Current Status of Mongolian Energy Policy and Legislation Mongolian Energy Policy and Legislation

Abstract

Mongolian energy transition is taking place within a complex interaction of policy frameworks, legal reforms, pricing mechanisms, and geopolitical dependencies. Although long-term strategic documents such as , renewable energy expansion, and market-oriented reforms, their implementation remains constrained by institutional fragmentation, political cycles, and heavy reliance on electricity imports during peak demand periods. This study analyzes the current status of Mongolian energy policy and legislation, focusing on the alignment between policy objectives, legal instruments, and market structures. Particular attention is given to energy pricing policy, which represents the most politically sensitive component of the transition, as well as to the role of neighboring countries in ensuring short-term system stability. Using policy analysis and electricity market theory, the study highlights the limitations of a fully liberalized market model under current conditions and argues that a transitional hybrid market structure is more suitable. The findings suggest that prioritizing the introduction of balancing and ancillary services markets, followed by a phased implementation of day-ahead market mechanisms, could improve system reliability, mitigate renewable energy variability, and support a gradual shift toward cost-reflective pricing while maintaining social affordability.