The Asian Development Bank’s (ADB) Board of Directors has approved a $40 million loan to develop a 41 megawatt (MW) distributed renewable energy system—a first-of-its-kind in Mongolia using a variety of renewable energy technologies to supply power and heating in the remote and less-developed western regions of the country.
The project will also be cofinanced by a $14.6 million grant from the Strategic Climate Fund (SCF) under the Scaling Up Renewable Energy Program in Low-Income Countries, one of the Climate Investment Funds designed to support scaled-up deployment of renewable energy solutions to increase energy access and economic opportunities, and a $6.0 million grant from the Japan Fund for the Joint Crediting Mechanism (JFJCM), which supports the adaptation of advanced low-carbon technologies in ADB-supported projects.
“A clean, reliable, and sustainable energy sector is needed to boost economic growth in western Mongolia while addressing the need to reduce carbon and air pollutant emissions,” said ADB Principal Energy Specialist for East Asia Mr. Shigeru Yamamura. “The 41 MW renewable energy system that the project will finance will not only make the energy sector less carbon intensive, but also help the country’s efforts in meeting its commitment under the Paris climate agreement to reduce carbon emissions by 14% by 2030.”
The Upscaling Renewable Energy Sector Project will help develop a 40.5 MW distributed renewable energy system using solar photovoltaic and wind powers with advanced battery storage technology and energy management systems to supply clean and reliable electricity to geographically scattered local towns in western Mongolia, which rely on high-cost and high-carbon-intensive electricity imports from neighboring countries. Meanwhile, the project will also showcase a 500-kilowatt thermal shallow-ground heat pump system, which will supply pollutant-free space heating in public buildings. This system could be scaled up in the future and, ultimately, help mitigate local air pollution during winter.
The distributed renewable energy system financed by the project will help connect more than 258,313 people in the project areas to clean and reliable electricity and heat supply, while a total of 87,968 tons of carbon dioxide emissions annually will be avoided by 2023.
The project will also help enhance the ability of the local electricity utilities and related agencies to manage a stable electricity supply. In addition, it will help build a foundation for future private renewable energy investment in western Mongolia by supporting preparation of long-term renewable energy investment plan.
The total cost of the project is $66.22 million, with the Government of Mongolia contributing $5.62 million. It is expected to be completed by 2023.
The Government of Mongolia has been making efforts to increase renewable energy use since 2000. However, the share of renewable energy in Mongolia’s energy mix remains low at 12%. ADB’s assistance for this project will help the government meet its goals under its State Policy on Energy, 2015–2030, which aims to raise the share of renewable energy to 20% by 2023 and 30% by 2030.
IRENA and UN agree to jointly combat desertification through renewables
The International Renewable Energy Agency (IRENA) and the Secretariat of the United Nations Convention to Combat Desertification (UNCCD) are joining forces to support climate adaptation and resilience and to implement UN Sustainable Development Goals through renewables.
In a Memorandum of Understanding signed today by IRENA’s Director-General Francesco La Camera and UNCCD’s Executive Secretary Ibrahim Thiaw, the two organisations have agreed to increase renewable energy capacity building and investment on the ground, get a better understanding of the land and renewable energy nexus and undertake joint outreach activities. The agreement was signed on the sidelines of the Conference of Parties to the United Nations Convention to Combat Desertification (COP14) which currently takes place in New Delhi, India.
“Today, renewable energy is the most effective climate action tool available. But renewables can play an important role in combating desertification and land degradation too”, said IRENA’s Director-General Francesco La Camera. “By signing today’s MoU, we intend to strengthen collaboration with the UN on country and regional support activities that accelerate renewables deployment as a component of a broader strategy to expand access to energy, foster sustainable development, biodiversity and climate resilience.”
“Renewable energy is one of the solutions to restore land, as it can help conserve food or develop irrigation systems. There are a lot of areas for cooperation,” UNCCD’s Executive Secretary Ibrahim Thiaw said, adding that he expects renewable energy to be among the issues that could come up as a request from our Parties, in their efforts to halt and reverse land degradation.
