The changing colors of Inner Mongolia

As the Inner Mongolia autonomous region approaches the 80th anniversary of its founding in 2027, it is worth looking back at this vast land and the enormous quantities of coal and electricity it has supplied to the nation.

For decades, what Inner Mongolia brought to the minds of many people was the roar of machinery and coal trucks kicking up clouds of black dust. Today, everything is changing.

Deep in the Kubuqi Desert, millions of photovoltaic panels stretch to the horizon, like a blue ocean. Beneath the panels, drought-resistant plants such as saxaul and indigo bush willow are striking root. On the grasslands of Ulaanqab, wind turbines more than 100 meters tall rise toward the clouds, strong winds making their huge turbine blades turn. Those winds help light up homes and businesses thousands of kilometers away.

A transformation is taking place. Inner Mongolia's energy landscape is being redrawn — from a "sea of coal" to a "blue ocean of green power". This is more than a shift in the energy mix. It is a profound change in the way development is conceived.

Building an irreplaceable energy foundation

To build a national modern energy economy demonstration zone, three entities — resources, industry, and policy — must come together. Inner Mongolia has a solid foundation in all three.

It is one of the few regions in China with exceptionally rich wind and solar resources. Its technically exploitable wind resources account for 57 percent of the national total, while its technically exploitable solar resources account for 21 percent.

Technically exploitable refers to the amount of resources that can actually be developed and utilized under current technological and economic conditions, rather than theoretical reserves. In other words, these resources are not only available, but also practical and economically usable.

In terms of wind power, Inner Mongolia enjoys stable winds of force 4 to 6 on the Beaufort Wind Force Scale throughout the year, providing excellent conditions for wind energy development. In terms of solar power, the region receives around 2,820 hours of sunshine annually on average, making Inner Mongolia a true "sunshine highland".

China's 15th Five-Year Plan (2026-30) places the construction of clean energy bases among its priorities. It calls for large-scale wind and photovoltaic power bases centered on the Kubuqi, Ulan Buh, Tengger and Badain Jaran deserts. Together, these four deserts cover more than 100,000 square kilometers within Inner Mongolia. Such vast, contiguous and concentrated renewable energy resources in China provide an unrivaled resource foundation for the region to build a national modern energy economy demonstration zone.

Its industrial foundation is also firmly in place. The first phase of the Ulaanqab wind power base, the world's largest single-site onshore wind power project, has a planned installed capacity of 6 million kilowatts. The initial 1.2-gigawatt phase was fully connected to the grid in December 2023 and is currently operating stably.

Ordos is home to China's first zero-carbon industrial park, which has attracted industry leaders. "Zero carbon" does not mean there are no carbon emissions. Rather, it means achieving net-zero emissions from production and operations through a combination of direct green power supply, energy storage and smart management, together with renewable energy generation and carbon offsets.

Most of the park's energy comes directly from wind and solar power generated within and around the park. The remainder is supplemented through energy storage facilities and green power trading. At the same time, the park is promoting electrification throughout the production process, setting it apart fundamentally from traditional industrial parks that rely heavily on coal-fired power.

The Inner Mongolia Power Group has built a leading 500-kilovolt backbone grid known as the "four horizontal and six vertical" network. The four horizontal lines are four major east-west transmission corridors that connect — from north to south — the major energy bases in eastern Inner Mongolia with major energy bases in western Inner Mongolia.

The six vertical lines are north-south interconnection corridors that link the power grids of eastern and western Inner Mongolia and extend southward to the North China power grid, providing backbone support for transmitting electricity from west to east and from north to south. This network has further expanded the reach of renewable power, covering North China, East China and Central China.

Policy support has also continued to grow. In 2023, the State Council, China's Cabinet, issued guidelines for promoting high-quality development in Inner Mongolia, devoting a separate section to building a new energy system. In 2024, six government departments introduced measures to support Inner Mongolia's green, low-carbon and high-quality development. The autonomous region has also enacted regulations on building a major national energy and strategic resources base, providing legal and institutional support for the transition.

Four areas of experimentation and demonstration

The essence of a "demonstration zone" lies in the word "demonstration": it must produce experience that can be replicated and scaled up. Inner Mongolia is exploring new paths in four areas.

The region is exploring ways to safely integrate massive amounts of renewable energy into the grid. The individual capacity of large wind and solar bases in deserts and barren areas can reach the 10-million-kilowatt level. Such massive centralized development places entirely new demands on the grid's capacity to absorb renewable power, as well as on dispatching, safety and stability.

Inner Mongolia is planning a "six horizontal and seven vertical" backbone grid while simultaneously advancing pumped-storage hydropower stations and new types of energy storage facilities. The six horizontal lines are six major east-west transmission corridors. Together, they will collect green power generated across the grasslands and deserts.

The seven vertical lines are seven powerful north-south interconnection corridors that will link the two major power grids of eastern and western Inner Mongolia and transmit electricity southward through ultra-high-voltage AC and DC projects to load centers in North China, East China and Central China.

Once fully developed and tested, this integrated solution — combining large-scale renewable energy, large-scale energy storage and smart dispatching — could show the way to other renewable-rich regions in western China.

