KCEP Mongolian Energy Futures Singles
KCEP Mongolian Energy Futures Singles
KCEP Mongolian Energy Futures Singles
REPOWERING ULAANBAATAR
CHALLENGES OF RADICAL ENERGY
SECTOR DECARBONIZATION
October 2019
Stephanie Carlisle and Nicholas Pevzner
2 kleinmanenergy.upenn.edu
CONTENTS
EXECUTIVE SUMMARY
The burning of coal in Ulaanbaatar (UB), the capital city power plants to provide both steam district heating
of Mongolia, has created a public health emergency, and electricity—as well as the particular patterns of
with wintertime air quality that regularly exceeds 100 urbanization that have shaped Ulaanbaatar’s recent
times the recommended daily average concentration, development. The difficulty of transitioning from coal
with dire health effects for a population of 1.5 million is made harder by the fact that winter temperatures in
people. Exposure to air pollution at such levels causes Ulaanbaatar regularly reach -40°F.
severe health effects for residents, particularly for
This paper analyzes the challenges of moving the
children, the elderly, and other vulnerable populations.
city’s heating supply to electricity and the challenges
According to a recent study by National Center for
of decarbonizing the city’s electricity production. It
Public Health and UNICEF Mongolia, the air pollution
then lays out three possible speculative scenarios that
is linked to extremely high rates of childhood asthma,
suggest pathways that the city might take toward a post-
pneumonia and other chronic respiratory infections,
coal future. Each potential future depends on concrete
high levels of miscarriage, preterm birth and childhood
planning and policy moves and results in a distinct urban
mortality, impaired cognitive development and a host
form, pattern of infrastructure, and energy access profile.
of other long-term health impacts (National Center for
Public Health 2018).
These health challenges are felt most acutely in the TWO CITIES IN ONE
city’s quasi-informal ger districts—low-density areas
The core of Ulaanbaatar is a dense district of Soviet-era
that consist of hundreds of thousands of traditional
apartment buildings, shopping centers, and civic buildings,
nomadic dwellings, known as “gers” in Mongolian, or
along with newly constructed contemporary high-rise
“yurts” in Russian, and self-constructed wood-frame
apartments and commercial office buildings. These are all
houses—where families rely on burning raw coal in
served by a district heating steam loop with heat supplied
their homes as their primary source of heat in the frigid
by the city’s three major coal-fired combined heat and
winters. With nearly sixty percent of the population
power (CHP) plants, along with a number of smaller coal-
unserved by adequate electricity or heating supply,
fired heat-only boilers (HOBs). District heating systems
environmental inequity in the city is directly tied to
generate heat in centralized locations, then use insulated
energy infrastructure, with consequences that are
pipes to distribute that heat for thermal use in other
particularly dire for children, the elderly, and other
buildings. For buildings located near these distribution
vulnerable populations.
pipes, district heating is considered an economical and
The challenge of reducing UB’s coal dependency efficient way of supplying heat.
is also intertwined with the design of infrastructural
Surrounding this dense core, however, is the sprawling
systems that the city has inherited from its Soviet-era
ring of ger districts, which can be classified into Central,
past—primarily its reliance on centralized coal-fired
4 kleinmanenergy.upenn.edu
Mid-Tier, and Fringe ger areas. More than 60% of UB’s is therefore difficult to supply enough electrical heat
population lives in the ger districts, and most of those to the leaky dwellings to maintain thermal comfort.
people lack access to basic services and infrastructure The government has attempted numerous policies and
provisions such as sanitation, water, solid waste programs to move Ulaanbaatar away from its reliance
management, roads, public transportation, or street on coal, such as clean stove programs, electric heater
lighting and drainage. initiatives, and a night-time electrical subsidy that makes
electricity effectively free.
The core’s district heating steam pipes do not extend to
the ger areas. Residents of the ger areas predominantly However, with poor power quality in the ger areas,
rely on coal stoves in their dwellings for heat, and which results in frequent power outages and voltage
these families spend 25–40% of their income on fuel. drops, electric heating has proven an unreliable and
Electricity supply is intermittent, of low-quality, and often therefore unpopular option, especially when the brutal
reliant on illegal hookups. winter temperatures discourage reliance on a fragile
heating system. Residential coal stoves, meanwhile, are
The ger areas began forming after 1990, when Mongolia a tried-and-true heating technology that families trust
transitioned from Soviet-backed communism to a neoliberal to supply enough heat to keep them warm, despite the
free market democracy, driven by several intense waves environmental drawbacks.
of rural-to-urban migration. New arrivals in UB struggle to
secure housing in the expensive core, where real estate
speculation is widespread, and instead take advantage
CHALLENGES TO DECARBONIZATION
of a provision of Mongolian law that encourages de facto
homesteading on the urban periphery. Even with ambitious and concrete renewable energy
targets, the government has been slow to add
renewable energy capacity and continues to rely on
AGING AND FAILURE-PRONE INFRASTRUCTURE coal for nearly 93% of heat and electricity generation.
