(2022.11.14-ний өдрийн орчуулгын хяналт)    Unofficial translation

LAW OF MONGOLIA

January 11, 2007               Ulaanbaatar city

ON RENEWABLE ENERGY

CHAPTER ONE

GENERAL PROVISIONS

Article 1.The purpose of the law

1.1. The purpose of this Law is to regulate relations concerning generation of power using renewable energy sources and its delivery.

Article 2.Legislation on Renewable energy

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

2.2.If an international treaty, to which Mongolia is party, stipulates otherwise than this Law, the provisions of the international treaty shall prevail.

Article 3.Scope of the application of the law

3.1.This Law shall apply to citizens and legal entities that generate and deliver electricity and/or power using renewable energy sources on the territories of Mongolia.

/This paragraph was amended by the Law as of June 06, 2019/

3.2.Unless otherwise stated in laws, this Law shall not regulate relations concerning use of renewable energy power sources designed for consumer's own supply.

Article 4.Definitions of terms of the law

4.1.The following terms used in this Law shall have the following meanings:

4.1.1."Renewable energy sources" mean natural restorable renewable sources such as solar, wind, hydropower, geothermal and biomass;

4.1.2."Biomass" means plant and organic waste;

4.1.3."Renewable energy power source" means a facility which converts renewable energy sources specified in Article 4.1.1 of this Law into electricity and/or power;

4.1.4."Renewable energy" means electricity and/or power energy produced by a facility stated in Article 4.1.3 of this Law;

4.1.5."Stand-alone renewable energy power source (hereinafter Stand-alone power source)" means hybrid and/or non-hybrid renewable energy power sources not connected to the Grid;

4.1.6."Producer" means a license holder for generation of electricity and power specified in Article 13.1 of the Law on Energy;

4.1.7."Transmitter" means a license holder for transmission of electricity and power specified in Article 14.1 of the Law on Energy;

4.1.8."Consumer" means a citizen or a legal entity specified in Article 3.1.19 of the Law on Energy;

/This sub-paragraph was amended by the Law as of June 6, 2019/

4.1.9."Supporting tariff" means a tariff included in energy price for the purpose of promoting renewable energy;

/This sub-paragraph was added by the Law as of June 19, 2015/

4.1.10."Project selection" means a competitive bidding process for a project to build a renewable energy power source to be connected to the energy transmission network based on the specified technical requirements and price for delivering power to the integrated network;

/This sub-paragraph was added by the Law as of June 6, 2019/

4.1.11."Project implementation guarantee" means funds deposited in the bank and a bank guarantee submitted by a project participant confirming the full implementation of the project;

/This sub-paragraph was added by the Law as of June 6, 2019/

4.1.12."National Dispatching Center" means a license holder specified in Article 10.1 of the Law on Energy.

/This paragraph was added by the Law as of June 6, 2019/

CHAPTER TWO

POWERS OF STATE AUTHORITIES

Article 5.Functions of State Authorities with regard to renewable energy

5.1.The State Great Khural shall define state policies on renewable energy and make decisions on transferring stand-alone power sources, construction of which was financed by the state budget, to local properties.

5.2.The Government shall organize implementation of legislation on renewable energy and approve a list of soums to supply with electricity and powers for consumers by stand-alone power sources.

5.3.The State Central Administrative Body in charge of energy matters shall exercise the following powers:

5.3.1.to develop and implement state policies on renewable energy;

5.3.2.to develop feasibility studies, investment cost estimates and researches for constructing renewable energy power sources to be financed by the state budget;

5.3.3.to draft standards on operation, safety and maintenance of renewable energy equipment and have them approved in compliance with relevant procedures;

/This sub-paragraph was invalidated by the Law as of December 19, 2008/

5.3.4.to organize a work to develop and implement a policy on preparing specialized human resource in a renewable energy field in collaboration with the state central administrative body in charge of education;

5.3.5.to develop and approve rules and procedures on implementing the Law on Renewable Energy and on regulation of relations concerning supply of electricity generated by consumer's renewable energy power source to the distribution grid;

/This sub-paragraph was modified by the Law as of June 19, 2015/

/This sub-paragraph was amended by the Law as of June 6, 2019/

5.3.6.to conduct study on renewable energy resources;

/This sub-paragraph was added by the Law as of August 17, 2012/

5.3.7.to develop norms, rules and standards for operation, safety, repair, maintenance and service of renewable energy equipment and facility, approve them in accordance with relevant procedures and monitor their implementation.

