Mongolia is a member of the Northeast Asian Energy Cooperation Initiative, promoted by South Korea since 2001, together with South Korea, North Korea, and Russia. The initiative brought notable cooperation in the energy sector that established Gobitech -Asian Super Grid project. At the forum, co-hosted by the intiative and the Government of Mongolia, the President of Mongolia delivered a speech at the forum about substantial resource of renewable energy in Mongolia's southern Gobi region. The Gobi Desert is estimated to be the third largest potential source of solar energy in the world and also experiences steady, strong wind speeds making it ideal for both technologies.
Yesterday, Energy Ministry of Mongolia signed a memorandum of understanding with KEPCO or Korea Electric Power Corporation, Korea's biggest power supplier and world's sixth-largest power plant builder, to start power plant project in Ulaanbaatar. Under the concession law of Mongolia, the company is expected to build and operate a fossil fuel power plant during a contract period, but it is still unclear when they will sign an official contract and when construction will begin.
In the news to Korean Times, the company's official said:
"This is a milestone making it possible for us to make inroads into the fast-growing power supply market in Mongolia," KEPCO said in a statement. "This project will make it possible for us to win other projects there."
Another Korean giant POSCO Energy, a unit of South Korea's top steelmaker POSCO, will kick off power business in Mongolia under joint consortium that comprised of GDF Suez of France, Sojitz of Japan and Mongolia's Newcom Group. In the news to South Korean News Agency Yonhap,
The consortium has signed a 1.5 trillion won (US$1.34 billion) contract to build and operate a combined heat and power plant in the suburbs of Ulaanbaatar after beating another consortium led by Samsung C&T and Korea Southern Power.
The consortium plans to start building the power plant with an annual generating capacity of 450 megawatts in 2015 and complete it by 2019, POSCO Energy said in a statement.
The consortium consists of POSCO Energy, GDF Suez of France, Sojitz of Japan and Mongolia's Newcom Group, with each of the first three companies holding a 30 percent stake in the project, while Newcom holds the rest, the South Korean company said.
After completing the power plant, the consortium will operate it for 25 years and then transfer it to the Mongolian government, the company said.
"This project will contribute to easing power shortage in Mongolia and help (POSCO Energy) expand presence in the Mongolian energy market in the future," POSCO Energy CEO Hwang Eun-yeon was quoted in the statement.
In the other news, POSCO also joined hand with MCS, one of Mongolia's largest private companies to build a clean energy project, named Baganuur Energy Corp., in the Baganuur district of Ulaanbaatar at the cost of US$2 billion.
POSCO said the joint venture plans to produce 100,000 tons of dimethyl ether and 450,000 tons of diesel oil per year. Won Kang-hee, POSCO's head of Mongolian unit, said,
"Given Mongolia's oil consumption is forecast to rise to 3.5 million tons by 2020 from last year's 800,000 tons, we are optimistic about our business prospect. Once the CTL plant is up and running, Mongolia will become a bridgehead for us to expand toward the world in the new energy resource area."