Mongolian renewable feed-in tariff law

Mar 17 2012 Published by under Energy from the desert, Mongolia

The Mongolian feed-in tariff law adopted by the Mongolian Parliament on January 11, 2007, is published in an English translation at the website of the Mongolian National Renewable Energy Center, as well as the original Mongolian version. This is also a good occasion to mention for further reference that “renewable energy” is “Сэргээгдэх эрчим хүч”, and “law” is “хууль” in Mongolian.

I reproduce a version slightly edited by me to correct minor grammar mistakes below for further reference:

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Chapter One

General Provisions

Article 1. The purpose of this law

1.1 The purpose of this law is to regulate generation and use of energy utilizing renewable energy sources.

Article 2. Legislation on renewable energy

2.1. Legislation on renewable energy shall consist of the Energy Law, this law, and other legislative acts adopted in conformity with these laws.

2.2. If an International Treaty to which Mongolia is a party provides otherwise, the provision of the International Treaty shall prevail.

Article 3. Application of the law

3.1. This law applies to legal entities, which buy and/or sell electricity and/or heat generated by using renewable energy sources within the territory of Mongolia.

3.2. Unless otherwise stated in laws, this law shall not apply to renewable energy sources which are designed for the consumer’s use only.

Article 4. Definitions

4.1. In this law, the following terms shall have the following meanings:

4.1.1. “Renewable energy sources” means natural restorable renewable sources such as solar, wind, hydropower, geothermal, and biomass;

4.1.2. “Biomass” plant and organic waste;

4.1.3. “Renewable energy power source” means a facility, which converts renewable energy sources stated in Article 4.1.1. of the law into electricity or heat;

4.1.4. “Renewable energy” means energy produced by using a facility as stated in 4.1.3. of this law;

4.1.5. “Independent renewable energy power source” (hereafter called “independent power source”) means hybrid and/or non-hybrid renewable energy power sources not connected to the grid;

4.1.6. “Generator” means a legal entity which holds a license for generating electricity and/or heat as stipulated in provision 13.1 of the Energy Law;

4.1.7. Transmission licensee” means a legal entity, which holds a license for transmission of electricity or heat as stipulated in provision 14.1 of the Energy Law;

4.1.8. “Consumer” means a natural or legal person as stipulated in provision 3.1.13 of the Energy Law.

 

Chapter Two

Full Powers of State Authorities with Regard to Renewable Energy

Article 5. Full Powers of State Authorities with regard to renewable energy

5.1. The State Great Khural shall approve strategy documents for promoting the renewable energy sector and decide on transferring an independent renewable energy power source built using the state budgetary funds into local property.

5.2. The Cabinet shall organize implementation of laws and legislation on renewable energy promotion, and approve a list of Soums to be supplied with electricity and heat generated by an independent renewable energy power source.

5.3. The State Administrative Authority in charge of energy shall exercise the following full powers:

5.3.1. To develop and implement strategy documents for promoting a renewable energy sector,

5.3.2. To carry out feasibility studies for constructing renewable energy power sources to be financed by public investment funds,

5.3.3. To develop and have approved the renewable energy equipment safety, operation, and maintenance standards in compliance with relevant procedures, and

5.3.4 To develop a policy on renewable energy human resources, to organize implementation of this policy in collaboration with the State Central Administrative Authority in charge of education;

5.3.5. To develop and have approved regulation on implementation of the Renewable Energy Law.

5.4. The Governors of Aimags, the Capital City, Soums and Districts shall exercise the following full powers:

5.4.1. To incorporate sites for constructing independent renewable energy power sources in land development plans for Aimags and Soums,

5.4.2 To make a decision on providing land for possession and use in compliance with procedures stipulated in laws,

5.4.3. To advertise the importance of using renewable energy power sources to entities, institutions, and residents, and

5.4.4 To lease locally owned independent renewable energy power sources to an entity or an individual.

5.5. The Energy Regulatory Authority shall exercise the following full powers:

5.5.1. To approve a model agreement to be concluded between a generator and a transmitter and to monitor implementation of the agreements.

Chapter Three

License

Article 6. Construction of a Renewable Energy Power Source

6.1. A license for construction of energy facilities stipulated in Article 20 of the Energy Law shall grant the right to a legal entity to construct a renewable energy power source.

6.2. A holder of a license stated in Article 6.1. may have a license for generation.

Article 7. License for Generation of Renewable Energy

7.1. A license for generation of electricity or heat as stated in provision 13.1 of the Energy Law shall grant the right to generate electricity or heat using renewable energy.

7.2. A generator of renewable energy to be connected to the grid shall have the following rights and duties:

7.2.1. To deliver its electricity to the nearest connection point of a transmission licensee,

7.2.2. To be responsible for transmission cost up to the connection point, and

7.2.3. To implement dispatching regulations requested by the dispatching licensee.

7.3. A generator of renewable energy using an independent renewable energy power source shall have the following rights and duties:

7.3.1. To deliver its produced electricity to local networks using a calibrated meter, and

7.3.2. To be compensated for the difference between end-user tariff as approved by the regulatory boards of Aimags and the capital city and costfrom the Renewable Energy Fund.

7.4. Provision 7.3.2. of this law shall not apply to a generator of renewable energy if the power source is built using public investment funds.