 /This sub-paragraph was added by the Law as of August 17, 2012/

 /This sub-paragraph was modified by the Law as of June 19, 2015/

 5.3.8.to develop and approve project selection rules and procedures;

 /This sub-paragraph was added by the Law as of June 6, 2019/

5.3.9.The following principles shall be adhered to with regard to organizing the project selection:

5.3.9.a.In accordance with the state policy on renewable energy development and sustainable operation of the integrated energy network, the location of the project, type of power source and its installed capacity, and the amount of power to be purchased per year shall be determined in advance;

5.3.9.b.to be competitive in terms of prices offered to integrated power network and renewable energy equipment and technology;

5.3.9.c.to be transparent, fair, and competitive.

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

/This paragraph was added by the Law as of December 19, 2008/

/This paragraph was invalidated by the Law as of August 17, 2012/

5.5.Governors of aimags, soums, capital city, and districts shall exercise the following powers:

/This paragraph was amended by the Law as of April 22, 2022/

5.5.1.to reflect the location of renewable energy power source in the land management plan of the aimag, soum, capital city, and district;

/This sub-paragraph was amended by the Law as of April 22, 2022/

5.5.2.to solve the issue of land possession and usage for the purpose of locating renewable energy power source in accordance with the procedures prescribed by law;

5.5.3.to promote the importance of using renewable energy to business entities, organizations and citizens;

5.5.4.to lease the stand-alone power source owned by local municipalities to citizens and legal entities.

/The numbering of this sub-paragraph was changed by the Law as of December 19, 2008/

5.6.The Energy Regulatory Commission shall exercise the following powers:

/This paragraph was amended by the Law as of June 19, 2015/

5.6.1.to review the calculation of energy prices to be produced and supplied by producers with power sources to be connected to the transmission network and approve tariffs in accordance with Article 11 of this Law;

5.6.2.to approve a template of an agreement to be concluded with the National Dispatching Center by the producer with power source to be connected to the transmission network and to monitor the implementation of the agreement.

/This sub-paragraph was amended by the Law as of June 6, 2019/

5.6.3.to set the amount of supporting tariff that is to be purchased by the consumer;

/This sub-paragraph was added by the Law as of June 19, 2015/

5.6.4.to set prices and tariffs in due time after the electricity power sale and purchase agreement expires.

/This sub-paragraph was added by the Law as of June 19, 2015/

/The numbering of this sub-paragraph was changed by the Law as of December 19, 2008/

5.6.5.to review and set prices and tariffs of the delivering electricity generated by consumers' distributed renewable energy power source to the distribution grid annually.

/This sub-paragraph was added by the Law as of June 6, 2019/

CHAPTER THREE

LICENSE

Article 6.Construction of a Renewable Energy Power Source

6.1.A legal entity to construct a renewable energy power source shall obtain a license for the construction of energy facilities specified in Article 20 of the Law on Energy;

6.2.The holder of a license specified in Article 6.1 of this Law may be a generator/producer of renewable energy.

Article 7.A License for the Generation of Renewable Energy

7.1.A legal entity generating renewable energy shall obtain a license for the generation of electricity and power specified in Article 13.1 of the Law on Energy;

7.2.A producer with power source to be connected to the Grid shall have the following rights and duties:

7.2.1.supply electricity to the transmission grid connection point closest to the renewable energy power source;

7.2.2.to be responsible for financing the cost of power transmission from the renewable energy power source till the connection point of the transmission network.

