Inner Mongolia, a region known for its vast deserts and nomadic heritage, is at the forefront of China's complex energy strategy. The region has become the country's largest producer of both renewable energy and coal, a duality that experts describe as an "all-of-the-above" energy approach. This mirrors China's national energy transition, where wind and solar capacity are expanding at an unprecedented rate, yet coal remains an indispensable energy source.
As seen at the Dalad Banner solar farm, where over 3 million solar panels stretch across the desert in the shape of a galloping horse, renewable energy development is a visible priority. However, a short distance away, coal-fired power plants continue to operate, supplying electricity to distant cities like Beijing. This juxtaposition highlights the region's commitment to both clean energy and traditional power generation.
China leads the world in wind and solar power installations, but data from the National Energy Administration indicates that coal-fired plants still supplied approximately 51% of the nation's electricity in 2025. David Fishman, an energy consultant at The Lantau Group, notes the paradoxical nature of Inner Mongolia's energy landscape, where increased renewable capacity often correlates with expanded coal capacity.
Officials in Inner Mongolia state that while wind and solar power are intended to increasingly supplant coal's traditional role, both sources will continue to grow to meet China's escalating power demands. Coal is seen as crucial for supplementing renewable energy during periods of intermittent output caused by weather conditions. "As more renewable energy capacity is added, coal-fired power will also continue to grow, although the pace will gradually slow," said Gu Qing, an official with Inner Mongolia's energy administration.
The Dalad Banner solar farm generates about 2 billion kilowatt-hours of electricity annually. This facility is part of a larger clean energy initiative launched in 2018 in the Kubuqi Desert. Inner Mongolia plays a critical role in China's "West-to-East Power Transmission Project," channeling electricity from its resource-rich northwest to the industrialized east. In 2025, the region exported roughly 350 billion kilowatt-hours, or 40% of its electricity generation, enough to power 120 million households.
Over the past five years, Inner Mongolia has seen its installed wind and solar capacity more than double. Nevertheless, coal continues to dominate electricity generation, producing around 590 billion kilowatt-hours in 2025, compared to approximately 277 billion kilowatt-hours from solar and wind combined. Coal power capacity within the region has also seen expansion during this period.
"Because wind and solar are intermittent…we cannot do without the support of coal-fired power," stated Huang Zhiqiang, vice governor of Inner Mongolia. He added that coal power units are being repurposed from primary supply roles to a supporting and regulating function. Inner Mongolia mines about 1.2 billion tons of coal annually, accounting for a quarter of China's total production, with over 60% transported to other provinces. Ordos, the city overseeing Dalad Banner, is a designated major coal-producing center.
To accommodate renewable energy, coal plants are being refurbished to ramp down and operate at as low as 15% of their capacity, thereby reducing coal consumption when renewable output is high. However, Fishman suggests that this flexibility might be an "aspirational or best-unit capability rather than something that applies across the whole fleet in day-to-day operations." Anika Patel of Carbon Brief points out that operating flexibly can be challenging due to economic and political incentives tied to coal use in China. Long-term power contracts and interprovincial trading arrangements can also limit the grid's ability to prioritize renewable electricity.
Beyond its role in power generation, Inner Mongolia is a significant hub for the coal chemical industry, where coal is transformed into chemicals and fuels. This process emits substantial carbon dioxide, though officials plan to deploy carbon-capture technologies. The region is also expanding its capacity in coal-to-oil, coal-to-gas, and coal chemical industries, which officials say can help offset China's reliance on imported oil and gas, particularly in light of global supply chain vulnerabilities.
The government is also investing in energy storage, transmission infrastructure, and grid efficiency to support the growing demand from sectors like AI computing, electric vehicle charging, and manufacturing. Factory production schedules may also be adjusted to align better with wind and solar generation patterns, optimizing renewable energy utilization.