Next Round Of Heat Tests China's Ability To Keep Factories Humming

Next Round Of Heat Tests China’s Ability To Keep Factories Humming

Another round of dangerous heat is forecasted to plague large swaths of China as the nation’s power grid is pushed to the brink. Factories have already received power rationing notices to stabilize the grid and thwart rolling blackouts, ensuring sufficient supply for air-conditioners. The last thing China needs is social unrest amid the mortgage boycott crisis

China Meteorological Administration expects temperatures in the southern region, including Jiangxi, Zhejiang, and Fujian provinces, to reach between 39 and 42 degrees Celsius (102.2 Fahrenheit and 107.6 Fahrenheit) through late August. 

For the last two weeks, China has been boiling with temperatures of 35 degrees Celsius (95 Fahrenheit). The next round of heat apocalypse appears to be arriving on Wednesday. 

Last week, the nation’s electricity generation hit a record high due to soaring cooling demand, forcing the government to ration power to polyester and textile factories in Zhejiang province, according to the South China Morning Post. Other electricity-hungry export factories were also rationed power to ensure grid stability. 

Another round of heat comes as nationwide power shortages worsen supply chain problems. Disruptions from power shortages could be nearing as Bloomberg points out that some coal-fired power plants in the country’s coastal area have rapidly depleted stockpiles. Some power plants have only ten days of usage, warned consultant Fenwei Energy Information Service Co. 

Besides energy-intensive factories rationing power, office buildings and shopping malls have reduced power usage. 

Eleven provinces have sent alerts to industrial users for “orderly consumption” that would limit supply when air-conditioning demand jumps. Among the affected regions, Jiangsu has already cut power to just 20% of normal levels in some places and threatened to switch off the electricity to factories consuming excessive amounts, according to industrial news outlet Chemical Fiber Group. -Bloomberg

Fenwei Energy also said that utility companies are under pressure because of high coal costs, resulting in losses for some coal-power generators. China’s COVID Zero policy made things worse by restricting coal imports and the movement of shipments within the country to utilities. 

The electricity shortage and power rationing at factories will dampen economic growth in the world’s second-largest economy and worsen supply chain problems. 

Tyler Durden
Tue, 07/19/2022 – 19:45

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