Sichuan paralyzes its industries for six days due to energy shortage

First modification: 08/17/2022 – 10:57

The high temperatures suffered this summer have led to a rapid increase in citizens’ demand for electricity, affecting the capacity of the supply network. According to data from the Sichuan electricity company, electricity consumption in July increased by 20% year-on-year, reaching residential consumption peaks on the worst days of heat of more than 90% increase compared to last year.

In addition, this year the rainy season is very scarce, reaching the lowest rainfall record since 1961.

On Sunday, the provincial government ordered 19 of the 21 cities in the region to suspend production at all factories from Monday to Saturday, in order to ensure enough power is available for residential use.

Sichuan is a prime location for many semiconductor, solar panel and lithium mining industries. Some of the largest electronics companies in the world have their factories in the region, such as the suppliers of Apple, Intel, Tesla or Toyota.

Sichuan’s cheap and highly available hydropower has attracted large-scale energy-intensive industries such as cryptocurrency mining.

The Sichuan hydropower grid, which harnesses excess power generated by heavy summer rains in southwestern China, has attracted large-scale energy-intensive industries. For example, Bitcoin mining operations abound in Sichuan due to its cheap and highly available hydroelectric power.

Now, factory closures for a week could restrict global supplies of polysilicon and lithium, among other materials, and drive up prices.

Electricity rationing is not new in the Sichuan region or in China. However, according to experts, Sichuan is currently facing the “most severe and extreme moment” in power supply. In recent years, the increase in electricity consumption derived from rising temperatures has caused power outages in many cities, forcing them to turn off their lights and live in darkness.

Living a progressive increase in electricity demand and with a supply system still highly dependent on coal, China has a hard and ambitious road ahead to achieve its commitments to reduce carbon emissions in 2030.