While several large wind projects have recently come
The three CHP plants that supply the bulk of UB’s on-line, the growth of renewables has been slowed
heating supply are old, at capacity, and two of the three by a number of factors. These include: curtailment of
are operating beyond their planned retirement age. The existing renewable generation during non-peak times;
city has tried to build a modern CHP plant to replace regulators’ concern about potential grid instability;
one of the older plants, to increase efficiency and add inadequate compensation due to unfavorable contracts;
redundancy, but has so far been unsuccessful. difficulty securing international financing; and political
The electrical distribution system is also old and prioritization of existing coal-fired CHP plants by energy
prone to failure, with both cables and substation regulators, which creates an uneven playing field.
transformers in need of upgrades or replacement. With
the current fees for electricity and abundance of illegal
grid connections, however, the utility does not have ULAANBAATAR’S ENERGY FUTURES
enough revenue to make the needed upgrades. Raising The city has attempted to address current energy,
the electricity tariffs to the necessary levels to allow public health, and housing issues through new
upgrades would prove politically unpopular. infrastructure projects and through long-term urban
planning. Proposals include extending the steam loop
along newly densified urban corridors and increasing
CHALLENGES TO ELECTRIFICATION coverage of high-voltage electrical transmission lines
There are several primary challenges to electrifying the through the addition of a new line and multiple new
ger areas, including rapid unplanned urban growth, substations. These projects are either still being built or
inadequate electrical distribution networks, and the have proved unsuccessful due to a lack of coordination
relative thermal inefficiency of ger district dwellings. It between the infrastructure upgrades and new
Mongolian Energy Futures: Repowering Ulaanbaatar 5
ABBREVIATIONS
ADB Asia Development Bank
MW Megawatt
UB City of Ulaanbaatar
Ulaanbaatar, the rapidly growing capital of Mongolia, is This recent study found that children in Ulaanbaatar
two cities in one: a dense downtown core of Soviet-era have 40% lower lung function than children living in rural
shopping centers, stately government buildings and plazas, areas. These health challenges are felt most acutely in
with a vibrant real estate market of apartment buildings and the ger districts where low-income communities are
commercial properties; and a rapidly growing ring of quasi- completely reliant on burning coal in their homes, and
informal urbanization consisting of traditional round “ger” where access to healthcare is limited. The economic
dwellings, also known as “yurts” in Russian, and simple impact of ger district residents is also pronounced.
wood-frame houses, arranged on privately-held parcels Families in the ger districts spend 25–40% of their
spreading up into the surrounding foothills. income on fuel, in a city where winter temperatures
regularly reach -40°F causing a condition of acute
These “ger districts” rely almost exclusively on raw energy insecurity paired with pronounced economic
coal for heating during the winter. The burning of coal inequity (Kamata et al. 2010; Seman 2017).
in hundreds of thousands of individual structures,
alongside outdated and inefficient central coal plants While Mongolia has ample solar and wind resources,
and distributed coal boilers, makes Ulaanbaatar one of it also has an immense supply of state-owned,
the most polluted cities in the world. During the long unregulated, cheap coal, and there are currently no
winter season, air pollution levels in Ulaanbaatar average credible plans for phasing out the use of coal for either
more than 25 times the World Health Organization electrical generation or thermal uses for the majority of
(WHO) guidelines for safe levels. On cold days, fine the Mongolian population. The future of decarbonizing
particulate pollution (PM2.5) levels regularly exceed 100 the Mongolian energy grid will require overcoming
times the recommended daily average concentration, political, technological, and economic hurdles that
hitting concentrations too high for most air quality have created coal’s dominance and incumbency.
monitors to measure (National Center for Public Health Still, a widespread shift in energy sources alone will
and UNICEF 2018). not displace the burning of raw coal in hundreds of
thousands of dwellings in Ulaanbaatar, and in turn will
Exposure to air pollution at such levels causes severe not alleviate the resultant public health crisis.
health effects for residents, particularly for children,
the elderly, and other vulnerable populations. The air The coal problem in the capital is not just an electrical
pollution is linked to extremely high rates of childhood generation problem, but principally a heating problem.
