter 0 77 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections Figure 26. Weibull wind distribution – average wind speed 8 & 9 m/s – Source EDF The turbine power curves are based on Vestas turbines for 2MW-Ø 110m and 3.5MW- Ø125m models; 5MW-Ø145m models’ power curve has been extrapolated. Figure 27. Turbines Power Curve – Source Vestas & EDF Load factor calculations are carried out considering a 90% wind farm availability (average 10% losses within the farm – grid connection losses not including at this stage). An air den- sity is taken equal to 1.225 (in cold temperature. The air density increases slightly and there- fore the performance of the turbine is improved. At this stage of the study, the impact of vari- ation in air density is not taken into account, as warm climate period should counter balance this effect). Two average wind speeds have been considered, for best resource sites: 8 and 9m/s. 78 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections Table 30. Wind turbine Power Curve – Source: Vestas – EDF Turbine model 2MW-110m 3.5MW-125m 5MW-145m Rated Capacity 2000 3500 5000 Wind speed (m/s) Power (kW) 0 0 0 0 1 0 0 0 2 0 0 0 3 0 55 75 4 45 235 325 5 195 500 625 6 405 880 1200 7 675 1405 1650 8 1175 2060 2500 9 1725 2710 3400 10 1895 3155 4600 11 1980 3370 4850 12 2000 3440 5000 13 2000 3500 5000 14 2000 3500 5000 15 2000 3500 5000 16 2000 3500 5000 17 2000 3500 5000 18 2000 3500 5000 19 2000 3500 5000 20 2000 3500 5000 21 0 3500 5000 22 0 3500 5000 23 0 3500 5000 79 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections 24 0 3500 5000 25 0 3500 5000 Table 31. Load factor calculation – Source EDF Turbine vs Load 2MW-110m 3.5MW-125m 5MW-145m Factor Average Wind 47.3% 47.9% 45.6% speed 8m/s (4145 h) (4198 h) (3997 h) Average Wind 54.2% 54.9% 52.9% speed 9m/s (4746 h) (4809 h) (4631 h) Wind farm availability: 90% Weibull wind distribution (k: 2.3 – A: 9 m/s or 10 m/s) Air density: 1.225 In high wind conditions, bigger turbines (larger rotor diameter) generally have a lower wind load factor. This is why today, for average wind speed range 8-9m/s, 2-4MW and rotor diam- eter Ø 100-130m turbines models are the preferred choice. In the longer term (>2030), due to the wind industry trend to develop bigger turbines for onshore, small turbines should no longer being commercialized by key manufacturers. 6.2.6 Solar PV characteristics Solar PV module technology The harsh site conditions for ground mounted solar PV (extreme temperature, desert…) re- quire to select robust double-glass frameless PV modules with a high protection against ele- ments (sand, frost…). PV module durability is a key concern in desert regions, where high operating temperatures and increased UV irradiation can accelerate the degradation of polymers for PV cell packaging such as encapsulants and backsheets. Moreover, solar PV installation must also endure fre- quent sandstorms and abrasive airborne dust. This is why it is required to replace conventional backsheet by solar glass. Frameless PV modules are well suitable in desert areas as they avoid dust deposit stuck in the framework. Summary of key constraints for solar PV in desert areas: Abrasive effect produced by wind and sand. Standard test sand should apply (IEC 68- 2-68:1994-08). Main glass abrasion effect: diffusion effect and not absorption one, therefore slight efficiency decrease (when loss is lower than 8%, the PV panel tested 80 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections is suitable for desert), depending on glass type, storm duration, sand concentration and type, wind speed… Special tempered glass should be used. High temperature decrease efficiency due to negative thermal coefficient High irradiance produces strong hot-spot effects (and subsequent ones). Not applica- ble to Mongolia as irradiance is not too high (max. GHI 1800 kWh/m2). High temperature may decrease the adhesion of the layers of modules (Encapsulant- Backsheet). Solar glass should replace conventional backsheet or robust backsheet required, like Tedlar. In order to reduce O&M costs, we recommend fixed tilted PV modules (mono or poly-silicon cells) instead of single or double axis trackers that require additional maintenance. Modules will be 15° tilted southward for energy assessment. The selection of PV module supplier requires making sure the manufacturers consider these aggravated operating conditions in their design. PV modules tests should be required and re- sults should be at least 3 times higher than classical IEC standards (in particular 3000 h test in hot and wet atmosphere and 600 frost-defrost cycles). Example of suitable PV modules from Canadian Solar manufacturer: Dymond 330P-FG mod- ules (poly-silicon) featuring: 16.9% efficiency Operating temperature: -40°C - +85°C Dimensions: 1968 x 992 x 5.8 mm (without J-Box and Corner protection) 330 Wp capacity 5400 Pa snow load – 2400 Pa wind load Frameless Weight : 27.5kg 30 year guarantee (linear power output) Figure 28. Canadian Solar “Diamond CS6X-315/320/325/330P-FG” module-Source Canadian Solar 81 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections Fine dust that is pervasive in arid areas (or even in polluted metropolitan areas) collects on the module surface, causing power loss. Without adequate cleaning, the dust layer significantly lowers PV performance and consequently the generated cash flow of a PV power plant (a 5% yield loss can occur in desert areas within a week only). PV system owners and operators need to rethink their O&M approaches, particularly, in regards to cleaning, and according to local operating conditions. There are already efficient solutions for PV modules cleaning systems which have been suc- cessfully tested in desert. Example of Bavarian based SunBrush mobil GmbH which has sold several hundred of solar module cleaning systems throughout the world. Four brush- systems, mounted on tractors, are cleaning a 200 MW solar park in Seih Al-Dahal in Dubai. The SunBrush system provides the equivalent of 20 hand washes per day: Figure 29. SunBrush PV panel brushing system (Seih Al-Dahal farm – Dubai) – Souce SunBrush In the case of 200MW Dubai PV farm, a complete cleaning run with four machines takes ten days (average 5 millimeters of sand lies on the modules’ surface). Once finished, the cycle starts again from the beginning. Depending on the PV modules height, it is possible to reach a speed of two kilometers an hour. A SunBrush system mounted on a conventional tractor costs around $ 35,000. PV module cleaning robot are also being developed. For example, Miraikikai from Japan has launched a water-free automated cleaning robot « Solar Cleaning Robot Type 1 ». Ongoing tests are conducted so as to make sure the robot does not damage PV coating. This robot is not yet commercialized. 82 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections Figure 30. PV module cleaning robot – Source Miraikikai The selection of reliable and robust inverters is also key. String or multi-string inverters are recommended for minimizing the mismatch losses. We should bear in mind that after 2030, major improvements in PV technology are still ex- pected in terms of conversion efficiency, size, reliability… Therefore our assessment for de- velopment in 2036 might be rather conservative as new technology breakthroughs might happen…For instance bi-facial PV modules are likely to be mature after 2020 and they should provide a significant increase in energy yield (10 to 20%). Solar power density At this stage, we use an average solar power density of 40MW/km2 on suitable areas for de- velopment. This is a common solar PV density used for potential assessment, taking into account space between tilted PV panels (to avoid shadowing), space for equipment installation (inverters…). Figure 31. Ground mounted tilted PV panels – Layout and shading - Source Schettler Gmbh Solar load factor In the potential solar PV assessment and future development scenarios, PV modules (poly- cristalline silicon cells) will have the following conversion efficiency according to the commis- sioning year of the project: 2020 : 17% 2026 : 19% 2036 : 22% 83 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections This conversion efficiency assessment is based on PV industry trend and forecast. By 2036, efficiency could be slightly higher if bi-facial PV modules have reached enough maturity for large commercialization. PV farm loss assumption is as follows: 20% comprising 10% loss from cables and inverters loss within the farm, 7% loss due to temperature and low irradiance, and 3% for angular re- flectance effect). Grid connection losses are note taken into account in load factor calcula- tion. Load factor calculations have been carried out only for best sites where Global Horizontal Ir- radiance is above 1700 kWh/m2 per year. As