1.1. Background
During the winter, Ulaanbaatar (UB), Mongolia, consistently ranks among the cities with the world’s most polluted air [
1]. Despite modest improvements in air quality lately, continual inward migration to UB and a subsequent rise in energy use could lead to a resurgence in dangerous pollution levels [
2]. UB’s air pollution problems are partially attributable to a heavy reliance on coal, wood, and dangerous non-conventional fuels (including household waste) for heat in UB’s low-income Ger districts (a sub-district of traditional residence houses and private houses) [
3]. The Ger residents use various traditional stoves and low-efficiency cast iron HOBs. For example, many HOBs retain heat for only three hours after firing and emit up to 20 times the pollution levels of an efficient stove [
4]. Furthermore, UB receives power from five coal-fired power plants with a low thermal efficiency of 35% that can lead to a net increase in both air pollution and CO
2 emissions. Although most of the houses in Ger districts are connected to the grid, transmission restrictions cause load shedding during peak load periods and temporary blackouts to cope with excess demand. This is especially true during the winter, where the additional load from space heating (4 kW per each household) adds a significant burden to the grid.
Figure 1 shows monthly electricity consumption in UB.
To achieve both climate mitigation and energy security goals in UB, utilizing more renewable energy sources, especially solar energy, is a pressing need. While coal has dominated Mongolia’s current economy and energy generation, the use of solar energy is rising. This increase is promising because Mongolia has 300 sunny days per year and annual solar radiation of 1700 kW/m
2 (See
Figure 2). Some suggest that UB could generate 150 GW of solar electricity, approximately 15% of the total electricity demand in this city from solar.
Recent policy statements suggest that Mongolia is willing to depend more heavily on solar power. Mongolia joined the Paris Agreement in 2016 and pledged to increase the country’s energy from renewable sources to 20 percent by 2020 and 30 percent by 2030 [
7]. To achieve this goal, the government has approved construction licenses for 247 MW of solar energy. In addition, in 2017, the Green Climate Fund (GCF) approved a project to develop a 10 MW solar photovoltaic (PV) farm in the Sumber Soum district of Mongolia [
8]. The project is expected to create 15,395 megawatt-hours (MWh) of power per year, reducing 12,270 tons of tCO
2eq in yearly greenhouse gas (GHG) emissions, while delivering environmental and social co-benefits. The solar farm has increased private sector involvement, making future renewable energy projects easier to finance with domestic private resources [
9]. In addition, Sermsang Power Corporation Public Company Limited (SSP) and Tenuun Gerel Construction LLC (TGC) signed an
$18.7 million loan with the Asian Development Bank (ADB) and Leading Asia’s Private Infrastructure Fund (LEAP) to develop and operate a solar power plant (15 MW), feeding electricity to Mongolia’s central grid system. The solar power plant, located in Tuv aimag (province) Sergelen soum in the Khushig valley (county), is supposed to provide 22.3 gigawatt-hours annually in Mongolia and lower CO
2 emissions by 26,400 tons per year. This will help the government in increasing renewable energy’s proportion of total installed capacity from 12% in 2017 to 20% by 2023 and 30% by 2030 [
10].
Although Mongolia has pledged to rely more heavily on renewable sources, high-interest rates and unreasonably short tenures have limited renewable energy investment. In addition, though there have been some strides in policy, stronger regulatory signals could attract more investment. However, for many investors and policymakers, the costs of renewable energy are not as great as the benefits. This perceived lack of benefits is partially attributable to the fact that the climate benefits of renewables are long-term, global, and uncertain. They would, therefore, not necessarily accrue to Mongolia. It is also partially attributable to the fact that the health and local economic benefits of renewable energy investment are not explicitly considered in investment and policy decisions. A critical step in accounting for these additional benefits or “co-benefits” is quantifying their magnitude.
The interest in quantifying co-benefits started when the term itself was coined in the early-1990s [
11]. At that point, co-benefits were often viewed as the additional development benefits of climate actions. This framing was used to convince policymakers in
developed countries to invest in GHG mitigation since it could improve air quality, health, and address other development needs [
12,
13]. Co-benefits have since found their way into discussion in
developing countries—with more emphasis on achieving sustainable development that could also have co-benefits for climate change [
14,
15,
16]. As views on co-benefits evolved, some have suggested the term refers to all
“benefits of policies that are implemented for various reasons at the same time, including climate change mitigation, acknowledging that most policies designed to address GHG mitigation also have other, often at least equally important, rationales” [
17].
The consideration of a full range of climate and sustainable development co-benefits continued to gain momentum with the approval of the Agenda 2030 for Sustainable Development (and its 17 Sustainable Development Goals (SDGs)) and the Paris Agreement in 2015 [
18]. Both agreements underlined the importance of the integration between sustainable development and climate change. Co-benefits also gained support as high-level reports and well-cited articles demonstrated the usefulness of accounting for co-benefits in a wider range of mix of policies and actions [
19,
20,
21,
22,
23]. Based on these advances, development banks such as the ADB have begun to assess a suite of co-benefits in carbon finance funds, including new jobs, improved education facilities for children, gender equity, improved energy efficiency, and access to health services. Meanwhile, the GCF (2022) [
24] has underlined that recognizing co-benefits is important to ensure that funded activities adhere to sustainable development criteria.