asthma, pneumonia and other chronic respiratory So far, it has proved difficult to move away from burning
infections, high levels of miscarriage, preterm birth and coal in the ger districts, because of the inadequacy
childhood mortality, impaired cognitive development of the entire urban electrical distribution grid, which
and a host of other long-term health impacts (National suffers from chronic shortcomings in capacity, voltage,
Center for Public Health and UNICEF 2018). and consistent supply. If a family is relying on electrical
heating at subzero temperatures, a loss of electricity
Mongolian Energy Futures: Repowering Ulaanbaatar 7
Central ger areas near the formal urban core compete for space with new apartment developments.
isn’t merely an inconvenience, but can be a matter of and seeing clearly the relationship between energy
life and death. This is a problem for the traditional ger infrastructure and urban design.
housing, as well as wooden and brick houses in the
Equitable energy distribution in Ulaanbaatar is at once a
ger district—all of which tend to rely on coal stoves
technological, political, economic, cultural, and design
in the home. Apartment buildings in the urban core,
challenge. The energy problems in Ulaanbaatar are
meanwhile, are both better insulated and rely on district
urban design problems; the energy solutions are urban
steam heating, which is more reliable and also does not
design solutions—they need to be considered in tandem.
contribute to poor indoor air quality.
Meeting the energy needs of all residents requires
Addressing the household heating needs of all making choices that will direct how the city will develop.
residents of Ulaanbaatar will require a transformation This report will provide a context for Mongolia’s energy
in urban planning that extends beyond just the energy challenges and explore potential pathways that the city of
infrastructure. Electrifying domestic heating in the Ulaanbaatar could take to move toward a post-coal future
capital’s ger districts will likely require changes to and an inclusive vision of energy security.
housing construction and building systems, rethinking
planning mechanisms, investing in grid upgrades,
8 kleinmanenergy.upenn.edu
miles outside of Ulaanbaatar. Salkhit was also the first The city’s three Soviet-era thermal power plants
private power producer in the country. The second large comprise the majority of the municipal energy supply.
renewable project opened in 2017: the Tsetsii wind farm These aging CHP plants are all centrally located in
in the Gobi Desert, also at 50MW capacity. And at the the urban and industrial core of the city and produce
moment, a 24 MW solar project is being added to the both electricity and steam for a central steam loop
Salkhit wind farm, making it the first hybrid renewable that services downtown government, commercial, and
plant in Mongolia. apartment buildings in the core.
Numerous other large renewable projects have tried Built in the 1980s, CHP#4 is the largest coal-fired
to take advantage of the generous FIT terms, and have thermal electric plant in Mongolia, with a design capacity
been issued permits (ADB 2018a), but few of these of 580 MW. It supplies about 70% of the electricity
projects have moved forward. Implementation of these and more than 60% of the heat for the city (Yokogawa
subsequent projects has been a challenge due to several Electric Corporation 2014). The two additional plants,
factors: political support for existing coal-fired generation, CHP#2 (21.5 MW), and CHP#3 (136 MW) were
which privileges existing coal-fired power plants in both built in the 1960s and are also located along the
securing favorable contact terms that guarantee them a southern edge of the urban core, in proximity to rail lines
large market share of electricity sales; underfunded FIT that bring coal into the city.
budgets, which do not have enough funds to pay out the
As the city’s district heating does not extend to houses
agreed-upon FIT to renewable energy generators; and
in the ger districts, nearly 85% of ger residents are
poorly implemented Power Purchase Agreement (PPA)
reliant on heating their homes with coal-fired stoves
rules, which similarly lead to idled renewable generation.
during the brutal winters. These stoves are a primary
PPAs are contractual agreements between an contributor to both indoor and outdoor air pollution, due
energy generator and an energy purchaser (often the to their less efficient combustion and the burning of
government) for the sale of a certain amount of electricity, low-quality, unrefined raw coal. Ulaanbaatar residents
typically used to guarantee a renewable project’s burn over a million tons of raw coal each year in the ger
financial viability by guaranteeing a minimum quantity districts, which accounts for about 80% of the city’s
of electricity sales. In Mongolia, because there is not smog and fine particulate matter pollution (PM2.5)
enough funding to pay for the generous renewable FITs, (Denton 2018; ADB 2018b).
