ADB supports large-scale battery storage system in Mongolia
Renewable energy gets a US$100 million boost to help decarbonize the energy system
13 May 2020 | Michael Marray

THE Asian Development Bank (ADB) is promoting the use of renewable energy in Mongolia, which is one of its most coal dependent member countries, via a US$100 million loan for a large-scale advanced battery storage system (BESS).

The project will install 125MW of advanced BESS, making it among the largest battery storage systems globally. The BESS will be resilient to Mongolia’s extremely cold climate and equipped with a battery energy management system enabling it to be charged entirely by renewable electricity. This will then discharge clean electricity to supply peaking power in the central energy system grid. The project will also provide regulation reserve to integrate additional renewable energy capacity in the transmission grid.

The ADB signed off on the loan agreement in late April. The total cost of the project is US$114.95 million, of which US$3 million is co-financed by a grant from ADB’s High Level Technology Fund, financed by the government of Japan. The government of Mongolia will provide US$11.95 million toward the cost of the project, which is due for completion in September 2024.

“Mongolia is among the most heavily coal dependent developing member countries of ADB, and its energy sector is the largest contributor to its greenhouse gas emissions, accounting for about two-thirds of the total,” said director general of ADB’s East Asia department James Lynch. “The project will lead to the de-carbonization of the energy system in the country with increased penetration of renewable energy.”

In 2018, coal-fired combined heat and power plants contributed to 93% of total power generation in the electricity grid. Mongolia’s rich renewable energy potential - such as wind and solar - is estimated to be equivalent to 2,600GW, which could fully meet the country’s future power demand.

However, this potential has not been realized. The government aims to increase the share of renewable energy in total installed capacity from about 12% in 2018 to 20% by 2023 and 30% by 2030, in line with the State Policy on Energy.

The country’s renewable energy capacity will be increased through the project, supplying 44 GW-hours of clean peaking power annually on completion. The project will also help strengthen the capacity of the National Dispatching Center to handle power dispatch and grid operations, and of the National Power Transmission Grid to operate and maintain the BESS.

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