Inner Mongolia is also exploring how renewable energy can drive new industrial development.

Green power is redefining the concept of location advantage. Through direct green power supply and incremental distribution networks, the region is attracting advanced, green and energy-intensive industries, giving rise to zero-carbon industrial parks.

In the past, both coal-fired and renewable electricity had to be transmitted and dispatched through the public grid, meaning companies could not purchase electricity directly from power plants.

Direct green power supply is breaking this model by allowing wind and solar farms to supply nearby enterprises through dedicated transmission lines, without going through the public grid. The result is lower electricity costs and zero-carbon power — much like giving a factory a direct connection to a green power source right at its doorstep.

Direct green power supply is a one-to-one dedicated line, while an incremental distribution network is a multi-to-multi, industrial-park-level microgrid. Within an industrial park, multiple entities jointly invest in an independent distribution network that integrates local wind and solar power, energy storage and electricity users into a unified system, creating a relatively independent green power network.

The local grid can exchange electricity with the main grid when necessary while retaining a degree of autonomous dispatch capacity, giving priority to local enterprises in accessing low-cost green power. This model creates institutional space for renewable-rich regions to attract clusters of new industries.

The computing industry also has a natural demand for green power. Data centers consume huge amounts of electricity and require highly stable power supplies. With its cool climate and abundant green electricity, Inner Mongolia is a natural location for data centers. The region is promoting coordinated development of computing centers and green power, using renewable energy to support the digital economy.

More importantly, the value of green power goes beyond electricity generation. It can also be used to produce green hydrogen. Hydrogen is the most abundant element in the universe and burning it produces only water, making it a potential, ultimate clean-energy source. But hydrogen comes in different "colors". Hydrogen produced from coal or natural gas is known as "gray hydrogen" and its production generates large amounts of carbon dioxide, while hydrogen produced by electrolyzing water with renewable electricity is known as "green hydrogen", with zero carbon emissions throughout the production process.

In industrial processes such as ammonia synthesis, steelmaking and the high-temperature melting of glass and ceramics, direct electrification is not always feasible. Hydrogen, however, can enter these sectors as a reducing agent, feedstock or fuel, addressing some of the most difficult industrial decarbonization challenges.

Yet hydrogen is expensive to store and transport. In the past, it generally had to be produced and consumed locally. In 2024, Inner Mongolia introduced China's first provincial-level safety management measures specifically for the green hydrogen industry, allowing green hydrogen projects to be built outside chemical industrial parks. This removed a major policy bottleneck, making it possible to produce hydrogen where conditions are favorable and transport it to where it is needed.

Pipelines are the most effective way to transport hydrogen on a large scale. Construction has begun on the Ulaanqab-Beijing-Tianjin-Hebei hydrogen pipeline, China's first interprovincial pure-hydrogen transmission pipeline. A hydrogen pipeline network featuring "one trunk, two loops and four outlets" is taking shape.

The "one trunk" is an east-west mainline; the "two loops" will cover the major industrial clusters in western and eastern Inner Mongolia; and the "four outlets" will connect with Beijing-Tianjin-Hebei, Northeast China, North China and East China.

In the future, Inner Mongolia's green hydrogen could flow through pipelines to major industrial provinces across China much like natural gas does today.

From green power to green hydrogen and then to green industry, renewable energy is becoming a key lever for reshaping Inner Mongolia's industrial competitiveness. It is also opening a new path for resource-dependent regions seeking to escape the "resource curse".

A demonstration zone must not only experiment with new technologies, but also seek institutional breakthroughs. Inner Mongolia has been exploring mechanisms for capacity compensation for independent energy storage plants, market-based grid connection for renewable energy projects, and green power trading. If proven effective, these institutional innovations could provide valuable local experience for the development of a unified national electricity market.

Meanwhile, the region is trying to integrate energy development with ecological restoration.

For example, the Kubuqi Desert model of photovoltaic-based desertification control — generating power above the panels, restoring ecosystems below them, and developing planting and animal husbandry between them — combines ecological restoration with economic output.

These four demonstration areas are helping Inner Mongolia safeguard energy security while exploring a new path of ecological conservation and green development for the country.

Building backbone of a new power system

The vast array of photovoltaic panels in the desert first serves as a kind of "windbreak". Their surfaces slow the movement of wind and sand, while their foundations help stabilize shifting dunes. Even more importantly, the panels provide shade. By blocking much of the direct sunlight, they lower soil temperatures and reduce water evaporation, creating conditions in which drought-resistant plants can survive.

Once shrubs such as saxaul and indigo bush willow strike root, their root systems help hold the sand in place, while fallen branches and leaves improve soil fertility. This creates a positive cycle: panels protect plants, plants stabilize the sand and the stabilized environment supports further plant growth. Land once considered barren is beginning to show signs of life.

The Elion Resources Group, which was established in Inner Mongolia, has spent more than a decade exploring PV-based desertification control in the Kubuqi Desert. It has now built gigawatt-scale, three-dimensional ecological PV power stations and invested in some of the first large-scale wind and solar projects in deserts and other barren areas.

