New ADB-backed battery energy storage system in Mongolia will put on track the decarbonization of the energy sector and help unlock renewable energy potential to bring back blue skies to Mongolia’s urban areas.
A planned battery energy storage system for Mongolia will be the largest of its type in the world and provide a blueprint for other developing countries to follow as they decarbonize their power systems. Mongolia’s coal-dependent energy sector accounts for about two thirds of Mongolia’s greenhouse gas emissions.
Mongolia’s coal-dependent energy sector accounts for about two thirds of Mongolia’s greenhouse gas emissions. World’s largest battery energy storage system planned in Mongolia with ADB backing will provide a blueprint for other developing countries to decarbonize power systems.
Smoke from coal-fired generators belches amid the winter landscape of the city of Bayankhongor in Mongolia. Photo: Graham Dwyer/ ADB A planned battery energy storage system for Mongolia will be the largest of its type in the world and provide a blueprint for other developing countries to follow as they decarbonize their power systems.
The country’s first utility-scale advanced BESS with a capacity of 125 MW/160 MWh is being financed by an ADB loan of $100 million and grant of $3 million from the High-Level Technology Fund approved in April 2020. "One of the challenges [in Mongolia] is the variability of renewable energy generation and the lack of regulation reserve.
Mongolia is in the midst of a demographic change as the rapidly growing population increasingly gravitates toward the cities, creating a need for energy that cannot keep pace with demands. On the periphery of urban areas, the informal ger areas lack public services such as district heating.
The global residential solar storage and inverter market is experiencing rapid expansion, with demand increasing by over 300% in the past three years. Home energy storage solutions now account for approximately 35% of all new residential solar installations worldwide. North America leads with 38% market share, driven by homeowner energy independence goals and federal tax credits that reduce total system costs by 26-30%. Europe follows with 32% market share, where standardized home storage designs have cut installation timelines by 55% compared to custom solutions. Asia-Pacific represents the fastest-growing region at 45% CAGR, with manufacturing innovations reducing system prices by 18% annually. Emerging markets are adopting residential storage for backup power and energy cost reduction, with typical payback periods of 4-7 years. Modern home installations now feature integrated systems with 10-30kWh capacity at costs below $700/kWh for complete residential energy solutions.
Technological advancements are dramatically improving home solar storage and inverter performance while reducing costs. Next-generation battery management systems maintain optimal performance with 40% less energy loss, extending battery lifespan to 15+ years. Standardized plug-and-play designs have reduced installation costs from $1,200/kW to $650/kW since 2022. Smart integration features now allow home systems to operate as virtual power plants, increasing homeowner savings by 35% through time-of-use optimization and grid services. Safety innovations including multi-stage protection and thermal management systems have reduced insurance premiums by 25% for solar storage installations. New modular designs enable capacity expansion through simple battery additions at just $600/kWh for incremental storage. These innovations have improved ROI significantly, with residential projects typically achieving payback in 5-8 years depending on local electricity rates and incentive programs. Recent pricing trends show standard home systems (5-10kWh) starting at $8,000 and premium systems (15-20kWh) from $12,000, with financing options available for homeowners.