Infrastructure sector

May 11, 2007 at 10:04 am Leave a comment

Energy

The power sector in Mongolia supplies 95% of the total demand in central part of Mongolia, which includes three main cities, Ulaanbaatar, Darkhan and Erdenet.

Mongolia began recently oil explorations and started to export crude oil to China, and for the development of oil industry there is a need for investment to oil sector and related infrastructure. At this moment all petroleum products imported from Russia and China.

Liquefied Petroleum Gas (LPG) use is increasing very rapidly, and the Government gives an importance to the development of LPG network and LPG use as a new and relatively “clean” fuel mix.

One third of population in Mongolia has nomadic lifestyle herding 28 million of livestock. Because of the nomadic style of living, it is difficult to develop appropriate electricity access for them. The Government is encouraging the development of renewable energy, such as small hydro, solar and wind energy. There are ongoing projects to develop small hydro power plants (HPP), to promote the use of solar and wind energy.

From the policy view major priorities for the Government is to create necessary institutional framework for private sector participation (PSP), to improve efficiency of energy sector, to facilitative the development of renewable energy, to accelerate commercialization of energy companies and gradually privatize them. The Government believes that the strong legal, institutional and regulatory framework, which reduces investors’ risk and encourages investors’ long term commitment (concessions, independent power producers (IPP), power purchasing agreements (PPA)), is necessary to bring the private sector in building new capacities, in developing power links, introducing energy efficient technologies, and promoting the use of renewable energy sources etc.

In 2002 the Great Khural (Parliament) adopted the “Mongolia Integrated Power System” (MIPS) program, and the program will contribute to energy access development and will help to reduce operational expenses, to create favorable socio economic conditions for regional development, and create reliable electricity supply. The ultimate goal of “Mongolia Integrated Power System” (MIPS) program is create a unified power grid connecting Central Energy System (CES) of Mongolia with the Western and Eastern Systems thus creating a network, which will improve the reliability and cost effectiveness.

The Government of Mongolia approved in 2002 the “Mongolia Sustainable Energy Sector Development Strategy Plan (2002-2010)”, and it reflects goals reinforced in the Poverty Reduction Growth Facility (PRGF) program, which is endorsed by international and donor community. The main objective of the Energy Sector Strategy of Mongolia is to create a financially sustainable energy sector that will provide cost-effective energy access, thereby enabling poverty reduction and greater private sector and civil society participation. Mongolia’s energy sector will be developed within a regional energy context, while at the same time taking advantage of new technologies and sources of energy that might further promote economic efficiency and environmental sustainability.

Energy Resources of Mongolia

  • Coal Resources
  • Oil Resources
  • Renewable Energy Resources
  • Solar Energy Resources
  • Wind Energy Resources
  • Hydro Energy Resources
  • Geothermal Energy Resources

At national level Structure and future trend of electricity and heating demand of Mongolia are shown in table below in accordance to the national statistic data of 2000-2005.

Electricity Generation and Consumption (million kWh)

Years

2001

2002

2003

2004

2005

Total

3123.0

3279.0

3309.0

3474.3

3586.4

Gross generation

3017

3111.7

3137.7

3303.4

3418.9

Import

196.0

167.3

171.3

170.8

167.5

Distribution

3123.0

3279.0

3309.0

3474.3

3586.4

Consumption

1948.0

2031.7

2194.6

2357.0

2534.0

Of which

  1. Industry & Construction

1204.0

1260.1

1361.1

1458.8

1569.1

  1. Transport and Communication

87.0

84.7

91.5

98.5

105.8

  1. Agriculture

17.0

22.0

23.8

25.6

27.5

  1. Communal housing

476.0

487.1

526.1

567.6

609.3

  1. Other

164.0

177.8

192.1

206.5

222.3

Losses in transmission and distribution

603.0

582.8

489.2

480.4

419.7

Station internal use

664.0

649.0

618.4

628.8

620.8

Export

18

15.5

6.7

8.2

11.9

Electricity produced per capita, /KWh/

1235.0

1265.4

1260.3

1311.6

1341.9

The Western Energy System imports electricity from Russia with capacity of 11 MW while the Central Energy System imports electricity with capacity of 120 MW.

The lowest and peak load of the Central Energy System in 2004 has reached to 240 MW and 560 MW, respectively.

The growth of electricity demand was 1% from 2003 to 2004, and 5% from 2004 to 2005, at the nationwide.

Estimation of current actual electricity demand for aimag centers, soums and bags, where there are no connection to the centralized grid was difficult to identify because the electricity has provided in these places with limitation due to high costs of diesel fuel. Some soums, having diesels, provide the customers by the electricity only for 4-6 hours per a day, during of national program of TV from 18.00 PM to 23.00 PM.

Heat Demand, Structure and Future Trends

At national level Structure and future trend of heat demand of Mongolia are shown in table below in accordance to the national statistic data of 2000-2004.

Heat Balance, (thousands, Gcal)

Year

2001

2002

2003

2004

2005

Gross generation

6597.2

6867.6

7133.3

7746.6

7805.6

Internal station consumption

59.6

144.9

355.5

479.7

446.8

Consumption

6537.6

6722.7

6797.8

7266.9

7358.9

Which of

  1. Industry and Construction

2343.7

2428.5

2288.5

2149.9

2275.9

  1. Transport and communication

485.6

419.6

443.5

391.0

407.5

  1. Agriculture

36.5

36.2

40.5

77.2

70.5

  1. Communal housing

2990.5

2843.1

2777.2

3000.9

3051.2

  1. Other

562.8

2000

1033.7

1468.3

1375.1

Distribution losses

118.5

153.5

214.4

179.6

178.7

Local heating system Families living in ger use stoves for cooking food and heating home. The main sources of fuel are coal, wood, animal dung and some wood plants such as bushes.

There are in total 170 soums in Mongolia that have not connected to the centralized electricity system. Among them 35 soums have local heating system, 86 soums use stoves in order to heat their offices and unites, and 45 soums use own heating system but their standards not identified.

Estimated heat load per system is 0.8-2.1 MW. The stoves with types of NR-54, NR-27, NR-13.5 and BZUI-100 produced in Mongolia and also stoves with types of CN and RGJ produced in China are popularly used in Mongolia. One heating station uses 1000-1500 ton coals per year at average. The specific coal consumption is fluctuated between 140-155 kg/GJ.

Source: Ministry of Fuel and Energy

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Information contained in this web site are partly derived from a CD-ROM "Guide to Investment and Trade-Mongolia", produced by Foreign Investment and Foreign Trade Agency (FIFTA). All trademarks are properties of their own respective owners.

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