Mongolia Energy

Looking to diversify its energy sources, Mongolia is stepping up efforts to expand the value-added content of its coal industry through developing a coal-to-liquids capacity, a move that could reduce energy import costs and provide cleaner fuel.

Delivery of a key new 450-MW combined heat and power plant known as CHP5 continues to face implementation uncertainties, with competing projects likely causing a delay in the final investment decision in the near term. Foreign participants who spoke to OBG remain interested in offering technology and expertise. However, progress appears to be stalling as a result of an internal debate over project viability.

Plans for a large power plant near Ulaanbaatar underline how Mongolia’s surging growth in resource revenues can be used to meet looming energy shortfalls in urban areas. However, more innovative sources are needed to supply power to the rural expanses of the country’s steppes.

Coal production continues to rise in Mongolia amid the ongoing development of large mining projects aimed at increasing regional demand, yet the energy sector has also began exploring greener alternatives.