Mongolia
With a cumulative score of 1.51, Mongolia ranks number 46 among emerging markets and number 75 in the global ranking.
- Emerging markets
- Asia-Pacific
2.01 / 5
Power score
0.70 / 5
Transport score
0.83 / 5
Buildings score
Low-carbon strategy
Net-zero goal and strategy
Mongolia has set no net-zero target or any specific timeline and has no phase-out strategy for fossil fuel given the country’s current dependence on coal. The government has submitted a Nationally Determined Contribution (NDC), or its official plan to cut emissions under the Paris Agreement, of the business-as-usual (BAU) type, but not yet in the form of a long-term strategy.
Nationally Determined Contributions (NDC)
Mongolia aims to reach 20% renewable energy installed capacity by 2023 and 30% by 2030 – a significant leap from the 2018 share of less than 10%. The most important legal foundation was laid by the Law on Renewable Energy (2007), as well as the National Renewable Energy Program (2005-2020) providing official targets and incentives for global investors in the sector. The principal incentive is the relatively generous feed-in tariff (FiT) − the price paid under the power-purchase agreement (PPA) signed with the National Dispatching Center. FiTs are denominated in U.S. dollars, and a tax exemption policy is available for renewables equipment.
Fossil fuel phase-out policy
There is no fossil fuel phase-out policy in Mongolia.
Power
Power policy
In 2020-21, Mongolia held its first renewable auction for a solar-plus-storage project funded by the Asian Development Bank. Due to the nascent state of the renewables sector, the vast majority of investment has come from international development banks or foreign entities. If the country is to meet its renewable energy target by 2023 and 2030, it will need an extra push for new investments in the coming years.
Power policies
Power prices and costs
Wholesale prices for general coal generators are at 80.86 tugrik/kWh, while the feed-in tariff ranges for on-grid renewables are: wind $80-95/MWh, small hydro $45-60/MWh, and solar $150-180/MWh. This level is generally more attractive than neighboring countries such as Kazakhstan and China. Energy costs for users are higher than in nearby countries due to transportation and limited know-how in the local market.
Power market
Fossil fuels still account for 90% of power generation, though renewables’ share is slowly picking up. The power market is generally state-owned and the grid is regulated without any near-term plans for liberalization.
Installed Capacity (in MW)
Electricity Generation (in GWh)
Utility privatisation
Which segments of the power sector are open to private participation?
Wholesale power market
Does the country have a wholesale power market?
Doing business and barriers
Grid-connected capacity is expanding, which should reduce Mongolia’s reliance on electricity imports from Russia in its western grid and from China in its south grid (Mongolia has four grids). Thus far, almost 100% of dispatch and purchase is secured for wind and solar by the only offtaker i.e. the National Dispatching Center.
Currency of PPAs
Are PPAs signed in or indexed to U.S. Dollars or Euro?
Bilateral power contracts
Can a C&I (Commercial and Industrial) customer sign a long-term contract (PPA) for clean energy?
Fossil fuel taxes
Does the government influence the wholesale price of fossil fuel (used by thermal power plants) up through taxes?
Bilateral power contracts
Can a C&I (Commercial and Industrial) customer sign a long-term contract (PPA) for clean energy?
Bilateral power contracts
Can a C&I (Commercial and Industrial) customer sign a long-term contract (PPA) for clean energy?
Fossil fuel subsidies
Does the government influence the wholesale price of fossil fuel (used by thermal power plants) down through subsidies?
Transport
EV market
The government has yet to implement any substantive policy support in this sector. The EV market remains at an early stage.
EV policy
The government has yet to implement any substantive policy support in this sector and the EV market remains at an early stage.
Transport policies
Fuel economy standards
Does the country have a fuel economy standard in place?
Buildings
Buildings market
The government has yet to implement any substantive policy support in this sector. The low-carbon heat market remains at an early stage.
Energy efficiency plan
Does the country have a national energy efficiency plan?
Energy performance standards
Are there minimum energy performance standards for buildings?
Buildings policy
The government has yet to implement any substantive policy support in this sector and the low-carbon heat market remains at an early stage.
