‘Electricity prices need to be increased by at least 28%’

During the Cabinet meeting on March 30, Minister of Energy N.Tavinbekh updated on the Erdeneburen hydropower plant project.

The energy minister pointed out that the plant is projected to have three times more capacity than the western region’s annual consumption. While the western region of Mongolia consumes 35 MW of power annually, the Erdeneburen hydropower plant is expected to produce 90 MW each year.

He said, “With the commissioning of this plant, we will be able to supply green energy to the western region domestically and sustainably. All the necessary preparation works to commence the construction phase are finished. The only challenge we are facing right now is the relocation of 1,251 farmers and herders or 270 households who currently reside in the project site. Under the effective law, they will be compensated based on only the value of their fixed assets. Therefore, the government is considering increasing the compensation rate. The final decision will be made at next week’s Cabinet meeting and in consultation with Prime Minister L.OyunErdene”.

Minister N.Tavinbekh emphasized that the world is switching to renewable energy sources to reduce greenhouse gas emissions and mitigate climate change and noted that a hydropower plant is most suitable for Mongolia. Currently, the country has only seven lowcapacity hydropower plants but none with a high capacity.

He also underlined that the government will pay special attention to the use of renewable energy sources due to the inability of existing power plants to normally operate during peak hours, before noting that not only Erdeneburen but also Eg and Shuren hydropower plant projects are being mobilized.

During the meeting, Minister N.Tavinbekh provided information on how to solve the problem concerning the electricity supply in case of widespread use of electric vehicles.

The minister highlighted that countries around the world including Mongolia support the use of electric vehicles as part of efforts to combat climate change and reduce greenhouse gas emissions in accordance with international agreements and conventions.

According to statistics, there are currently 1.2 million vehicles registered in the country, of which 662,000 are driven in Ulaanbaatar. Of them, only 498 are electric vehicles. Therefore, the minister stressed the need to take certain measures to increase and promote the use of electric vehicles. A total of eight electric vehicle charging stations with a capacity of seven to 60 kWh have been operating in Mongolia since 2018, according to Minister N.Tavinbekh.

Moreover, he reported that as energy losses continue to amass, the ministry has no choice but to increase electricity prices. In 2019, the energy sector had a loss of 78 billion MNT and 92 billion MNT in 2020. A study estimates that current prices need to be increased by at least 28 percent.

Cabinet also reviewed the following during its meeting:

Corresponding ministers gave presentations on the works carried out last week within the framework of ensuring the implementation of the development projects included in the New Revival Policy.

• A certificate of permit for the construction of an energy facility was granted to a contractor to resume the expansion of the Choibalsan Thermal Power Plant in 2022.

• Under the energy minister’s order dated March 14, executive directors of state-owned Southern Region Electricity Distribution Network JSC, Tavan Tolgoi Power Plant and the National Dispatching Center were authorized to establish a power purchase and sales agreement.

• Cabinet decided to organize a stakeholders’ meeting within the framework of developing a strategy and plan of action to implement the “Billions of Trees” national movement, and submit a draft amendment to the Law on Forest to Parliament.