Power Sector Transition in Inner Mongolia

Introduction

Inner Mongolia, on its own, contributes nearly 10% to the total operating capacity from coal power in China, making it the province with the highest coal-operating capacity. The total prospective capacity from coal power plants takes up almost 7% of the national total, ranking as the third largest province with coal projects in the pipeline.

Meanwhile, Inner Mongolia boasts tremendous potential for solar and wind energy. Its deserts and sandy lands make ideal locations for solar and onshore wind installations. In 2023, Inner Mongolia led all Chinese provinces in three records: the highest new installed capacity, accumulative capacity, and electricity generation from renewable energy sources in the country.

The electricity generation in Inner Mongolia significantly surpasses the province's own demand. Over the past 18 years, the exportation of electricity generation has consistently ranked as the highest in the country. As a result, electricity is transmitted across the country, reaching regions such as North China, Northwestern China, Eastern China, and Northeastern China.

Current System Description

Current Power Capacity Mix

Energy Source	Installed Capacity(MW)
Coal	113,722 MW
Gas	350 MW
Hydropower	3,040 MW
Solar	17029.7 MW
Onshore Wind	50,652.2 MW

Prospective Power Capacity

Energy Source	Announced	Pre-construction	Construction
Coal	6,000 MW	5,190 MW pre-permit; 5,280 MW permitted	11,240 MW
Gas	-	-	55MW
Hydropower	2,100MW	3,800MW	2,400MW
Solar	27,244MW	14,701MW	10,989MW
Onshore Wind	7,820MW	42,748MW	38,521.5MW

Renewable in Inner Mongolia

In 2022, Inner Mongolia published its "14th Five Year Plan on Renewable Energy", expecting the renewable energy installed capacity will reach 135GW in 2025, exceeding the coal-fired installed capacity in the province, and will contribute to 35% of the total electricity generation in the province. Among the renewable energy installed capacity:

• Wind: 89GW by 2025 - 4GW will be from distributed wind projects located in border areas and Gobi deserts
• Solar: 45GW by 2025 - 6GW from distributed solar, 2GW from Desertification Prevention Project, incorporating photovoltaic technology, and 5GW from retired coal mine areas.
• Biomass: 600MW by 2025.

In November 2023, Inner Mongolia published the policy paper "Doubling New Energy Sources Action Plan"(自治区新能源倍增行动实施方案). In the policy paper, the energy target is listed in the following table:

	2022	2025	2030
1. Installed Capacity
1.1 Installed Capacity % from New Energy Sources	36.5%	50%	65%
1.2 Wind Installed Capacity(MW)	45,680	98,000	180,000
1.3 Solar PV Installed Capacity(MW)	15,580	52,000	120,000
2. Electricity Generation
2.1 Wind Electricity Generation(TWh)	107.7	220	395
2.2 Solar PV Electricity Generation(TWh)	24.5	70	195
2.3 Local Consumption from New Energy Sources(TWh)	102.9	200	400
3. Grid Flexibility Supports
3.1 Solar Thermal Installed Capacity(MW)	100	300	1,000
3.2 Pumped Storage Hydropower Capacity(MW)	1,200	1,200	8,000
3.3 Battery Storage Capacity(MW)	590	10,000	20,000

Renewable Targets

Baotou City

	Solar	Wind	Pumped Storage Hydro	Battery Storage	Notes
Potential	28GW	37GW
2025 Target	4GW	10GW	1.2GW	2GWh	9 billion RMB output value

The potential capacity of solar and wind in Baotou City is 28GW and 37GW, respectively. The city government mentioned in its 14th five-year plan that by 2025, it is expected to have 4GW installed capacity from solar and 10GW from wind, creating an output value of 9 billion RMB. Furthermore, there will be an integrated energy system using solar, wind, hydrogen, and storage capacity.

Other infrastructure and storage capacity are under preparation to support the penetration of renewable energy. This includes the 500kV new transmission line across Daqing Mountain to transmit several fossil fuel power plants to help with peak-shaving, the planned 1.2GW Meidaizhao pumped storage hydropower station, and the new energy storage capacity of 2GWh.

