Background: Roughly 90% of total thermal energy is supplied by coal-fired power plants in Mongolia, whereas most of the total distributed thermal energy is used for space heating of commercial and residential buildings. Mongolia’s energy demand is projected to exceed the currently installed capacity in 2023. Mongolia’s energy demand is projected to exceed the currently installed capacity in 2023 and demand is growing at 6% p.a. With rapid urbanization access to heat and hot water is currently constrained this is a particular challenge for the 21 provinces of the country. With no additional capacity and the majority of exisitng infrastructure having reached the end of its lifespan the energy sector cannot sustain the reliability of its operations.
Approach to Transformational Change: “Mongolia – Scaling-up clean Heating Investments to Facilitate energy Transformation (SHIFT)” proposes a catalytic effect through two main channels: 1) demonstrating the viability of Solar District Heating (SDH) in the Mongolian context; and, 2) supporting the approval of a new clean heating policy and investment plan for Mongolia. The NAMA Support Project (NSP) will trigger a shift in the heating sector in Mongolia by demonstrating the viability of the technology, approving a clean heating policy roadmap, and enabling a shift in financial flows from coal to renewable energy heating technologies. Once the key barriers are removed, clean heating technologies can be scaled up and a broader shift in the energy production towards renewable energy sources sector can be accelerated.
The financial component (FC) of the NSP consists of (1) results-based grants for SDH facilities (2) a guarantee scheme. The NSP intends to leverage EUR 5 m. and EUR 15 m. of public and private co-funding respectively.
Mitigation potential: The NSP is expected to directly result in at least 437,093 tCO2e avoided during the NSP and 2,4 million tCO2e avoided over technology lifetime.