PV modules are 15° tilted southward, a calculation of Global Tilted Irradiance has been done via PvGIS free software. Table 32 Solar PV load factor – Source EDF 2020 2026 2036 Average GHI: 1700 kWh/m2 (Average GTI 15° tilt: 1940 kWh/m2) Load Factor 17.8% 19.9% 23.1% Average GHI: 1750 kWh/m2 (Average GTI 15° tilt: 1990 kWh/m2) Load Factor 18.3% 20.4% 23.7% 6.3 GIS RANKING METHODOLOGY A Ranking process has been implemented in the dedicated GIS tool in order to identify pre- ferred areas for wind and solar power developments. The following key criteria have been implemented in the GIS tool: Resource (Wind speed and Global Horizontal Irradiation - GHI): minimum wind speed > 6.5 m/s and GHI > 1500 kWh/m2. Location of potential development areas (cost drivers for installation & O&M): – Proximity to existing roads (paved or unpaved): access to future sites – Proximity to cities/villages…: key factor for future Operation & Maintenance (Ac- commodation of O&M staff and reasonable distance by car to get access to the farm site) – Proximity to railways for Solar PV equipments supply only (Wind equipments are supplied only by trucks) – Proximity to existing 220 kV substations for Scenario 0 only (maximum distance 200 km): reduction of grid connection costs (transmission line length) – Slope of suitable terrains for PV panels installation: < 20° 84 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections 6.3.1 Multi-criteria decision analysis (MCDA) Multi Criteria Analysis techniques can be used to identify most preferred option, to rank op- tions, or to simply distinguish acceptable form unacceptable possibilities. In GIS-based Multi Criteria Decision Analysis (MCDA) the weighted linear combination (WLC) technique (known also as Simple Additive Weighting method) is one of the most commonly used ranking concepts. This technique can be summarised as a map (raster) combination procedure where each evaluation criterion (standardised factor) is multiplied by a weight and the results summed to produce a composite map with ranked sites. The weight represents the relative importance of the criteria (decision factors). where: Si: Suitability map ranking i; Wj: relative importance of normalized weight of criterion; Nij: the standardized rating value i under criterion j; and n: number of criteria. An important prerequisite for a successful MCA is to base all processing steps on the prefer- ence of the decision makers and on expert knowledge. This applies to the selection of the data, its evaluation, classification, and subsequent weighting. In the context of the study, the remaining (non-excluded sites) areas suitable for wind and solar power development are evaluated according to a few criteria that are critical for the economic success of power plants construction and maintenance later on. There are two types of factors: criteria contributing positively to the site selection and criteria contributing negatively to site selection. In this framework, 4 factors for wind and 5 for solar power deployment are selected to evaluate the overall suitability of each site (grid cell in the GIS tool). The criteria and weights are outlined in table 32 and 33. Future Wind or PV farms should be located as closely as possible to the existing Mongolian road network (paved or unpaved roads) or railways (only for PV’s logistics, as train is not suit- able to transport heavy wind turbines nacelles or blades), to avoid expenditure for building new long access roads. Proximity to existing road network is key to future O&M task and it is less important, to a certain extent, for construction and transportation (by truck) as heavy loaded trucks can drive on frozen flat soils which can bear the loads. In general, roads should have a minimum width of 4 m and a solid pavement, but the available digital data on roads provide scarce information on the road type and quality in Mongolia. In the ranking assessment, the suitable areas too far from roads are considered less suitable than those closer to any kind of roads. Only for Scenario 0 (development of wind and solar for Mongolia and grid connected to existing power network), in order to reduce the costs associated with investment in new power lines and substations, wind and solar farms should be located in the vicinity of the existing 220kV substations. Based on the assumption of the study, sites within the range of 50km receive the highest value score and areas up to 200 km the lowest value. A 200km buffer around existing 220kV substations has been implemented in the GIS tool. 85 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections Slope of terrain is a factor that influences the construction costs, but also the placement of PV panels. Therefore, lower slopes are preferred and receive higher value scores, only for solar PV (maximum slope: 20°). The proximity to cities, villages, settlements is also a key criteria for future O&M: the workforce involved in the O&M tasks should live not too far from the farm (opportunities for accommoda- tion for O&M staff) and should get an easy access by road (short trip by car). A 100km distance is considered in this study as a proximity limit. 6.3.2 Weighing of criteria for the different scenarios The GIS ranking methodology provides scores (from 1 to 5) allocated to the suitable areas for wind and solar power development. In order to reduce the number of potential sites, only areas with the minimum surface of 10 km2 for a wind farm (minimum 50 MW wind farm capacity) and of 0.25 km2 for solar plants (minimum 10MW solar farm capacity) are eventually considered in the MCA study. Scenario 0 (“MinGW”): renewables development around existing grid by 2020 In Scenario 0, all wind and solar farms will be connected to the existing 220kV power network of Mongolia (no export) and they will be located at a maximum 200 km distance to existing substations (200km buffer). Within each 200km buffer, the maximum theoretical additional capacity of wind or solar farms (100% wind or 100% solar PV or mix 50-50%) will depend on the available connection capacity of the corresponding substation by 2020. As existing substations are generally located not too far from city/village (consumers), this criterion applies as well for O&M issues (not too far for workforce/accommodation…). The Scenario 0 Ranking Table criteria is as follows: Table 33 Scenario 0 – Ranking & Scores. Source EDF Scores Weight Weight Criteria in % in % 1 2 3 4 5 Wind Solar Wind speed in A 6.5 - 7 7 - 7.5 7.5 - 8 8 - 9 9 - 10 65 - m/s Solar irradia- 1500- 1600- 1650- 1700- A tion GHI in >1750 - 60 1600 1650 1700 1750 kWh/m² Proximity to B >100 100-80 80-50 50-20 <20 10 10 roads in km 86 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections Proximity to railway or rail- C >100 100-80 80-50 50-20 <20 - 5 way station in km (only PV) Proximity to D substations in 200-150 150-100 100-50 50-20 <20 20 15 km Slope (only for E 15-20° 10-15° 6-10° 1-6° 1° - 5 PV) Distance to city or village in km F >200 200-150 150-100 100-50 <50 5 5 (criteria for O&M) Scenario 1, 2 and 3: renewable development only for export by 2026, 2036 and in the longer term. New HV transmission lines are required for interconnection, including either upgrade of exist- ing 220kV substations or construction of new ones. Therefore, in these scenarios, the distance to existing 220kV substations is no longer a crite- rion. The Scenario 1 to 3 Ranking Table criteria is slightly different from the previous one: Table 34 Scenarios 1 to 3 – Ranking & Scores. Source EDF Scores Weight Weight Criteria in % in % 1 2 3 4 5 Wind Solar Wind speed in A 6.5-7 7-7.5 7.5-8 8-9 9 - 10 90 - m/s Solar irradia- 1500- 1600- 1650- 1700- A tion GHI in >1750 - 80 1600 1650 1700 1750 kWh/m² Proximity to B >100 100-80 80-50 50-20 <20 5 5 roads in km Proximity to railway or rail- C >100 100-80 80-50 50-20 <20 0 5 way station in km (only PV) 87 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections Slope (only for D 15-20° 10-15° 6-10° 1-6° 1° - 5 PV) Distance to city or village in km E >200 200-150 150-100 100-50 <50 5 5 (criteria for O&M) 6.3.3 Multi-criteria decision analysis for the different scenarios All of the selected criteria are converted into the ESRI raster format with a resolution of 100 m x 100m and then reclassified into ordinal suitability scores of 1–5, with 5 being the most suita- ble and 1, the least suitable. Next step is to assign a relative importance to each of the various criteria. The weights outlined in table 34. Tables reflect the impact of the factors on the final evaluation of suitable locations for wind and solar farm deployment. The process of available site evaluation is shown as fol- lows: Figure 32. Procedure for ranking suitable areas. Source EDF EIFER A final layer representing ranked sites is a sum of all standardized map layers (criteria) multi- plied by corresponding weights. The approach returns a suitability map ranking the relative importance of each site to one another. In this study, preferred areas for future wind and solar power developments have a score equals to 4 (or even score 5, only for Scenario 1 to 3 and for wind but these few areas 88 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections are generally located in the western part of Mongolia, very far from the 220kV power network, and unlikely to be selected). The following maps represent the various criteria and the scores, used for the ranking meth- odology. Figure 33. Wind speed-Value scores. Source EDF EIFER Figure 34. Solar GHI-Value scores. Source EDF EIFER 89 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections Figure 35. Proximity to roads-Value scores. Source EDF EIFER Figure 36. Proximity to railways (only for Solar)-Value scores. Source EDF EIFER 90 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections Figure 37. Proximity to cities/villages-Value scores. Source EDF EIFER Figure 38. Terrain slope (only for Solar)-Value scores. Source EDF EIFER 91 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections Figure 39. Proximity to 220kV substations (only Scenario 0). Value scores. Source EDF EIFER 6.4 WIND POWER POTENTIAL 6.4.1 Wind resource data New updated and robust wind data have been purchased from Vaisala’s 3TIER Services, one of the leader in the use of mesoscale Numerical Weather Prediction (NWP) models and satellite processing technologies in the energy sector for modeling wind and solar resource variability. The Vaisala’s scope of work included: Configure and run a suite of numerical weather prediction (NWP) simulations to reconstruct the last 30 years of meteorological conditions over Mongolia. Model simulations : 30-year, 5km resolution data set created from the following model simulations: o 1-year WRF simulation at 5km resolution o 30-year WRF simulation at 15km resolution Provision of annual Weibull parameters (k, A) which describe wind speed fre- quency distribution Annual-mean and monthly-mean wind speeds were assessed at wind turbine height at 100m and 80m. All data were provided in GIS format so as to implement them in the GIS tool. 92 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections Figure 40. 30-year (1987-2016) mean wind speed at 100m – Source Vaisala 6.4.2 Gross wind potential Mongolia wind resource map (long-term average wind speed) is shown on the map below (areas with a wind speed < 6m/s are not detailed as below this wind speed, we consider the resource is not relevant for future wind project developments): Figure 41. Wind resource in Mongolia. Source EDF EIFER Best suitable areas for wind development: wind speed > 8 m/s 93 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections 6.4.3 Technical wind potential After the implementation of all constraints defined in the GIS tool, the wind resource map on suitable areas (non-excluded areas) is Figure 42. Wind resource in non-excluded areas. Source EDF EIFER Best suitable areas for wind development: wind speed > 8 m/s Despite very large constrained and excluded areas for wind developments, there are very vast areas with an average wind speed > 8m/s, suitable for future developments. 94 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections 6.4.4 Scenario 0 – Wind potential In Scenario 0, the location of ranked suitable areas for wind development is shown on the map below (wind areas > 10 km2 and wind speed > 6.5m/s): Figure 43. Scenario 0 – Wind ranked potential areas – All scores. Source EDF EIFER The detailed results per Score is set out in this table: Table 35. Scenario 0-Wind resource scores. Source EDF Wind Capacity All Scores Score 1 Score 2 Score 3 Score 4 Score 5 Scenario 0 Total Capacity GW 269.5 403.9 267.9 21.7 0 963 2 Area km 53,903 80,779 53,585 4,340 0 192,607 Number of areas 391 400 211 38 0 1,040 The results show that Preferred Score 4 areas for wind power (second best resource and best location) could provide up to 21.7GW of wind capacity, covering a total surface of 4,340 km2 divided in 38 sites. 95 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections As distance to 220kV substation is key in this Scenario 0, the detailed results within 200km buffer around each substation are set out in this table: Table 36. Scenario 0-Wind resource within 200km substations buffers-All scores. Source EDF Wind Scenario 0 tar New New IHB4 Substation Choir Erdenet Darkhan Baganuur Oyutolgoi Ulaanbaa- Songino & & Songino Mandalgovi Tavantolgoi Substation Connection 50-100 150-250 50-100 50-100 150-200 50-100 50-100 150-200 100-150 Capacity (MW) Score 1 Capacity MW 72,232 8,827 183 22,365 69,206 1,114 31,203 17,845 46,541 2 Area km 14,446 1,765 37 4,473 13,841 223 6,241 3,569 9,308 Numb. of areas 96 26 2 68 64 8 26 53 48 Score 2 Capacity MW 97,053 14,075 4,258 29,837 102,632 4,809 71,552 17,274 62,405 2 Area km 19,410 2,815 852 5,967 20,526 962 14,310 3,455 12,481 Numb. of areas 113 20 12 46 91 8 26 29 55 Score 3 Capacity MW 69,015 3,961 3,137 10,104 65,493 - 76,921 406 38,886 2 Area km 13,803 792 627 2,021 13,099 - 15,384 81 7,777 Numb. of areas 72 7 5 24 57 - 22 4 20 Score 4 Capacity MW 11,185 - - 920 6,015 - - - 3,580 2 Area km 2,237 - - 184 1,203 - - - 716 Numb. of areas 18 - - 2 10 - - - 8 Note that the areas explored in this study are located to the nearest substation per score in the GIS tool (centroid of the polygon surface). Some areas might be at the same distance from 2 substations, therefore total areas (or capacity) per score do not match total global areas (or capacity). 96 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections For each 220kV substation, within 200km buffer, the total suitable wind capacity (all ranking scores) versus their available connection capacity is presented in this table: Table 37. Scenario 0-Total wind resource within 200km substations buffers. Source EDF Wind Capacity - Scenario 0 Total Capacity Total areas Connection Capacity All Scores vs Substation 2 MW Range MW Capacity MW km Mandalgovi 249,485 49,897 50-100 Songino & IHB4 26,864 5,373 150-250 Ulaanbaatar 7,579 1,516 50-100 Baganuur 63,226 12,645 50-100 Choir 243,346 48,669 150-200 Darkhan 5,923 1,185 50-100 New Oyutolgoi 179,675 35,935 50-100 Erdenet 35,525 7,105 150-200 Tavantolgoi 151,413 30,283 100-150 2 Total 963,036 MW 192,607 km 800-1,300 MW If we focus only on Score 4 sites, the results per 220kV substation is as follows: Table 38. Scenario 0-Score 4 wind resource within 20-50km substations buffers. Source EDF Wind Capacity - Scenario 0 Score 4 vs Substation Total Capacity Total areas Connection Capacity 2 (best sites) MW km Range MW Capacity MW Mandalgovi 11,185 2,237 50-100 Baganuur 920 184 50-100 Choir 6,015 1,203 150-200 Tavantolgoi 3,580 716 100-150 2 Total 21,700 MW 4,340 km 350-550 MW Around 21GW suitable wind capacity having a Score 4 (in particular 20-50km distance to 220kV substations) could be developed which far exceeds the available connection capacity of four 220kV substations (350 – 550 MW range). We should notice these 21GW suitable areas could be selected as well in Scenario 1 to 3, as their good location, very close of existing substations (between 20 and 50km), could be an asset, provided these substations are upgraded for future exportation. 97 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections 6.4.5 Scenario 1 to 3 – Wind potential Due to the huge wind potential, at this stage we do not differentiate these 3 scenarios. The ranking results will select the best areas suitable to meet the target of each scenario. The location of ranked wind areas for Scenario 1 to 3 is set out in the following map (wind areas > 10 km2 – Wind speed > 6.5 m/s): In Scenario 1 to 3, distance to 220kV substation is not a criteria as the potential areas are mainly dedicated to exportation and will require new HV transmission lines and substations. Figure 44. Scenario 1 to 3-Wind ranked potential areas – All scores. Source EDF EIFER Results per scores are set out in this table: Table 39. Scenario 1 to 3-Wind resource Scores. Source EDF Wind Capacity All Scores Score 1 Score 2 Score 3 Score 4 Score 5 Scenario 1 to 3 Total Capacity GW 881.9 791.5 458.8 191.6 2.9 2,326.7 Area km2 176,390 158,310 91,766 38,324 577 465,367 Number of areas 1,484 1,086 630 223 15 3,438 If we focus on Score 4 & 5 wind potential areas, the results are as follows (per Province/Aimag): 98 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections Table 40. Scenario 1 to 3-Score 4 wind potential areas per Aimag. Source EDF Wind Score 4 Capacity Total area Number of Province (Aimag) GW km2 areas Dzavhan 0.15 29 1 Uvs 0.23 47 1 Hovsgol 0.43 87 2 Arhangay 1.00 199 4 Dornod 1.52 305 5 Govisumber 2.57 513 1 Hovd 2.81 561 14 Tov 3.00 599 7 Bayan-Olgiy 4.65 929 