Oyu Tolgoi Moves Closer to Domestic Power Through Gobi Renewable Auction
Mongolia's Ministry of Energy has selected a consortium of Net Zero Tech LLC, MCS International LLC and Inner Mongolia Energy International Cooperation LLC to build up to 530 MW of solar and wind capacity in the Gobi region, following a competitive auction held on September 24, 2026. The winning bid of 7.9 US cents per kWh is 24 percent below the tariff Oyu Tolgoi currently pays for imported electricity, marking a potential turning point for the country's largest copper mine. According to MCS International, the project will require a total investment of $400 million and is expected to be completed within two years.
Breaking an Import Dependence
Oyu Tolgoi is 100 percent dependent on electricity imported from China's Inner Mongolia Autonomous Region, purchasing an average of 1.6 billion kWh per year. Both import volumes and payments rose steadily between 2020 and 2026, and the mine now spends $120 to $140 million a year on imported power. Import volumes are projected to reach 1.87 to 2 billion kWh per year between 2027 and 2030, when the current supply contract expires. The import tariff is renegotiated annually and takes effect each April 1. Since April 1, 2026, Oyu Tolgoi has paid 9.81 US cents per kWh, compared with the 7.9 cents secured through the auction.
Auction Details
Bidders were assessed on both price and their ability to deliver 99.5 percent reliable power from renewable sources. Of ten interested companies, only two qualified. Bidding opened at 9.7 US cents per kWh, and the winning bid of 7.9 cents is a highly competitive price, particularly given the strict reliability requirement, which typically adds to costs through storage and firming. The runner-up was a consortium led by Envision Energy. The new capacity will connect at the Oyu Tolgoi (260 MW) and Zes-Oyu (270 MW) substations and requires no state budget funding. This is Mongolia's second renewable auction, following a June 2026 round for 220 MW of solar and 135 MW/440 MWh of battery storage.
Investor Takeaways
Timing is the key point. If the two-year construction schedule holds, the new capacity would come online around 2028, well ahead of the 2030 expiry of Oyu Tolgoi's import contract. That would give Mongolia's flagship mine a domestic power source before it has to renegotiate or replace its current supply arrangement, reducing its exposure to annual tariff changes and supply risks outside the country's control.The pricing also sets an important benchmark. At 7.9 cents per kWh, renewable power with firming requirements has come in below the cost of imports. This strengthens the commercial case for further renewable investment in Mongolia, particularly for large industrial consumers in the mining sector.
