Recent trends of International cooperation towards power interconnection

ENKHTUVSHIN Ganbaatar

Ph.D candidate

Green school,Korea University

129 AUG 2017

Irkutsk, Russia

Table of Contents

• Introduction• Mongolian energy sector

• Mongolian regulatory and investment framework of power interconnection• Regulations

• Investment environment

• Multi/bilateral dialogue and cooperation towards power interconnection• Bilateral cooperation of power trade

• Multilateral cooperation towards regional power interconnection

• Global renewable energy trend • International level;

• Corporate and Local level;

• Conclusion

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Introduction

WES AUES

CES

EES

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

Population: 3,120,606

GNP per capita (current U$D): 3870

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

3Source: worldbank.org /2015 data/

Continue ….

4

Table of Contents

• Introduction• Mongolian energy sector

• Mongolian regulatory and investment framework of power interconnection• Regulations

• Investment environment

• Multi/bilateral dialogue and cooperation towards power interconnection• Bilateral cooperation of power trade

• Multilateral cooperation towards regional power interconnection

• Global renewable energy trend:• International level;

• Corporate and Local level;

• Conclusion

5

Mongolian regulatory framework of power interconnection: Regulations

• Legal and regulatory environment for Power trade

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

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

2024-2030 The stage to export secondary energy and

develop sustainably renewable energy sector;

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

local electricity supply-demand sustainably, initiates

power export projects to PRC;

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• Ministry of Energy /Central Public Administration/

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

• Energy Regulatory Committee /ERC/ • Awarding licenses to power generator, trader and transmitter etc.

• National Dispatching Centre• 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 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 and others

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 towards power interconnection• Bilateral cooperation of power trade

• Multilateral cooperation towards regional power interconnection

• Global renewable energy trend:• International level;

• Corporate and Local level;

• Conclusion

9

Multi/bilateral dialogue and cooperation towards power interconnection

Bilateral cooperation of power trade• Mongolia is net importer of electricity from 2 neighbours

• 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 /GWh/ 157.5 200.6 434.25 1181.19 1389.24 1421

Export /GWh/ 20.7 21.4 21 23.3 30.4 54.2

Average import price $ 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 China4800 MW Shivee Ovoo TPP 600 MW Tevshiin Goviin TPP 600

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Oyu TolgoiCopper and Gold mine

imports 70% of total electricity

import

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 lines11

Multi/bilateral dialogue and cooperation towards power interconnection

Multilateral cooperation towards regional power interconnection

• Mongolia aims to be a Power exporter in Long term• Actively cooperating with UNESCAP, Energy Charter, ADB, EBRD;

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

• Actively supporting and participating Asian super grid and Gobi Tec initiative;

• Mongolia is active member of international community: WB, AIIB, ASEM, IRENA, SCO /observer/, APEC /observer/, IGU;

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Challenges ahead:

• Strong Inter-Governmental organization is needed: UN, ADB or ?

• Super Nations in The Region: 2 permanent Members of UN Security counsel

• Government’s commitment to support private initiative

• Feasible Business model (Softbank/Private/ - KEPCO/Public/ - SGCC/Public/ -

Ministry of Energy/Public/ + Rosseti /Public/)

Nort

heast A

sia

Super

Grid

(Appr. 2

000 k

m H

VD

C)

Source: Pre feasibility study ECS /2014/

Table of Contents

• Introduction• Mongolian energy sector

• Mongolian regulatory and investment framework of power interconnection• Regulations

• Investment environment

• Multi/bilateral dialogue and cooperation towards power interconnection• Bilateral cooperation of power trade

• Multilateral cooperation towards regional power interconnection

• Global renewable energy trend:• International level;

• Corporate and Local level;

• Conclusion

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International power interconnectioninitiatives

Existing

• Buthan-India-1260MW

• Bangladesh-India-1000 MW

• India-Nepal-150 MW

Under construction

• India-Sri-Lanka-1000MW

• Iran-Pakistan-1000MW

• Nemo Link- 1000MW

• Nord Link- 1400MW

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, BritNed, Estlink 2, NorNed, Fenno-Skan 2, Skagerak 4 etc ..,

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RE100 companies committed to 100% renewable energy

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Private entities leadership /Bigger companies become bigger renewable

energy/

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Between 2010-2017 35/19/ companies signed

total 7.31 GW renewable energy PPA in USA

Cities and small communities going renewable

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• Cities are responsible for 80% GHG emission;

• 2030: 60% of population in cities;

• Over 1040 cities over 500,000 population;

Source: UN Dep. Economics and Social Affairs

Source: Bloomberg new energy finance

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

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Table of Contents

• Introduction• Mongolian energy sector

• Mongolian regulatory framework of power interconnection• Regulations• Investment environment

• Multi/bilateral dialogue and cooperation towards power interconnection

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

• Conclusion

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Challenges ahead

What should be the Mongolian commitment to develop Energy cooperation with Foreign investors ?

• Government policy and legal environment should be clear and transparent 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; • predictability of policy framework;

Particularly Energy sector

• Coal can be the initial step to develop energy cooperation with Northeast Asian countries for Mongolia. However, until 2030 Mongolia aims to increase its renewable energy share up to 30% compared with 5% in 2015;

• System efficiency and TSO cooperation;

• Improvement of legal environment, Renewables certificate;

• Decentralization of energy sector VS scale of economies;

• Huge investment is required to execute power interconnection in Northeast Asia. Private institutions should drive the way.

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Thank you for your attention