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Mongolian Policymakers Must Prioritize the Energy Sector in 2024

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Mongolian Policymakers Must Prioritize the Energy Sector in 2024

A cohesive strategy aimed at improving the country’s energy sector has become a dire necessity. 

Mongolian Policymakers Must Prioritize the Energy Sector in 2024
Credit: Erdenebayar Bayansan from Pixabay

In November 2023, Mongolia experienced days of intermittent energy shortages. To manage the energy demand and prevent power outages, Mongolia’s Energy Regulation Committee imported more energy from Russia and asked people to follow energy-saving practices. In 2024, energy experts and Mongolia’s global partners are urging the Mongolian government to prioritize the energy sector. 

On December 4, after a few days of electricity shortages, the Energy Regulation Committee released a utility report tracking the previous week’s energy usage. It highlighted a peak load of 1493 megawatts (MW) on November 30. Meanwhile, energy imports reached 311 MW. Moreover, in comparing December 3 to the previous year, energy usage had increased from 1421 to 1432 MW, while imports rose from 290 to 293 MW.

The last month has illustrated Mongolia’s energy vulnerability but what upsets the public even more is the Mongolian government’s — current and previous — prolonged poor decision-making, unpreparedness, and incapability of implementing previously proposed or planned energy development projects to improve the situation. 

In an interview with Bloomberg Mongolia, economist Khashchuluun Chuluundorj highlighted decades of failed energy policies. He said, “Even ten years ago, Mongolian policymakers had the prognosis of increasing energy demand. There have been many project proposals and plans, but unfortunately, none of them have been implemented.” Moreover, “in the past 8 years, there hasn’t been any improvement in the energy sector and the Mongolian government needs to prioritize the energy sector in 2024.” 

To many Mongolians, energy shortages and power outages are not new problems. However, this does not mean the country’s 3.4 million people should be complacent with underdevelopment. 

The recent energy shortage also stresses Mongolia’s extreme dependence on Russia’s energy supply. It is a wake-up call for Mongolian policymakers to take bold action to diversify energy sources, accelerate renewable energy production, and make it possible for foreign investors to invest in the country’s energy sector. 

On December 13, Mongolian Minister of Energy Choijilsuren Battogtokh announced Russia’s intent to reduce energy supply to Mongolia by half. He said, “As a result, it will not be possible to receive more than 150 MW of energy from Russia. The reason behind this decision is Russia’s aim to prioritize its domestic energy security by reducing energy exports. As part of the plan, there will be a three-hour daily electricity cut in Ulaanbaatar city, six provinces, and 150 soums that are part of the central integrated energy system.” 

Followed by multiple meetings, the Cabinet Secretariat of Mongolia released a statement that reads, “Alexander Alexandrovich Kozlov, the Head of the Russian part of the Intergovernmental Commission of Mongolia and Russia, has announced that there will be no restrictions on electricity supplied from Russia to Mongolia in the near future.” And that “the intergovernmental commission of the two countries will continue to work on this issue, ensuring the smooth supply of electricity. In order to ensure this, Prime Minister L. Oyun-Erdene of Mongolia has instructed Deputy Prime Minister and Minister of Economic Development Ch. Khurelbaatar and Energy Minister B. Choijilsuren to take all necessary measures.” 

Mongolia’s energy sector writ large is directly linked to Moscow’s energy capacity. If and when Moscow decides to prioritize its own domestic needs, Ulaanbaatar must employ a sustainable energy strategy that meets the current energy demand but also secures the future. 

For decades, Mongolian policymakers have blamed Russia for controlling Mongolia’s energy sector. However, Russia or any other foreign actors are not responsible for renewing, or modernizing Mongolia’s power plants or diversifying energy sources. It has become clear that the Mongolian government, including previous administrations, has long failed to prioritize energy and that is the root cause of the problem. 

Mongolia’s dependency on coal-based energy has been the source of political, social, and health problems. The country’s “coal-fired combined heat and power (CHP) plants constituted 93 percent of total power generation in the country’s Central Energy System (CES), which accommodated more than 80 percent of the domestic demand.” Renewable energy projects and initiatives have been supported by international partners.

Since 2018, the Asian Development Bank (ADB) has supported several renewable energy projects by providing soft loans, and commissioning off-grid renewable hybrid energy systems in Altai province. In September, the ADB and the Mongolian government launched a grid-connected solar photovoltaic power plant in Altai. In addition to the ADB and Japanese investment in renewable energy projects, European partners have shown support for Mongolia’s energy diversification process.  

Also in September, the European Union delegation in Mongolia released an energy report, “Why the Transition to Renewable Energy Should Matter to Mongolia and Mongolians” highlighting the country’s potential in renewable energy. The report, in essence, aimed to motivate the Mongolian government to pay closer attention to its energy sector but also drew realistic, implementable examples from Ireland, Uzbekistan, and Australia as case studies. Moreover, in a recent interview with The Diplomat, U.K. Ambassador to Mongolia Fiona Blyth said she views it as the perfect time for Mongolia to diversify its energy sources, while there is so much support available. 

In response to the global demand for clean energy and critical minerals, Mongolian policymakers have been active but there is room for improvement. Mongolia’s commitment to the Paris Agreement and the U.N. Climate and Clean Air Coalition 2030 are closely linked with Ulaanbaatar’s pursuit of reinvigorating its energy sector. For these mega projects to be successful and fruitful, Mongolia must tackle corruption and strengthen the country’s investor profile. 

As Ulaanbaatar continues to seek outward-led foreign policy, investment in renewable and clean energy technologies is crucial. While Mongolia’s commitment to global initiatives is important in the long run, fulfilling domestic energy needs and securing energy security is a pressing issue for current and future governments. The currently placed energy-saving methods may work in the short run. Still, a strategic energy plan, a cohesive strategy that improves the country’s energy sector has become a dire necessity.