Is Ulanqab the correct answer for the AI ​​Data Center?

PJM holds a capacity auction every year, and the auction item is the promise of having electricity available at peak times in three years.

It’s like you booked a banquet but didn’t order a single dish even when the time came. Then PJM also has to prepare all the raw materials, kitchens and chefs on the day of the banquet.

The capacity clearance price in the delivery year of 2024/25 is US$28.92 per megawatt per day, which rises to 269.92 in 2025/26, 329.17 in 2026/27, 333.44 in 2027/28, and 325 in 2028/29.

After the gain and loss, all three games are stuck with the upper limit. Otherwise, according to PJM’s own calculations, the price will rise to US$554.72 per megawatt per day.

Who paid for the money in the end?

PJM’s independent market regulator ran the four auctions again, removed the data center load from the forecast, and concluded that the data center contributed $29.4 billion, accounting for about 46% of the capacity fee.Spread to 67 million people, that’s about $440 per person over four years.

This is like a sudden heavy rain, and then a bunch of people without umbrellas want to take a taxi, but the number of taxis that the platform can provide is limited, and if you want to dispatch taxis from other areas, you have to pay extra. As a result, the platform increased the dynamic fare increase in the entire area, which resulted in passengers who would normally take a taxi having to pay extra to take a taxi.

The New Jersey Public Utilities Commission estimates that starting in June 2025, the average bill for PSE&G users will increase by 17.24%, JCP&L will increase by 20.20%, Atlantic City Electric will increase by 17.23%, and Rockland Electric will increase by 18.18%.

Calculated in Maryland, the monthly increase is 14 to 18 US dollars; in Washington, DC, the increase is 10 US dollars per month; many users in Ohio saw power supply prices jump by 10% to 35% in the same month.

Figures from the U.S. Energy Information Administration show that from January to July 2026, the average electricity price for residents in the District increased by 17.8% year-on-year.

As the old saying goes, whatever is lacking is supplemented. Since the data center is short of power, why not build a power station?

The U.S. Energy Information Administration says electricity usage across the U.S. has been essentially flat for nearly two decades. What little gains were brought about by population and economic growth were offset by improvements in energy efficiency and the relocation of manufacturing industries.

The U.S. power grid is a long-term plan and is planned based on long-term needs. The power grid plan did not originally include data centers, and we did not expect that the demand for data centers would be so great.

According to statistics from Lawrence Berkeley National Laboratory, there will still be 2,061 gigawatts of power generation and energy storage projects waiting to be connected to the grid in the United States by the end of 2025, which is approximately 1.6 times the installed capacity.

The median waiting time from application submission to commercial operation was 61 months, compared with only about 22 months from 2000 to 2008. Only about 13% of applications submitted between 2000 and 2019 were actually put into operation, and 75% were withdrawn.

Even if the approval is passed, it’s not over yet, you still have to wait for the equipment.

According to Wood Mackenzie statistics, the average delivery time for large power transformers in the United States in 2025 is 128 weeks, for generator step-up transformers 144 weeks, and for power distribution equipment up to 160 weeks. Prices have increased by 77% compared with 2019, and about 80% of them are imported.

A computer room park can be built in 18 to 24 months, a high-voltage transmission corridor generally takes 5 to 15 years, and cross-state lines can take more than four years to get permits, up to 11 years.

In 2024, there will be less than 900 miles of newly built high-voltage transmission lines in the United States, compared with about 4,000 miles in 2013.

The costs are borne locally, but the benefits are not.

Nearly three-quarters of states now provide some form of tax relief to data centers. Sales tax and property tax are exempted for more than ten years. Texas’s threshold is an investment of US$200 million plus 20 jobs. New York State simply does not set a minimum investment amount.

The 2024 report of the Virginia Legislative Audit and Review Commission wrote: A typical 250,000-square-foot data center has about 50 long-term full-time positions, nearly half of which are outsourced; it is true that there can be 1,500 people during the construction period, but the construction period is only 12 to 18 months.

In a Gallup survey in March 2026, 71% of Americans opposed the construction of AI data centers near their communities, and 48% were “strongly opposed”; in comparison, only 53% opposed the construction of a nuclear power plant near their homes.

Among the reasons for opposition, half pointed to resources, such as water, power grids, and farmland; nearly a quarter mentioned quality of life, such as noise, traffic, and housing prices.

Water is particularly specific. A large facility can use up to 5 million gallons of water per day, or about 18,900 tons, which is equivalent to the daily consumption of a small or medium-sized town. Residents of Newton County, Georgia, have been told that their water bills are expected to rise 33% over the next two years.

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However, for China, all the above problems do not exist.

In 2025, the total electricity consumption of China’s computing power centers will be approximately 170 billion kilowatt hours, accounting for 1.6% of the entire society’s electricity consumption; according to the U.S. Department of Energy, data centers will consume 176 terawatt hours of electricity in 2023, accounting for 4.4% of the United States.

China’s newly installed capacity in 2025 will be 542 million kilowatts, and its new renewable energy power generation will be 519.3 billion kilowatt hours, which has already exceeded the increase in electricity consumption in the entire society.

Inner Mongolia is the place with the fastest growth in data center construction in China. Some people on the Internet always say that they chose Inner Mongolia because of its vast land, sparse population, and suitable temperature, but these are just appearances.

