Far East: From Coal Mines to Wind Mills, Mongolia is Paving the Path for Green Energy Transition
imageBROKER/Bayar Balgantseren
In July of 2023, the United Nations Secretary-General Antonio Guterres officially announced that Earth is entering its “Global Boiling” era as the month was declared the hottest on record by the World Meteorological Organization (WMO). After the statement was made, many countries around the globe began to turn towards green and renewable energy. Among the many countries advancing progressive renewable energy policies, one stands out the most. Despite being heavily reliant on non-renewable energy, it has made significant strides toward embracing green energy.
Coal Exports by Country in 2023 (in Billion USD)
For decades, Mongolia has been known as one of the world’s leading exporters of coal mining. It was the 6th largest exporter of coal globally in 2023, with an export evaluation of over $8.8 billion, which accounts for 4.6% of coal exported into the global market. In the age of climate change, however, the country must adapt In July of 2023, Mongolia suffered one of its worst floods on record, due to the unusually heavy rainfall in the capital, Ulaanbaatar. Due to poor urban planning, the heavy rainfall caused the flood to affect over 31,600 families or around 128,000 people, displacing 20,000 residents, and significantly damaging critical infrastructure. This included a significant dam on the Selbe River along with more than 700 roads, bridges, schools, and power lines across the city. Moreover, Mongolia has also experienced year-round severe water scarcity as a result of rising global temperatures and decreased precipitation. With such dire conditions, it was clear to the Mongolian government that it must play a bigger role, both domestically and internationally, in lowering the emissions and making the switch to green energy a reality as soon as possible.
How Did Mongolia Get Here?
Ulaanbaatar under the soviet’s influencec in 1976
After the Soviet Union's support ended in 1990, Mongolia faced an economic downturn, with its energy sector among the hardest hit. Given Mongolia's location in one of the coldest regions on the planet, a stable energy supply was crucial for both power and heating. At one point, the disruption of power and heat supply was aggravated so badly that the government was forced to introduce coal-fired combined heat and power plants of the CHP. The plant heavily relies on lignite coal, a lower-grade coal predominantly found in Eastern and Central Mongolia. Over time, this short-term solution became a long-term source of energy supply, resulting in the country’s unsustainable reliance on coal with over 74% of the country’s energy being coal-supplied by 1997.
Lignite coal mine in mongolia
By the turn of the 21st century, Mongolia found another way to use its coal. In 2003, Mongolia began exporting coal, initially to China. Over the years, coal exports have generated billions in revenue, with the latest report in 2024 indicating that coal export revenue exceeded $8.6 billion, with an export volume of over 83.7 million tonnes. Notably, China accounts for 90% of Mongolia's coal exports.
What’s Next?
Initially, the Government of Mongolia has outlined in its State Policy on Energy 2015-2030 that the country is aiming for a 20% renewable energy share by 2023 and 30% by 2030. The plan also mentioned its intended reduction in greenhouse gas emissions by 22.7% by 2030, a significant reduction considering its latest development in 2020 as the energy sector accounts for over 44.78% in greenhouse gas emissions from Mongolia.
By 2023, Mongolia already has 3 large wind farms, 9 solar farms, and a small hydropower plant, jointly accounting for 18.3% of the total installed capacity and 9.6% of the total electricity production. This means that the country will have to greatly accelerate its plans if it is to meet its planned 30% renewable energy share by 2030.
the salkhit wind farm in central province of Töv, mongolia
No significant progress, however, was introduced up until the catastrophic flooding at Ulaanbaatar in July 2023 which has alarmed the government to amplify its funding towards the green energy transition. After extensive planning, the Government of Mongolia has announced its partnership with the European Bank for Reconstruction and Development (EBRD) to accelerate its green energy programmes in the country. The partnership includes extensive funding of over $270 million for 28 projects across the country. These projects include the construction of up to 300 MW of solar power plants and 200 MW of wind power plants, along with energy storage, all set for completion by 2028.
What’s Stopping Mongolia from Achieving Its Climate Goals Then?
The main challenge to Mongolia achieving its climate goals is Mongolia’s overreliance on coal for its economic stability and exports. In 2022, it was reported that coal, along with gold, copper, and iron contributes to over 30% of the national budget revenue. Together, this represents 25% of the country’s GDP and 42% of total investment into the country. Reduction in coal mining means lower revenue and foreign investment into Mongolia which makes the government hesitant to fully implement the transition head-on. Other than the valuation of the mining industry, the number it employs is also huge with over 49,018 of its citizens working in the industry. Reduction in coal mining, therefore, will result in massive unemployment in the country.
The First Joint Committee Meeting of the Joint Programme on Just Energy Transition
These statistics point out that with the country’s reliance on the mining industry, a swift shift alone will not be enough but a sophisticated policy development that can mitigate economic disruptions will be required. This is why Mongolia’s Ministry of Energy, in collaboration with the United Nations, is launching a joint program to accelerate a green and equitable energy transition, aiming towards aligning national planning and green energy initiatives with sustainable development goals.
With the international community’s help and the Government of Mongolia’s commitment towards a clean and sustainable energy sector, Mongolia has proven to the world that despite its heavy economic reliance on mining, the transition towards green energy is not impossible and that with the constant momentum, Mongolia is not far off from reaching its climate goals by 2030.