21 Hentiy 6.89 1,377 11 Suhbaatar 6.92 1,384 12 Ovorhangay 10.20 2,039 17 Bayanhongor 15.46 3,091 40 Govi-Altay 21.37 4,275 30 Dundgovi 32.52 6,505 36 Omnogovi 37.00 7,399 20 Dornogovi 44.92 8,983 22 TOTAL 191.62 GW 38,324 km2 223 Table 41. Scenario 1 to 3-Score 5 wind potential areas per Aimag. Source EDF Wind Score 5 Capacity Total area Number of Province (Aimag) GW km2 areas Bayan-Olgiy 0.89 178 2 Bayanhongor 0.79 159 3 Hovd 0.57 115 4 Govi-Altay 0.49 98 4 Ovorhangay 0.14 27 2 TOTAL 2.88 GW 577 km2 15 99 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections Score 5 wind potential areas are located mainly in western Mongolia, very far from Mongolia power network and in particular from preferred new HV transmission lines routes for exporta- tion. Therefore, only Score 4 wind potential areas will be selected for further analysis on renewables development and export: 191GW wind potential are suitable within 223 potential areas cover- ing a total 38,324 km2. If we apply a 200km buffer around existing 220kV substations (to use existing grid and sub- stations, provided they are upgraded), Score 4 wind potential areas within this buffer are as follows: Table 42. Scenario 1 to 3-Score 4 wind potential areas within 200km substations buffers. Source EDF Wind Score 4 Capacity Total area Number of 200 km buffer Substa- GW 2 areas tion km Mandalgovi 33.65 6,730 36 Choir 29.41 5,882 28 Tavantolgoi 28.93 5,786 17 New Oyutolgoi 23.24 4,648 6 Baganuur 2.78 556 6 Ulaanbaatar 0.25 50 1 2 TOTAL 118.26 GW 23,652 km 94 The total wind potential of Score 4 areas within 200km substations (220 kV) buffer is 118GW; it is much higher than Score 4 results in Scenario 0 (21GW) as in this Scenario 0, only areas between 20 and 50km distance from substations are selected. This Score 4 result for areas within 200km substations (220kV) buffer could help prioritize suitable wind areas developed for exportation, using existing power grid that must be up- graded. 6.5 SOLAR PV POTENTIAL 6.5.1 Solar resource data Solar resource data used in this study come from open-source Global Solar Atlas (SolarGIS- ESMAP-World Bank Group) which provides maps and solar Global Horizontal Irradiance (GHI in tif format) for Mongolia. 100 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections Figure 45. Solar resource (GHI) in Mongolia. Source SolarGis 6.5.2 Gross solar potential The Mongolia solar resource map representing an average GHI is shown on the map below (Areas with a GHI<1500kWh/m2 were excluded from the study, as they are not relevant for ground mounted solar development): 2 Best suitable areas for solar PV development: GHI > 1650 kWh/m Figure 46. Wind resource in Mongolia. Source EDF EIFER 101 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections 6.5.3 Technical solar potential After the implementation of all constraints defined in the GIS tool, the wind resource map on suitable areas (non-excluded areas) is: Figure 47. Solar resource in Mongolia (non-excluded areas). Source EDF EIFER Like wind potential, despite very vast constrained and excluded areas, there are vast suitable areas suitable for ground mounted solar development. 6.5.4 Scenario 0 – Solar potential In Scenario 0, the location of ranked suitable areas for solar development is as follows (solar areas > 0.25 km2 and GHI > 1500kWh/m2): 102 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections Figure 48. Scenario 0 – Solar ranked potential areas – All scores. Source EDF EIFER The detailed results per Score is set out in this table: Table 43. Scenario 0-Solar resource scores. Source EDF .Solar PV Capac- All Scores ity Score 1 Score 2 Score 3 Score 4 Score 5 Total Scenario 0 Capacity GW 1,863.6 3,123.8 6,207.7 483.7 0 11,679 2 Area km 46,590 78,095 155,192 12,092 0 291,969 Number of areas 486 888 818 599 0 2,791 Preferred Score 4 areas (best resource and best location) could provide up to 483.7GW of solar capacity, covering 12,092km2 divided in 599 areas. As distance to 220kV substation is key in this Scenario 0, the detailed results within 200km buffer around each substation are set out in this table: 103 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections Table 44. Scenario 0-Solar resource within 200km substations buffers-All scores. Source EDF Solar PV Scenario 0 tar goi Substation govi New IHB4 Choir Erdenet Mandal- Darkhan Tavantol- Baganuur Oyutolgoi Ulaanbaa- Songino & & Songino Substation Connection Capacity 50-100 150-250 50-100 50-100 150-200 50-100 50-100 150-200 100-150 (MW) Score 1 Capacity MW 907 342,183 - 462,353 204,144 1,278 - 852,754 - 2 Area km 23 8,554 - 11,559 5,103 32 - 21,319 - Numb. of areas 20 117 - 94 41 15 - 199 - Score 2 Capacity MW 546,555 479,160 145,079 445,146 872,230 1,442 346,104 269,858 18,232 2 Area km 13,664 11,979 3,627 11,129 21,806 36 8,653 6,746 456 Numb. of areas 45 214 33 167 194 12 22 178 23 Score 3 Capacity MW 1,850,690 121 35,758 17,327 1,267,573 - 1,562,065 - 1,474,138 2 Area km 46,267 3 894 433 31,689 - 39,052 - 36,853 Numb. of areas 256 2 13 22 322 - 126 - 77 Score 4 Capacity MW 128,637 - - - 429 - 30,173 - 324,436 2 Area km 3,216 - - - 11 - 754 - 8,111 Numb. of areas 46 - - - 22 - 85 - 446 Note that areas are located to the nearest substation per score in the GIS tool (centroid of the polygon surface). Some areas might be at the same distance from 2 substations, therefore total areas (or capacity) per score do not match total global areas (or capacity). 104 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections For each 220kV substation, within 200km buffer, the total suitable solar capacity (all ranking scores) versus their available connection capacity is presented in this table: Table 45. Scenario 0-Total solar resource within 200km substations buffers. Source EDF Solar Capacity - Scenario 0 Total Capacity Total areas Connection Capacity All Scores vs Substation 2 MW Range MW Capacity MW km Mandalgovi 2,526,800 63,170 50-100 Songino & IHB4 821,480 20,537 150-250 Ulaanbaatar 180,840 4,521 50-100 Baganuur 924,840 23,121 50-100 Choir 2,344,360 58,609 150-200 Darkhan 2,720 68 50-100 New Oyutolgoi 1,938,360 48,459 50-100 Erdenet 1,122,560 28,064 150-200 Tavantolgoi 1,816,800 45,420 100-150 2 Total 11,678,760 MW 291,969 km 800-1,300 MW If we focus only on Score 4 sites, the results per 220kV substation is as follows: Table 46. Scenario 0-Score 4 solar resource within 20-50km substations buffers. Source EDF Solar Capacity - Scenario 0 Score 4 vs Substation Total Capacity Total areas Connection Capacity 2 (best sites) MW km Range MW Capacity MW Mandalgovi 128,637 3,216 50-100 Choir 429 10.7 150-200 New Oyutolgoi 30,173 754 50-100 Tavantolgoi 324,436 8,111 100-150 2 Total 483,675 MW 12,092 km 350-550 MW Around 483GW suitable solar capacity having a Score 4 (in particular 20-50km distance to 220kV substations) could be developed which far exceeds the available connection capacity of four 220kV substations (350 – 550 MW range). We should notice these 483GW suitable areas could be selected as well in Scenario 1 to 3, as their good location, very close of existing substations (between 20 and 50km), could be an asset, provided these substations are upgraded for future exportation. 105 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections 6.5.5 Scenario 1 to 3 – Solar potential Due to the huge solar potential, at this stage we do not differentiate these 3 scenarios. The ranking results will select the best areas suitable to meet the target of each scenario. The location of ranked solar areas for Scenario 1 to 3 is set out in the following map (wind areas > 10 km2 – Wind speed > 6.5 m/s): the location of ranked solar areas for Scenario 1 to 3 is set out in the following map (solar areas > 0.25km2 – GHI > 1500kWh/m2): In Scenario 1 to 3, distance to 220kV substation is not a criteria as the potential areas are mainly dedicated to exportation and will require new HV transmission lines and substations. Figure 49. Scenario 1 to 3-Solar ranked potential areas – All scores. Source EDF EIFER Results per scores are set out in this table: Table 47. Scenario 1 to 3-Solar resource Scores. Source EDF Solar PV Capacity All Scores Score 1 Score 2 Score 3 Score 4 Score 5 Scenario 1 to 3 Total Capacity GW 11,764.0 4,165.8 12,835.6 1,165.7 0 29,931 2 Area km 294,100 104,144 320,891 29,142 0 748,278 Number of areas 3,399 1,509 949 2,574 0 8,431 106 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections If we focus on Score 4 solar potential areas, the results are as follows (per Province/Aimag): Table 48. Scenario 1 to 3-Score 4 solar potential areas per Aimag. Source EDF Solar Score 4 Capacity Total area Number of 2 Province (Aimag) GW km areas Omnogovi 1,032.77 25,819 574 Dundgovi 100.21 2,505 1,526 Dornogovi 16.16 404 41 Ovorhangay 14.69 367 358 Bayanhongor 1.77 44 68 Govi-Altay 0.12 3 8 2 Total 1,165.72 GW 29,142 km 2,574 There are no Score 5 solar potential areas (areas are too small).Therefore, only Score 4 wind potential areas will be selected for further analysis on renewables development and export: 1165GW solar potential are suitable within 2,574 potential areas covering a total 29,142 km2. If we apply a 200km buffer around existing 220kV substations (so as to use existing grid and substations, provided they are upgraded), Score 4 solar potential areas within this buffer are as follows: Table 49. Scenario 1 to 3-Score 4 solar potential areas within 200km substations buffers. Source EDF Solar Score 4 Capacity Total area Number of 200 km buffer GW 2 areas Substation km Mandalgovi 46.12 1,153 1,291 Choir 63.90 1,598 105 Tavantolgoi 845.68 21,142 677 New Oyutolgoi 1.70 43 1 2 Total 957.40 GW 23,935 km 2,074 The total solar potential of Score 4 areas within 200km substations (220 kV) buffer is 957GW; it is much higher than Score 4 results in Scenario 0 (483GW) as in this Scenario 0, only areas between 20 and 50km distance from substations are selected. This Score 4 result for areas within 200km substations (220kV) buffer could help prioritize suitable solar areas developed for exportation, using existing power grid which must be up- graded. 