T.Tserenpurev, Director General of Energy Policy Department at the Ministry of Mineral Resources and Energy, talks to G.Iderkhangai on a power plant in the Gobi region. Why has the Government decided to build the power plant ahead of schedule?OT will need 280 mw of energy to start commercial production in 2013 and OT and our ministry had agreed that until the 600-mw power plant in Tavan Tolgoi began generation, Oyu Tolgoi would take its electricity from China. What happened was that development work on OT has been ahead of schedule and the power would be needed much earlier than expected. So we gave them permission to make arrangements to import power from China for the time. Since we shall build a plant, it makes no sense to delay it until 2016, because the earlier Mongolia produces power, the sooner the need for imports will go. That is why the Government decided to bring forward construction of the plant. Let us hope the election does not delay matters, for once our ministry selects the best location for the plant, the Government wants to start construction.
What’s wrong with building it in the Tavan Tolgoi area?The original decision was taken on the basis of recommendations made by our Ministry and the National Development and Innovation Committee. Further studies revealed that adequate water could be a problem in Tavan Tolgoi. There is underground water but this will be needed for the coal washing plant. There may still be enough for the power plant and we have not taken any firm decision to shift it from Tavan Tolgoi. Indeed, we would like to stick to the original plan but the whole water issue needs careful re-evaluation. We have called in experts from Singapore and will compare our views with what they say.
But there must be a good feasibility study before you build a power plant. What are you doing about that?
We shall have to make a feasibility study only if we choose the Tavan Tolgoi area to build the plant, as OT LLC already has one for a plant in their area. If we choose that location, we and the investors can straightaway start on the construction. However, the ministry thinks it will make more sense to have the power station in the TT deposit.
What will happen if no agreement is reached with Beijing?
I don’t think that is likely. Our ministry and the National Development and Innovation Committee of China have an agreement to meet annually to review the state of collaboration in the energy and mineral resource sector, and the present meeting in Beijing will discuss supply of power to the Gobi region and coal export.
Does this mean the Gobi region will have electricity from more than one source?
Ultimately. yes. We decided to have electricity transmission lines installed before the power plant is built at either one of the deposits. MCS International was selected to put up the lines and are working on the Ulaanbaatar-Mandalgobi-Tavan Tolgoi-Oyu Tolgoi section. We have allowed OT to import power from China, but this is a temporary measure as OT will have to be provided electricity from inside Mongolia.
The power plant will also provide electricity to the Tsagaansuvarg deposit, mines of SouthGobi Sands, Chinhua MAK, Mongolyn Alt and such. The demand will be so huge that importing electricity will be no solution. We must be self-sufficient and developing the domestic electricity sector will also create employment opportunities.
Will the Gobi region get a hydro power plant built under the concession law, as is being done at Mogoin Gol?
We have to decide which is better, BOO (build, operate, and own) or BOT (build, operate, and transfer). In the latter, ownership is transferred to the state after the investor recovers his costs and makes adequate profit, and this is what the concession law provides.
Have you thought of where you will find the engineers and technical staff for the power plant?
A 600-mw power plant sounds quite for Mongolians, but in China it will be considered just a medium-size station. It will produce mainly power and not heating, and will require around 200 staff. They can be trained in Ulaanbaatar or in the provinces. If the investor thinks experts are necessary we can provide 20-30 experts also. Things will become clear once construction proceeds. Our engineers have enough skill to build and operate a power station. Look at how they are building the18-mw Ukhaa Khudag power plant.