MONGOLIA WILL USE COAL TO FUND WIND

Mongolia: Wind Farm Project Could Tilt Ulaanbaatar from Coal to Green Energy
Pearly Jacob, 3 November 2010 (EurasiaNet)

"Despite Mongolia’s nearly limitless supplies of coal, Ulaanbaatar recently approved plans to set up the country’s first commercial wind farm. The decision is fueling a public debate that aims to strike the right balance between Mongolia’s near-term and long-term economic development interests.

"Sparsely inhabited, with vast steppes and ample wind, Mongolia’s potential for harnessing renewable energy is huge, proponents say. In 2005, the government passed the Renewable Energy Program, mandating that green energy sources account for 20-25 percent of Mongolia’s needs by 2020. Renewable energy is nothing new for Mongolians: It is common to see a remote nomad’s ger – a traditional felt home – fitted with solar panels and windmills powering satellite receivers…Approximately 2 percent of the country’s power needs are currently met with household solar systems and small hydro-electricity projects. The wind farm could significantly boost this figure…"

click to enlarge

"Newcom Group, the country’s largest Mongolian-owned private mobile telecom provider, is helping finance the $80-million joint venture with the European Bank for Reconstruction and Development (EBRD). The project is to be situated on Salkhit Mountain, 78 kilometers south of Ulaanbaatar. Newcom has already signed a power-purchase agreement with the government for the proposed 50-megawatt project. Construction is slated to start in early 2011…The cost [of wind] has decreased rapidly in recent years, making wind harvesting the most suitable renewable energy for commercial operation in Mongolia…

"…But [wind] is still more expensive than coal, critics contend. And coal is a much better bet to bring in much-needed revenue in the coming year and meet the country’s power needs, they emphasize…With estimated reserves of 150 billion tons, according to the Ministry of Mineral Resources and Energy, the country is experiencing a coal rush. Exports to China could increase from 7 million tons in 2009 to 30-50 million tons by 2015…Mining experts believe the need to exploit Mongolia’s coal resources to generate near-term revenue outweighs the need to focus on expensive renewable energy solutions…"

click to enlarge

"…Apart from the higher investment costs, wind power is unable to provide nearly enough power to heat homes during Mongolia’s bitterly cold winters when total heat demand from the country’s Combined Heat and Power (CHP) Plants exceeds the level of electricity production…Stakeholders in the Salkhit Wind Farm are under no illusion that renewable resources will replace coal any time soon…But with mounting environmental problems in Mongolia, it makes sense to examine renewable options…Renewable energy could help mitigate the increased CO2 emissions that the country is expected to generate with the mining boom…

"The question now is how to pay for an investment that many say is redundant in a developing country…[S]ome of the capital can be generated from eco-taxes on dirty industries and channeling a portion of mining revenue towards financing renewable energy. But this remains a risky political decision for a country that has been wooing investors with a favorable low-tax climate…Green activists are concentrating on [Mongolia’s future]…"