Wuhai City

	Solar	Wind	Pumped Storage Hydro	Battery Storage	Notes
2023	780.6MW	26MW
2025 target	1,700MW	500MW	1,200MW	200MW
2035 target	5,250MW	1,250MW	2,400MW	600MW

In 2023, the city has installed 750MW from centralized solar projects, 30.6MW from distributed solar projects, and 26MW from distributed wind projects.

According to the 14th Five-Year Plan published by Wuhai City, installed capacity from new energy sources will reach at least 5580MW by 2025, accounting for more than 50% of the city's installed capacity mix.

Wuhai City has unveiled its energy plan for the period 2020 to 2035. According to the plan, the installed capacity from new energy sources will surpass 2,200 MW by 2025. Among these capacities, 1,300MW will be derived from centralized solar projects, 200MW from distributed solar projects, 200MW from solar projects on agricultural facilities, and 500MW from wind energy. By 2035, the new energy sources in the city are expected to exceed 6,500MW, with 4,750MW coming from centralized solar, 500MW from distributed solar, and an energy storage capacity of 600MW.

The government also aims to repurpose lands to expand renewable energy. By 2025, 350,000㎡ coal mining subsidence to construct solar power stations totaling 1,300MW. Additionally, a total of 1.95k㎡ suitable rooftop spaces, including agricultural facilities, will be utilized to build 200MW of distributed solar systems.

In support of the newly installed renewable energy, there are plans to achieve a 1.2GW pumped storage hydropower capacity by 2025 and 2.4GW by 2035, along with an energy storage capacity of 200MW by 2025 and 600MW by 2035. The city government has designated Ba Yin Tao Hai Town in the Hainan district as the location for the wind, solar, and storage integration system project.

In terms of coal reduction plan, the average coal consumption for electricity is projected to drop to below 300g/kWh by 2025 and below 290g/kWh by 2035.

Other infrastructure initiatives include the concurrent construction of 500kV and 220kV transmission lines and substations to enhance the penetration of renewable energy.

Chifeng City

In 2022, Chifeng City has a total installed capacity of 6,605.5MW from renewable energy, surpassing the amount of fossil fuel sources and accounting for more than 50% of the city's energy capacity mix.

According to Chifeng City's 14th Five-Year Plan, the installed capacity of new energy sources, including renewable energy, will reach 12.6GW, and the electricity generation will reach 30.1 TWh

Tongliao City

By the end of 2020, the installed capacity from renewable energy in Tongliao City had reached 5,893MW, accounting for an increase from 41.6% in 2015 to 47.9% in 2020 in the city's energy capacity mix. Compared to the 2015 level, the installed capacity's share in the energy mix had decreased by 6.3%.

From the 14th Five Year Plan published by Tongliao City, the new energy sources, including renewable energy, will account for 63.4% of the energy capacity mix of the city by 2025, totaling 20,090MW.

Ordos City

In 2020, the city's total installed capacity was 26.120GW, accounting for more than one-fifth of the provincial total. Among that, 22,990MW from fossil fuel and 3,130MW from renewable energy. The total electricity generation was 124.2TWh, of that, 399Twh was exported to other provinces.

https://www.ordos.gov.cn/ordosml/ordoszf/202206/t20220623_3233577.html

光伏装机规模较2015年增加了153万千瓦，提高了3.7%；可再生能源发电量从2015年27.3亿千瓦时提高到2020年72.38亿千瓦时，占比从2015年3.7%提高到2020年5.8%。全市先进煤电机组容量不断增加，60万千瓦以上煤电装机占比达到27.6%，较2015年底提高了14.5%；全市煤电机组全部达到超低排放限值要求，供电标准煤耗从2015年337克/千瓦时下降到2020年331克/千瓦时

可再生能源装机仅占总电力装机的12%。

In 2025, the installed capacity from renewable energy is expected to surpass 50%, the electricity generation will account for more than 35%.