there is currently a moratorium on all new renewable
Even though the central power stations that provide
licenses with PPAs. Despite the country’s ambitious
the majority of Ulaanbaatar’s electricity are unlikely
renewable targets, the energy planning through 2023
to stop burning coal in the near future, if individual
remains principally focused on two hydroelectric plants
household heating can be switched from coal stoves to
as a way to meet these goals, along with plans for the
clean, efficient, electric heaters, air quality and public
construction of six new coal-fired power plants, rather
health would improve. However, to date, the extension
than on a comprehensive plan for increasing wind or solar
of electricity that provides sufficient power quality and
generation (Seman 2017).
reliability to support electric heating has been slow,
uneven, and inequitably distributed. Additionally, the cost
of switching to efficient electric heating has been borne
HEAT AND ENERGY IN ULAANBAATAR CITY
entirely by families and the nonprofit sector, representing
In Ulaanbaatar, coal is burned at three distinct scales: a significant hurdle for low-income families who might
at the three large centralized combined heat and power otherwise be eager to change fuel sources.
(CHP) plants, which produce heat managed by the UB
District Heating Company; at smaller neighborhood heat Another replacement for the burning of raw coal at
plants or heat-only boilers (HOBs) that heat individual a household level would be the broad extension of
buildings or complexes; and in hundreds of thousands of district heating, bringing steam heat from the central
individual dwellings. power plants beyond the downtown core and into the
Mongolian Energy Futures: Repowering Ulaanbaatar 11
ger areas. Here, the low density of the ger areas acts and disagreement over final tariff rates. CHP#2 was
as a barrier, since the efficiency of this type of heating slated for retirement in 2005, and CHP#3 in 2011. But
declines with increasing linear length of heat pipe. because of a lack of a viable replacement, CHP#3 and
While plans have been proposed for the extension of CHP#2 both remain in operation (HJI Group 2011). The
several heating pipes north of the core—one to the result is a fragile and failure-prone system, with terrible
Bayankhoshuu subdivision and one to the planned Selbe potential health consequences.
sub-center—as part of the city‘s 2030 master plan,
According to a 2011 technical consultant’s report
planning for any widespread district heating for the ger
commissioned by ADB, the potential impact of a
areas is not in the works.
breakdown on the heating supply is especially dire: “The
In addition to the problem of heat distribution, there present available heating capacity of the three CHP
is also the problem of heat production. Ulaanbaatar’s plants in UB is 1,585 Gcal/hr, while the actual heating
power plants are at capacity, and both the CHP#2 demand in 2009 was 1,555 Gcal/hr. In other words, there
and #3 power plants’ heat production systems are is essentially no backup heating capacity in UB. This is
nearing the end of their lives. CHP#3 was supposed a very dangerous situation for the coldest capital in the
to be replaced by a new power plant, to be known as world. The consequences are unimaginable should one of
CHP#5, with a generating capacity of 820 MW, but the aging CHP plants in UB become unavailable during
this has not occurred amidst scandal and speculation, the middle of winter” (HJI Group 2011).
Each year, the air pollution in Ulaanbaatar worsens. With the collapse of state-subsidized industries and
Attempts to address this dire public health emergency institutions, roughly 150,000 Mongolians became
to date have largely focused on relatively ineffective unemployed and turned to herding to survive. Many
programs on the household scale. The World Bank families moved closer to villages and towns, and
and other international aid organizations have spent traditional land rights were ignored as herd sizes
hundreds of millions of dollars giving away marginally swelled, leading to widespread overgrazing and land
more effective coal stoves in ger areas, and the city has degradation. On top of this social and economic turmoil,
attempted to incentivize households to switch to electric several years of particularly harsh dzuds—a climate
heating and made promises to introduce subsidized phenomenon in which summer droughts are followed by
compressed coal briquettes. very cold winters with temperatures as low as -50°C—
caused hundreds of thousands of families to lose their
However, outdoor air pollution has only continued to livestock. For example, from 2009 to 2010 in one of
worsen and researchers are only just now beginning to the worst winters, 8.5 million animals, roughly 18% of
study the impacts of coal stoves on indoor air pollution total livestock in the country, died, leaving families in the
(KieranTimberlake 2018, UNICEF 2018). There are countryside destitute (Reinikainen 2013).