7.5. A generator of renewable energy using an independent renewable energy power source shall be a holder of a license for regulated supply.

7.6. A generator of renewable energy using an independent renewable energy power source shall be a holder of a license for unregulated supply.

Article 8. Rights and Duties of a Transmission Licensee

8.1. A transmission licensee has the following rights and duties:

8.1.1. To purchase electricity sold by a generator at a price approved by the Energy Regulatory Authority specified in Article 11 of this law;

8.1.2. To connect a generator to the distribution board of a transmission network complying with technical requirements and to finance the cost of required capacity expansion.

Article 9. Obtaining a License

9.1. An interested legal entity shall submit an application for a license to the Energy Regulatory Authority or relevant regulatory boards of the Aimag or the capital city.

9.2. In addition to the documents stipulated in provision 21.2 of the Energy Law, documents meeting the following criteria shall be attached to the application specified in provision 9.1. of this law:

9.2.1. A land possession certificate permitting to locate the renewable energy power source with a certified copy,

9.2.2. A plan for disposing of or reprocessing renewable energy power sources after complete use or after their useful life has expired,

9.2.3. Studies on soil, flora, geological and hydro-geological conditions, geographical location, land surface, air pressure, weather, wind regime, and a water study in case of the construction of a hydro renewable energy power source,

9.2.4. A statement issued by an authority on the conformity of the renewable energy equipment and the facilities with international and national standards.

9.3. License terms, its extension, amendment and renewal, suspension and revocation as well as liabilities imposed on a licensee shall be regulated by the Energy Law.

Article 10. Power Purchase/Sale Agreement

10.1. A generator shall conclude a power purchase/sale agreement with a transmission licensee in compliance with a model approved by the Energy Regulatory Authority.

10.2. A power purchase/sale agreement shall specify electricity capacity and energy to be purchased/sold, tariff, location of commercial meters and other measuring devices, their types, model, accuracy, multiplier and serial number, quality indices of electricity to be supplied, payment and settlement conditions, duties of the parties and provisions on cancelling the agreement.

Chapter Four

Price and Tariff

Article 11. Renewable Energy Tariffs and Prices

11.1. The Energy Regulatory Authority shall set tariffs and prices of energy generated and supplied by renewable energy power sources to be connected to a transmission network in the following frames:

11.1.1. The price of electricity generated and supplied by wind power sources between USD 0.08 to 0.095 per kWh.

11.1.2. The price of electricity generated and supplied by a hydropower station with a capacity of up to 5,000 kW is between USD 0.045 and 0.06 per kWh.

11.1.3. The price of electricity generated and supplied by a solar power source is USD 0.15 to 0.18 per kWh.

11.2. Any price difference of electricity generated by a renewable energy power source connected to a transmission network shall be absorbed in selling prices of other generators connected to the transmission network.

11.3. Regulatory Boards of Aimags and the capital city shall set prices and tariffs of energy generated and supplied by independent renewable energy power sources in the following frames:

11.3.1. The price of electricity generated and supplied by wind power sources between USD 0.10 an 0.15 per kWh.

11.3.2. The price of electricity generated and supplied by hydro power stations with a capacity of up to 500 kW between USD 0.08 and 0.10 per kWh.

11.3.3. The price of electricity generated and supplied by hydro power stations with a capacity of 501 to 2,000 kW between USD 0.05 and 0.06 per kWh.

11.3.4. The price of electricity generated and supplied by hydro power station with a capacity of 2,001 to 5,000 kW between USD 0.045 and 0.05 per kWh.

11.3.5. The price of electricity generated and supplied by solar power sources between USD 0.2 and 0.3 per kWh.

11.4. Regulatory Boards of Aimags and the capital city shall pursue the following principles in setting prices of renewable energy generated by an independent power source:

11.4.1. Geographical location and stages of local economic and social development and infrastructure services shall be reflected;

11.4.2. Prices and tariffs shall be affordable.

11.5. The Energy Regulatory Authority shall set prices and tariffs of energy produced and supplied by geothermal, biomass, and other renewable energy power sources except those regulated in provisions 11.1. and 11.2. of this law in conformity with acceptance in and influence on society.

Article 12. Duration of application of prices and tariffs

12.1. Prices and tariffs of renewable energy shall be followed consistently for a period of not less than ten years after the date of this law coming into force.

Chapter Five

Renewable Energy Fund

Article 13. Renewable Energy Fund

13.1. Matters relating to establishing, generating, disbursing, and reporting the performance of the Renewable Energy Fund shall be regulated by the law on the Government Special Purpose Fund.

Chapter Six

Miscellaneous

Article 14. Dispute Resolution

14.1. A dispute between generation and transmission licensees as well as between a licensee and a consumer shall be resolved in compliance with the Energy Law.

Article 15. Sanctions for violation of the renewable energy law

15.1. If a violation of the law on renewable energy does not constitute a criminal offense, a judge or a state inspector on energy supervision shall impose the following penalties:

15.1.1. A fine of up to MNT 250,000 in the case of a violation of provision 8.1.2. of this law.

15.1.2. A fine of up to MNT 50,000 in the case of an official violating provision 7.3.2. of this law, denying or delaying compensation payment without justification.

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