Mongolian deal latest cross-border energy tieup

China and Mongolia recently took a major step toward regional energy integration, officially commissioning their first "grid-to-grid" power transmission link to bolster energy security and expand cross-border clean power sharing.

The milestone was reached last month as Mongolia's 220-kilovolt substation was successfully synchronized with the regional grid of North China's Inner Mongolia autonomous region.

Built and operated by Inner Mongolia Power Group, the 220-kV double-circuit transmission corridor delivers power directly from Inner Mongolia across the border to Mongolia's South Gobi province. The commissioning elevates bilateral energy cooperation from isolated, single-point power supplies into a fully synchronized, two-way cross-border transmission network, the company said.

The project is designed to address chronic power shortages in southern Mongolia, where booming mining operations and local communities have outpaced domestic generation.

Following formal discussions initiated in early 2023, the two sides built a cross-border coordination mechanism that culminated in trial operations over the summer and full commercial commissioning in September. Significantly, clean and renewable energy will account for more than 40 percent of total cross-border deliveries under a bilateral green electricity trading framework.

Beyond physical infrastructure, engineers from both sides have harmonized technical standards and operational protocols, overcoming complex grid-synchronization challenges. For Inner Mongolia Power Group, which already operates several international transmission routes serving border trading ports, the project marks a significant upgrade in cross-border dispatch capability.

The breakthrough reflects China's broader drive to deepen cross-border energy connectivity with neighboring countries under the Belt and Road Initiative. In Southwest China, the long-running power interconnector between Yunnan province and Laos has already established a benchmark for regional electricity sharing, helping balance seasonal hydroelectric discrepancies and optimizing clean power allocation across the Greater Mekong Subregion.

These cross-border ventures are undergirded by China's domestic power network, which has grown into the world's largest.

According to the China Power Supply Development Report 2026 released by the National Energy Administration, China's total power consumption surpassed the historic 10-trillion-kilowatt-hour mark in 2025, reaching 10.37 trillion kWh.

To sustain this unprecedented demand and lay the groundwork for the 15th Five-Year Plan period (2026-30), China has accelerated grid infrastructure investments.

National power grid investment reached 639.5 billion yuan ($95.6 billion) in 2025. Crucially, more than half of that capital was directed into upgrading distribution networks at or below 110 kV, reinforcing grid reliability in rural communities and remote border areas.

Nationwide, transmission lines of 220 kV and above now exceed 1 million kilometers, bolstered by an interregional backbone of 45 ultra-high voltage direct-current and alternating-current lines.

This modernized grid serves as the core foundation for China's green energy transition. Electricity now accounts for roughly 30 percent of the nation's end-use energy consumption, outpacing the global average.

Underpinned by massive renewable installations, green power supplied 38.5 percent of total electricity consumption in 2025 — up nearly 9 percentage points from end-2020.

Ye Xiaoning, a senior engineer at the new energy department of the State Grid Energy Research Institute, said as China expands its domestic power transmission capabilities and renewable energy base, its technical experience and clean power surpluses will play an increasingly active role in enhancing regional energy security and market integration with neighboring economies.

The consistent upgrades of grid and transmission infrastructure in China — the world's largest consumer and producer of renewable energy — have drastically improved the nationwide optimization of renewable energy resources, Ye said.