Mongolia’s vulnerability in energy revealed in latest outage
Last Saturday, Ulaanbaatar and surrounding five provinces experienced a massive power outage due to a malfunction at Thermal Power Station No. 4, the largest provider of electricity to the central power grid, contributing almost 70 percent. The malfunction at power station number four subsequently impaired the operations of Thermal Power Station No. 3, increasing the size of the power outage. The massive power outage served as a wake-up call to Mongolia’s vulnerability when it comes to energy.
Immediately following the power outage, chaos ensued in Ulaanbaatar. The disarray first began on the roads when every traffic lights in the city shut off. This understandably created a hectic atmosphere around the city. If the same power outage happened 20 years ago, the repercussions would be far less than what the consequences were on Saturday. Due to the fact that our modern lives have become dependent on the internet and connectivity, Ulaanbaatar as a whole essentially came to a standstill. What we had become so accustomed to having and taking granted of had become an uncertainty. Everything from banking to transport stopped in its tracks.
After two to three hours without power, most of the city had their power restored. Some areas still experienced shortages as the issue was being resolved at Thermal Power Station No. 4. In the aftermath, much was made about the irresponsibility of those working at the power stations. There were even calls for the resignation of Minister of Energy Ts.Davaasuren. But what many fail to realize is that the power outage was not a consequence of a mistake made by a worker but the repercussion of our acceptance of the inadequate, almost obsolete, power system in Mongolia.
...Mongolia’s power stations are 33 to 50 years old. International experience puts the lifetime of most power stations at 30 to 40 years...
Instead of putting blame on specific people, we must look at the problem systemically. Mistakes are bound to happen and malfunctions are frequent even at the most efficient power stations in the world. Lapses and miscalculation are a byproduct of human involvement in any job or sector. The important thing is that when those mistakes do happen, the system must be able to handle and absorb the issue without massive interruptions. Seeing as Mongolia is not particularly prone to catastrophic natural disasters, any potential damage or malfunction is not likely to be structural. But even the slightest malfunction has proven to be massive in terms of scale in Mongolia as we learned on Saturday.
Depending on one power station for 70 percent of total power output is the energy equivalent of putting all your eggs in one basket. Add on to the fact that Thermal Power Station No. 4 is 35 years old, the situation is dire. All of Mongolia’s power stations are 33 to 50 years old. International experience puts the lifetime of most power stations at 30 to 40 years. That means all of the power stations that the country depends on are either close to becoming obsolete or have already become obsolete and only remain operational due to the fact that we have no other options. The newest major power station in the country, the one in Erdenet City, is 33 years old. In short, Mongolia is barely scraping by in terms of energy on power stations nearing retirement.
All of this is made worse by the fact that the country does not have a truly independent or self-sustaining power system. In fact, the current state of the power system carries major risks and it is almost a miracle that we do not experience such outages on the regular. Most proposed power projects such as the Baganuur power station, Tavan Tolgoi power station, and Thermal Power Station No. 5 have yet to be realized. These projects have been discussed for many years, decades even, but no solution has been reached upon. Even when it seems like a solution is around the corner, politicization turns the issue sour and only serves to frustrate efforts to improve the situation. The biggest example of this is the Baganuur power station, which has begun construction but is currently in standstill due to a number of disputes and other factors.
But outside of disruptions in our everyday life, power outages carry lifethreatening risks. If an extended power outage is experienced during peak winter, lives are at stake. Thermal Power Station No. 4 not only produces 70 percent of total power in the central power grid but 60 percent of heating. In a 2014 assessment of risk, a power outage due to a malfunction at Thermal Power Station No. 4 was cited as one of the biggest risks to the population of Ulaanbaatar. Without heating from this plant, Ulaanbaatar is at risk of literally freezing.
To make matters worse, Mongolia imports a significant amount of electricity from Russia. As a result, immediately replacing supply of electricity in the event of a malfunction at a major power station is difficult. While renewable energy sources provide clean energy, it can be unreliable at times. Most solar power stations stop producing electricity in the evening, which coal power plants have to compensate for. Wind power is even more unpredictable, which means coal power plants must always be on standby to make up for the lost supply.
Power usage in 2018 increased 10 percent compared to 2017, according to the Ministry of Energy. The ministry underlined that power usage has been consistently increasing more and more each year. Winter power usage is expected to double compared to last year. In the southern region, mining activity accounted for the majority of the increase in the usage of power. Meanwhile, households and businesses have been using more and more power in Ulaanbaatar.
Currently, the ministry has said that the overall power capacity of Mongolia is 1,200 MWt. In the winter of 2017, power usage reached 1,081 MWt. Due to the surge in demand, all power stations had to work at full capacity and even then power had to be imported from Russia to survive winter.
Therefore, the only mid-term solution to our woes is the Baganuur power station. Construction has already commenced albeit with many delays and issues to build a 1.2 billion USD 700 MWt power station. The agreement states that the investors will finance, construct, and operate the plant for 25 years. After 25 years, it will be transferred to the Mongolian government free of charge. Once completed, the power station will host two 350 MWt turbines capable of maneuvering capacity down to 140 MWt. The power plant will reportedly produce electricity for 6.3 cents per kilowatt-hour, compared to 8.2 cents per kilowatt-hour paid to Russia for imports.
In addition, Baganuur has a proven resource of 812 million tons of coal that can be used to power the station. According to the energy ministry, the Baganuur power station will require around 70 million tons of coal every year. The bottom line is, the Baganuur power station is a critical project that will ensure that the country is ready to handle the power usage that increases with every passing year. If we are to realize the economic development that was promised by our leaders, we will need to power it, in this case, literally.