Policy Study of Hydrogen Utilisation in Mongolia

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Mongolia has long relied on coal as its primary energy source, with coal accounting for 83% of total primary energy supply in 2020. The country also exports coal to neighbouring countries such as China, and domestically, coal is primarily used to meet heat demand. At the same time, Mongolia possesses significant renewable energy potential. The vast meadows in the north and the Gobi Desert in the south offer promising sites for wind and solar photovoltaic (PV) systems. According to an ADB report (2020) assessing the feasibility of a Northeast Asia power interconnection, Mongolia could play a pivotal role in regional renewable energy development.
However, the Mongolia Energy Economics Institute (MEEI), under the Ministry of Energy, presents a different perspective. It is currently studying the potential for hydrogen production using electricity generated from renewable energy through water electrolysis. A key constraint to this approach is the lack of water resources in the southern region, where solar energy potential is highest. This would require building long-distance transmission lines to deliver electricity from the south to water-rich northern areas – an investment-intensive undertaking. Consequently, the actual availability of renewable electricity for hydrogen production may be more limited than the ADB projections suggest.
An alternative approach being considered is hydrogen production from coal via gasification, with carbon dioxide emissions managed through Carbon Capture and Storage (CCS) technology. The resulting hydrogen would primarily be used for heating and industrial purposes.
In this scenario, efficient hydrogen transport becomes essential. Methylcyclohexane (MCH) is viewed as a suitable hydrogen carrier for Mongolia, offering economic and safety advantages over other options.