48030-001: Strategy for Northeast Asia Power System Interconnection | Asian Development Bank

Mongolia: Strategy for Northeast Asia Power System Interconnection

Sovereign (Public) Project | 48030-001 Status: Active

The proposed policy and advisory technical assistance will prepare a strategy for Northeast Asia Power System interconnection using Mongolia's abundant renewable energy.

Project Details

Project Officer
Ogino, Kaoru East Asia Department Request for information
Country
  • Mongolia
Sector
  • Energy
 
Project Name Strategy for Northeast Asia Power System Interconnection
Project Number 48030-001
Country Mongolia
Project Status Active
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 9001-MON: Strategy for Northeast Asia Power System Interconnection
Climate Change Fund US$ 750,000.00
People's Republic of China Poverty Reduction and Regional Cooperation Fund US$ 500,000.00
Republic of Korea e-Asia and Knowledge Partnership Fund US$ 500,000.00
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Regional integration
Drivers of Change Knowledge solutions
Partnerships
Sector / Subsector

Energy / Energy sector development and institutional reform

Gender Equity and Mainstreaming No gender elements
Description The proposed policy and advisory technical assistance will prepare a strategy for Northeast Asia Power System interconnection using Mongolia's abundant renewable energy.
Project Rationale and Linkage to Country/Regional Strategy

The power sector is the single largest source of greenhouse gas emissions in Northeast Asia. A low-carbon transformation is needed to lessen reliance on fossil fuels and reduce the carbon footprint. The region as a whole has sufficient renewable sources to meet demand, but the limited connectivity of power systems among countries poses a major challenge. Each jurisdiction has unique power utility ownership, tariff policies, market design and regulations, and other institutional frameworks that are not well coordinated or harmonized, which inhibits interconnection. Despite abundant energy sources many jurisdictions in Northeast Asia suffer from energy shortages or meet their energy needs at a high cost, resulting in high electricity prices for consumers, and burdening economic activities.

Power systems that are well interconnected would improve system flexibility and efficiency and allow system optimization, provide more reliable and affordable electricity to consumers, enhance economic activities, and improve the competitiveness of economies. This has been demonstrated by a number of other successful interconnected regional power systems (e.g., in the Greater Mekong Subregion). At present there is no such interconnected power market in Northeast Asia, even though it is home to some of the world's largest and most prosperous economies. Mongolia is in a unique position to spur economic growth by developing its vast energy resources to meet the power demands of its more prosperous neighbors through power exports. However, in the absence of an interconnected power system, Mongolia lacks access to large neighboring markets, and thus to investment in its energy resources and power system development. There is a need to undertake a comprehensive analysis and chart out a clear strategy for Mongolia for power system interconnections in Northeast Asia. Mongolia has tremendous renewable energy potential, especially wind and solar. The wind and solar power potential are estimated to be equivalent to 2,600 gigawatts of installed capacity, or 5,457 terawatt-hours of annual power generation (equivalent to 27% of global electricity consumption in 2014). If one-third of this wind and solar potential was exploited, Mongolia could supply about 25% of combined annual electricity demand of the PRC, Japan, and the Republic of Korea. Using abundant and diversified resources, Mongolia could serve as a core power supplier to neighboring countries, while improving power security and driving sustainable prosperity. Power system interconnection would be an ideal and comprehensive solution to reduce power system carbon emissions in Northeast Asia. The power system interconnection by low-loss, high-voltage direct current transmission lines would allow transmission of electricity from Mongolia to demand centers in neighboring countries. However, the existing transmission line infrastructure in Mongolia is decrepit and requires significant investment for high-voltage direct current transmission lines; Mongolia cannot afford this investment on its own, and will have to leverage investments from multilateral development banks emerging climate financing mechanism and private sector participation. A prerequisite to integration is a comprehensive study that can address these challenges, provide plausible cost benefit scenarios, and demonstrate benefit sharing across countries. A thorough assessment would enable a regionally planned investment to be developed and priority projects to be identified. Given the sensitive geopolitical situation in Northeast Asia, a bottom-up approach that engages nongovernmental institutions and the private sector is preferable. The TA is aligned with ADB's Energy Policy in its promotion of renewable energy development and regional power sector integration, and (ii) the Strategy for Regional Cooperation in the Sector of CAREC.

Impact

Carbon footprints of the power system in Northeast Asia reduced.

Power system in Northeast Asia optimized.

Stakeholders' agreement on the Northeast Asia power system interconnection (NAPSI) plan reached.

Project Outcome
Description of Outcome A strategy and an action plan road map for the NAPSI prepared utilizing Mongolia's vast energy resources
Progress Toward Outcome The major findings of the draft final report include (i) estimated annual profit of power interconnection in northeast Asian countries; (ii) identification of the power transmission corridor and the best province in Mongolia (Dornogovi, Dundgovi, Govisumber, Ovorhangay, and Umnugovi) for renewable energy development (wind and solar); and (iii) Mongolia being identified as the best country for renewable energy investment among the Northeast Asian countries and is rich in renewable energy resources with lower land cost.
Implementation Progress
Description of Project Outputs

Power systems and markets in the Northeast Asian countries assessed

Power system interconnection projects prioritized and investment plan developed

Knowledge sharing and consensus building for the NAPSI implemented

A regional knowledge and investment platform for the NAPSI initiated

Mongolia''s renewable energy capacity expansion plan to export clean electricity analyzed

Status of Implementation Progress (Outputs, Activities, and Issues)