several primary challenges to electrifying the ger areas,
which have to do with rapid unplanned urban growth, In the two decades that followed, Mongolia underwent
inadequate electrical distribution networks, and the an unprecedented rural-to-urban migration driven by a
relative thermal inefficiency of dwellings. combination of political, economic, and environmental
pressures. According to UNICEF, between 2000 and
2013 the percentage of Mongolians living in urban areas
RAPID URBAN MIGRATION, LAND OWNERSHIP, increased from 57% to more than 70% (Marple-Cantrell
AND URBAN SPRAWL and Boudreaux 2018). Accelerating this rural-to-urban
migration was the 2002 Law on Allocation of Land to
Private land ownership in Mongolia is a relatively
Citizens of Mongolia, that gave every Mongolian citizen
recent phenomenon and its management, paired with
the right to claim a 0.07-hectare parcel of land in an
ineffective planning practices, are a primary challenge
urban area for free once in their lifetime. This provision
to increased electrification of Ulaanbaatar. Just before
was set to expire in 2012 but has been extended
the collapse of the Soviet Union, in 1990, Mongolia
repeatedly (Millenium Challenge 2018 Property Rights
staged a largely peaceful transition from Soviet-backed
Project). Between 1990 and 2014, the population of
communism to a neoliberal free market democracy.
Ulaanbaatar grew from 427,000 to 1,070,000 (NYU
Nomadic communities fared particularly poorly in Urban Expansion Program 2018).
the economic transition, as state support of herders
During this time of social transition, the city of
decreased, and animals moved into private ownership.
Ulaanbaatar was itself in the midst of a transition from
Mongolian Energy Futures: Repowering Ulaanbaatar 13
FIGURE 5: GRADIENT OF DENSITY, FROM THE FORMAL URBAN Soviet-style centralized planning towards a market-
CORE, ACROSS THE GER AREAS, TO THE SUMMER CAMP AREAS ON driven planning model. Rather than providing affordable
ULAANBAATAR’S PERIPHERY housing or extending services to the city’s growing
low-income population, private investment was focused
on infrastructure and development projects in the well-
serviced, high-value urban core and along transportation
routes established by the city planning agencies as
targeted development zones (World Bank 2015).
provisions such as electricity, sanitation, water, solid Power Line project), and to build a number of new
waste management, roads, public transportation, substations. However, this expansion of transmission
or street lighting and drainage. A growing number and substation infrastructure is not yet complete, and
of rural Mongolians have moved to the city in the prevalence of illegal electrical hookups will likely
search of economic and educational opportunities, continue to degrade the power quality outside the
the government has struggled to reconcile the immediate vicinity of the new substations. Even as more
contradictions of free-market democracy and private electricity becomes available thanks to new transmission
ownership of land with the responsibilities of the state in lines and is stepped down to residential voltage through
providing services to an increasingly urban population. new substations, the anticipated growth in household
While the cost of living in the well-connected urban core electrical loads (as well as new illegal hookups) will once
continues to rise precipitously, land at the edges of the again result in an unstable and unreliable electrical supply.
ger districts remains effectively free, leading to a sort of
Families that have no access to electricity at all face
urban homesteading, and creating a condition of severe
financial barriers to paying for new grid connections.
energy inequality.
And even though the Energy Regulatory Authority (ERA)
Without a formal planning process, the city has been introduced low-cost lifeline tariffs that are designed to
slow to extend services to the ger areas, resulting in help low-income families by providing low rates for a
widespread illegal electrical hookups and poor power “basic amount” of electricity, with higher rates levied
quality, which has decreased the ability of households on users that exceed the “basic amount,” many families
to switch to electric heating, even when they have the have not subscribed for these lifeline rates because
economic means to do so. they lack proper land registration, or because they have
outstanding debts to the electric utility for previously
used electricity (Kamata et al. 2010).
INADEQUATE TRANSMISSION AND DISTRIBUTION CAPACITY
In the ger districts, political and infrastructural
(GRID WEAKNESS) shortcomings are difficult to disentangle from the
Beginning in January 2017, the government attempted general marginalization of poor communities who
to spur a switch to electric heating in the ger areas by are consistently disenfranchised and excluded from
introducing a zero night time electricity policy, which government programs and subsidies by bureaucracy,
makes residential electricity use free at night, from 9 politics, and housing insecurity. As population censuses
p.m. to 6 a.m. (ADB 2018c). Most households in the ger were only introduced recently, and have been tied to
districts have some access to electricity, but for many taxation, there is currently no reliable accounting of the
that electricity is unreliable, and of insufficient power population or the energy needs of the ger districts.
quality to support electric heating.