The West Inner Mongolia Power Grid is the only provincial power grid in the country that is independent of the State Grid and China Southern Power Grid. It is directly under the autonomous region and manages 8 league cities including Hohhot, Baotou, and Ulanqab, covering 720,000 square kilometers and more than 14 million residents.

When the factory network was separated in 2002, this asset was not taken over because of its small scale and heavy liabilities, so it was left behind. Two years later, there was a power shortage across the country, and Inner Mongolia relied on coal and wind to turn around.

It is easy to ask God but difficult to send God away, and trouble will follow. Electricity is not a fast-moving consumer product that we use every day. We have to use it as soon as it is delivered. For example, the wind has been strong these past two days.If there is no load to catch the extra part, the unit will have to reduce its output or simply discard it.

At the end of 2015, the thermal power surplus in western Inner Mongolia was about 10 million kilowatts and in eastern Inner Mongolia was about 6 million kilowatts.

After that, Inner Mongolia built 8 UHV lines with “five connections and three direct lines”. In December 2025, it started construction of the ±800 kV DC line from western Inner Mongolia to Beijing, Tianjin and Hebei, 700 kilometers long, with an investment of about 17.2 billion yuan. It is planned to be put into operation by the end of 2027.

But a photovoltaic power station can be built in one or two years, and it takes about five years for a channel to go from being included in planning to being put into operation.

As mentioned before, the electricity that cannot be sent out can only be thrown away.

The wind curtailment rate in West Inner Mongolia increased from 6.8% in 2023 to 15.6% in the first quarter of 2026.

According to media reports, the time-sharing data of a certain subsidized wind farm in May is as follows: only 40% of the declared power can be cleared in 9 hours a day, less than 10% in 10 hours, and 90% can be achieved only in the 3 hours during the evening peak.

West Inner Mongolia is the country’s first “monorail” electricity spot market. Thermal power and new energy are reported and quoted on the same platform. Market-oriented units account for about 94%. The lower limit for declaration will be lowered to minus 0.05 yuan/kWh from June 2025.

In April 2025, the highest clearing price here was 1.5 yuan and the lowest was negative 0.004 yuan in one day, with an intraday price difference of 1.5 yuan. In the first half of 2026, the average settlement price of wind power in western Inner Mongolia was 170.6 yuan/MWh, and that of thermal power was 315.6 yuan.

You might say it’s a coincidence, but the data center happens to be a big consumer of electricity. It is 240 kilometers from Ulanqab to Beijing. Although it took two years since 2017 to lay two 144-core point-to-point dual-routing dedicated optical cables, the one-way measured 2.1 milliseconds and the end-to-end 4.2 milliseconds. But for reasoning, it’s still a bit long.

Therefore, the data centers built in Inner Mongolia are generally used for training, rendering, offline big data, and warm and cold storage. Scientific research and supercomputing that are not sensitive to delay and sensitive to cost basically go there.

There is another problem. As mentioned before, in addition to lack of power, American data centers are also short of water. Data centers need heat dissipation, and the most commonly used heat dissipation method is water cooling.

In fact, Inner Mongolia is also short of water.“Water calculation collaboration” is even one of the key tasks of the Municipal Water Conservancy Bureau, which strictly controls water access to projects.

So the solution here is: use outdoor cold air to naturally dissipate heat most of the year, and only turn on spray auxiliary during high temperature periods in summer; stack high-power-density liquid-cooled cabinets on top of air cooling to suppress evaporation and sewage discharge. For example, Kuaishou’s project design WUE is lower than 1, using a variety of water-saving and waterless air-conditioning technologies.

The waste heat in the computer room can also be used for heating. For example, UCloud’s Ulanqab Intelligent Computing Center can recycle 78,000 gigajoules a year and reduce carbon emissions by about 7,380 tons. Huawei Cloud uses heat recovery heat pumps to send heat back to the return air of the computer room and campus offices in winter.

In Hohhot, China Mobile’s data center cooperates with Jingneng Shengle Thermal Power Plant to use high-temperature waste heat from power generation to drive lithium bromide chillers, replacing traditional electric refrigeration. The municipal heating pipe network was changed to a two-way multiplexing system of “hot in winter and cold in summer”, and the asset utilization rate of the pipe network was increased from 50% to 100%.

After the B02 terminal was put into operation, the PUE dropped from 1.315 to 1.209; with all the terminals completed, it is expected to save 10 million kilowatt hours of electricity and 150,000 tons of water a year. The computer room, thermal power plant, and municipal pipe network are connected into a loop.

Although there is still a shortage of water, water consumption has been reduced to a minimum through various methods.

So, will local residents who originally enjoyed low-price electricity bills be forced to pay more because data centers are “stealing” electricity?

Actually no.

After Document No. 1439 in 2021, industrial and commercial electricity prices are formed by the market, while residents and agriculture are still set by the government.

Zheng Shanjie, director of the National Development and Reform Commission, said in January 2026 when answering questions at the National People’s Congress: “Resident electricity prices have been lower than the cost of power supply for a long time, which is equivalent to industry and commerce cross-subsidising residents’ electricity consumption. This is different from other countries.”

The data center belongs to industrial and commercial users, and the local government gets investment, industrial chain and tax revenue, and residents do not bear the incremental electricity price.

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