The foundation laying ceremony for the construction of the new thermal substation with 210 MW capacities next to the IV Thermal Power Plant (TPP) was held on June 14, 2012. 

A team of scientists and researchers from the Power Engineering School of the Mongolian University of Science and Technology (MUST) conducted the feasibility study of the substation to be built with the financing from the state budget. 

With commissioning of the new substation to operate shoulder to shoulder with the central heating network of Mongolia, will be enabled to keep up with the increasing demand on heat supply and the stations will be given with an opportunity to operate efficiently using its full capacity by following a sufficient operating mode of heat transmission at any time and any season. Also, pleasant conditions will be created for improving the turbine operations by increasing the utilization degree as with the on stream of the substation maneuvering of the heat transmission by a central heating network and the substation will be enabled too. 

An initiation to build a substation with a capacity of 210 MW with a steam driven prime mover using its own internal potential recourses was proposed by the IV Thermal Power Plant and was promoted by the Ministry of Mineral Recourses and Energy. The new substation will be a core stone in connecting the residential districts “Orbit”, “Bayangol”, “MUST” and “Moscow Complex” that are planned to be built in the area named Bayangolyn Am, on the east side of “Nairamdal” International Children’s Camp Road.

The Ministry of Mineral Recourses and Energy called for an open bid earlier this year of 2012, where “Alliance-Tech” LLC has been chosen to be the executor of the construction work of the substation that will be on stream by 2013.

As seen from the surveys done in the last few years, the central heating network was supplying heat measured in relevance with the outside temperature maximum of -27°C. Currently, the IV Thermal Power Plant generates 662 GCal/hour heat. The full capacity of the IV TPP is evaluated at 1,185 GCal/hour. In January 2012, the station dealt with its most intense load of 717 GCal/hour in its entire history since it became operational in 1987. Thus, with the new substation, the IV TPP will be enabled to receive an extra 280-310 GCal/hour heat generation load. 

Foundations of the IV Thermal Power Plant, the state owned company was first laid in 1979. The first unit was put into operation in 1983. Since 1987 it has been operating with a project capacity of 380 MW. As a result of an extension made in 1988-1990, the capacity increased by 160 MW, 2007, 2009 2 x 20 MW and now it has an installed capacity of 580 MW electricity and 1,185 GCal/heat generation. 

In Mongolia, temperatures fall as low as -40°C in midwinter. The heat and electricity generated by IV Thermal Power Plant in Ulaanbaatar is an important lifeline for the people living there. This is the largest coal fired power plant in Mongolia and it generates 70% of the electricity for Mongolia's central energy system and 65% of the heat energy used by Ulaanbaatar district heating system.

Also, the long awaited V Thermal Power Plant's construction is to start in 2013. The Government has decided to build the V TPP next to the existing III TPP and the facility will have six furnaces, five turbines, and the capacity to produce 300 MW CHP (combined heat and power) of electricity, and heat at a rate of 1,101 GCal/hour. The plan is to finish the first part of the V TPP in 2015 and start the second part and finish by 2020. The plant will have a capacity to produce 820 MW of electricity using the latest technology. Two eco friendly factories will be built near the power station to recycle the waste from the factory.

The Mongolian energy sector consists of three regional interconnected systems, the Central, Western and Eastern systems, as well as a number of isolated grids. Of these three, the Central Energy System is by far the largest representing 91% of installed electricity generating capacity and 96% of electricity supplied. The Central Energy System supplies electricity to the capital and largest urban centre, Ulaanbaatar, as well as the major industrial complexes at Erdenet, Baganuur and Darkhan. In Ulaanbaatar, Erdenet and Darkhan the CES also serves district heating networks and provides steam for industry. Electricity and heat is supplied by five combined heat and power (CHP) plants. There are also limited electricity imports from the Russian Federation.

The Energy Authority was restructured in 2001 into independent generation, transmission and distribution companies, comprising the following: 

- Five generation companies are III TPP, IV TPP and V TPP in Ulaanbaatar, Darkhan TPP and Erdenet TPP. 

- Central Regional Electricity Transmission Grid Company (CRETG)

- National Dispatching Center Company (NDC).

- Ulaanbaatar Electricity Distribution Network Company (UBEDN) 

- Darkhan-Selenge Electricity Distribution Network Company (DSEDN) 

- Erdenet-Bulgan Electricity Distribution Network Company (EBEDN)

- Baganuur and South-Eastern Regional Electricity Distribution Network Company (BSEEDN)

- Ulaanbaatar District Heating Network Company (UBDHN) 

- Darkhan District Heating Network Company (DDHN)