Paving the Way to a Sustainable Heating Sector : A Roadmap for Ulaanbaatar Urban Heating
Ulaanbaatar's heating sector is struggling to meet accelerating demand growth. Over the past twodecades, population growth in Mongolia's capital city has increased exponentially, mainly due to rapid rural-to-urban migration, and it is exp...
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| Format: | Working Paper |
| Language: | English |
| Published: |
Washington, DC: World Bank
2019
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| Online Access: | http://documents.worldbank.org/curated/en/361331554753311754/Paving-the-Way-to-a-Sustainable-Heating-Sector-A-Roadmap-for-Ulaanbaatar-Urban-Heating http://hdl.handle.net/10986/31571 |
| Summary: | Ulaanbaatar's heating sector is
struggling to meet accelerating demand growth. Over the past
twodecades, population growth in Mongolia's capital
city has increased exponentially, mainly due to rapid
rural-to-urban migration, and it is expected to reach 1.9
million by 2035. With urbanization and economic growth, new
buildings are being built at a rapid pace, requiring
connections to the district heating (DH) network. Over the
next decade, it is projected that urban heating demand will
grow by an average annual rate of 5–6 percent. At the same
time, the DH network—once Ulaanbaatar's principal heat
supply—is deteriorating. About two-fifths of the population
(some 120,000 households) are supplied from the DH network.
However, the system is dilapidated, resulting from a lack of
investments for needed rehabilitation and upgrading in past
decades. Owing to high water losses, the quality of
replenishment water has not been adequately maintained to
prevent corrosion; thus, piping is typically quite old and
corroded. The total length of transmission pipelines is
about 130 km (dual pipe) with pipe diameters in a range of
200-1,200 mm. It is estimated that 50 percent of the
transmission pipelines are in poor technical condition,
urgently requiring replacement. The secondary (distribution)
network, with a total trench length of about 226 km, has a
variety of owners and operators and also requires major
rehabilitation and replacement. Tariffs, which are set below
cost-recovery levels, exacerbate the sector's financial
distress and contribute to its decay. Despite recent
adjustments, consumer tariffs remain lower than the
cost-recovery level, requiring state subsidies for sector
operators and cross-subsidies at various points along the
entire heat supply chain. Tariff-related cost allocations
between electricity and heat customers lead to indirect
subsidies for residential DH customers. The average DH price
of 0.8 US Dollars per GJ (2014 figure) is approximately
10–20 times lower than in such Eastern European cities as
Vilnius or Warsaw, and even lower than in other European
cities. The sector's 2013 Master Plan estimated that a
130 percent increase in the heat tariff would be needed to
achieve full cost recovery. The situation has changed little
in recent years. |
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