Inner Mongolia’s Renewable Energy Expansion Coexists with Enduring Coal Infrastructure Amid Energy Transition Challenges

ORDOS, China — From above, the sprawling array of over 3 million solar panels at the Dalad Banner solar farm glints under the desert sun, arranged in the shape of a galloping horse — a nod to the region’s nomadic cultural heritage. Just a short distance away, a coal-fired power plant stands ready to transmit electricity 700 kilometers (435 miles) to Beijing, symbolizing the dual energy trajectory defining this northern Chinese region.

This juxtaposition reflects what analysts term an “all-of-the-above” strategy in Inner Mongolia, which has emerged as both China’s leading renewable energy hub and a cornerstone of coal production. The region’s energy landscape mirrors the nation’s broader transition: while wind and solar capacity surges, coal remains central to energy supply and economic planning.

China leads the world in renewable energy expansion, yet coal-fired power plants still accounted for approximately 51% of the country’s electricity generation in 2025, according to the National Energy Administration. In Inner Mongolia, this duality is particularly pronounced, as the region grapples with balancing clean energy growth against entrenched coal infrastructure.

“While China as a whole is transitioning away from coal, Inner Mongolia represents the most paradoxical aspect of this shift,” said David Fishman, an energy consultant at The Lantau Group. “Increased renewable capacity here often coincides with expanded coal projects.”

Regional officials emphasize that renewable energy is gradually replacing coal-dependent electricity, but both sources will remain integral for the foreseeable future. Coal plants are positioned to fill gaps during periods of low wind or sunlight, ensuring grid stability amid rising national energy demand.

“People often assume renewables and traditional energy compete, but the reality is more nuanced,” said Gu Qing, an official with Inner Mongolia’s energy administration. “As renewable capacity grows, coal-fired power will also expand, albeit at a slower pace.”

The Dalad Banner solar farm, part of a 2018 clean energy initiative in the Kubuqi Desert, produces roughly 2 billion kilowatt-hours annually. It underscores Inner Mongolia’s role in China’s “West-to-East Power Transmission Project,” which channels electricity from resource-rich western regions to eastern industrial centers. In 2025, 40% of the region’s 350 billion kilowatt-hours generated were exported, sufficient to power 120 million households yearly.

Over the past five years, solar and wind capacity in Inner Mongolia has more than doubled. Yet coal still dominates, with coal-fired plants generating 590 billion kilowatt-hours in 2025 compared to 277 billion kilowatt-hours from renewables. Coal power capacity expansion persists despite renewable growth.

“Because wind and solar are intermittent, coal remains indispensable for grid reliability,” said Huang Zhiqiang, Inner Mongolia’s vice governor. “Coal plants are shifting from primary supply to supportive roles, ensuring flexibility.”

All coal units have been retrofitted to operate at as low as 15% capacity, minimizing coal consumption during peak renewable output. However, Fishman cautions that this capability may not be uniformly achievable under daily operational strains, citing technical and financial challenges.

Anika Patel, China section editor at Carbon Brief, adds, “Flexibility in theory doesn’t guarantee flexibility in practice.” Structural issues, such as long-term contracts and interprovincial trade agreements, complicate grid adaptation to renewable energy dynamics.

Beyond generation, Inner Mongolia is investing in energy storage, transmission upgrades, and grid modernization to integrate renewables. Officials encourage industrial users to align production schedules with renewable energy availability to maximize efficiency.

Since the early 2010s, China’s renewable expansion has been propelled by government targets and subsidies, though overcapacity issues have emerged. Meanwhile, Inner Mongolia’s coal chemical industry — converting coal to fuels and chemicals — continues expanding, driven by national energy security concerns. The regional push for carbon capture technologies aims to mitigate emissions amid this growth.

The Iran conflict and geopolitical tensions in the Strait of Hormuz have highlighted vulnerabilities in global energy supply chains, reinforcing Inner Mongolia’s strategic focus on domestic coal processing. “This reduces our reliance on imported oil and gas,” Huang said.

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