107 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections 6.6 WIND AND SOLAR PV POTENTIAL –SYNTHESIS In this section, both wind and solar potential areas are presented in the same maps in order to ease the analysis of future developments. 6.6.1 Wind and solar technical potential Without any ranking process, the non-excluded potential areas for both wind and solar are presented in the following map: 2 Minimum wind speed: 6.5m/s – Minimum GHI: 1500 kWh/m 2 Best suitable areas for wind and solar PV development: wind speed > 8 m/s and GHI > 1650 kWh/m Best common wind & solar areas Figure 50. Wind and Solar potential areas (non-excluded areas). Source EDF EIFER This map sets out common potential areas where either wind or solar PV could be developed, in particular for high resource (purple areas). 108 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections 6.6.2 Wind and solar ranked potential – Scenario 0 For Scenario 0, “all scores” wind and solar potential areas are presented in the following map: Total potential capacity 963GW wind & 11,679GW solar (All scores) Figure 51. Scenario 0-Wind & Solar potential areas-All scores. Source EDF EIFER With the 220kV power network (situation in 2020 when ongoing upgrading and construction works are completed), the map is: Figure 52. Scenario 0-Wind & Solar potential areas-All scores-220kV grid. Source EDF EIFER Total potential capacity 963GW wind & 11,679GW solar (All scores) 109 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections If we focus only on Score 4 for both wind and solar potential areas, the result is set out in the following map: Total potential capacity 21.7GW wind & 483.7GW solar (Score 4 only) Figure 53. Scenario 0-Wind & Solar potential areas-Score 4. Source EDF EIFER We can notice for Score 4, there are very few common potential areas where either wind or solar PV could be developed in the same location. 6.6.3 Wind and solar ranked potential – Scenario 1 to 3 For Scenario 1 to 3, only Score 4 wind and solar potential areas (preferred location: best re- source and best location) are presented in the following map: 110 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections Total potential capacity 191.6GW wind & 1,165.7GW solar (Score 4 only) Areas where both solar PV and wind can be developed Figure 54. Scenario 1 to 3. Wind and Solar potential areas. Score 4 only. Source EDF EIFER Like for Scenario 0-Score 4, there are very few common areas suitable either for wind or solar PV development. If we implement the future 220kV power grid (2020 situation), the common wind and solar map (Score 4 only) is: Total potential capacity 191.6GW wind & 1,165.7GW solar (Score 4 only) Figure 55. Scenario 1 to 3. Wind and Solar potential areas. Score 4 only. 220kV grid. Source EDF EIFER 111 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections This map shows that preferred wind and solar potential areas are generally well located, close to the 220kV power grid and substations. Therefore, amongst the scenarios of new HV trans- mission lines for export, an upgrade of existing 220kV lines or substation could be envisaged. A focus on Southern Mongolia where the best wind and solar potential is located, is set out in the following maps: Figure 56. Scenario 1 to 3. Best Provinces for wind and solar development (Score 4)-220kV grid. Source EDF EIFER 112 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections Omnogovi, Dundgovi, Dornogovi and even Govisumber are considered as the best Prov- inces (Aimags) for wind and solar development, in particular for export. 6.7 WIND AND SOLAR PV COST ASSESSMENT - LCOE Levelized Cost of Electricity calculations are carried out only for preferred potential sites having a Score 4 (best resource and best location; see Ranking methodology) where a 100MW wind farm or a 50MW ground mounted solar PV farm can be developed. The following assumptions are used: Lifetime of farm: 25 years Discount rate: 5% and 8% Grid connection cost are not including, in particular construction of new trans- mission line from the farm substation to the 220kV substation (existing one in Scenario 0 or new one in Scenario 1 to 3). The average cost of a new HVAC line is around $200 per km. EDF cost assumptions are based on world market analysis from BNEF, IEA, Make Consulting, Vestas, GTM Research, Nova Terra… including EDF Energies Nouvelles’ wind and solar mar- ket knowledge. 6.7.1 100MW wind farm costs The CAPEX breakdown for a 100MW wind farm, commissioned in 2020, based on 2 MW-Ø110 m turbine model is as follows: Table 50. 2020 Wind CAPEX. Source EDF CAPEX Total Electrical Logistics-De- $/kW Turbine Foundation CAPEX 2017 Equipment velopment 2020 $/kW Range 1200-1400 200-300 100-200 90-120 1590-2020 Average 1300 250 150 100 1800 Turbine: procurement, transportation & installation of nacelle, blades, tower… Foundation: turbine foundation construction. Electrical Equipment: procurement, transportation & installation of inter-array cables, other Balance of Systems, farm substation… Logistics-Development: includes in particular creation of new access road to farm site (average 30 km) and road inside the 100MW farm, between turbines (25-30 km, depending on number of turbines installed). Average cost for road construction $100k/km. 113 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections The 2020 OPEX (including service & spare parts, administration, insurance, taxes & fees…) is: Table 51. 2020 Wind OPEX. Source EDF $/kW/year2017 OPEX 2020 Range 55-65 Average 60 2026-2036 Cost assessment For projects developed by 2026 or 2036, future CAPEX breakdown depends on new turbines models commercialized, cost reduction expected from manufacturers and contractors, and volume of wind development in Mongolia. Bigger turbines lead to less units to be installed (less cables, optimization of installation…). Table 52. 2020-2026-2036 Wind CAPEX. Source EDF CAPEX Turbine Foundation Electrical Equipt Logistics-Devlpt Total CAPEX $/kW2017 2020 Range 1200-1400 200-300 100-200 90-120 1590-2020 Average 1300 250 150 100 1800 2026 Range 950-1150 180-280 80-180 85-110 1295-1720 Average 1050 230 130 90 1500 2036 Range 600-850 150-250 70-150 60-80 880-1330 Average 720 200 110 70 1100 Future OPEX (decrease expected thanks to better turbine reliability, less O&M costs…): 114 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections Table 53. 2020-2026-2036 Wind OPEX. Source EDF OPEX $/kW/year 2020 2026 2036 2017 Range 55-65 40-60 40-50 Average 60 50 45 LCoE assessment LCoE calculations for a “Score 4” 100MW wind farm are based on the following assumption regarding turbine models installed: 2020: average turbines 2 MW rated capacity – 110 m rotor diameter 2026: average turbines 3.5 MW rated capacity – 135 m rotor diameter 2036: average turbines 5 MW rated capacity – 145 m rotor diameter Table 54. 2020-2026-2036 Wind LCoE. Source EDF $ 2017 2020 2026 2036 CAPEX $/kW 1800 1500 1100 OPEX $/kW/y 60 50 45 Average Wind Speed 8 m/s Load Factor 47% 48% 46% LCoE $/MWh – 8% 55.9 45.6 38.2 LCoE $/MWh - 5% 45.8 37.3 31.9 Average Wind Speed 9 m/s Load Factor 54% 55% 53% LCoE $/MWh – 8% 48.6 39.8 32.1 LCoE $/MWh - 5% 39.8 32.6 26.6 6.7.2 50MW solar farm costs 115 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections 2020 Cost assessment For a 50MW ground mounted solar farm commissioned in 2020, the CAPEX breakdown, based on double-glass (Poly-Si) PV modules, fixed axis, tilted 15° southward (17% conversion effi- ciency) is as follows : Table 55. 