Mongolia set to reap windfall from coal and green energy

April 09, 2012

Even as coal production continues to rise in Mongolia to meet increasing regional demand, the country’s energy sector has actively embarked on a campaign to and tap into one of the world’s biggest alternative energy sources.

In late February, construction started on the country’s first wind farm. Located 64 km southeast of Ulaanbaatar, the USD 100 million Salkhit Project, which is a joint venture between Mongolian investment firm Newcom Group and US-based General Electric, is expected to deliver 168.5 million KWh of electricity. Salkhit will be a joint project

While expected to contribute only about 5 percent of national demand, Salkhit is just the tip of massive wind energy potential. According to data from the National Renewable Energy Laboratory in the US and the National Renewable Energy Centre of Mongolia, the 1.56m-sq-km country has the potential to generate 2.6 terawatts of renewable energy per year – about one-quarter of global electricity demand.

As the country’s potential as a green-energy center for Asia, particularly neighboring China, rises, it is already becoming a regional leader in fossil fuel supply as well. The Mongolian Coal Association has predicted that coal export volumes will reach 50 million tonnes by 2015 and 100 million tonnes by 2025.

It has been reported that Mongolia could cut China’s costs from USD185 per tonne for coking coal sourced in Australia to just USD62 per tonne.

 The growth in exports will accelerate exponentially as the vast Tavan Tolgoi coking coal mine – the largest in the world, with an estimated 6.4 billion tonnes of untapped reserves – comes online in 2014, with output of around 20 million tonnes of coal expected annually.