The TA started with a kick-off meeting held in Ulaanbaatar, Mongolia in June 2017 with potential stakeholders invited to become part of the steering committee to establish the Northeast Asian Power System Interconnection. Meetings, networking, and workshops with potential stakeholders continued and the consulting team progressed very well in achieving the TA results and engaged more organizations to take part in forming the NAPSI SC. The interim workshop was held in Gwangju, Korea in November 2017 which was co-organized and sponsored by the Korea Electric Power Corporation and the Green Technology Center. The latest SC meeting and international workshop held in Tokyo, Japan on 8 March 2018 was co-sponsored/organized by the International Renewable Energy Institute which drew the attention of the Japanese stakeholders to be open and take part in this initiative. The event was well attended with participants coming from the PRC (State Grid Corporation of China; Global Energy Interconnection Development and Cooperation Organization); Japan (Renewable Energy Institute; Tokyo Electric Power company; Ministry of Energy, Industry, and Trade; Institute of Energy Economics); and Mongolia (Ministry of Energy; National Transmission Company). The resource persons presented the developments and initiatives of power interconnection among northeast Asian neighboring countries drawing lessons learned from European nations.

The fourth steering committee meeting was held in Beijing in October 2018 which presented the potential technologies for expansion and analysis of benefits for interconnection.

The fifth steering committee meeting was held in Ulaanbaatar on 28 February 2019, which presented the findings on enabling environment for power trade, and the promotion of coordinated regional planning and investment. A stakeholders' meeting was held on 1 March 2019 which was opened by President Battulga, stressing the importance of exploiting Mongolia's renewable energy for Northeast Asia's regional use.

Geographical Location Nation-wide, Mongolia
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design Following the first regional conference on the power system interconnection held in November 2012, non-governmental organizations and research institutes requested ADB support to conduct analytical studies to prepare a road map for power interconnection in the Northeast Asia sub-region, and raise awareness and build consensus on the importance of power interconnection for greater engagement of non-governmental organization, research institutes, and private sector in the sub-region. The Government of Mongolia and other stakeholders in the subregion have expressed strong support in this endeavor. ADB is exploring partnerships with some institutions, like the Korea Electric Power Corporation, Soft Bank, and Hanns Seidel Foundation.
During Project Implementation The TA will be monitored through (i) consultant progress reports, and (ii) ADB TA review missions. Quarterly consultation meetings will be organized for inception, interim, and draft final outputs with all concerned officials from the government, development partners, nongovernment organizations, and private sector invited to disseminate findings and receive comments.
Business Opportunities
Consulting Services The TA will require the following consulting services to achieve projects outputs: (I) outputs 1 and 2 will require 14.2 person-months of consulting services (3 international consultants for 14.2 person-months), while output 3 will require 42.8 person-months of consulting services (5 international consultants for 12.8 person-months and 5 national consultants for 30 person-months); and (ii) outputs 4 and 5 will require 25 person-months of consulting services (3 international consultants for 15 person-months and 1 national consultant for 10 person-months). Consultants for outputs 1, 2, and 3 will be engaged through a firm using quality- and cost-based selection (90:10) method with full technical proposal. Consultants for 4 and 5 will be engaged using individual consultant selection in accordance with the Guidelines on the Use of Consultants (2013, as amended from time to time) of ADB.
Procurement Procurement of equipment will follow shopping method in accordance ADB's Procurement Guidelines (2015, as amended from time to time). The equipment used by the consultants during TA implementation will be turned over to the executing agency upon completion of the TA.
Responsible ADB Officer Ogino, Kaoru
Responsible ADB Department East Asia Department
Responsible ADB Division EASI
Executing Agencies
Ministry of Energy
Government Building 14, Khan-Uul District
Chinggis Avenue, 3-r khoroo
Ulaanbaatar, 17060 Mongolia
Timetable
Concept Clearance 24 Apr 2015
Fact Finding 21 Sep 2015 to 25 Sep 2015
MRM -
Approval 27 Nov 2015
Last Review Mission -
Last PDS Update 26 Mar 2019

TA 9001-MON

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
27 Nov 2015 26 Jan 2016 26 Jan 2016 15 Feb 2018 15 Aug 2019 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
750,000.00 1,000,000.00 0.00 0.00 0.00 0.00 1,750,000.00 27 Nov 2015 1,121,660.08

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

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Safeguard Documents See also: Safeguards

Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

None currently available.

Evaluation Documents See also: Independent Evaluation

None currently available.

Related Publications

None currently available.


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Tenders

Tender Title Type Status Posting Date Deadline
International Policy Advisor Individual - Consulting Closed 11 Apr 2019 17 Apr 2019
Country Coordinator for Mongolia Individual - Consulting Closed 16 Sep 2017 22 Sep 2017

Contracts Awarded

Contract Title Approval Number Contract Date Contractor Contractor Address Executing Agency Contract Description Total Contract Amount (US$) Contract Amount Financed by ADB (US$)
Policy and Advisory Technical Assistance 9001 27 Apr 2017 Electricite de France (France) 1 Place Pleyel 93262 Saint-Denis, Cedex France Ministry of Energy 1,120,000.00
Policy and Advisory Technical Assistance 9001 27 Apr 2017 Electricite de France (France) 1 Place Pleyel 93262 Saint-Denis, Cedex France Ministry of Energy 1,120,000.00
Policy and Advisory Technical Assistance 9001 27 Apr 2017 Electricite De France(France) 1 Place Pleyel 93262 Saint-Denis, Cedex France Ministry of Road and Transportation 1,120,000.00

Procurement Plan

None currently available.