Mongolia’s domestic consumption of coal has been increasing by about 200,000 tonnes annually since 2005, reaching nearly six million tonnes last year. Domestically, the majority of the coal is used as fuel for the country’s thermal power plants. Mongolia’s three energy systems, consisting of six power plants, consume nearly five million tonnes of coal annually, representing more than 80 per cent of the country’s total coal consumption.9
Coal is also used as a direct heating fuel for homes in Mongolia. Administratively, Mongolia is divided into 21 aimags10 and every aimag is divided into a number of soums11. Since only 200 out of Mongolia’s 331 soums and settlements are connected to a power system12, a large amount of households are dependant on coal for heating and cooking. Even though more than one million of the total population of 2.6 million lives in Ulaanbaatar13 , 21 per cent of the capital’s population resides in the ger districts surrounding the city14. Consequently, more than
450 thousand tonnes of coal was used for heating of communal and private houses and gers in
Figure 2: Development of coal consumption
Apart from the six million tonnes of coal consumed domestically, Mongolia exports about three million tonnes of coal annually, mainly to China16. China’s coal consumption has been growing progressively, resulting in increasing imports 17 . According to forecasts by the International Energy Agency (IEA), in the period from 2004 to 2030 China and India account for 72 per cent of the projected increase in world coal consumption18. However, due to the global financial crisis the demand for coal by the industry and the energy sector in China has been decreasing, causing rapidly falling prices for coal in China. The decreasing demand is predicted to continue into 2009, leading to a possible surplus of domestic Chinese coal.
Mongolia’s future domestic coal consumption is largely determined by new energy and coal consuming projects coming on stream, such as the construction of additional coal-fired power plants and implementation of technologies for coal liquefaction (CTL) and coal gasification (CTG). If consumption continues at the same speed as in the past, a growth by about eight per cent can be expected by 2015. However, implementation of new projects will create a different scenario for Mongolia’s future domestic coal consumption.
According to the development plans for Mongolia, several new coal consuming projects are planned to be constructed by 2040 (for more information see Chapter V. Regulation and Policy). The plans allow for a fifth power plant to be up and running in Ulaanbaatar around
2010, using CTG technology to generate electricity. The plant alone is predicted to consume