2020-Solar CAPEX. Source EDF CAPEX Electrical Logistics- Total CAPEX $/kW Modules 2017 Equipments Development $/kW 2020 Range 400-420 380-420 60-80 840-920 Average 410 400 70 880 Modules: procurement, transportation & installation of PV modules, tilted framework structure… Electrical Equipment: procurement, transportation & installation of electrical connec- tions, inverters, other Balance of Systems, farm substation… Logistics-Development: includes in particular creation of new access road to farm site (average 30 km) and road around the 50 MW farm (5-10 km, depending on number modules installed). Average cost for road construction $100k/km. The 2020 OPEX (including service & spare parts, administration, insurance, taxes & fees..) is: Table 56. 2020 Solar OPEX. Source EDF $/kW/year 2017 OPEX 2020 Range 24-28 Average 26 2026-2036 Cost assessment For projects developed by 2026 or 2036, future CAPEX breakdown depends on new PV panels and inverters commercialized, cost reduction expected from manufacturers and contractors, and volume of solar development in Mongolia. 116 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections Table 57. 2020-2026-2036 Solar CAPEX. Source EDF CAPEX $/kW2017 Modules Electrical Equipt Logistics-Devlpt Total CAPEX 2020 Range 400-420 390-410 60-80 850-910 Average 410 400 70 880 2026 Range 320-340 320-340 50-70 690-750 Average 330 330 60 720 2036 Range 240-260 270-290 40-60 550-610 Average 250 280 50 580 Future OPEX (decrease expected thanks to less O&M costs, in particular for cleaning, more robust modules…) are: Table 58. 2020-2026-2036 Solar OPEX. Source EDF OPEX $/kW/year2017 2020 2026 2036 Range 24-28 18-22 14-16 Average 26 20 15 LCoE calculations for a “Score 4” 100MW wind farm are based on the following assumption regarding PV modules: 2020: PV modules - conversion efficiency 17% 2026: PV modules - conversion efficiency 19% 2036: PV modules - conversion efficiency 22% (possibility to install bi-facial PV mod- ules) 117 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections LCoE assessment Table 59. 2020-2026-2036 Solar LCoE. Source EDF $2017 2020 2026 2036 CAPEX $/kW 880 720 580 OPEX $/kW/y 26 20 15 Average GHI: 1700 kWh/m2 (Average GTI 15° tilt: 1940 kWh/m2) Load Factor 17.8% 19.9% 23.1% LCoE $/MWh – 8% 69.9 50.4 34.5 LCoE $/MWh - 5% 56.9 40.9 27.9 Average GHI: 1750 kWh/m2 (Average GTI 15° tilt: 1990 kWh/m2) Load Factor 18.3% 20.4% 23.7% LCoE $/MWh – 8% 68.1 49.2 33.7 LCoE $/MWh - 5% 55.4 39.9 27.2 Conclusions In the short term (before 2025), wind farm projects remains cheaper than ground mounted solar farm, in particular due to the outstanding wind resource in Mongolia (> 8 m/s). In the longer term, we could expect similar LCoE for wind and solar projects, due to significant increase in PV modules efficiency, PV cost reductions. That is the reason why we will take the assumption that the development of wind and solar will be 50/50. Even though this assessment for solar could be conservative as new technology breakthroughs, dramatic cost decreases could occur in 20 years time. 6.8 CONCLUSIONS OF WIND AND SOLAR PV ASSESSMENT The potential of Wind and Solar PV development in Mongolia is huge thanks to an outstanding wind resource (wind speed > 8 m/s), a good solar resource (GHI > 1700 kWh/m2) and above all, to many suitable areas (unconstrained, good location for logistics…). Wind and solar PV potential capacity far exceeds development our development Scenarios for exportation (+5GW, +10GW and +100GW). This updated study provides results much higher than the previous ones due to various reasons: More robust wind and solar data sets, in particular wind speed at 100m height (in- stead of 30m) 118 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections Accurate and robust GIS tool for the selection of suitable sites Difficulties to compare 2018 results with previous studies, in particular due to the lack of detailed assumptions for the selection of suitable areas (in particular for solar as previous capacity assessment is likely to be underestimated, based only on 23,461 km2 suitable sites !) Grid connection to existing power network and substations (distance < 50 km) can be envis- aged for short term Mongolia Renewables Development Strategy but limited to 350-550 MW available 220 kV substation capacity. For future exportation of Renewables to neighboring countries, the location of preferred areas should lead to various power network extension scenarios (new HV transmission lines, studied in Module 5), either upgrading existing 220 kV substations (e.g. Mandalgovi or Tavantolgoi substation) or constructing new ones (e.g. in Dornogovi). « Score 4 » Wind (21.7 GW) and Solar (483.7 GW) preferred areas from Scenario 0 could also meet Scenario 1 to 3 development targets. The success in Wind and Solar PV development will also rely on the choice of robust, reliable and efficient technologies (turbine, PV modules) to bring down O&M costs and cope with ex- treme weather conditions As logistics is key, investors and developers will require visibility in terms of Mongolia energy policy development planning. We should bear in mind this work is still a high level potential assessment and site specific issues (e.g. soil characteristics) or local constraints (e.g. social acceptability, land usage con- flict) will have to be taken into account for further Wind or Solar farm project development. The results are not aimed at pre-siting and are also very dependent on the heterogeneous quality of the input GIS data. 7 IMPACT OF RENEWABLES DEVELOPMENT ON MONGOLIA POWER SYSTEM Development of renewable generation has two major impacts on Mongolia power system. Firstly, development of renewable generation will greatly relieve the current tight generation margin and improve power supply reliability. On the other hand, renewable generation, due to its inherent variability and intermittency, will exacerbate the difficulties and increase the com- plexity in operating the power system in Mongolia, extra flexible generation is required to ena- ble the operability of Mongolian power system. Secondly, the development of renewable gen- eration will require significant development and upgrade in transmission network in Mongolia. The detailed results of the Mongolian power system study will be included in Module 5 report on Power System Interconnection. 119 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections 7.1 METHODOLOGY 7.1.1 Methodology for analyzing impact on transmission system Depending upon the actual transmission configuration and design adopted as discussed in 5.1.2 above, renewable generation development will have different impact on conventional generation. This is described below 1) Quarantined scheme. Under this scheme, renewable generation will be developed in both concentrated and distributed manner. The concentrated development will see renewable generation developed as a large scale wind and/or PV farm, with total installed capacity reaching several or tens of gigawatt. It will be physically segregated from the Mongolian main transmission system, and its output will be collected and transmitted to neighboring countries with dedicated power network, as shown in Figure 57. In this case, the large renewable generation base has no or minimal impact on the Mongolian main power sys- tem, especially conventional generation. On the other hand, some renewable generation will also be developed in a distributed fashion and connected to the main Mongolian trans- mission system. These distributed generation are developed primarily to meet government renewable energy target, especially, the target of renewable generation meeting 20% and 30% of total installed capacity by 2020 and 2030, respectively. Due to intrinsic variability and intermittency of wind and PV generation, the distributed renewable generation devel- opment will have a major impact on Mongolian generation system. 2) Integrated scheme: Under the integrated scheme, as shown in Figure 58, the renewable generation base is connected with the main Mongolian transmission system. Their impact on Mongolian generation system will greatly depend upon the operating mode of intercon- nectors, for example, whether the interconnector is operated in a constant, variable or pro- filed transfer mode. At this stage of the project, we have not yet carried out detailed power network studies, and therefore, it is not possible to assess the impact of integrated scheme. Instead, only quaran- tined option is considered in this report. There are two types of technologies that can be used in each of the above two options, i.e. 1) High voltage DC transmission 2) High Voltage AC transmission Therefore, there are 4 theoretical transmission configurations. They are 1) quarantined HVDC 2) quarantined HVAC, 3) integrated HVDC and 4) integrated HVAC. From economic and operational point of view, quarantined AC option is not investigated. And only 3 options have been considered. 