We had the opportunity to speak with Mr. Gankhuyag, who currently serves as the Chief Infrastructure Officer at Newcom Group. During our conversation, we focused on the energy sector initiatives and programs implemented by Newcom. Notably, Mr. Gankhuyag played a crucial role in the development of the Salkhit and Tsetsii wind park projects.
-Do you remember when the Newcom Group first entered the renewable energy field?
-Since its establishment, Newcom Group has been committed to localizing new technologies that are of long term strategic importance for the country, with a specific focus on investing in and operating within the infrastructure sector, which serves as a key pillar for national development. As we entered the renewable energy sector in the early 2000s, there was a significant lack of understanding and expertise regarding renewable energy (RE) in Mongolia. Debates on global trends, energy security, global warming, and air pollution were intense. In 2001, the National Renewable Energy Laboratory of the United States created a general map of solar and wind resources of our country using satellite data, which marked a crucial turning point.
Upon learning this information, the founders of Newcom Group recognized that it is crucial for Mongolians to maintain a competitive edge and prevent lagging behind. Even if we face challenges in keeping pace with global progress, our objective should be to draw closer and stay connected to advancements happening worldwide.
This realization became a pivotal moment for us. In 2003, we made the decision to lay the foundation for the renewable energy sector, attract investments, and implement projects. Consequently, in 2004, “Clean Energy” LLC was established, marking the pioneering introduction of wind resource assessment in Mongolia. Following extensive resource assessment, Salkhit Mountain in Sergelen Soum, Tuv Province, was selected as the project site, and construction commenced.
The entire eight-year project development phase was a journey of exploration. We navigated uncharted territory in the renewable energy sector. Foreign investors and partners were unfamiliar with Mongolia, and governmental regulations and rules had not yet been established. Consequently, we had to start from scratch, building everything from the ground up. The Salkhit project was not purely driven by commercial interests; rather, it aimed to set a new trajectory for renewable energy in Mongolia.
Despite being a business organization, our initiative was driven by a long-term vision for the country’s future and growth
The project brought forth a multitude of innovative components, encompassing diverse aspects such as legal frameworks, international relations, regulations, technical and technological solutions, knowledge, and financing. It should also be highlighted that our partners, such as the International Finance Corporation of the World Bank Group and Sumitomo Corporation of Japan, provided valuable training and guidance on the implementation of renewable energy projects, including support on the development power purchase agreement, as well as the creation of financial models.
Furthermore, the EBRD and General Electric of the United States played a substantial role in the actual execution of the project and became investors. Our objective has always been to contribute to Mongolia’s energy sector and help address the formidable challenges posed by climate change. This is precisely why we undertook the project, willingly accepting risks in support of the country’s long-term development, despite being a business organization.
-Could you please share with us your goal as the pioneering private-sector provider of renewable energy?
-In Mongolia, there are three wind and six solar power plants successfully constructed, leading to a significant contribution of renewable energy in the overall energy output. Our long-term objective is to utilize Mongolia’s abundant solar and wind resources to not only meet domestic energy needs but also explore the potential for energy exportation. This plays a crucial role in fostering economic diversification and supporting the development of a multi-pillar economy.
Under our subsidiary, Gobi Green Energy, we are currently conducting comprehensive wind resource assessments and base studies in approximately 370,000 hectares of land in Tuv, Dornogovi, and Umnugobi provinces. These endeavors will provide the groundwork for our upcoming large-scale renewable energy projects. For instance, we are in the planning phase of a 24 MW solar power project in close proximity to the Salkhit wind park.
Furthermore, we have collaborated closely with esteemed partners, including Engie from France, Sojitz from Japan, and Posco Group from South Korea, on the Fifth combined heat and power plant megaproject. Despite the challenging circumstances faced by Mongolia’s energy sector, such as limited fuel sources beyond coal and Ulaanbaatar’s status as the coldest capital in the world, international banks and financial institutions, including the EBRD and ADB, expressed interest in financing the project and emphasized that it would be the very last coal power plant project globally that they were willing to finance.
Regrettably, the project faced setbacks due to the lack of making the right decisions by the government and politicians. However, given the imperative to transition away from coal and the demand for a substantial energy source, we are currently exploring the possibility of revitalizing the project utilizing different fuel sources such as gas.
Addressing the energy needs of large-scale mining and industrial projects that are located in remote areas without access to the central grid is indeed a significant challenge in a country with such a vast territory. Examples such as a mortar plant involved in road construction and a small mine with limited reserves exemplify the pressing need for energy
infrastructure in such cases.
To tackle this issue, we are actively exploring opportunities to localize a variety of hybrid solutions. Our aim is to provide off-grid, self-contained, and small-scale renewable energy solutions tailored to meet the specific requirements of these industrial and mining operations. By implementing such solutions, we can enable further expansion of industrial and mining activities while ensuring a reliable and sustainable energy supply.
It is crucial for Mongolians to maintain a competitive edge and prevent lagging behind. Even if we face challenges in keeping pace with global progress, our objective should be to draw closer and stay connected to advancements happening worldwide
-Could you provide further details about Newcom Group’s ongoing research into the potential of providing renewable energy to mining operations?
-Energy plays a crucial role as an essential industrial resource that should be developed in advance of economic growth. However, as energy consumption continues to increase and new projects and factories requiring electricity and heating are being constructed, the unfortunate reality is that Mongolia has not been able to keep up with the demand by establishing new energy sources.
This regression in the energy sector has created a situation where development is being impeded instead of progressing, calling for immediate attention and action. In light of this, Newcom Group, as a pioneering force in the private energy sector, is actively focused on implementing upcoming projects to address this pressing issue.
As the international energy transition gains momentum, various emerging technologies for energy production from diverse sources such as solar, wind, batteries, water, and hydrogen are undergoing rigorous testing and transitioning into the commercialization phase.
With this context in mind, we have joined forces with our partners to launch a project aimed at supplying renewable energy to large-scale mining operations. Our goal is to put this project into action in the near future, and if successful, it will significantly contribute to achieving our future energy export targets.