Strategies for Development of Green Energy Systems in Mongolia (2013-2035)

STRATEGIES FOR DEVELOPMENT OF GREEN ENERGY SYSTEMS IN MONGOLIA (2013-2035)

Extended Executive Summary

STRATEGIES FOR DEVELOPMENT OF GREEN ENERGY SYSTEMS IN MONGOLIA (2013-2035) Extended Executive Summary

The Global Green Growth Institute 19F Jeongdong Building, 21-15, Jeongdong-gil, Jung-gu, Seoul, Korea 100-784

The Global Green Growth Institute does not make any warranty, either express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or any third party’s use or the results of such use of any information, apparatus, product, or process disclosed of the information contained herein or represents that its use would not infringe privately owned rights. The views and opinions of the authors expressed herein do not necessarily state or reflect those of the Global Green Growth Institute.

ISBN: 979-11-952673-0-9

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Contents

FOREWORD Error! Bookmark not defined. PREFACE 11 ACKNOWLEDGEMENTS 12

PART I. INTRODUCTION TO MONGOLIA ENERGY SCENARIOS 1 Background 13 2 Mongolia’s Energy System: Overview and Challenges 13 3 Report Goals and Objectives 16 4 Overview of Scenarios and Methodology 16 4.1 Scenarios Summary 17 4.2 Methodological Approach 19 PART II. SECTOR SCENARIO DETAILS AND RESULTS 5 Power and Heat Supply 21 5.1 Sector Overview 21 5.2 Reference Scenario 21 5.3 Recent Plans Scenario 22 5.4 Expanded Green Energy Scenario 24 5.5 Shifts in Energy Export Scenario 28 5.6 Discussion and Possible Initiatives 30 6 Buildings 32 6.1 Sector Overview 32 6.2 Reference Scenario 33 6.3 Recent Plans Scenario 34 6.4 Expanded Green Energy Scenario 35 6.5 Discussion and Possible Initiatives 37 7 Transport 38 7.1 Sector Overview 38 7.2 Reference Scenario 38 7.3 Recent Plans Scenario 39 7.4 Expanded Green Energy Scenario 39 iv

7.5 Discussion and Possible Initiatives 41 8 Industry: Mining and Manufacturing 42 8.1 Sector Overview 42 8.2 Reference Scenario 43 8.3 Recent Plans Scenario 45 8.4 Expanded Green Energy Scenario 46 8.5 Shifts in Energy Export Scenario 48 8.6 Discussion and Possible Initiatives 48 9 Agriculture 49 9.1 Sector Overview 49 9.2 Reference Scenario 49 9.3 Expanded Green Energy Scenario 51 9.4 Discussion and Possible Initiatives 51 PART III. OVERALL RESULTS AND CONCLUSIONS 10 Overall Scenario Results 52 10.1 Electricity Generation 52 10.2 Energy Demand 53 10.3 Greenhouse Gas Emissions 56 10.4 Other Pollutant Emissions 60 10.5 Cost-effectiveness Analysis 62 PART IV. RECOMMENDED NEXT STEPS 11 Summary of Overall Findings 65 11.1 Policies for Consideration 65 11.2 Potential Next Steps for Green Energy Development: Projects, Pilots, and Further Research 66 11.3 Data Gathering 66 11.4 Capacity Building 67 11.5 Pilot Programs 67 11.6 Research 68 References Cited 70

List of Tables Table 2-1. Primary energy supply in Mongolia, 1990-2010, TJ 15

Table 2-2. Primary energy production in Mongolia, 1990-2010, TJ2 15

Table 4-1. Overview of four scenarios 18

Table 6-1. Key drivers for the buildings sector 33

Table 7-1. Key drivers in the transport sector 40

Table 8-1. Key drivers for the industry sector 43

Table 10-1. Electricity generation, energy demand, and GHG emissions in three scenarios 52 Table 10-2. Electricity output in the reference, recent plans, and expanded green energy scenarios, TWh 533 Table 10-3. Estimated cumulative incremental costs (net present value) of expanded green energy scenario versus reference scenario, assuming 5% real discount rate 64

List of Figures Figure 2-1. Historical electricity generation, by fuel 14 Figure 5-1. Electricity capacity in the reference scenario 21 Figure 5-2. Electricity generation in the reference scenario 21 Figure 5-3. Electricity generation capacity in the recent plans scenario 23 Figure 5-4. Electricity generation in the recent plans scenario 23 Figure 5-5. Electricity capacity in the expanded green energy sce