For the city overall, existing electrical distribution
According to a 2010 World Bank report, “the key issues infrastructure is old and failing. The city has not
with the electricity supply in ger areas are insufficient managed to build the new CHP#5 plant to replace
capacity of transformers and substations, and poor the two power plants that are over 40 years old and
service quality due to the capacity shortage” (Kamata operating beyond their expected lifespans; in addition,
et al. 2010). This results in frequent voltage drops and according to the World Bank, “[n]early 70 percent of
power outages, making electric heating unreliable, and underground cables have exceeded their technical life
disincentivizing families from investing in electric heaters spans, and some 425 cable faults are reported annually.
as opposed to their tried-and-true coal stoves. At last Half of the 75 main substation transformers have been in
count, only about 5% of ger area households have service for more than 25 years; nine have been in use for
electric heating (World Bank 2018). more than 40 years” (Kamata et al. 2010). Due to both
these technical losses, as well as “non-technical losses”
The government is currently planning to add a new
(i.e., illegal interconnection), electrical losses in the
electric transmission line (the Ikh Toiruu 110 kV Electric
Mongolian Energy Futures: Repowering Ulaanbaatar 15
One of the many fringe ger districts on the north side of Ulaanbaatar.
ger areas are very high, averaging 20% (although this THERMAL INEFFICIENCY OF GERS, HOUSES,
is down from an average of 31% prior to 2006, when
OLD SOVIET BUILDINGS
the World Bank’s Energy Sector Project began issuing
loans for the upgrading of electrical substations and Low-cost, self-built housing in the ger districts—a
electrical distribution equipment) (Kamata et al. 2010). combination of poorly insulated wood or masonry
houses and gers (lightweight felt and wooden tent-like
The utility has struggled to make upgrades, or even do structures)—are thermally inefficient and ill-equipped to
basic upkeep, because current electricity prices are meet the needs of an urban population whose habits,
below the cost of service. Studies have suggested that expectations, finances, and daily patterns are different
electric rates would need to increase by 60% in order to from those of nomadic communities. Settlement patterns
be able to cover costs (Kamata et al. 2010), a politically in the ger districts are at once too dense for pollution to
unpopular option that would put further financial stress dissipate (as it might on the Mongolian steppe), but not
on the lowest-income ger residents. dense enough for efficient extension of municipal services
such as electricity, district heating, and sanitation.
16 kleinmanenergy.upenn.edu
Current planning and development efforts are caught In the city center, the presence of old Soviet-style
between two competing models of urban growth. In one apartment buildings connected to district heating makes
vision, the majority of residents voluntarily sell their land matters easier. One could imagine further densification
and move into mid-rise apartment buildings connected to to support the growing population, paired with retrofits
district heating and power, located on new transit corridors to existing aging building stock. Improved construction
and supplied by a constellation of new substations. methods and systems design, including better-insulated
wall assemblies and windows, along with improved
In another vision, families are able to acquire clear land heating, ventilation, air filtration, and user controls, would
titles and legal connections to an improved electrical dramatically improve occupant health and comfort,
grid; individual houses and gers are upgraded piecemeal improve resilience to loss of power, and allow buildings
through a combination of market-driven and publicly- to decarbonize along with the grid. In the city center,
financed deep energy retrofit programs; and eventually the central challenge is governance and economics: will
all homes are super-insulated and switched over to there be a future in which the government is motivated to
electric heating, while maintaining their traditional control an inflated real estate market, and provide high
character and seasonal flexibility. In the meantime, coal quality, low-income housing?
ash is safely disposed of, “improved” coal briquettes are
produced and distributed, and air quality is improved Central to the viability of these potential futures is
through increased combustion efficiency of coal stoves, an underlying question: what sort of housing is most
and reduction in the number of stoves. appropriate for Ulaanbaatar’s unique climate, culture,
and urbanism?
Mongolian Energy Futures: Repowering Ulaanbaatar 17
CHALLENGES TO DECARBONIZATION
Despite Mongolia’s nationwide renewable energy goals GRID STABILITY AND CURTAILMENT
that resulted from the Paris Agreement, the country
The inadequacy of regulatory capacity to deal with
has been slow to add renewable energy generation
intermittent renewables has led to a moratorium on
to its grid or curtail coal-based energy production.
all new renewable PPAs, because of concerns about
There are several dynamics at play that are slowing the
potential grid instability by the Energy Regulatory
decarbonization of Ulaanbaatar’s energy grid. Much
Commission (ERC) and because of so much potential
of this phenomenon has to do with the system used to
wind and solar generation, even though most permitted
award PPA contracts, and with political interference in
renewable projects remain unbuilt.
setting energy production targets at different facilities.