120 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections Figure 57 shows the schematic diagram of transmission system design for quarantined HVDC option Figure 57. Schematic Diagram of Quarantined VSC-HVDC Transmission Scheme Under this quarantined VSC -HVDC scheme, the sending system is not connected to the lo- cal grid. As the sending system is primarily comprised of wind and PV renewable generation and in addition, some conventional and flexible generation, the transmission technology used is VSC-HVDC transmission design. Figure 58 shows the schematic diagram of integrated HVDC transmission system design. Figure 58.Schematic Diagram of Integrated HVDC Transmission System Design Under this design, the transmission system for transmitting renewable generation is integrated with Mongolia transmission system. There would be strong interaction between renewable generation and local system. This may require some reinforcement and upgrade of local trans- mission systems 121 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections 7.2 IMPACT OF SCENARIO 0 ON CURRENT POWER NETWORK At present, Mongolia transmission system is already planned to be reinforced to integrate re- newable generation, rising demand and improving system reliability. Specifically, the overhead line from Songino to Mandalgovi, currently operating at 110kV, will be upgrated to operate at 220kV, and new 220kV transmission lines will constructed from Mandalgovi to Tavantolgoi to Oyutolgoi. Currently, the work is planned to be completed by 2019. Figure 59 shows the geographical Mongolian transmission system in 2020. Figure 59. Scenario 1 – Impact on Mongolian Transmission System The schematic single line diagram of Mongolian system shown in Figure 60. It should be noted, however, that the connection capacity of renewable generation as indi- cated in Figure 60 did not mean that the system would not require further reinforcement if the maximal capacity is fully utilized at every single node. 122 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections Map of Mongolian 2019 integrated power system with conductor type and rated current RUSSIA ERDENET DARKHAN 2x200MVA 2XLGJQ-400 879A 2x63MVA 150-200MW 50-100MW 2XLGJQ-300 746A SONGINO 2x63MVA 50-100MW 2XLGJQ-400 879A IKHB 4 2x125MVA 100-150MW 2XLGJQ-300 746A 2x63MVA ULAANBAATAR 50-100MW 2XLGJQ-300 746A BAGANUUR 2x63MVA 50-100MW 2XLGJQ-300 746A CHOIR 2x200MVA 150-200MW MANDALGOVI 2x63MVA 2xLGJ-300/40 746A 50-100MW TAVANTOLGOI 2x125MVA 100-150MW 2xLGJ-300/40 746A NEW OYUTOLGOI 2x63MVA 50-100MW OYUTOLGOI 2xAS-240/39 768A Notes：1 figures in red are number of auto transformers and their CHINA capacity, 2) figures in green are estimated potential capacity of renewable generation that could connected to each substation Figure 60. Schematic Single Line Diagram of Mongolian Transmission System 123 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections Figures in green shows the amount of renewable generation that could be connected to the 220kV substation that is unlikely to require significant reinforcement. 7.3 IMPACT OF SCENARIO 1&2 7.3.1 Impact of Scenario 1 & 2 on conventional power on economy, politics & regula- tion and society & environment Economic and financial impact In scenario 1, total of 5GW capacity from solar and wind sources are expected to be added by 2026; 2.5GW from solar and 2.5GW from wind, for export purposes. As reported in this study, currently there are two 50MW operational wind farms in Mongolian with the third one being a 55MW wind farm which is to be commissioned in 2018; however, these projects do not count towards the capacity of 2.5GW from wind generation. Currently there are two 10MW solar plants already operating with the third 15MW solar PV farm under construction in Zamiin-Uud. There are two projects with 60MW capacity in Choir and two projects with 50MW capacity near Ulaanbaatar that are expecting completion by 2020. Likewise, these project will not count towards the 2.5GW generation from solar as the above projects will be connected to the grid to serve the domestic demand in Mongolia. Table 60. Mongolian GDP and renewable energy investment under Scenario 1 2026 GDP $ billion 20.4851 GDP growth 7.00% Investment, % of GDP 27.10% Investment $ billion 5.55 Solar PV 1.80 Wind 3.75 CAPEX $/MW Solar PV 720,000.00 Wind 1,500,000.00 Capacity (MW) 5,000.00 Solar PV 2,500 Wind 2,500 51 World economic outlook data, October 2017: the historical real GDP growth was calculated from 2005 to 2017 of which the average was applied to project the GDP in 2026. 124 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections Based on the above table as per Scenario 1, USD 5.55 billion investment is expected to go into the renewable energy sector in Mongolia which is equivalent to roughly quarter of the country’s projected GDP at the time. Under Scenario 2, an additional 5GW capacity is envisaged by 2036 with 2.5GW each from wind and solar for export purposes, reaching total capacity of 10GW. Total new investment of USD 4.2 billion is expected by 2036 which will equal 10 per cent of the country’s GDP in 203652. Table 61. Mongolian GDP and renewable energy investment under Scenario 2 2036 GDP $ billion 40.29 GDP growth 7.00% Investment, % of GDP 10.42% Investment $ billion 4.20 Solar PV 1.45 Wind 2.75 CAPEX $/MW Solar PV 580,000.00 Wind 1,100,000.00 Capacity (MW) 5,000.00 Solar PV 2,500 Wind 2,500 Fall in CAPEX between 2026 and 2036 is driven mostly by cost reduction in equipment, but roughly 7-12 per cent of the cost reduction is directly attributable to increased proficiency of local contractors and improved logistics. According to the State Policy on Energy, the transmission network is to be retained under the control of the state which means the transmission company will earn additional revenue from power export, aiding the state and local budgets as well as funds for repair and maintenance. Political and regulatory impact The interviews presented in Module 3 show that there is full support for developing renewa- ble energy in Mongolia at both the private and public levels. To jump the gap between 0- 52 The historical real GDP growth was calculated from 2005 to 2017 of which the average was applied to project the GDP in 2036. 125 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections 10GW for renewable power export, the Mongolian government has to implement stable poli- cies to strengthen the industry by continuing to denominate the feed in tariff in USD and keeping the same tariff levels. Recently, there has been discussion of lowering the feed in tariffs for renewable projects when the Mongolian currency depreciated against the dollar dramatically in previous years which increased the financial pressure on the government to pay the investors in dollars. If tariff levels do get lowered, then the government is recom- mended to take compensating measures such as making appropriations in the annual gov- ernment budget for soft loans, grants, income tax rebates and other tax credits available to renewable energy developers to keep the development and operations costs down while not discouraging or stunting the growth of the renewable energy sector. Building up renewable energy capacity in Mongolia is a must if the country is to become a serious energy exporting country. Module 6 will address the regulation related issues in details. Socio-environmental impact There is no resistance to acceptance by the locals of renewable energy and the two major political parties both support the export of renewable power on a large scale. Investment into the renewable energy sector in Mongolia will spur further capability building of the local con- tractors, engineers and technicians. This directly correlates with the goal of the State Policy on Energy to train the energy sector personnel on the same level as international standards 7.3.2 Impact of scenario 1 & 2 on current power network Under Scenario 2, a total of 5GW renewable generation consisting of 2.5GW wind and 2.5GW of PV farms will be developed. Of which 1100 MW would be developed in a distributed manner and connected to the main Mongolian power network. The other 3900 MW of wind and PV generation should be developed in intensive manner over a concentrated area. This renewable generation farm would be developed in the Gobi desert. There are two transmission configurations based on HVDC transmission technologies: inte- grated and quarantined schemes. Figure 61 shows the transmission configuration for transporting 5GW of wind and PV genera- tion to China and Russia under the quarantined scheme. 