ADB approves $100 million loan to develop battery energy storage system in Mongolia

• 4 years ago (2020-04-27)
• David Flin

Asia 892 Transmission 191

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The Asian Development Bank (ADB) has approved a $100 million loan to help supply renewable energy to Mongolia by installing its first large-scale advanced battery energy storage system (BESS).

James Lynch, Director General of ADB’s East Asia Department, said: “Mongolia is among the most heavily coal-dependent developing members of the ADB, and is energy sector is the largest contributor to greenhouse gas emissions, accounting for about two-thirds of the total. The project will lead to the decarbonisation of the energy system in the country with increased penetration of renewable energy.”

Mongolia is estimated to have a potential 2600GW of renewable energy capacity, which could fully meet the country’s future power demand. The Government aims to increase the share of renewable energy in total installed capacity from about 12 per cent in 2018 to 20 per cent by 2023 and 30 per cent by 2030.

The project will install 125MW of advanced BESS, making it among the largest battery storage systems globally. The BESS will be resilient to Mongolia’s extremely cold climate and equipped with a battery energy management system enabling it to be charged entirely by renewable electricity. This will then discharge clean electricity to supply peaking power in the central energy system grid. The project will also provide a regulation reserve to integrate additional renewable energy capacity in the transmission grid. The project will supply 44GWh of peaking power annually on completion.

The total cost of the project is $115 million, of which $3 million is co-financed by a grant from ADB’s High-Level Technology Fund, financed by the Government of Japan. The Mongolian Government will provide $12 million to the cost of the project, which is due for completion in September 2024.