September 29, 2022

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China's densely populated Sichuan province shuts down factories due to electricity scarcity

China’s densely populated Sichuan province shuts down factories due to electricity scarcity

Severe drought in Longquan, southwest China. Almost all the water in this tank has evaporated.AP . image

The Chinese province of Sichuan is facing a massive power shortage, and therefore it is expanding the scope of measures to reduce electricity consumption by some industrial companies. On Sunday, the government ordered those companies to halt production until at least August 25. A contingency plan has also been drawn up to deal with the “extremely serious” shortage of electricity.

Power generation via hydroelectric plants in particular has declined due to extremely high temperatures and little precipitation, while there is record demand for electricity, including air conditioning. Never before has such a severe drought and heat been recorded in China. While water flow into reservoirs for hydropower plants was at a historical average at the beginning of the month, it has since fallen by more than 50 percent, according to the Chinese government.

Emergency generators will be operated as part of the measures. The priority is to supply power to households, important users and regions. Oil, gas and coal production will also be maximized.

Sichuan is one of the most populous provinces in China and an important area for producing batteries for electric cars and solar panels. Companies such as automaker Toyota and contemporary battery maker Amperex Technology closed their factories in the region a few days ago. Jinko Solar, one of the world’s largest manufacturers of solar panels, has significantly reduced activity at two of its plants in Sichuan.

The effects of heat and drought extend well beyond Sichuan. The province itself not only relies on generating power from rivers, but also sells that electricity to the densely populated eastern parts of China, including Shanghai and Zhejiang. According to Hanyang Wei, an analyst with research firm BloombergNEF, there are unlikely to be blackouts across the country. Most counties rely more on coal for electricity, and power stations were storing it on behalf of the government before the summer began.

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However, there are certainly national consequences of heat and drought. If water levels continue to drop, that will be bad news for river and coastal shipping. In 2020, according to the Ministry of Transportation, these accounted for 16 percent of all freight transports in China.