[Mongolian Economy] SALKHIT WIND POWER PLANT

BY E. ZORIGT

The fresh fragrance of grass and trees and the abundance of sunshine during the day tells us that mid-summer is already approaching. Salkhit Mountain, what was once a remote spot located at Sergelen, Tuv, on June 20 had a bustling crowd of people and a line of trucks parked for the opening ceremony of Clean Energy’s Salkhit wind farm.


The ceremony was the first time a new power generation plant had opened in 30 years. The facility includes 31 enormous wind turbines on one of the slopes of the mountain and at its peak.


For some time there was a lack of wind to move the turbines during the opening ceremony, but a gush of wind arrived just as the ribbon was being cut. The launch of operations at Salkhit was a historic event that may be the beginnings of a tremendous
new industry for Mongolia.


The idea for a wind farm was that of Ts. Boldbaatar, chairman of Newcom Group, when he saw a 2004 map charting Mongolia’s wind patterns. At that time, as Mongolians had very little understanding of the potential for wind energy, creating a wind turbine park was thought to be impossible.
“Mongolia is rich in coal resources, but people ask why can’t we use all of it,” said R. Arvintsogt, a member of Newcom’s board of directors. “The similarity goes with the wind resource, which is a renewable energy. Because there is enough wind resources, we thought why can’t we.” The preparatory work for this project began in 2011 while the main construction started last year. This project will prove if such an endeavour can be profitable. And if successful it can kick start more of its kind. Newcom estimates that it can recover its investment within 15 years.


In Figures


The Salkhit wind farm extends over 14,000 hectares to produce 50 megawatts and will supply 100,000 households with energy.


“Previously, our experience was in solar energy. But this time, we have carried out a study on wind energy of our own making and investment”, said Energy Minister Mishigiin Sonompil.


These wind turbines stand 120 metres high and weigh about 125 tonnes each. Each blade is 40 metres long and 6.2 tonnes.


Installation of such enormous equipment required some 240 cubic metres of cement, which is the size of the foundation to a nine-story building. It has two 110 kilowatt transmission wires of 28 kilometres in length. There are 31 wind turbines in total, each able to produce1.6 megawatts of energy.


Also built was a 33-kilometre road linking each of the turbines. Australia’s Leighton Asia was the main service provider of construction work, while some 18 local companies also participated in its construction. In total, 500 workers worked for its construction, of which 94 percent were Mongolians.


Six-hundred trucks were used for the transport of equipment and spare parts from the Chinese border 1,300 kilometres away by road. The trip takes five days with an average speed of 10 to 15 kilometres per hour. The slow speed was to ensure the safe transport of the load. A normal drive typically only lasts two to three days.

 


 

“MONGOLIAN ECONOMY” MAGAZINE QUESTIONS
 -The first wind farm has just started to operate in Mongolia. Could you please share your opinion on this?


We have been working on this project for almost three years with many different partners such as EBRD, FMO and some construction companies. There has been great coop¬eration across all those teams.


We use this product in many countries. This is our 1.6 MW turbine which is very efficient and perfect for these types of wind speeds. For the Mongolian market, this is a great product.

The hardest part was just the logistics. Mongolia has a very harsh winter. These are large towers and blades and they had to be moved, so you can imagine the logistical challenge of bringing the product, getting it installed, and connecting it to the grid. It was a big challenge for the team to work through, but they managed to do it which was great.


I think that servicing is an important part so we’re going to continue to provide service to the wind farm so we can make sure that it is efficient so it can run the 5 percent of the energy it is expected to deliver.


We look at projects all over the place, to the extent that there are other projects in Mongolia. We will look at them.
 

Shane Fitzsimons, Chief Financial Officer of Global Growth and Operations division, General Electrics

 



Our biggest achievement is the development and the ap¬proval of standards to be followed at the Salkhit wind farm. By building this farm, it will produce energy without air pollution, burning coal or even water consumption. This green-energy farm has been established by Mongolians. This is a big infra¬structural work that required investment of more than USD 120 million in total. Mongolia’s wind resources have also been determined. The largest wind resource is at the Gobi desert. And the next wind farm is planned to be built in Tsogttsetsii soum. Mongolia has the capacity to produce four trillion kilowatt hours per year by us¬ing its wind resources. But in reality, it could produce 2.8 trillion kilowatt hours per year by building wind farms. It means that we have enormous potential. Salkhit wind farm is just the beginning.
 