126 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections Figure 61. Scenario 2 Quarantined HVDC Transmission Scheme Under this configuration, output from the renewable generation farm would directly be ex- ported to China via HVDC transmission lines. The flow to Russia would be bidirectional to take advantage of hydro generation in Russia. Figure 62 shows the integrated design of transmission system. Figure 62. Scenario 2 – Integrated HVDC transmission scheme Under this configuration, renewable generation farm is connected to Tavantolgoi and Oyutol- goi via 220kV lines, HVDC lines are used to export renewable generation to neighboring 127 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections countries. Like for the quarantined scheme, the flow to Russia would be bidirectional to take advantage of hydro plant in Russia. 7.4 IMPACT OF SCENARIO 3 7.4.1 Impact of Scenario 3 on economy, politics & regulation and society & environ- ment Economic and financial impact Under Scenario 3, total of 100GW capacity or an increase of 90GW is envisaged for the long term with 45GW each from wind and solar for export purposes. Total investment of USD 57.33 billion investment is expected by 2051, equivalent to 68 per cent of the projected GDP at that time. Even with the required investment of USD 57.33 billion for solar and wind farm development for additional 90GW capacity, this amount is still less than the single largest in- vestment in Mongolia by Rio Tinto in terms of investment size as percentage of GDP53. From the investment size perspective, USD 57.33 billion over a period of 15 years from 2036 to 2051 (long term) definitely is within reach, provided that fair and beneficial power trade agreements are in place. Table 62. Mongolian GDP and renewable energy investment under Scenario 3 Long term GDP $ billion 83.76 GDP growth 5.00%54 Investment, % of GDP 68.44% Investment $ billion 57.33 Solar PV 21.03 Wind 36.30 CAPEX $/MW55 Solar PV 467,222.22 Wind 806,666.67 Capacity (MW) 90,000.00 Solar PV 45,000 Wind 45,000 53 Rio Tinto’s investment in the Oyu Tolgoi copper and gold project equaled around USD 11 billion in 2016 when Mongolia’s 2016 GDP was USD 11.03 billion. 54 Lower GDP growth rate was applied to calculate the GDP up until 2051 (long term) 55 The CAPEX reduction between 2036 and 2026 was 19% and 27%, respectively for solar and wind projects. Same reduction as applied over a 15-year period between 2051 and 2036. 128 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections For building up of renewable capacity for export up to 100GW, Mongolia will have to promote systematically the carrying out of some activities of the value chain inside Mongolia in order to lower costs and increase efficiency. Political and regulatory impact To enable renewable energy generation capacity in excess of 10GW and up to 100GW, the government is likely necessitated to implement new industrial policies and decisions and other regulatory issues that are to be discussed in Module 6. As result of developing such large generation capacity in southern Mongolia, the government will need to make some amendments to the land law, making acquisition process easier, clearly stipulating the lands are to be allotted for at least 25 years and clarify the steps re- quired for renewable energy projects to be approved. Socio-environmental impact Renewable energy generation in excess of 10GW and up to 100GW will present huge oppor- tunities for Mongolia in the form of contracts to build power plants, related infrastructure and power lines, and O&M service providers. Abovementioned capacity could also make it eco- nomical to carry out certain activities of the value chain in Mongolia, such as manufacturing of certain components and assembly of related equipment. 7.4.2 Impact of Scenario 3 on current power network Under this scenario, 10GW of renewable generation consisting of 5GW wind and PV each would be developed. From the RE resource analysis, it is clear that Gobi desert area has sufficient renewable resources to develop 10GW renewable generation farm. It is proposed that like Scenario 2 renewable generation farm be developed in a large scale, concentrated manner, in order to maximize the efficiency and minimize the cost of development. Three transmission configurations are considered. They are 1) Quarantined HVDC scheme 2) Integrated HVDC scheme 3) Integrated HVAC scheme Figures 63, 64 and 65 show the schematic diagram of these three schemes. 129 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections Figure 63. Scenario 3 – Quarantined HVDC Transmission Scheme Figure 64. Scenario 3 – Integrated HVDC Transmission Scheme 130 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections Figure 65. Scenario 3 – Integrated AC Transmission Scheme For both quarantined and integrated HVDC transmission schemes, a ±800kV DC transmission line with capacity of upto 8GW is used to export the renewable generation to China, and a 500kV DC transmission line would be used to connect with Russia, which would be capable of operating in bidi- rectional mode to fully take advantage of hydro generation in Russia. In the case of integrated HVDC scheme, renewable generation farm is connected to Tavantolgoi and Oyutolgoi via 220kV AC trans- mission lines. For AC transmission scheme, wind and PV generation will be collected and stepped up to 500kV at the renewable farm as shown in Figure 65. The 220kV transmission lines from Oyutolgoi, Tavantolgoi to Ulaanbaatar will be uprated to 500kV which would then connect to the 500kV half ring system from Kyzylskaya, Russia to Emnigov, Telmen, Erdenet to Gusirnoozerskaya, Russia. A 500kV double cir- cuits would be connected to back-to-back HVDC converter station at the border between Mongolia and China, from where 500kV HVDC line will link to Chinese network. In addition, the existing 220kV interconnector between China and Mongolia will also be uprated to 500kV. 131 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections APPENDIX 1: SOURCE OF KEY CONSTRAINTS FOR RES ASSESS- MENT (GIS TOOL) Constraints Data source Technical constraints Elevation, slope https://lta.cr.usgs.gov/SRTM1Arc http://www.eic.mn/geodataen/geomoose.html Waterland http://www.eic.mn/geodataen/geomoose.html Buildings http://download.geofabrik.de/asia/mongolia.html Railways http://download.geofabrik.de/asia/mongolia.html Roads (All) http://download.geofabrik.de/asia/mongolia.html Forest http://www.eic.mn/geodataen/download.html Permafrost http://www.eic.mn/geodataen/download.html http://www.eic.mn/geodataen/geomoose.html Military zones http://download.geofabrik.de/asia/mongolia.html OVERPASS API Airport zones http://download.geofabrik.de/asia/mongolia.html OVERPASS API Radar zones (meteorological, mili- http://download.geofabrik.de/asia/mongolia.html OVERPASS API tary, etc.) Radar at airports http://download.geofabrik.de/asia/mongolia.html OVERPASS API Protected areas Ramsar sites (wetlands) https://www.protectedplanet.net/ Strictly Protected area https://www.protectedplanet.net/ Important Bird areas (migratory http://datazone.birdlife.org/country/mongolia routes) National protected areas http://www.eic.mn/geodataen/download.html http://www.eic.mn/geodataen/geomoose.html National protected areas : World Her- http://www.eic.mn/geodataen/geomoose.html itage Site Local protected areas http://www.eic.mn/geodataen/geomoose.html SPA zone boundary http://www.eic.mn/geodataen/geomoose.html Other constraints PV, wind power plants existing and Google Earth planned http://www.thewindpower.net/country_maps_en_66_mongolia.php Tourist camps http://overpass-turbo.eu/ -tourism=camp site Power lines and substations http://overpass-turbo.eu/ -tourism=camp site / NovaTerra State border http://www.eic.mn/geodataen/download.html Minerals deposit areas, mines http://overpass-turbo.eu/ 132 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr Module 4 report on Mongolia Energy Sector Profile and Projections MINISTRY OF ENERGY, GOVERNMENT OF MONGOLIA Government Building 14, Khan-Uul District Chinggis Avenue, 3-r Khoroo Ulaanbaatar, 17060 Mongolia Contact: Mr. Chimeddorj Demchigjav General Director of Energy Policy Department ASIAN DEVELOPMENT BANK 6 ADB Avenue Mandaluyong City, 1550 Metro Manila, Philippines Contact: Mr. Teruhisa Oi Project Manager, Energy Division (EAEN), East Asia Department (EARD) [email protected] Consultant: EDF EDF CIST, Immeuble Spallis, 2 rue Michel Faraday 93282 Saint-Denis Cedex France Contact: Mr. Philippe Lienhart Strategy Innovation New Business Manager Strategy for NAPSI Technical Assistance to Mongolia Team Leader [email protected] Deliverable: Module 4 Report on Mongolia Energy Sector Profile and Projections (Conven- tional Generation, Renewable Energy Capacity Expansion Plan) Date: 8 March 2018 133 EDF ELECTRICITE DE FRANCE – with a capital of 1 006 625 696.50 euros – TA-9001 MON: Strategy for Northeast Asia Power System Interconnection 552 081 371 R.C.S. Paris EDF References: CIST – DCO – PhL – 18 - 208 www.edf.fr