Because the vast majority of the city’s heating comes from
The Asian Development Bank outlined the persistent
the existing CHP plants, heat production drives coal-fired
fundamental bottlenecks in the new renewable project
electricity production: the coal plants cannot simply be idled
pipeline in 2014 in a Technical Assistance Report, just
because they are needed to produce heat. Due to consistent
after the Salkhit wind farm began operations, as follows:
wintertime heating demand, existing coal-fired CHP plants
• (i) diminishing reserve margin and lack of regulating need to run nonstop, creating a de facto coal-fired electrical
capacity in the power system to compensate for baseload. This leads to curtailment of renewable energy
fluctuating outputs from intermittent renewable energy facilities at times of lower electrical demand, and reduces
such as wind and solar power; the amount of renewable energy on the grid.
High voltage transmission line passing over newer mid-tier and fringe ger areas to the north of the city center.
Mongolian Energy Futures: Repowering Ulaanbaatar 19
Uncertainty surrounding the aspirations and desires of low density of the ger areas makes it a challenge to
ger district residents, as well as an inability to predict efficiently provide centralized heating from the main
future infrastructure changes, has created a challenging CHP plants—or other services such as sewer or water
climate for communities, designers, engineers, services, for that matter.
government, and development organizations. Scenarios
The city focuses on densifying the inner ring of ger
allow us to play out potential futures, testing each
districts—those in closest proximity to the historic Soviet
pathway towards decarbonization.
core—in order to make the provision of services more
At a household level, housing can be retrofitted to economical, supporting construction of new high-rise
use either coal or electric heating, but from a building apartment buildings in the ger areas, buying out ger
science perspective, these technologies are not residents and giving them stakes in new apartments
interchangeable. Effective building retrofit solutions will connected to the centralized district heating. This strategy
vary considerably depending on whether a family has is a direct outgrowth of the city’s 2030 decentralization
access to an affordable, high-quality, electricity supply master plan, which prioritizes provisioning of heat, transit,
now and in the future. water, and sanitation along main arteries to dense sub-
centers surrounding the core.
But, further confounding assessment of development
projects is the uncertainty surrounding future housing The rate system is changed to charge residents and
paradigms. Are scarce resources best spent upgrading building owners for the heat they use, rather than the
gers to use less coal if families are more interested in current flat rate. This policy change incentivizes building
living in modern single-family houses? Should programs retrofits and energy efficiency upgrades, in turn reducing
increase capacity to build well-insulated free-standing total heating load and coal consumption. Further
houses if many families would rather live in an apartment expansion to the district heating network is paid for by
if they had the means to do so? The following scenarios the most affluent residents and used to extend energy
play out three different urban design responses, each of access to residents below the poverty line.
which enables a different type of energy infrastructure.
In this scenario, new renewable energy projects outside
of Ulaanbaatar won’t be able to play a direct role in
boosting the heating output of the old CHP plants’
SCENARIO 1: EXPAND THE CORE
coal-fired boilers and district steam systems. Instead
The city pours resources into upgrading the centralized efforts to decarbonize the grid make use of Japanese
CHP plant system, modernizing the boilers and adding Green Climate funds, to build several new power-to-
redundancy. This strategy is premised on the simple gas and waste incineration co-gen plants, allowing
idea that thermal power plants are a very efficient way the oldest CHP plants’ boilers to transition from coal
of generating heat, unlike electricity. However, the to electrolyzed hydrogen and waste-powered steam.
20 kleinmanenergy.upenn.edu
The power-to-gas system allows Mongolian wind farms number of low-cost electric cars and trucks. Many ger
to productively use their excess wind generation at dwellers, especially those who make a living as drivers,
night, reducing their curtailment rates and incentivizing make use of their vehicle batteries and the night-time
construction of more wind farms and power-to-gas electricity pricing. The combination of increased electric
facilities. Ulaanbaatar’s grid decarbonizes rapidly. heating and reduced vehicle emissions dramatically
improves the air quality in the furthest fringe ger areas,
On the city’s periphery, however, ger area residents suddenly making this formerly low-cost land increase in
watch the central heating infrastructure slowly advance value and desirability.
towards their far-away neighborhoods, but never quite
make it. They continue to burn coal in the meantime, With ger residents’ batteries and electric vehicles
now making up the bulk of PM2.5 emissions in the city acting as a large distributed source of energy storage,
and increasing social unrest and greater environmental regulators allow an increased share of renewable
injustice as apartment dwellers seal their windows to the energy into the grid mix, spurring construction of new
smog. Inequality continues, poisoning the discussions wind farms outside of town and hastening the rise of
about buyouts and apartment upgrades, as the fringe all-electric, low-carbon enclaves for the wealthy on the
neighborhoods feel forgotten and tossed aside. urban outskirts.
dramatically; children can’t wait to go to school to well-insulated multi-family townhouses to groups of ger
alleviate their chronic respiratory symptoms. area landowners in exchange for land swaps.