Ts. Sukhbaatar, Chief Operating Officer at Clean Energy

 



This is the first wind mill project in Mongolia with private money. It is a huge amount of private money for public in¬frastructure. That is something to be proud of for all of the parties involved.


I think it is very important that we look at the emissions and greenhouse gases being avoided. Mongolia is heavily dependent on fossil fuels and coal. If you have an alterna¬tive to wind power, it makes sense because you avoid the rising prices of fossil fuels, but it is also very good for the environment and the energy sector. In the long-term, I think that this world is going into an unavoidable path towards more and more renewable en¬ergy because we can’t afford our emissions worldwide at the current state. Renewable energy is the future.


We provide development funding in the early stages. Sometimes we can definitely take an initiative role, but we always need people with a technical spin. We are bankers. We really appreciate Mongolia as a country and we are al¬ways looking for new business, particularly in renewable energies.
 

Aart Mulder, Manager of Energy, Entrepreneurial Development Bank

 




In 2007 the Law on Renewable Energy was approved. The law made a number of things clear for promoting re¬newable energy, including investment environment and price. At the same time, Newcom Group was entitled to build a wind farm.


But today I feel happy for the opening ceremony of this huge infrastructural work in the renewable energy sector. The Energy Regulatory Commission approved samples of the energy sales agreement and its price. As the Salkhit wind farm was the first one, there have been a number of challenges in making its sales agreement. As we had a strong team, the team managed to deal with the difficulties. Currently, one kilowatt of energy produced by wind turbines is planned to be sold at the price of USD 0.095 and this is not that cheap price.


As its energy production is environmentally friendly and this is a large investment in environment, it cannot be said that this is a high price.
 

N. Myagmarsuren, Coordinator at Energy Regulatory Commission

 



It’s just the first step. With wind turbines, we are producing clean energy and we all know that the pollution is very bad in Ulaanbaatar. With the wind turbines, we can help reduce this pollution.


A real big problem was the transportation in order to get the main components here. We are talking about 20 to 50 tonnes. We brought them from China, through the border, to here. It was 400 kilometres of no railroad so we had to fight with a lot of damages and move slowly. The second problem was the conditions in the winter time. It was very cold and we had to stop for at least two months. But we had a very good direction team. We had a mix of teams: Mongolians, Irish guys, and guys from the UK and Australia. They grow up together and work as a team which is really important. We had to work during the night time. For three weeks we had to wake up at two in the morning to start working so you need to have a good team. We had that so I am very proud to be a part of that.

We planned to have finished last year, but as I said, it is the first wind project. The first project takes the longest time. For example, for the first turbine we needed four or five erection days and for the last one we needed fourteen hours. Almost every tower had to be fixed. For the first four towers, we had to bring in factory workers because there was serious damage. We had measurements in place and quality control, so we had some minor damage, mostly loosened screws. You will also see that in upcoming projects. There are mea-surements that we have that we can follow for other projects.


Making them turn for the first time is okay, but we have to maintain it. We have maintenance twice a year so we have to stop them just two times each year. It’s like a car where you have to change oil and check filters. We have to do some tests to guarantee that the turbines will last. We are all looking forward to the next winter to see how the turbines will perform in the very cold conditions. There we will have a lot to learn as well. It’s going to be interesting.
 

Joeran Buethe, Site Operation Manager, Clean Energy

 



This is the first time that a private company has successfully attracted foreign direct investment into Mongolia’s energy sec¬tor. There are plenty of things that we have learned from what we have done.


Most importantly, our company is very proud that we built the Sakhit wind farm, meeting international standard. We should mention the active participation of a number of Mongolian com¬panies. Mongolians learned many things during the construction of the Salkhit wind farm. The company considers that this farm has launched Mongolia’s clean energy future.
 

Ts. Gansukh, Shift Engineer, Salkhit Wind Power Station