7.2.3.to comply with the requirements set by the licensee for dispatch coordination.

7.3.A producer using a stand-alone power source shall have the following rights and

duties:

7.3.1.to deliver produced electricity to the distribution network using a calibrated meter;

7.3.2.to be reimbursed by the Government for the difference in the price of electricity sold to consumers in the territory specified in the license;

 /This sub-paragraph was amended by the Law as of January 23, 2015/

7.4.The Article 11.2 of this Law shall not apply to producers with renewable energy power sources constructed by state budget investment.

/This paragraph was amended by the Law as of June 19, 2015/

7.5.A producer of renewable energy using a stand-alone power source shall be a holder of a license for regulated supply.

7.6.A producer of renewable energy using a stand-alone power source may hold a license for unregulated supply.

Article 8.National Dispatching Center's Duties

/The heading of this article was amended by the Law as of June 6, 2019/

8.1.The National Dispatching Center shall have the following duties:

/The paragraph was amended by the Law as of June 6, 2019/

8.1.1.to purchase electricity power from a producer at tariffs approved in compliance with Article 11 of this Law;

8.1.2.to carry out expansion works except connecting the producer to the transmission grid's switch gears in compliance with the technical requirements and bear the costs of the expansion.

 /This sub-paragraph was amended by the Law as of June 6, 2019/

Article 9.Obtaining license

9.1.An interested legal entity shall submit an application for a license for constructing a renewable energy power source and/or for a generation to the Energy Regulatory Commission, or to the relevant Regulatory Boards of Aimags and Capital city.

/This paragraph was amended by the Law as of June 19, 2015/

9.2.The following documents shall be attached to the application stated in Article 9.1 of this Law in addition to documents specified in Article 21.2 of the Law on Energy:

9.2.1.a copy of the land possession certificate issued for the purpose of locating the renewable energy power source (the authorized person receiving the document shall verify the copy with the original and make a note on the authenticity of the copy free of charge), or a notarized copy if the copy was submitted via post;

/This sub-paragraph was modified by the Law as of February 10, 2011/

9.2.2.a plan for reprocessing and/or disposing accumulators with completed useful life being used in a renewable energy power source;

9.2.3.studies on soil, flora, geological and hydro-geological conditions, geographical location, land surface, weather, air pressure, wind regime, and water study for cases of constructing facilities which will use hydro sources;

9.2.4.a statement issued by an competent authority with regard to compliance of equipment, technology and facilities of a renewable energy power source with national and international standards.

9.3.The subject matters related to issuance of a license, amendments and additions to and renovation of a license, suspension and termination of a license, extension of license terms, and obligations of a licensee shall be regulated by the Law on Energy.

Article 10.Electricity power sale and purchase agreement

10.1.Electricity power sale and purchase agreement between a renewable energy producer and a National Dispatch Center shall be concluded in accordance with a template of an agreement approved by the Energy Regulatory Commission.

/This paragraph was amended by the Law as of June 19, 2015/

/This paragraph was amended by the Law as of June 6, 2019/

10.2.An agreement stated in Article 10.1 of this Law shall specify power capacity to be generated and delivered, quality standards, amount, tariff, duration, project implementation guarantee, location of meters and measuring devices, their type, model, accuracy, coefficients, ID numbers, terms of electricity payment and settlement, justifications for contract termination, mutual obligations and liabilities of contract parties.

/This paragraph was amended by the Law of June 6, 2019/

10.3.The term of the agreement shall be determined in accordance with the payback period of the investment.

/This paragraph was added by the Law of June 19, 2015/

CHAPTER FOUR

PRICES AND TARIFFS

Article 11.Renewable Energy Prices and Tariffs

11.1.The Energy Regulatory Commission shall set prices and tariffs for energy produced and supplied by renewable energy sources connected to the transmission network within the following limits:

/This paragraph was amended by the Law as of June 19, 2015/

11.1.1.up to USD 0.085 for 1 kWh of electricity generated and delivered by wind power sources;

/This sub-paragraph was amended by the Law as of June 6, 2019/

11.1.2.US$ 0.045-0.06 per kWh of electricity generated and delivered by a hydropower plant with a capacity of less than 5000 kW;

11.1.3.up to USD 0.12 for 1 kWh of electricity generated and delivered by a solar power sources.

