China’s densely populated Sichuan province shuts down factories due to power shortages

China’s Sichuan Province is facing a huge power shortage and is therefore extending measures to reduce the power consumption of some industrial enterprises. These companies were ordered by the government on Sunday to halt production until at least August 25. An emergency plan has also been put in place to deal with “very serious” electricity shortages.

Electricity generation from hydroelectric plants in particular has declined due to extremely high temperatures and lack of rainfall, while demand for electricity is at record highs, including for air conditioning. Never before has such severe drought and heat been recorded in China. While water flows to reservoirs at hydroelectric plants were at a historic average earlier this month, they have since fallen by more than 50%, according to the Chinese government.

Emergency generators will be started as part of the measures. The priority is the power supply to households, large users and regions. The production of oil, gas and coal will also increase to the maximum.

Sichuan is one of the most populous provinces in China and an important region for the production of batteries for electric vehicles and solar panels. Companies such as automaker Toyota and battery maker Contemporary Amperex Technology had already closed their factories in the region a few days ago. Jinko Solar, one of the world’s largest solar panel makers, has drastically reduced operations at two of its factories in Sichuan.

The effects of heat and drought extend beyond Sichuan. Not only does the province itself rely on power generation from rivers, but it also sells that power to densely populated eastern regions of China, including Shanghai and Zhejiang. According to Hanyang Wei, an analyst with research firm BloombergNEF, power outages are unlikely nationwide. Most provinces are more dependent on coal for power generation, and power plants stockpiled it on behalf of the government before the start of summer.

However, there are certainly national consequences of heat and drought. If water levels continue to drop, it will be bad news for river and coastal navigation. In 2020, according to the Ministry of Transport, these accounted for 16% of all freight transport in China.