可再生电力消纳占比8.8%(2020)to >35%(2025) expected(全社会用电量82.6TWh(2020)/112.4TWh(2025) 可再生能源装机比重12%(2020) to >50(2025) expected(电力装机总量26120MW(2020)/97660MW(2025)

In 2025, the city aims to increase the installed capacity from renewable energy to 50GW, which will be more than 50% of the energy capacity mix of the city. Wind's installed capacity will be 10GW and solar will be 40GW. From these newly added capacities, 5.8GW of wind and 23GW of solar are planned to export to other provinces.

风光氢储一体化项目规划建设新能源超过200万千瓦。到2025年，力争风光氢储一体化项目配套可再生能源装机规模超过1600万千瓦，形成绿氢制取规模40万吨/年，化工副产氢规模不低于2万吨/年。 .“绿色矿山+新能源产业+现代农牧业”融合发展示范基地光伏500万千瓦。 到2025年，生物质发电及垃圾焚烧发电装机规模新增约14万千瓦。 到2025年，储能电站装机容量力争达到新能源装机容量10%以上。 到2025年，需求侧响应能力力争达到最大用电负荷的3%以上。

到2025年，新建线路工程总长度不低于8000千米，变电工程总容量不低于25000兆伏安，形成本地500千伏“日字型”主干网架。

Bayannur City

https://solar.in-en.com/html/solar-2389144.shtml

Ulanqab City

Feasible potential of wind: 29.8GW and solar: 56GW 可開發利用的風電資源約2980萬千瓦，光照資源約5600萬千瓦 http://nm.people.com.cn/BIG5/n2/2023/1114/c347192-40639577.html

Potential impacts from renewables expansion

Desertification poses a significant environmental challenge in Inner Mongolia, and the adoption of solar PV offers a solution to mitigate further evaporation and facilitate vegetation regeneration in the region. Consequently, numerous solar projects are being planned to integrate with ecological governance initiatives, such as establishing solar farms on sandy lands or farmlands to facilitate irrigation support.

Fossil Fuel in Inner Mongolia

Fossil Resources and Retirement

Retired Coal power plant: 2,400MW

Land availability from coal mines (km²):

• Shelved: 46.05 km²
• Mothballed: 200.46 km²
• Operating: 5,380.22 km²
• Proposed: 4,332.66 km²

Employment

Current employment from the fossil fuel sector

In 2020, the total employment in coal extraction, the electricity sector, the steel industry, and the chemical industry amounted to 500,000 individuals. It's noteworthy that this figure represented less than 5% of the total employment in Inner Mongolia. Despite being a coal-exporting province, the relatively low employment number can be attributed to the fact that many coal workers are employed on a contractual basis and often hold multiple jobs.

Prospective employment from the renewable energy sectort

From Inner Mongolia's "14th Five-Year Plan on Renewable Energy", the renewable energy industry, including the generation sector and upstream and downstream supply chains, can create up to 500 thousand employment opportunities for the locals.

Land availability

Photovoltaic Desertification Control Project Desertification poses a significant challenge in western China. In 2015, the Chinese government launched the Photovoltaic Desertification Control Project. This project involves installing solar panels on desertified land, reducing evaporation by 20% to 30%, and creating a suitable environment for vegetation to thrive. Implementing this project can curb further desertification and improve the efficiency of solar energy. Overall, it's a mutual benefit for both solar energy expansion and ecosystem protection.

Until 2023, Inner Mongolia reutilized 120km2 of desert area to install photovoltaic panels, contributing 5,200MW of solar capacity. This included Photovoltaic Desertification Control Projects in the Kubuqi Desert, Ulanbuh Desert, Hunshandake Desert, and Horqin Sandy Land.

The Inner Mongolia 14th Five-Year Plan has listed the goal of the Photovoltaic Desertification Control Project in the province:

1. By 2025, reutilize 427 km2 of sandy land to generate 21,400 MW of solar PV capacity.
2. By 2030, reutilize 1,534 km2 of sandy land, providing 89,000 MW of solar PV capacity.

Photovoltaic in Agricultural Sector

In agricultural regions like Tongliao and Chifeng, the government aims to repurpose degraded agricultural land totaling 18 km2 and non-irrigated farmland spanning 13 km2 for the development of Photovoltaic and Irrigation projects. This initiative is projected to yield a solar panel installed capacity of 1,000 MW in the area.