The company has developed a three-dimensional model of power generation above the panels, plants growing underneath and animal husbandry between them. Power generation efficiency above the panels has increased by 5 to 10 percent, while licorice, isatis root and other cash crops are grown on a large scale beneath them, and ecological animal husbandry is developed between the panels. This makes more efficient use of different layers of desert space.

Today, Elion's photovoltaic desertification-control projects in the Kubuqi and Tengger deserts have a combined capacity of more than 3.5 million kilowatts and have helped restore 200,000 mu (13,333 hectares) of desertified land. They reduce carbon emissions by around 6 million metric tons annually.

The projects have generated more than 3,000 job opportunities cumulatively. Through land transfers, employment and dividends, participating farmers and herders now earn three times more than what they did in the past. The past "sea of death" is becoming a model of shared prosperity through ecological restoration.

Building a demonstration zone cannot stop at concepts. From planning to implementation, Inner Mongolia is laying out a clear path forward.

China's 15th Five-Year Plan calls for an initiative to develop non-fossil energy. Inner Mongolia is working to launch all the approved wind and solar bases in deserts and barren areas, while accelerating three ultra-high-voltage transmission corridors. The region is also planning a new batch of projects for inclusion in national plans. By 2030, electricity transmitted across provincial and regional borders is expected to reach 200 billion kilowatt-hours, double the 2025 level.

It is not enough for renewable energy to be generated. It must also be transmitted and consumed. Inner Mongolia plans to study the deployment of ultra-high-voltage direct-current projects for intra-regional use.

In pumped storage, the Chifeng Zhirui project, targeted for operation by the end of 2027, and the Wuhai project, targeted for operation by the end of 2028, are both accelerating their construction pace. The development of new energy storage is also moving ahead, supported by a capacity compensation mechanism introduced by the autonomous region.

A new power system integrating ultra-high-voltage transmission, pumped storage, electrochemical energy storage and smart dispatching is taking shape.

The ability to consume renewable power is a key constraint for large-scale renewable energy development. Inner Mongolia is tackling the challenge on three fronts: supplying green power directly to energy-intensive industries, using green hydrogen to replace fossil fuels and coordinating the development of computing centers with renewable energy.

The commercialization of green hydrogen is particularly important. At present, the cost of producing green hydrogen is around 27.5 yuan ($4.09) per kilogram. China has set a target of reducing the end-use hydrogen price to below 25 yuan per kilogram by 2030, with leading regions aiming for 15 yuan per kilogram.

Once the green hydrogen pipeline network is built and costs fall to a level at which green hydrogen can compete with gray hydrogen, the potential for renewable energy consumption will expand from the power system to the entire energy system.

Addressing three structural challenges

While construction of the demonstration zone is advancing rapidly, three structural problems are becoming increasingly apparent.

First, coordination on cross-regional consumption of renewable electricity needs to be strengthened. The period from the inclusion of an ultra-high-voltage transmission project in national plans to its commissioning can be lengthy, while the willingness of receiving provinces and regions to absorb renewable power, as well as their supporting policies, remains uncertain.

The sending and receiving sides have yet to establish stable expectations regarding the distribution of benefits. This has affected the pace of transmission corridor construction and the efficiency of renewable power consumption to some extent.

Second, the economics of energy storage remain unresolved. At present, independent energy storage facilities receive capacity compensation of 0.28 to 0.35 yuan per kilowatt-hour per day. For electrochemical energy storage projects, however, this remains insufficient to cover their full life-cycle costs.

The value of energy storage goes well beyond simply charging and discharging electricity. It includes regulating peak load by discharging electricity during peak demand periods, frequency regulation by responding within milliseconds to fluctuations in the grid, and tapping backup power to provide emergency support when unexpected failures occur. These multiple sources of value have yet to be fully reflected in existing pricing mechanisms.

Third, the supply of skilled professionals is insufficient. Inner Mongolia has limited local talent reserves in areas such as renewable energy, carbon trading and electricity market design. Although the autonomous region has launched a talent program, both the recruitment of high-level professionals and the development of homegrown talent require time. This is becoming a hidden bottleneck constraining the energy economy's transition from quantitative expansion to qualitative upgrading.

These three challenges are not unique to Inner Mongolia. To some extent, these are common problems afflicting China's broader energy transition. In line with national plans and regional policies, Inner Mongolia is actively exploring cross-provincial and cross-regional green power trading mechanisms, rules governing the participation of energy storage in electricity markets, and integrated education-industry programs for talent development, with the aim of making effective breakthroughs during the 15th Five-Year Plan period.

Building a national modern energy economy demonstration zone is an important part of implementing the national energy security strategy and a practical exploration of how to advance the goals of carbon peaking and carbon neutrality. By aligning national strategic needs with its own resource advantages, Inner Mongolia is exploring a path toward modernization that seeks to balance energy security, economic development, and ecological conservation.

The author is an associate professor of School of Economics‌ at Inner Mongolia University of Finance and Economics.

The views don't necessarily reflect those of China Daily.

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