Solar gains ground in Mongolia

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The Green Climate Fund (GCF) established by the United Nations Framework Convention on Climate Change has announced completion of a large-scale solar project in Mongolia.

The GCF said the 10 MW project is in the Sumber Soum area of Mongolia’s southern Govisümber province and was built for $17.6 million with a loan from Mongolian bank XacBank, with the UN body adding a long-term, $8.7 million concessional loan.

“The Sumber solar power plant is the first successful project jointly implemented by the Ministry of Environment and Tourism with XacBank, based on strong GCF support,” said the fund, which was established to help developing countries fight global warming.

Ayaan Adam, director of the GCF’s private sector facility added: “XacBank has shown that, with initial concessional loan support from GCF, it is possible for local businesspeople to set their own course in addressing … climate challenge.”

The plant was built by Japanese company Sankou Seiki Co. Ltd. Inc, with domestic company ESB the operator.

Renewables could double generation capacity

Mongolia’s operational installed PV capacity has now reached 35 MW after two other solar parks came online in the past year: a 15 MW solar plant in the economic development zone of Zamyn-Üüd, in the southeastern province of Dornogovi; and a 10 MW project in the northern city of Darkhan.

The Mongolian Ministry of Energy said it has already approved 28 PV projects with a combined capacity of 712 MW and four wind power projects totaling 450 MW. If built, they would almost double Mongolia’s installed generation capacity, which currently stands at 1,309 MW, with around 18.1% represented by renewables, the Mongolian government said.

Other projects under development include a 30 MW project in the Gobi Desert region which is being supported by the European Bank for Reconstruction and Development and investment partners, and a 20 MW solar park for Dornogovi.

Mongolia in 2014 tried to implement a FIT scheme for solar which proved unsuccessful, with payments of $0.15-0.18/kWh. A year later, it amended a renewable energy law to replace the fixed payment feed-in tariffs with feed-in premiums – added on top of the market energy price – with the new payments dubbed the “encouraging tariff” by the authorities. At the same time, the government improved regulation for power purchase agreements.