Ecological Restoration for Retired Coal Mine areas Inner Mongolia's 14th Five-Year Plan includes deploying 5GW of solar installed capacity from restoration areas of coal mines. These retired coal mines are located in coal subsidence areas, open-pit coal mine spoil dumps, and other regions in Erdos, Tongliao, Wuhai, Alxa, Bayannur, Baotou, and other areas with stable geological conditions and good access conditions for developing solar projects. The aim of the plan is to promote the development of renewable energy and environmental protection in areas previously polluted by coal extraction.

Governmental information

Related governmental policies and papers

Hydrogen plan:https://m.21jingji.com/article/20220301/herald/8641fa1c81d82fe4a043351296155fc6.html

Transmission

Current transmission resources

The electricity generation in Inner Mongolia significantly surpasses the province's own demand. Over the past 18 years, the exportation of electricity generation has consistently ranked as the highest in the country. As a result, electricity is transmitted across the country, reaching regions such as North China, Northwestern China, Eastern China, and Northeastern China. This transmission is made by the support of 11 extra high-voltage 500kV lines and 5 Ultra High Voltage transmission lines, with a total transmission capacity of 70GW. In 2022, the export generation reached 264TWh.

New transmission needed for renewables

Inner Mongolia is constructing the 1000kV ultra-high voltage Zhangbei-Shengli transmission line and is aiming to operate by the end of 2024. The province has set the target for electricity exportation:

1. By 2025, one-third of the total electricity generation(equaling 100TWh out of 300TWH) from Inner Mongolia will be exported outside the province.
2. By 2030, one-third of the total electricity generation(equaling 200TWh out of 600TWH) from Inner Mongolia will be exported outside the province.

To accommodate the influx of newly generated renewable energy into the grid and meet the electricity demand of other regions, the following transmission lines are scheduled to commence construction or operation during the 14th five-year period:

1. Start the construction of 4 transmission lines, including Kubuqi to Shanghai, Jiangxi to Tengri, Ulanbuh to Beijing-Tianjin-Hebei, and Xilinguole line as soon as possible.
2. Start the operation of the West Inner Mongolia to the Beijing-Tianjin-Hebei transmission line.
3. Start planning two to four transmission lines through Kubuqi Desert, Ulanbuh Desert, Tengger Desert, and Badain Jaran Desert for the 15th Five-Year period.

Other than the ultra-high voltage transmission construction, several cities, including Baotou City and Ordos City, also announced the goal to build 500kV transmission lines to support renewable energy growth.

Supply Chain

Inner Mongolia boasts abundant silicon resources, which are utilized in the production of solar panels. This gives the province a significant advantage in developing the photovoltaic industry. Baotou City, also referred to as the "Green Silicon City" in China, stands out as the largest silicon-producing city in the country. Moreover, it aspires to become the world's leading hub for silicon industry production.

Currently, the production of Polycrystalline and Monocrystalline silicon from Baotou City ranks as the highest in China, accounting for approximately 25% and 30% of the national total, respectively. The city aims to increase its share further, targeting to produce over half of the national production total for Polycrystalline and Monocrystalline silicon by 2025. Due to its rich silicon resources, the city is forming a complete industrial chain, from polycrystalline silicon and monocrystalline silicon to solar wafers, solar cells, and modules.

From the province's "Doubling New Energy Sources Action Plan", Inner Mongolia has planned the production targets for its renewable energy supply chain:

1. Wind Industry: The wind power industry's comprehensive supporting capacity will reach 25GW by 2025.
2. Photovoltaic Industry: Monocrystalline silicon and polycrystalline silicon will reach 1.4 million tons, and the supply capacity of photovoltaic modules will reach 70 million kilowatts by 2025.
3. Hydrogen Energy Industry: By 2025, green chlorine production capacity will exceed 500,000 tons, and hydrogen production equipment capacity will reach 1,000 sets.
4. Energy Storage Industry: By 2025, the production capacity of energy storage equipment will meet the demand for installing 10GWh of energy storage capacity.

