In Mongolia, the energy sector accounts for most greenhouse gas emissions (GHG), as the energy sector heavily depends on fossil fuels. The energy sector alone accounted for 50.08% of the total emissions in 2014. Mongolia’s relatively high energy intensity in both industrial and residential applications offers potential for energy efficiency improvements and consequently growth, given Mongolia’s steadily rising energy demand.  An average annual increase of Mongolian energy demand is about 5%.  Economic and population growth are key factors for the increased energy consumption, and industrial sectors such as mining use the most energy in the country. By 2045, the country’s population is expected to reach 5 million, about 54% higher than in 2018.

The Government of Mongolia set out ambitious targets and goals to reduce GHG emissions in the energy sector through developing renewable energy and improving energy efficiency. Mongolia’s Nationally Determined Contribution (NDC) proposes energy efficiency measures in both the energy and construction sectors as mitigation measures. The Law on Energy Conservation was approved by the Parliament in 2015. It specified that the Energy Regulatory Commission (ERC) shall exercise the powers of the Energy Conservation Council mandated to issue regulations on energy conservation – including classification, grading, standards and labelling of energy powered products. The ERC ensures implementation of the Energy Conservation law and 5-year National Energy Efficiency Action Program (2017.  The purpose of NEEAP is “to reduce GHG emissions, mitigate climate change through integrated management of conservation and efficient use of energy, and to introduce and promote the use of advance energy efficient techniques and technologies. One of the objectives of NEEAP is the revision of the legislative framework for regulating energy conservation activities and classifying and labelling energy consumption of appliances and equipment and adopt monitoring regulations is one of key priorities to achieve this.

Interests of the private sector and technical understanding of the multiple benefits of EE across the sectors is still underdeveloped due to many factors, including subsidized energy tariff. Energy efficiency has a wide range of benefits, such as energy saving, resource efficiency, reduction of air pollution and GHG emissions, increasing green jobs, improving household savings and public budget and contribution to poverty alleviation from less money spent on space heating. GGGI’s comprehensive value chain approach to green growth through helps effectively address these multi-disciplinary dimensions of energy efficiency improvement. As part of support to the Government of Mongolia, GGGI is providing technical assistance and policy advisory support to the Government in implementing the Energy Efficiency Law (2015) and the National Energy Efficiency Action Program (NEEAP, 2017).

In 2016, GGGI conducted first-in-the country audit on power energy savings of 15 entities out 135 large energy users. The audit demonstrated that the country has high potential for energy efficiency – only power saving measures can conserve power of 260 million kWh worth MNT35 billion, which is equal to annual electricity production of Erdenet Power Plant. Later, in 2018, Chinggis hotel, private enterprise – one of the 15 audited companies, took EE measures with GIZ grant (10k) and achieved 20% of improved EE. The project will continue focus on increasing awareness of the private sector in EE market potential, and mobilizing resources in EE market. One of the proposed approaches is to bundling smaller scale energy efficient projects into larger projects of specific sector to reduce high transaction costs and attract investors to the relatively small market.   Also, the project will be supporting the ERC in improving communications and dialogue at various levels on multi-benefits of the energy conservation.

Impact: Improved energy efficiency (EE) and reduced GHG emissions in energy and building sectors.

Outcome: Energy Efficiency of Mongolia’s building and energy sectors is increased through incentive mechanisms, improved energy demand management and designing of energy efficiency project concept notes.

Project Outputs completed in 2020:

i. Green Growth Policies:

Policy Assignments:

• Review of the Energy Conservation Law and Development of draft amendment

ii. Green Investments:

• Concept note on Motor and Invertor Efficiency Program
• Walkthrough Building Energy Audits conducted for 25 selected public buildings in Ulaanbaatar, Darkhan and Erdenet cities
• Desk analysis of solar PV use at energy-efficient SMEs

iii. Capacity Building and Knowledge Products:

• Sustainable Energy Posters for public awareness
• Short Video on importance of Building Energy Efficiency;
• Capacity building activities in the form of workshops.
• Case Studies Based on GGGI Activities: Development of Green Energy Systems and Energy Efficiency in Mongolia
• Findings from Situational Analysis on Green Heating Analysis at Selected Subnationals