Energy
From The Report: Mongolia 2014
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Despite abundant reserves of coal and rich potential for wind, solar and hydroelectric power, Mongolia has lagged in exploiting its natural resources. From generation to transmission to distribution, the country’s power infrastructure is outdated, and reliance on foreign imports is growing. Aware of this, the government has been pushing to fast-track a range of projects that, if successful, should reduce the country’s dependence on any one supplier, and may in time sprout an industry in its own right. The state is now planning to upgrade its power distribution network, is trying to attract private investment to greenfield plants, and is gradually liberalising trade tariffs and creating new laws to spur exploration for crude oil. The state’s energy plan aims to reach 100% electrification by 2020, up from about 65% in 2013, despite the difficulty of spanning Mongolia’s huge, yet sparsely populated, landmass. Production of crude oil in the country’s two eastern blocks jumped from 2.2m barrels in 2010 to 3.9m in 2012, and is set to almost double in the medium term. Attracting private investment to new initiatives will be key to helping Mongolia develop its abundant natural resources – fossil fuel-based and renewable – into the energy it needs to reach its goals.
This chapter contains interviews with B. Unenbat, CEO, Newcom; John Lee, President & CEO, Prophecy Coal; and R. Batbayar, President, M. Oil.

Articles from this Chapter

Overview

Off the grid: Aiming to reduce the rising need for imports
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Energy security was never going to be easy for a country as big as Iran but with only about 3m people. Despite abundant reserves of coal and rich potential for wind, solar and hydroelectric power, Mongolia has lagged in exploiting its natural resources. From generation to transmission to distribution, its power infrastructure is outdated, and reliance on foreign imports is growing. Aware of this, the government has been pushing to fast-track a batch of projects that, if successful, should reduce…

Interview

Charging up: OBG talks to B. Unenbat, CEO, Newcom
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Interview: Baatar Unenbat What role can the private sector play in achieving energy self-sufficiency for Mongolia? BAATAR UNENBAT: The contribution of the private sector is essential for Mongolia to achieve energy self-sufficiency. This is not only true from a technical point of view but also from a financial perspective. Risks cannot be undertaken by the government exclusively, as this would directly affect the taxpayer. Therefore, the contribution of the private sector needs to be encouraged…

Interview

OBG talks to John Lee, President & CEO, Prophecy Coal
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Interview: John Lee What needs to be done to boost public-private partnerships (PPPs) in the energy sector? JOHN LEE: There is a preliminary legal framework for PPP projects, although it is missing details. The concept is still quite new and Mongolia is only starting to receive attention and foreign investment for PPP projects. A lack of examples to follow, added to the election period that we have recently ended, has prevented the new government from focusing on energy projects. On the private…

Analysis

Power up: A summary of efforts to close the energy supply gap
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Having seen little investment in new generation capacity over the past decade, Mongolia is now forging ahead with upgrades to its coal-fired heat and power (CHP) capacity and trying to lure private investment to greenfield plants. Given a looming power shortage, which the Ministry of Energy (MoE) projects at 250 MW by 2016 but the IMF estimates at 600 MW, plus the cap on Russian imports, time is of the essence. The first wind-driven independent power producer (IPP) added a little capacity in mid-2013,…

Interview

Tapping into resources: OBG talks to R. Batbayar, President, M-Oil
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Interview: Batbayar Raash How will current infrastructure developments affect oil transport in Mongolia? BATBAYAR RAASH: Transporting oil is no easy task and, therefore, the lack of infrastructure is a big challenge in our sector. Additionally, the more transportation is done by road, the more expensive it becomes. Current railway developments being undertaken by the government will have a major impact in reducing the costs of transporting oil in Mongolia, and it will become less risky as well.…

Analysis

The road to self-reliance: The government is leveraging growing oil production to diversify imports and improve terms of trade
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First deliveries of “Mongol93” hit the market in May 2013. With its plans to build a domestic refinery delayed, Mongolia has agreed to swap crude for refined fuel with PetroChina, a subsidiary of China National Offshore Oil Corp. This new import source, though still expensive, should reduce Rosneft’s leverage at the trading table. Even a domestic refinery, however, would still rely on imports of Russian crude. In the long term, only the development of expensive coal-to-liquid (CTL) plants would…