Mongolia has an extremely harsh winter climate, with winter temperatures ranging from negative 10 degrees celsius to negative 40 degrees celsius during the daytime in mid-winter. The long and harsh winter requires a long heating season, of approximately 8 months from the middle of September to the middle of May. Administratively, Mongolia is divided into the capital city (Ulaanbaatar), three autonomous cities, 21 aimags (provinces) and 314 soums (counties). The population of the largest soum center is less than 10,000 and most of them are located far from the main urban centers, which poses serious challenges in providing adequate and affordable basic services to the communities. Although a decade of strong economic growth led by investments in mining sector has substantially boosted average incomes, poverty remains a challenge for Mongolia. Around 30% of the population is still living below the poverty line and poverty ratio in soum centers is 42.6%. Inequality is severe between the urban and rural areas. This is also reflected in poor and unequal access to essential services like adequate and reliable heating supply in peri-urban and rural areas.
The current heating practices in soum centers include (i) individual household stoves for residents living in ger (Mongolian traditional tent); and (ii) centralized or decentralized coal-fired heat-only boilers for some apartments and the public buildings such as schools, dormitories, hospitals, and government offices. Existing coal-fired heat-only boilers are old and inefficient, which operates with low combustion efficiency of less than 50%. These boilers are generally not fitted with emission control equipment. These boilers are a major cause of air pollution in soum centers resulting in increased risks of acquiring respiratory and heart diseases, with particularly higher impact on the sick, children, elderly and poor people. Lack of proper heating services and inadequate coverage in most soum centers result in low room temperature in classrooms, dormitories, and hospitals with serious consequences on school and medical services.
Mongolia is rich in solar resources with an average annual irradiation of about 1,350- 1,850 kilowatt-hour per square meters. Due to its distributed nature, solar power is one of the likely solutions to provide sustainable and cleaner heating services in soum centers. Heat load of soum centers is in the range of 0.5 to 1.0 megawatt-thermal equivalent, which requires a solar field of 714 square meters to 1,429 square meters and costs about $620/square meters. Central solar heating typically comprises central heating and hot water through arrays of solar thermal collectors (CSHP) and distributed through district heating pipe networks. Compared to small household level solar heating, CSHPs have better price performance due to lower installation costs, higher thermal efficiency, and less maintenance. CSHP is a proven technology and is commercially operated in Denmark and Sweden where climate conditions are similar to Mongolia. Availability of vast land combined with near-zero fuel cost during O&M will make such solar installations particularly suitable for remote areas in soum centers. Once a solar heating plant is connected to an existing district heating network, the existing coal-fired heat-only boilers can act as back-up system to be used only as peak-load heat source. This will drastically cut coal consumption, associated fuel costs and emissions. These recurring operation cost savings will free up local government's budget to be used for improving complementary public facilities and other social services.
The proposed grant project will demonstrate CSHPs as cleaner and reliable heating system in one or two pilot soum centers. These pilot soum centers will be selected at the beginning of the project implementation using the proposed selection criteria:
(i) closest possible location from Ulaanbaatar for showcasing;
(ii) high poverty incidence;
(iii) soum centers where centralized heating system is adopted;
(iv) soum centers where residential buildings are connected in the centralized heating system;
(v) commitment letter from aimag and soum administration to provide counterpart (including in-kind) contribution for project implementation, and O&M;
(vi) confirmed financial viability and sustainability;
(vii) exclude soum centers which are close to major mining areas;
(viii) no involuntary land acquisition or resettlement of people required;
(ix) no negative impact on biodiversity, wetland, natural resources, and physical cultural resources;
(x) soum centers where there is sufficient water availability for the project to ensure no changes in water flow regimes caused by the water intake from surface water or underground wells;
(xi) project locations must have adequate distance (at least 100 meters) from any water bodies; and
(xii) project sites must not be located in the areas vulnerable to natural hazards such as earthquakes, floods, landslides, storm surges, and volcanic eruptions.
(xiii) project sites must not cause negative impacts on sensitive areas and habitats such as water-gathering grounds, nature conservation areas, protected ecological habitats, and physical cultural resources.
(xiv) project sites must have adequate distance (at least 500 meters) from residential areas to minimize impacts associated with noise and dust.
The Government of Mongolia requested the Asian Development Bank (ADB) on 24 April 2013 to support implementing the proposed project. The proposed project is in line with Mongolia's country partnership strategy, 2012- 2016 which identifies improving heating access in remote rural areas as an important area of intervention.