Sustainable energy can stimulate land restoration and conservation efforts and improve the economic sustainability of projects undertaken. For example, renewables can electrify rural health centers, provide solutions in the agri-food sector and alleviate poverty through integrated rural community development projects. In regions like Africa and particularly the Sahel, additional bioenergy production through land restoration activities can generate further benefits by lightening the burden of energy in security while generating employment and income, thereby reducing poverty.
ADB-Supported Solar Project in Cambodia Achieves Lowest-Ever Tariff in ASEAN
The auction for 60 megawatts (MW) of solar photovoltaic (PV) capacity conducted by Electricite du Cambodge (EDC), Cambodia’s national electricity utility, has led to the lowest bid of 3.877 cents (US dollar) per kilowatt hour by Prime Road Alternative Company Limited. The project, supported by the Asian Development Bank (ADB), drew 26 bidders, including several global companies, and has achieved the lowest power purchase tariff for a solar project so far recorded in Southeast Asia.
The 60 MW project is part of a 100 MW National Solar Park and is structured as a public–private partnership. EDC is providing the land and transmission access, while the private sector will provide power generation capacity based on a long-term power purchase agreement with EDC. ADB served as the transaction advisor for the project, through the Office of Public–Private Partnerships, while also providing a sovereign loan blended with climate finance funds to finance the transmission line and substation for the solar park. The project preparation work was carried out by ADB with the support of the governments of Canada and Singapore.
“The record low prices show the power of competition. This is a new era for renewable energy development in Cambodia and the region, and particularly for solar power generation. This is good news for EDC and the people of Cambodia,” said the Director of ADB’s Office of Public–Private Partnerships Mr. Siddharta Shah. “We believe more governments in the region will adopt auction as a strategy to procure renewable energy generation capacity, and this structure and tariff will serve as a benchmark for future projects.”
“Expanding solar generation is aligned with the country’s goal of increasing access to affordable and reliable sources of electricity,” said ADB Principal Climate Change Specialist Mr. Pradeep Tharakan. “ADB, as a trusted development partner of the government, is working toward the long-term development of the energy sector in the country.”
ADB’s other ongoing support to the country’s energy sector includes financing for the expansion and strengthening of the national grid; the development of a comprehensive power development plan through 2040; and the piloting of innovative technologies, including energy storage systems.
IEA and ASEAN: “Key strategic partners” in pursuit of Southeast Asia’s energy goals
Dr Fatih Birol, the IEA’s Executive Director, took part in the 37th ASEAN Ministers of Energy Meeting (AMEM) in Bangkok on 4 September.
Dr Birol gave the opening presentation of the AMEM, discussing with Ministers the energy challenges facing ASEAN, as set out in the IEA’s forthcoming 2019 Southeast Asia Energy Outlook, and presenting the results of the IEA’s extensive work with ASEAN. As part of this, he highlighted the results of the IEA’s work in response to the ministerial mandates it received at the 2018 AMEM in Singapore, related to how the region can boost regional power trade, boost energy efficiency and speed up renewables integration.
ASEAN ministers released a Joint Ministerial Statement at the completion of the AMEM that expressed their “appreciation to the IEA Executive Director for contributing to stronger ASEAN-IEA institutional ties and advancing ASEAN energy priorities.” They confirmed that “the IEA is a key strategic partner to ASEAN in helping the region tackle its energy challenges across all fuels and all technologies”. Ministers also called for further “strengthening of the ASEAN-IEA partnership in 2019-2020, specifically through joint projects to increase regional power trade and renewables integration, enhance buildings energy efficiency, boost energy security and enhance energy data quality.”
On the margins of AMEM, Dr Birol met with ministers from various Southeast Asian countries, including three IEA Association countries (Indonesia, Thailand and Singapore) and the next AMEM chair, Viet Nam, to discuss the IEA’s engagement with the region and with the countries bilaterally.
While in Bangkok, Dr Birol also gave a special address at the ASEAN Energy Business Forum. His remarks focused on key global trends in energy markets and their implications for Southeast Asia.
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