International cooperation on power interconnection: Mongolian Regulatory perspective

4 th Northeast Asia Energy Security Forum 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/ 15 DEC 2016 Seoul, Republic of Korea 1

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 2

Introduction Power system Map of Mongolia WES AUES South 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 km 2 (19 th ) Power installed capacity: 1178 MW Energy mix: 89% CHP, 5% Wind& Solar PV s, 4% Diesel, 2% Hydro Energy access to grid: 98% Government: 3 Unitary-Parliamentary republic

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/: 2 nd 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 5

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 6

Mongolian regulatory framework of power interconnection: Investment environment: Concession Law 2010 Investment Law 2013 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 Protect 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/ 7

Multi/bilateral dialogue and cooperation on power interconnection Bilateral 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 Table 1. Power Export and Import /2010-2015/ 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

Continue. Power Transmission line map of Mongolia RUS RUS PRC PRC PRC PRC Mongolia is interconnected with Russian and China through 220 kv 2 circuit transmission lines and 4 other low voltage transmission lines 10

Multi/bilateral dialogue and cooperation on power interconnection Multilateral 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 11

Continue. Regional power interconnection initiatives 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. 12

Continue. 13

Continue. TOTAL NOMINAL RENEWABLE ENERGY INVESTMENT (Bn$) 2004-2015 BY Source: Bloomberg new energy finance 14

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. 16

Thank you for your attention