Mongolia is in the heart of the Central Asian Orogenic Belt located between the East European, Siberian, North China, and Tarim cratons, and is considered the largest area of Phanerozoic continental crustal growth.

Renewables Readiness Assessment of Mongolia prepared jointly by the International Renewable Energy Agency (IRENA) and the Ministry of Energy of Mongolia, finds that electricity output from the country's solar and wind resources alone could reach 15,000 terawatt-hours (TWh) per year, the equivalent of more than 18 million tonnes of avoided coal.

Mongolia's total renewable energy potential is 2600 gigawatts (GW), over 1000 times larger than the 1.6 GW installed capacity of Mongolia's electricity system.

The State Great Khural (the Parliament) approved the revised version of the Law on Licensing on June 17, 2022 and shall become effective from 01 January 2023.