To relieve the energy crises it is now facing in the midst of a heat wave that has been running amok on the nation for weeks, the Sichuan province in China issued a directive for all factories inside the region to cease operations and close the facilities for six days.
The advice is anticipated to have a considerable negative impact on production. A significant manufacturing region in China, Sichuan is home to numerous semiconductor and solar panel manufacturers. In addition, some of the top technology companies in the world, like Intel and Foxconn, an Apple supplier, are serviced by the local power grids.
Since the region is the country’s center for lithium mining, analysts also warned that rates for raw materials for automobile batteries would surge in the coming days. For the creation of batteries for electric vehicles, lithium is crucial.
Problems mounting another
The present heat waves are the most severe that China has experienced in more than 60 years and are currently affecting a large portion of the country. In dozens of cities around the country, recorded temperatures were higher than 40 degrees Celsius, or 104 degrees Fahrenheit. Thus, there was significant demand for air conditioning in homes and workplaces. The pressure to meet customer demand is increased as a result.
The impact of the heat wave is made worse by the nation’s present drought. The phenomenon has reduced river water levels in China, which has a detrimental influence on the amount of electricity produced by hydropower facilities.
The provincial administration and state grid of Sichuan province issued an urgent notification directing 19 of its 21 cities to suspend all factory production on Monday. The approach should guarantee that the limited energy produced by electricity companies would be adequate to meet the needs of the province’s 84 million residents.
China’s hottest on record in 60 years
Since last month, the province has endured heat and dryness in multiple locations. For instance, the southwestern region of the province has been severely impacted, resulting in lower power generation from its hydroelectric facilities. In addition, the average rainfall has decreased by 51% compared to the statistics from the years before, and the phenomenon the region is currently experiencing is the most extreme it has felt in 60 years, according to the government’s website.
A city in Sichuan called Luzhou has stated that it will turn down its streetlights at night to save energy and help electrical grids regain capacity.
A chief expert at the Xinjiang Meteorological Observatory, Chen Chunyan, said, “Continued high temperature has accelerated glacial melting in mountainous areas and caused natural disasters such as flash floods, mudslides, and landslides in many places.”
Other industries affected by the government’s decision
In addition to energy, Sichuan is a center for mining crucial minerals that are essential to the electronics and solar photovoltaic industries. Sichuan is home to facilities for global semiconductor firms like Texas Instrument, Intel, Onsemi, Foxconn, and Onsemi. CATL, a Tesla supplier, operates a plant in the province to produce its products.
Several Chinese enterprises are alarmed by Sichuan’s provincial government’s power reduction. The executives said the reduction would jeopardize their company’s production. For instance, Sichuan Haowu Electromechanical and Sichuan Lutianhua both impressed the authorities with the potential losses they could suffer if the cuts and suspension last for an extended period of time.
Other provinces to their citizens are now giving the advice to save energy. In case the dry season lasts the entire summer, the provinces of Anhui, Zhejiang, and Jiangsu have all warned their populations to be prepared for possible outages and shortages. In addition, to save energy, many workplaces gave their staff orders to increase the temperature levels of the air conditioning in their spaces.
Inflation could worsen
“Affected by the continuous high temperature in many places, the price of fresh vegetables rose by 12.9% year-on-year, which was significantly higher than the same period in previous years,” said the National Bureau Statistic spokesperson, Fu Linghui, .
“August and September are the key periods for the formation of autumn grain production. [We must] pay close attention to the impact of natural disaster, insects and disease on our country’s food production.”