Bloomberg – According to a report released on Monday, Inner Mongolia, China’s largest coal-mining region, is poised to take a leading role in the country’s energy transition. The region plans to develop several large-scale clean energy projects in the desert. This year, Inner Mongolia is the top producer of coal in China, boasting 88 gigawatts of wind and solar energy capacity, with an additional 170 gigawatts planned. This total capacity would surpass that of Germany’s entire power fleet.
Researchers from WaterRock Energy Economics and the Centre for Research on Energy and Clean Air indicated that, with appropriate policy adjustments and infrastructure improvements, Inner Mongolia could supply affordable, carbon-free electricity to China’s coastal megacities. Liutong Zhang, an analyst at WaterRock, stated, “If executed effectively, the growth of large-scale clean energy facilities in Inner Mongolia can boost wind and solar generation to meet local energy demands and increase renewable energy exports.”
The region’s long-distance power lines connect its coal and renewable energy plants to major areas such as Beijing and Shandong, which are densely populated. However, these lines are currently underused and primarily transport coal-generated power. This situation presents an opportunity to expand wind and solar energy production to utilize these lines more effectively. According to the researchers, Inner Mongolia’s clean energy exports are already more cost-effective than existing electricity rates and coal-generated power.
To further drive growth, the analysts suggested that increased power market liberalization and inter-provincial electricity trading would be beneficial. Inner Mongolia has four planned mega-bases, which will include eight gigawatts of solar, four gigawatts of wind, and four gigawatts of coal power. The researchers emphasized that these projects should be developed alongside long-distance power lines to ensure proper infrastructure utilization. They also urged the government to reconsider including coal in these projects. While coal is intended to help stabilize the fluctuating output from wind and solar, the analysts argue that affordable batteries, improved transmission technology, and currently underused power plants in the region can fulfill this role at a lower cost.
Market Update
Chinese stocks have experienced one of the most significant recoveries in history, rising for the ninth consecutive day as government stimulus draws investors back to one of the world’s most depressed markets. Additionally, Chinese property shares have surged following the easing of home-buying restrictions in three major cities, part of the central government’s efforts to support the struggling real estate sector. Meanwhile, iron ore prices jumped nearly 11%, spurred by increased demand forecasts in the world’s largest consumer of this essential steel-making ingredient.
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