Cutting across different views and application of co-benefits is an emphasis on estimation and quantification. The steady interest in quantification reflects the long-held belief that what gets measured gets counted in investment and policy decisions. Many studies have since estimated the climate and other co-benefits of solar energy in different regions and contexts [
25,
26]. For example, Lama et al. estimated the job opportunities, the contribution of local entities, and the transfer of knowledge and skills with financial support from Chinese enterprises for solar energy in Sub-Saharan Africa [
27]. García-Valladares and Ituna-Yudonago assessed the carbon footprint and economic co-benefits from solar energy for water heating systems in residential buildings in Mexico, Costa Rica, and the Democratic Republic of the Congo (DRC) [
28]. Ren et al. looked at using the hybrid PV-battery system in residential units, showing that the households would effectively contribute to the self-consumption of on-site electricity generation or improve grid load control by providing additional grid electrical peak demand while improving the air quality, energy security, and load reduction [
29]. In yet another study, Kim et al. revealed a significant reduction in energy consumption from using a hybrid renewable energy system (HRES) over existing gas-fired boilers or centralized heat pumps for a net-zero community in Jincheon, South Korea [
30].
In recent years, the tools and types of co-benefits assessed in relevant research have grown increasingly diverse. For example, recent work has looked at the human well-being co-benefits from the implementation of the solar electrification projects for three electrification projects (grid extension, centralized hybrid, and solar home systems) in four remote communities in Malaysia, Cambodia, and Myanmar [
31]. Taking a slightly different approach to co-benefits analysis, Lo et al. used Heilmann’s experimentation under a top-down hierarchy framework to identify synergies between solar energy and sustainable development, concluding that a qualitative assessment of the characteristics of co-benefits of solar energy policies could help local governments leverage solar energy for sustainable development in China [
32]. In a study that further demonstrates the expanding scope of inquiry, Nutu et al. quantified the co-benefits of solar mini-grids to rural Ghanaian islands, including mediated impacts of heatwaves through the use of fans, reduced harmful gases from excessive burning of wood, and reduced social vices at night found that full recognition of an array of co-benefits of solar mini-grids offer more to sub-Saharan African rural populations than meeting development objectives alone [
33].
1.2. Research Gaps and Originality Highlights
From the above discussion, it is clear that recognizing and quantifying co-benefits can spark interest in deploying solar energy projects. It is, nonetheless, less apparent how easily the tools and techniques used to quantify these benefits could be incorporated into decision-making processes and thereby achieve action on the ground. Part of the reason that research on co-benefits might have limited impacts on policy and action is that quantifying a full range of benefits is challenging. Those challenges, in turn, have led to the following gaps.
Existing co-benefits studies on a shift to a low-emission path through renewable energy mainly focus on costs. While costs are important, a failure to recognize benefits, particularly benefits that outweigh the costs (e.g., public health), can lead to flawed policy and project recommendations. Solar energy, especially in coal-dependent countries such as Mongolia, can bring multiple benefits such as improving local air quality, enhancing the local economy, and boosting energy security that can alter the decision-making calculus.
Although previous studies have highlighted some kinds of co-benefits, much of the research relies on tools and techniques that can be a black box for decision-makers. This is partially due to the inherent complexity of the modelling techniques. It is, however, also a function of a failure to develop tools that can be grasped with relative ease by decision-makers and their staff.
To fill the above research gaps, this study aims to place the emphasis on benefit estimation and open up the black box in ways that can shed light on how multiple co-benefits (such as improved air quality, health, and local economy) can be estimated. Especially, to fill the later gap, the study seeks to make co-benefits methods accessible with an easy-to-use spreadsheet-based simulation tool. The tool is employed to estimate the environmental, health, and economic co-benefits of using solar electricity and heat generation in the Ger area in UB, Mongolia. The assessment is based on calculating avoided emissions from a suggested project by the Financial UNEP Initiative to the local government, covering 100 MW solar electricity, including rooftop PV and community grids, and replacing heating load demand from existing HOBs for 20,000 households [
5]. It is assumed that the amount of the generated power and heat from this project can meet the demand load requirement of the targeted society in this area. Toward this end, the spreadsheet tool simulates the hourly electricity and thermal energy generation from both solar panels and water heaters. The results are further processed to estimate the prevented disability-adjusted life years (DALYs) from the avoided emissions and associated economic benefits. The tool makes it possible to generate results that can inform policy.
The remainder of this paper is organized as follows: the analytical methods are explained in
Section 2.
Section 3 covers the scenarios definitions, and
Section 4 includes the results and discussion that follow from the conclusion.