RENEWABLE ENERGY POLICY OBJECTIVES AND PLANS TO INTEGRATION ON NORTH-EAST ASIAN POWER INTERCONNECTION

Enkhtuvshin Ganbaatar /Ph.D/ Expert of Policy and planning Department

July 08, 2021 Table of content

• Current condition of Energy sector in ; • Renewable energy policy objectives and plans; • Key milestones of ADB technical assistance on “Northeast Asian Power System Interconnection” project ENERGY SECTOR Source: Source: Energy Ministry of EASTERNREGIONELECTRICITY SYSTEM CENTRALREGIONELECTRICITY SYSTEM ALTAI WESTERN REGION ELECTRICITYSYSTEM 748.7 11% 817.1 12% - REGION ELECTRICITYULIASTAISYSTEM 36.0 0% ELECTRIC ELECTRIC POWER DISTRIBUTION /2018/ Mln 5259 77% Kilowatt Kilowatt Hour Erdeneburen Bayan - Olgii Export consumption plant's Power internal Leakage of gridsthe Consumption ~ ENERGYSYSTEM OF MONGOLIA: INSTALLED POWER PLANTS AND PROPOSEDPROJECTS wind, solarwind, and dieselstations. of Majorityenergy electricalbeing is generated coalby fired thermalpower plants and the from remaininghydro, is 20 HPS(90 MW) MW Durgun HPS(12 MW) Taishir HPS(11 MW) Uliastai Altai EG EG HPS(315 MW) 6624.8 DOMESTIC PRODUCTIONDOMESTIC ANDIMPORT 48% 1683.6 52% Million Kilowatt Million Kilowatt Hour / 201 6720.8 45% 8/ Mörön Power plant (53MW) 900 6% 116 1% Import Western Central Produced Shuren ( Tavantolgoi 450 HPS(244 MW) MW) Power plant Power plant (48MW) 2018: 304 million Erdenet Sukhbaatar ~201MW kWt Darkhan Darkhan /h solar plant (10 MW) ~140MW Choir Uhaa + Power plant Power plant Power plant Power Plant 3 Tsogt Khudag tsetsii ndörkhaan Ö Sainshand Power plant (18MW) - - - 4 3 2 WPS( Zamin ( (198MW) (2 Expansion (325MW) 703 4 MW) MW) 50 WPS(50MW) Uud Shivee Мо Ulaanbaatar solar plant (8.3 MW) Salkhit MW) nnaran Gegeen Ovoo WPS(48MW) Baganuur solar plant (10MW) SPP (15MW)SPP Power plant (5280MW) Baruun Power Plant (70 - Buuruljuut Urt Power stationsPower to be built stationPower in operation Khusigtin SOLARPLANT WIND PLANT HYDROPLANT POWER PLANT Power Plant (600MW) 0 MW) © DBM Asset Asset DBM Management LLC © + Choibalsan power plant (36MW) Expansion Khundii SPP (15MW) 110 KW KW 110 power grid under use KW 220 power grid under use ( 50 MW) FOOD, AGRICULTURE AND LIGHTGreen INDUSTRY tariff - SECTORFeed in tariff Upper limit limit Upper of Continued Renewable EnergyRenewable RatesTariff inDollar/KW $ Solar Energy:$0.12 Hydropower Wind Farm: $0.085 (Less than 5 MW Imported Tariff Rates Tariff Imported CES import electricityimport CES rates Western region import electricity import region Western rates: ): $0.045 - 0.06 160 170 2.77 Rubles/ 0.65 Yuan or - 190 Tugrugs * : Tugrugs *Unofficial *Unofficial estimate of Energy from Ministry 116.3 240.5 Green Tariff Tugrugs Tugrugs Approximately The The Energy Regulatory Commission’s Green Tariff: Difference Difference in Tariffs: 11.88 3 - 4% tugrugs of of average household’smonthly electricity bill. per user per kW/hour 80 - 30 0 Tugrugs Government policy on Renewable energy

“State energy policy 2030” ensure achieving SDGs vision 7 “Ensure access to affordable, reliable, sustainable and modern energy for all” goals

• Renewable energy share on total installed capacity 20% by 2020 /271.2MW or 18.3% in 2020/ • Feed in tariff for solar, wind and small hydro; • Renewable energy share on total installed capacity 30% by 2030 /1036 MW or 30% in 2030/ • Competitive bidding, net metering for renewable energy generation on households;

36% or 33.5% or 30.6% or 50MWh 376MW 345MW 315MW Government policy on Renewable energy

Long term development policy document “Vision 2050”:

1st Phase 2021-2030 • Cut energy sector GHG emissions by improving mitigation policy 2nd Phase 2031-2040 • Strengthening existing power grid by horizontal and vertical dimension • Moderate exiting power plants and improve efficiency • Transfer of green energy from coal fired heating system in urban areas, continue supporting net metering; • Phase out of existing old coal fired power plants and introduce of new low emission and high power plants; • Facilitate export oriented power generation and initiate energy export 3rd Phase 2041-2050 • Self-sustained, resilient and smart electricity system with appropriate renewable energy combination, become net exporter of energy • Facilitate sustainable green energy export by boosting renewable energy generation specially solar and wind Evaluation target of Government policy

• Number of people access to affordable energy sources by 2025 is 95.5%, 100% by 2030, 100% 2050 • Cut GHG emission by 12.3% compared with 2015, 22% reduction on GHG emission in 2030 compared by 2015. KEY FINDINGS OF FIRST TECHNICAL ASSISTANCE FINANCIAL FEASIBILITY

Solar and Wind Grid Investment in Investment in MGL NEA • Scenario 0: “minGW” capacity in 2020, connected to Mongolian 220kV $ 5.5 bln $ 3.3 bln 5 GW power grid, only for Mongolia electricity consumption. The “minGW” capacity refers to the available connection capacity to current 220kV substations.

10 GW $ 10.0 bln $ 5.0 bln • Scenario 1: + 5GW in 2026, mainly for exportation to neighbouring countries.

• Scenario 2: + 10GW in 2036 (therefore + 5GW between 2026 and 2036) for exportation to neighbouring 100 GW $ 85.0 bln $ 60.0 bln countries as well.

• Scenario 3: +100GW in the long term.

21-07-21 21-07-21 Date & Location Date & Location 8 OBJECTIVES AND NEXT STEPS

REGULATORY FRAMEWORK

• Establish NAPSI Authority organization

• Elaborate NEA Grid Code

• Implement Regulation at regional level and the follow-up of the necessary evolutions and harmonization of the National regulations

• Continue comprehensive study on Market and Power Trade • Power trade contracts standardization • Institutionalization of competitive mechanisms • Regional Grid Code: Clear common rules • Transmission rights: Development of comprehensive methodology

21-07-21 Date & Location 9 OBJECTIVES AND NEXT STEPS

STRATEGY AND INFRASTRUCTURE National level: • Enhance legal environment for investors, keep it sustainably • To have a clear policy for governmentally and politically for foreign investors • Develop infrastructure in border area /railway, road, capacity of checkpoints Subregional level: • Develop electricity cooperation on the basis of bilateral agreements • Support existing and identified bilateral pioneer projects through the regional mechanism Regional level: • Develop multilateral dialog platform • Strengthen existing and initiated institutional mechanisms towards connectivity development

21-07-21 Date & Location 10 THANK YOU FOR YOUR ATTENTION