“Mongolia the Saudi Arabia of Renewable” Revisited

I recall that adviser to the Mongolian President Tsagaan had this to say in March of this year in Tokyo:

“The western mining companies like to call Mongolia the ‘Saudi Arabia of coal’, and it is true, because Mongolia has proven reserves of 160 billion tons of coal. But I would prefer to call Mongolia the ‘Saudi Arabia of renewable energy’”.

I have two new comments based on recent developments.

For one, Mongolia has seen revenue drop this year, since most of it comes from coal, and the price as well as the volume of exports has gone down.

In contrast, once large scale renewable electricity infrastructure is built in the Gobi desert, I would expect the demand alone from China to be very stable for a couple of decades.

And the other point is that while Saudi Arabia has been known mostly for its oil reserves, they now want to become the “Saudi Arabia of renewable” themselves.

In a race between Mongolia and Saudi Arabia to get large scale energy from the desert going, Mongolia will lose. Mongolians have much less money, much less experience in international energy trade, and a much less stable political situation.

Fortunately for Mongolia, Saudi Arabia is far enough away to be not a direct competitor for delivering electricity to the Chinese market.

Published by kflenz

Professor at Aoyama Gakuin University, Tokyo. Author of Lenz Blog (since 2003, lenzblog.com).

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