Mongolia’s new Prime Minister Zandanshatar Gombojav recently directed government agencies to prioritize early preparations for the upcoming winter. This includes conserving energy use and limiting exports of certain agricultural products to ensure adequate supplies during the winter season. 
But to prepare for this winter, and winters to come, Mongolia will need to not only conserve energy but boost supply. Mongolia’s government is working to improve energy security, both through the use of fossil fuels and renewable energy sources.
Last week, Zandanshatar visited thermal power plants in the Ulaanbaatar city limits and assessed production levels. In an effort to increase energy production, the prime minister encouraged the plants to expand capacity by 50 percent. 
At the same time, Mongolia is increasing investment in renewable energy and seeking partnership to support that transition. On August 20, Mongolia hosted the Fourth Mongolia-South Korea Strategic Forum, where Zandanshatar emphasized cooperation between the two countries in the introduction of modern renewable energy technology. 
While the government is prioritizing energy reform, there are several underlining issues that needs to be addressed.  
For years, Mongolia’s energy shortages have been a recurring issue for policymakers. Mass migration from the rural countryside to Ulaanbaatar has resulted in a population boom – and increased energy usage. The population shift to the capital is understandable; migrants are seeking better education and work. But the energy system is struggling to meet the demand now that Ulaanbaatar is home to one-third of the country’s population. The construction of high-rise apartment complexes and modern housing units will require additional energy sources. 
In order to supply electricity to these new communities, Ulaanbaatar’s energy capacity must be increased. But to ensure true energy security, this needs to be done with an eye toward diversifying Mongolia’s energy sources.
As of 2022, coal supplied 86 percent of the country’s electricity, with another 4 percent coming from oil. Despite government interest, renewable energy remains limited, with wind, solar, and hydropower combining supplying less than 10 percent of electricity.
Mongolia currently aims to reach 30 percent solar power capacity by 2030. To reach this goal, Mongolia will need to incentivize foreign investment – but Ulaanbaatar needs to be selective and strategic about its partnerships. 
In the first half of 2025, Mongolia became the second largest importer of Russian energy, importing 16 percent of its domestic energy consumption from Russia. By contrast, China’s imports of Russian energy have dropped. This highlights China’s growing energy self-reliance, in large part due to its success in establishing diverse renewable energy sources. While Mongolia and China have potential to cooperate in renewable energy, much of current Chinese investment remains focused in the mining sector. 
In addition to China, Mongolia is hoping to boost investment in its energy sector from “third neighbors,” especially those with technological advantages like Japan and South Korea. In this context, the U.S. decision to reduce investment in wind and solar power will impact Mongolia’s renewable energy sector. 
The Mongolian government is aiming to create an investment friendly environment. In comparison to the previous Oyun-Erdene Luvsannamsrai administration, Zandanshatar is leaning more toward liberalization of certain markets, reducing Public-Private Partnerships and abolishing 22 state-owned enterprises. But as Mongolia seeks to boost foreign investment, one of the major challenges facing the renewable energy sector specifically is that the laws have not been consistent. The initial law on renewable energy of 2007 was amended in 2008, 2009, 2011, 2012, 2019, and 2022. Having stable regulation will be crucial for attracting investment in renewable energy – and that, in turn, is key to ensuring Mongolia’s energy security. 
Guest Author
Bolor Lkhaajav
Bolor Lkhaajav is a researcher specializing in Mongolia, China, Russia, Japan, East Asia, and the Americas. She holds an M.A. in Asia-Pacific Studies from the University of San Francisco.

Published Date:2025-08-22