/This sub-paragraph was amended by the Law as of June 6, 2019/

11.2.The difference in the price of electricity power produced by the power sources specified in Article 11.1 of this Law shall be compensated by the supporting tariff.

/This paragraph was modified by the Law as of June 19, 2015/

11.3.The Regulatory Boards of aimags and capital city shall set tariffs of energy generated by stand-alone power sources within the following limits:

11.3.1.US$ 0.10-0.15 per kWh of electricity by a wind power source,

11.3.2.US$0.08-0.10 per kWh of electricity by a hydropower plant with a capacity of less than 500 kW;

11.3.3.US$0.05-0.06 per kWh of electricity by a hydropower plant with a capacity of 501 -2,000 kW;

11.3.4.US$0.045-0.05 per kWh of electricity by a hydropower plant with a capacity of 2,001 -5,000 kW;

11.3.5. US$ 0.2-0.3 per kWh of electricity by a solar power source.

/This paragraph was invalidated by the Law as of June 6, 2019/

11.4.The Energy Regulatory Commission, the Regulatory Boards of Aimags, and Capital city shall consider the following conditions in setting prices and tariffs of electricity power generated by consumer's distributed renewable energy power source and delivered to a distribution grid:

/This paragraph was amended by the Law as of June 19, 2015/

/This paragraph was amended by the Law as of June 6, 2019/

11.4.1.geographical location, infrastructure development, and socio-economic development in the particular region;

11.4.2.prices and tariffs should correspond to the purchasing ability of consumers.

11.5.The Energy Regulatory Commission shall set prices of energy generated and delivered by a renewable energy power sources using geothermal energy, biomass and renewable energy power sources other than specified in Article 11.1 of this Law by considering the social impacts of such prices and tariffs.

/This paragraph was amended by the Law as of June 6, 2019/

11.6.Prices and tariffs for hydropower plants to be connected to the energy system and regulating the regime shall be determined by the Energy Regulatory Commission based on their actual cost and feasibility study.

/This paragraph was added by the Law as of June 19, 2015/

11.7.The price and tariff limits specified in Article 11.1 of this Law shall be set in accordance with the payback period of the investment.

/This paragraph was added by the Law as of June 19, 2015/

/This paragraph was amended by the Law as of June 6, 2019/

11.8.The Article 11.1 of this Law shall not apply to electricity export activities.

/This paragraph was added by the Law as of June 6, 2019/

Article 12.Effective Period of Price and Tariff

12.1.Renewable energy prices and tariffs shall be effective from the date of entry into force of this Law.

/This paragraph was modified by the Law as of June 19, 2015/

CHAPTER FIVE

RENEWABLE ENERGY FUND

Article 13.Renewable Energy Fund

13.1.The Law on Government's Special Funds2 shall regulate relations concerning establishment of the Renewable Energy Fund, generation and disbursement of the fund sources and reporting.

/The above Chapter Five was invalidated by the Law as of January 23, 2015/

CHAPTER SIX

MISCELLANEOUS

Article 14.Dispute resolution

14.1.A dispute between a producer of renewable energy and a transmission licensee or between a licensee and a consumer shall be resolved in compliance with procedures stipulated in the Law on Energy.

Article 15.Liabilities for Violators of the Law

15.1.An official who has violated Article 7.3.2 of this Law shall be subject to liability specified in the Law on Civil Service.

15.2.A person or legal entity that violates this Law shall be subject to liability specified in the Criminal Code or the Law on Violations.

/This paragraph was modified by the Law as of December 4, 2015/

THE CHAIRMAN OF THE STATE GREAT KHURAL OF MONGOLIANYAMDORJ.TS