A proposal by the EU Commission wants to spend 15 billion Euro per year in aid to developing countries to help with the cost of the necessary measures to combat climate change, estimated at 100 billion Euro yearly.
This would come in handy for any plans of large-scale renewable energy projects in the Mongolian Gobi desert.
China is going ahead with big renewable energy projects at Dunhuang, at the Chinese side of the Gobi desert. They are building a 10 gigawatt wind farm there, over 12 times the size of the world’s largest today, and are planning for a 10 Megawatt photovoltaic plant.
Montsame has a short report on a decision of the Japanese International Cooperation Agency (JICA) to start a survey on building a solar power supply for the “Chingis Khaan” international airport.
to start in 2010. The Federal Government has passed an Auctioning Ordinance regulating details for the process, which is based simply on using existing European emission trading exchange.
(First posted June 4th 2006, republished.)
This post starts a new category with the title “Energy from the Desert”. There I will discuss the 2004 book with that title edited by Kosuke Kurokawa. It is the result of research in the framework of the International Energy Agency, more specifically in the Agency’s Photovoltaic Power Systems Programme. The book is $125 at Amazon, but there is a summary PDF-file available.
I got the idea of studying the possibility of large-scale energy and hydrogen production in the Gobi desert from that book. Therefore, I want to devote some space to discussing it in detail on this blog. To kick the discussion off with this post, I want to discuss one of the recommendations of the summary (on page 2). The authors recommend that
desert-bound countries reevaluate their deserts not as potential problem areas but as vast and profitable (future) resources for sustainable energy production, recognizing the positive influence on local economic growth, regional anti-desertification and global arming.
That is because, as they state on page 9,
The Gobi desert area between the western part of China and Mongolia can generate as much electricity as the present world primary energy supply.
As I have discussed in this other post, there is about $100 billion of gold and copper estimated to be waiting at the Oyu Tolgoi site alone. I don’t know what the dollar value of the world primary energy supply is. But it sure should be more than $100 billion. In other words, once you understand the potential for large scale energy generation from the desert, deserts become valuable assets. However, just as with the mining projects, that is only true if you are able to actually realize the potential of that powerful idea.
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Update:
The second edition of that book was published in 2007.
(First posted May 16th, 2006, republished with old links stripped)
Montsame reports that Mongolia is set to export about 10 tons of gold this year, marking 3.6 tons for the first four months. In comparison, the Ivanhoe Mines Oyu Tolgoi project is expected to reach peak production of 900.000 ounces of gold in six years. At 31.1 gram per ounce that is 27990000 grams or about 28 tons of gold per year. At $681 per ounce (todays price according to kitco.com) that is $612.9 million per year. That is almost equivalent to the amount of all Mongolian exports in 2004 ($869 million). Multiply by at least 35 years expected production time and we are talking about over $20 billion in gold.
However, the value of expected copper production of over 1.6 billion pounds per year is much higher still. One pound of copper is quoted at about $3.60. That means that 1.6 billion pounds of the stuff amount to over $5 billion per year. If that site gets to operate according to plan, Mongolia’s exports would grow more than fivefold. Again, multiply the $5 billion per year by 35 years and the worth of the copper alone clearly tops $100 billion. There is a lot of money at stake here.
Unfortunately, there are still some difficult hurdles to clear. The Mongolian Parliament recently enacted new tax measures that would bring some dramatic changes to the conditions for the mining project to operate under. See for example this Ivanhoe press release at NewEurasia.
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Update to this post today:
Gold prices are at $966 per ounce today, so the above estimates would need to be adjusted by adding 41 percent. In contrast, copper prices are at $2.70 per pound, or 75 percent of the 2006 price.
That is only to be expected. Market prices of gold and copper change over time. While this might lead to downsizing the total estimate by a couple of billion dollars, there is still enough left to make for some very high stakes in the negotiations.
Ivanhoe states in a fact sheet that
“At the end of March 2007, drilling by IMMI had established that the Oyu Tolgoi deposits contained 987 tonnes of gold (31.6 million ounces) and more than 32 million tonnes of copper (71 billion pounds) in resources in the Measured-and-Indicated, plus Inferred, categories (based on a 0.60% copper equivalent cut-off), as defined by regulations set under Canadian securities law.”
31.7 million ounces of gold would be over $30 billion, 71 billion pounds of copper would be over $190 billion at today’s prices.
There is still no final deal on the Oyu Tolgoi mines. The foreign investors are still negotiating with the Mongolian government. The Mongolian Parliament recently voted to authorize the government to conclude an agreement.
The Blog I had under this title in a different directory of this site has ceased working for reasons I am to busy to figure out. Therefore, I start over now.
I was able to download a copy of my database, and with some effort I can read most of the old posts. I will reproduce some of them here.
There also have been a couple of pages mirrored at Archive.org: