Region forging master key for next industrial revolution, proving that whoever can best store electricity holds future of power

For a long time, electricity has been a unique energy commodity, with production and consumption happening almost simultaneously. You use it the moment it is generated.

But today, as solar and wind power have become China's largest sources of installed capacity, energy storage is quietly building "warehouses" for the power grid. These massive facilities store surplus green electricity during the day and deliver it to factories, shopping malls and millions of households at night.

This time-shifting magic has found its grandest stage in North China's Inner Mongolia autonomous region. Driven by the massive deployment of new-type battery facilities designed to support its vast wind and solar power bases, Inner Mongolia has overtaken California to become the world's largest energy storage region.

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As of the end of 2025, the region's cumulative installed capacity of new-type energy storage exceeded 25 million kilowatts, ranking first in the nation. Under the blueprint of the 15th Five-Year Plan (2026-30), this figure is projected to break the 50 million kW mark, cementing the region's role as the most critical power "reservoir" for the country's renewable mega-bases in the Gobi Desert and other arid areas.

The sheer scale of this deployment has triggered a profound industrial metamorphosis. In the past, Inner Mongolia's vast Gobi Desert served merely as an application ground for energy storage, with complete sets of equipment largely purchased from manufacturing clusters in China's eastern provinces.

Today, the narrative has shifted from isolated breakthroughs to a multi-city synergy. Hohhot, Baotou and Ordos are firing on all cylinders, forming a differentiated energy storage equipment manufacturing cluster.

This has created a new paradigm of "desert application plus multicity collaborative smart manufacturing" — a concentrated reflection of the region's upgrading new energy industry chain.

Each city brings a unique strength to the table, but the regional capital, Hohhot, stands out for its specialized focus on system integration and custom solutions engineered for extreme environments.

Operating at the forefront of grid resilience, Hohhot's manufacturing sector produces energy storage equipment uniquely designed to withstand the severe cold and punishing sandstorms characteristic of the northern frontiers.

While Baotou boasts the most comprehensive industrial chain and Ordos combines equipment manufacturing with ultra-large application scenarios at sites like Envision's zero-carbon industrial park, Hohhot's tailored approach to hostile climate operations ensures these massive systems remain reliable year-round.

"Deploying gigawatt-scale battery facilities in the Gobi Desert is fundamentally different from installing systems in temperate coastal plains," said Lin Boqiang, head of the China Institute for Studies in Energy Policy at Xiamen University. "Extreme sub-zero winters can degrade battery performance and discharge efficiency by double digits, while seasonal sandstorms pose severe risks to thermal management and air filtration systems."

Hohhot's focus on hostile-climate customization addresses the industry's biggest operational bottleneck — ensuring that massive desert storage parks don't just get built, but actually run safely and reliably 365 days a year, he said.

Inner Mongolia's regional triumph mirrors a broader national strategy. Entering 2026, the strategic importance of new-type energy storage has reached unprecedented heights. For the first time, it has been listed among the nation's six emerging pillar industries for the 15th Five-Year Plan.

The China New Energy Storage Development Report 2026, released recently by the National Energy Administration, said China's cumulative installed capacity of new-type storage had reached 136 million kW/351 million kilowatt-hours by the end of 2025, representing a year-on-year surge of 84.3 percent.

Accounting for roughly 50 percent of the global total, new-type energy storage has surpassed pumped-hydro storage to become China's largest regulating resource, it said.

Yet, after years of rapid expansion, the fundamental logic of the industry is evolving. Experts agree that the sector has bid farewell to the era of simple policy-driven scale expansion.

"The industry has formally entered a new phase characterized by market-oriented selection, value priority and a focus on quality," said Dai Hongcai, director of the new energy institute at the State Grid Energy Research Institute.

While the "forced pairing" of storage with renewable projects drove early growth, future expansion will rely on sustainable business models.

The market is also demanding longer duration capabilities. While the average storage duration was around 2.5 hours at the end of 2025, four-hour storage has now become the mainstream, and eight-hour long-duration storage is moving from demonstration to commercial application. This shift ensures that "giant power banks" don't just respond quickly, but can actually sustain the grid through the entire evening peak.

As the technology matures, the application boundaries of energy storage are expanding far beyond the traditional power grid. A new and highly lucrative frontier has emerged: the intersection of energy storage and artificial intelligence computing power.

In the era of AI large models, a massive global "compute-power race" has sparked acute anxiety over electricity consumption. A single 10,000-GPU computing cluster can consume roughly 100 million kWh of electricity annually.

While tech giants in the West are resorting to isolated gas turbines or small nuclear plants to power their AI ambitions, China is leveraging its robust wind, solar and storage ecosystems to pioneer a "compute-power and electricity synergy" model.

Inner Mongolia is at the absolute forefront of this revolution.

Ulaanqab, a city once known primarily for its grasslands and potatoes, is rapidly transforming into one of the Asia-Pacific's largest and fastest-growing AI computing clusters.

In under two years, the region's computing power has nearly quadrupled. Tech titans including Huawei, Alibaba, ByteDance and Kuaishou have poured hundreds of billions of yuan into the region.

Why Inner Mongolia? The answer lies in a golden formula: abundant and cheap green electricity, a cold climate that allows for natural cooling up to 10 months a year, and proximity to the Beijing-Tianjin-Hebei region, ensuring network latency of under five milliseconds.

Here, energy storage is the linchpin that makes green computing possible. At the Zhongjin Data zero-carbon computing base in Ulaanqab — the nation's first "source-grid-load-storage" integrated project directly connecting green power to data centers — a 300,000 kW wind and solar facility is paired with 45,000 kW of energy storage.

"On our intelligent control platform, wind, solar, storage and computing interact in real time," said Li Chunxiao, the base's operations manager. "When the wind is strong and sunlight is ample, we compute more. When nature pauses, energy storage steps in." This model ensures stable power supplies for training large AI models while keeping green electricity usage at an impressive 85 percent.

To support the insatiable energy appetite of future gigawatt-level AI centers, local zones are pioneering "incremental distribution network+ direct green power" zero-carbon parks. By developing centralized wind and solar projects paired with massive storage, these parks aim to stabilize the direct supply of green electricity at over 80 percent, effectively turning green electrons into AI "tokens".

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Looking ahead to the 15th Five-Year Plan, the trajectory for Inner Mongolia's energy storage sector is one of high-end, intelligent and globalized growth. Liu Yong, deputy director of the energy storage branch of the China Industrial Association of Power Sources, predicts that the industry will maintain a robust annual growth rate of 25 to 30 percent between 2026 and 2030.

"The future will be shaped by a virtuous cycle: demand drives innovation, innovation empowers the industry and the industry secures market returns," Liu said.

For the enterprises driving this boom, the core competitiveness is no longer simply about manufacturing capacity or shipment volumes. The ultimate victors will be those who can provide the most reliable, sustainable and high-value system solutions tailored to real-world scenarios — whether that means surviving a Gobi sandstorm, smoothing out a fluctuating power grid or keeping the world's most advanced AI models running through the night.

Contact the writers at zhengxin@chinadaily.com.cn