The power shortages and outages that plagued much of China last year are back in the industrial south, crucially at a time Guangdong factories are revving hot to meet rising demand in the post-pandemic West.
Electricity production in southern China has been hamstrung by drought, with this summer’s tardy monsoon parching the upper reaches of the Yangtze and other major rivers that fuel hydropower stations.
Guangdong’s provincial mouthpiece the Southern Daily recently amplified fears that widespread power cuts could hit a large swathe of manufacturers and exporters in China’s largest provincial economy, just as they stirred back to life after the Covid-19 pandemic. It warned production in the province could relapse into “a state of suspended animation” due to power shortages.
The newspaper reported that numerous plants in Guangzhou, Shenzhen, Dongguan, Foshan and other industrialized cities now face “power rationing” orders by local authorities. That means they face power limits or cuts every three to four days, sometimes without prior notice.
Many businesses in Guangdong have vivid memories of the sudden electricity shortages they faced between December and January, a period when mounting orders for backup diesel generators sent prices skyrocketing.
Data from Guangdong’s provincial statisticians show manufacturing volume in the first four months in the economic dynamo surged nearly a quarter over a year ago to hit 1 trillion yuan (US$156 billion), driving the province’s gross domestic product (GDP) to 2.7 trillion yuan in the first quarter, up 18.6% year-on-year. Guangdong’s GDP surpassed that of Canada, Russia and South Korea in 2020, according to the Southern Daily.
The state-owned electricity utility operator China Southern Power Grid (CSPG), which generates and sells electricity to Guangdong and its neighboring provinces, is now rushing to tap alternative supplies and link its network to the state grid to tap electricity from the north. Guangdong’s total daily power demand in early May soared 15.7% over a year ago to 130 million kilowatts, marking an all-time high.
Some reports even said some cities there had banned newly-built plants and equipment from being wired to the power grid, so as not to further stain supply reliability when the system was already at full baseload capacity.
But that may not hold up for long when the temperature curve ticks up and more businesses also enter their summer production peak.
CSPG has warned of future huge swings in supplies due to weather, seasonal and hydrological “force majeure circumstances.”
It said its hydropower building spree over the past decade, a policy aimed at weaning power production off coal and encouraged by Beijing’s stated goal of achieving carbon neutrality by 2060, may have crippled system stability as this year’s water run-off is reduced at a time Guangdong’s electricity demand is soaring.
“We have to take the good with the bad as far as weather goes,” the Southern Daily quoted a CSPG executive as saying.
The company also noted in a separate document reviewed by Asia Times that Yunnan, the southwestern border province that has recently supplied as much as a third of Guangdong’s electricity, has seen an 11% drop in hydropower output amid dry spells since the second quarter.
For instance, the Pearl River that rises in Yunnan and empties into the South China Sea in Guangdong has recently seen the storage reservoirs situated along its basin drop to new lows. Yunnan itself is reportedly grappling with power shortages of its own.
Hydro units now contribute nearly half of the electricity generation in southern China. But low water levels along the Yangtze and Pearl Rivers and their major tributaries this summer have exposed the risks to power supply reliability when peak runoff is not enough to meet peak demand.
Green groups now worry that cadres in charge of electricity-starved southern provinces may revive plans to use more coal as a quick, expedient fix to the power shortages. China’s overall electricity sector still relied on coal for 60% of its output in 2020.
In May, the State Council’s National Development and Reform Commission also named and shamed Guangdong, Zhejiang, Yunnan and Guangxi for failing to lower their respective energy consumption intensity relative to their GDP in the first quarter.
Li Shuo, a senior policy consultant with Green Peace’s China branch, revealed in a report that Beijing approved 46.1 million kilowatts worth of new coal-fired plants last year.