With continued support from NGOs, dwellings near the As solar panels and batteries continue to decline in price,
solar school microgrids receive insulation upgrades, more and more neighborhoods set up their own solar
reducing heat loss and increasing thermal comfort, microgrids, and incorporate low-cost thermal insulation
allowing households to either switch to electric heating measures to make their heating go further. Social
if they haven’t yet, or use less electricity if they’ve pressure on holdout coal-burning households increases
already made the switch. The newly insulated homes are as more families make the switch to electric heating.
targeted for NGO-led solar panel programs, expanding With fewer and fewer customers to service, the aging
the microgrid’s capacity, and enabling nearby residents CHP plants continue to supply the downtown core, with
to plug into the microgrid and stop burning coal as well. increasingly frequent power outages, while ger areas
Meanwhile, the Asian Development Bank continues its increasingly defect from the utility and take control of their
Green Affordable Housing Program, supplying new own electricity production and energy security.
22 kleinmanenergy.upenn.edu
The scenarios developed here offer a sense of A post-coal future for Ulaanbaatar will not come easily,
the many potential actions that could result in a considering the availability and political power of
radically decarbonized Ulaanbaatar. Each has its incumbent coal-dependent actors. What the city must
unique tradeoffs, and distinct winners and losers. keep in mind, however, is that if it hopes to alleviate the
Each strives for decarbonization along with a more winter air quality public health emergency, it will have to
equitable distribution of services, improved air quality, make decisive improvements to the quality of life in the
and reduced reliance on coal. The challenges facing ger areas, which includes reliable access to high-quality
Ulaanbaatar are a mix of policy, infrastructure, and urban energy and fair housing, and do so in a way that plans
design. The scenarios, therefore, play out interactions the evolution of infrastructure and urban form in tandem.
between all three sets of issues, making clear the
entanglements between energy policy, infrastructure,
and the city.
Mongolian Energy Futures: Repowering Ulaanbaatar 23
APPENDIX
Raw coal for sale in Ulaanbaatar: bags for 3000 Tugrik each.
Coal sorting yard, where trains deliver coal into the city, and it is sorted by size and loaded on trucks.
24 kleinmanenergy.upenn.edu
Informal coal marketplace, where coal is sold by the truck, or divided into bags.
CHP#3 coal-fired thermal power plant, with district heating steam pipes in foreground, and coal loader in background.
Mongolian Energy Futures: Repowering Ulaanbaatar 25
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ABOUT THE AUTHORS
Pilcher, Raymond C.; Marshall, James S.; Tellio, Candice L. M.; Boger, Charlee A. (2013).
Pre-feasibility Study for Coal Mine Methane Recovery and Utilization at Baganuur Mine,
Mongolia. (Report, U.S. Environmental Protection Agency). https://www.epa.gov/sites/
production/files/2016-03/documents/2013_coal_mongolia_baganuur_pfs.pdf Stephanie Carlisle is a lecturer in urban ecology
Reinikainen, P. (2013) Mongolia: extreme cold forces families from traditional living to urban at the University of Pennsylvania Stuart Weitzman
slums. International Federation of Red Cross and Red Crescent Societies. Retrieved from
http://www.ifrc.org/es/noticias/noticias/asia-pacific/mongolia/mongolia-extreme-cold- School of Design and an environmental researcher at
forces-families-from-traditional-living-to-urban-slums-60820/?id=60820_214677&idkee
p=True&epslanguage=en KieranTimberlake Architects.
Seman, Ana-Maria. (2017). Mongolia’s Energy Sector: Time for a rethink. (Report, CEE
Bankwatch Network). https://bankwatch.org/wp-content/uploads/2017/06/Mongolia- Nicholas Pevzner is a faculty fellow at the Kleinman
energy-sector-web.pdf
Center for Energy Policy and a full-time lecturer in the
Stryi-Hipp, Gerhard; Eggers, Jan-Bleicke; Triebel, Marc-André; Jantsch, Martin,
Behrens, Jochen. (2018). Development of an Energy Master Plan for Ulaanbaatar (study). Department of Landscape Architecture in the University
(Intermediate Report).
of Pennsylvania Stuart Weitzman School of Design.
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