Ownership

Major owners of current fossil capacity

Top 10 owners of operating coal power plants

1. INNER MONGOLIA Datang International Tuoketuo POWER Generation owns 10 projects totaling 6,120MW.
2. HUA NENG Yimin Coal and POWER owns 6 projects totaling 3,400MW.
3. Guodian & Jiantou Inner Mongolia Energy Investment owns 4 projects totaling 2,640MW.
4. Jingneng (Xilinguole) Power Generation owns 4 projects totaling 2,640MW.
5. Daihai Electric Power owns 4 projects totaling 2,460MW.
6. Inner Mongolia Shangdu Power Generation owns 4 projects totaling 2,400MW.
7. InnerMongolia Jinlian Aluminum Material Limited [100%] 2380 5
8. Inner Mongolia Jingning Thermal Power [100%] 2020 4
9. Guodian Power Shuangwei Inner Mongolia Shanghaimiao Energy [100%] 2000 2
10. Inner Mongolia Changcheng Power Generation [100%] 2000 2
11. Shandong Energy Inner Mongolia Shenglu Electric Power [100%] 2000 2
12. State Energy Group Inner Mongolia Shanghaimiao Power Generation [100%] 2000 2
13. Inner Monglia Chuangyuan Metal [100%] 1980 6
14. Ordos Beijiao Thermal Power [100%] 1980 4
15. Inner Mongolia Erdos Electric Power [100%] 1960 10

Major owners of prospective renewables

The top three owners of operating solar projects:

1. The project owned by Alxa Fuquan Coal CO LTD[19%] and other[81%] are the highest operating projects 900.
2. Aohan Tongwei New Energy CO LTD[80%]; Aohan Banner State-owned Assets Management CO LTD[20%] 740.4
3. Asika[30%]; Tian Liqing[30%]; Zhou Jing[30%]; Niu Benxu[10%] 400

Together, they account for 12.14% of the total operating capacity.

The top three owners of solar projects in the pipeline are:

1. China Three Gorges Renewables (Group) CO LTD and Inner Mongolia Energy and Electric Power Investment Group Ltd own two projects totaling 8,000MW, representing 15.12% of the total.
2. Huaneng Group CO LTD Northern United Power CO LTD(53%), Ordos Municipality State Asset Group New Energy Development and Utilization CO LTD (44%), and Yuanjing (Envision) Energy CO LTD (3%) owns a 7,000MW project, representing 13.23% of the total.
3. China Tianying CO LTD owns a 4,000MW project, representing 7.56% of the total.

Onshore wind operating:

1. Huaneng New Energy CO LTD owns 15 projects totaling 1,676.5MW, accounting for 3.31% of the total.
2. Huadian New Energy Group CO LTD owns 13 projects totaling 1,453MW, accounting for 2.87% of the total.
3. China Guangdong Nuclear (Xing'an League) New Energy CO LTD owns 1 project with 1,000MW, accounting for 1.97% of the total.

Onshore wind in pipeline:

1. Inner Mongolia Huolinhe Open-Pit Coal CO LTD and Wulanchabu Energy Investment Development CO LTD own 7 projects constituting 6,000MW, 6.73%.
2. Shuimu Mingtuo (Baotou) Energy Management CO LTD owns 1 project 5,000MW, constituting 5.61%.
3. Inner Mongolia Energy Group CO LTD owns 5 projects totaling 4,594MW, constituting 5.16%

Finance

In 2023, the total investment in renewable energy in Inner Mongolia exceeded 50 billion RMB. The province has announced its investment target for 2024, with a focus on pouring over 180 billion RMB into renewable energy development. Of this amount, 90 billion RMB will be allocated to equipment and infrastructure for renewable energy projects. However, a portion of the financing will also be directed towards the fossil fuel sector in the province to secure medium-term and long-term procurement contracts for fossil fuel sources.

According to the "Doubling New Energy Sources Action Plan," the investment for renewable energy in 2022 was 500 billion RMB(around $75 billion). The provincial target is to reach a total investment of:

1. 950 billion RMB($ 142.5 billion) in 2025;
2. 1.5 trillion RMB($225 billion) in 2030.

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