International cooperation on power interconnection:

Mongolian Regulatory perspective

ENKHTUVSHIN Ganbaatar

Ph.D. candidate

Energy and Environmental Department, Korea University

/Former Director of International cooperation Division, Ministry of Energy/

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15 DEC 2016

Seoul, Republic of Korea

4th Northeast Asia Energy Security Forum

Table of Contents

• Introduction• Mongolian energy sector

• Mongolian regulatory and investment framework of power interconnection

• Regulations• Investment environment

• Multi/bilateral dialogue and cooperation on power interconnection

• Bilateral cooperation of power trade• Multilateral cooperation of regional power interconnection

• Conclusion

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Introduction

WES AUES

CES

EES

Total GDP (current U$D): 11,7 billion

Population: 3,120,606

GDP per capita (current U$D): 3973.4

Surface area: 1,566,000 km2 (19th)

Power installed capacity: 1178 MW

Energy mix: 89% CHP, 5% Wind& Solar PV’s,

4% Diesel, 2% Hydro

Energy access to grid: 98%Government:

Unitary-Parliamentary republic

South

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Power system Map of Mongolia

Table of Contents

• Introduction• Mongolian energy sector

• Mongolian regulatory and investment framework of power interconnection

• Regulations• Investment environment

• Multi/bilateral dialogue and cooperation on power interconnection

• Bilateral cooperation of power trade• Multilateral cooperation of regional power interconnection

• Conclusion

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Mongolian regulatory framework of power interconnection: Regulations

• Legal and regulatory environment for Power trade

• Energy law /2015/: Enables power export and import

• Renewable Energy Law: FiT, Supporting Tariff, Long

Term PPA

• National Energy Policy Document /2015/: 2nd Term

2024-2030 The stage to export secondary energy and

develop sustainable renewable energy sector, up to

30% from renewable energy

• Government Action Plan /2016-2020/: By maintaining

local electricity supply-demand sustainably, initiates

trans border power export projects to PRC

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Continue ….

• Ministry of Energy /Central Public Administration Institution to carry out Country wide Energy policy/

• Carry out and determine necessary strategies and policy to develop Energy export and import policy

• Energy Regulatory Committee /Energy Regulator in the Country/

• Awarding licenses to power generator, trader and transmitter etc.

• National Dispatching Centre /Main body of single buyer model/

• Dispatch energy flows through out the country

• Plan and organize Power export and import

• National and Local Power Transmission company/1+4/: • own and maintain ≥ 110𝑘𝑉 transmission lines

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Mongolian regulatory framework of power interconnection:

Investment environment:

• Concession

Law2010

Establish the framework for granting concessions to private

investors to use existing infrastructure facilities owned by the

state, and to construct new infrastructure facilities for the

purpose of providing services to the general public

• Investment Law 2013Protect the legal rights and interests of investors in the territory

of Mongolia, to establish a common legislative guarantee for

investment, to stabilize the tax environment.

Coal Fired TPP’s for Export purpose:

• “Shivee Ovoo” Thermal Power Plant

/TPP/

• “Tevshiin Goviin” TPP

Renewable energy:

• “Egiin” HPP /Government/

• “Erdeneburen” HPP /Government and

Private/

• “Sain Shand” wind farm /private/

• “Tsetsii” wind farm /private/

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Table of Contents

• Introduction• Mongolian energy sector

• Mongolian regulatory and investment framework of power interconnection

• Regulations• Investment environment

• Multi/bilateral dialogue and cooperation on power interconnection

• Bilateral cooperation of power trade• Multilateral cooperation of regional power interconnection

• Conclusion

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Multi/bilateral dialogue and cooperation on power interconnectionBilateral cooperation of power trade

• Mongolia is net importer of electricity from 2 neighbour countries • National Dispatching Centre contracts exporting counterparts for national level /≥110kV/

• Regional power transmission companies makes power import agreement with regional level

Year 2010 2011 2012 2013 2014 2015

Import /kWh/ 157.5 200.6 307.8 325.3 288.0 176.3

Export /kWh/ 20.7 21.4 21 23.3 30.4 54.2

Average

import tariff $ 0.061 0.068 0.069 0.077 0.084 0.073

Amount

payed

(thousand.$) 9552 13621 21171.8 24932.8 24149.7 12884.9

Source: NDC data

Intended Trans-border Power Export projects with China /subject to change/4800 MW Shivee Ovoo TPP 600 MW Tevshiin Goviin TPP 600 9

Table 1. Power Export and Import /2010-2015/

Power Transmission line map of Mongolia

RUS

RUS

PRC PRC

PRC

PRC

Continue ….

Mongolia is

interconnected with

Russian and China

through 220 kV 2 circuit

transmission lines and 4

other low voltage

transmission lines10

Multi/bilateral dialogue and cooperation on power interconnectionMultilateral cooperation of regional power interconnection

• Mongolia aims to be a Power exporter in Long term

• Actively cooperating with UN-ESCAP, Energy Charter, ADB, WB, IRENA

• Actively cooperating with Northeast Asian Countries, but still we don’t have former discussion mechanism to address Power interconnection

• Actively supporting and participating Asian super grid and Gobi Tec initiative, GEIDCO

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Regional power interconnectioninitiatives

Existing

• Buthan-India-1260MW

• Bangladesh-India-1000 MW

• India-Nepal-150 MW

Under construction

• India-Sri-Lanka-1000MW

• Iran-Pakistan-1000MW

R&D

• CASA-1300 MW

• Iran-Pakistan-1000 MW

• Turkey-Iran-1200 MW

• Israel-Cyprus-Greece-2000 MW

• Tunisia-Italy-2000 MW

• Portugal-Morocco-1000 MW

Regional energy cooperation

• GMS

• NORDEL, SAPP, and England‐France power exchanges.

Continue ….

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Continue ….

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Source: Bloomberg new energy finance

TOTAL NOMINAL RENEWABLE ENERGY INVESTMENT (Bn$)2004-2015 BY

Continue ….

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Table of Contents

• Introduction• Mongolian energy sector

• Mongolian regulatory and investment framework of power interconnection

• Regulations• Investment environment

• Multi/bilateral dialogue and cooperation on power interconnection

• Bilateral cooperation of power trade• Multilateral cooperation of regional power interconnection

• Conclusion

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Conclusion

• Primary energy endowment is the regional economic cooperation opportunity for Mongolia. Mongolia could become power supplier in the region;

• Mongolian economy is very tightly dependent on mining sector and revenue from mineral export in these days;

• There is a notable potential for Mongolia to develop energy cooperation with neighbouring countries and active cooperation is imminent matter and vital for the continued economic growth and advancement of the country nowadays;

• What should be the Mongolian commitment to develop energy cooperation with NEA-n countries?

• To have a clear policy for Governmentally and keep sustainable legal environment for foreign investors:

• the track record of the regulating agency;• mechanisms in place for tariff adjustments;• changes in the law and the financial equilibrium of the concession;• changes in the tax system; and• predictability of policy framework.

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Thank you for your attention