China's Chongqing extends power curbs as drought drags on

3 minute read

An aerial view shows the Yangtze river that is approaching record-low water levels during a regional drought in Chongqing, China, August 20, 2022. REUTERS/Thomas Peter

Register now for FREE unlimited access to

BEIJING, Aug 25 (Reuters) - The sprawling Chinese region of Chongqing, home to several large global automakers, has extended power curbs at factories as a prolonged heatwave and drought continue to wreak economic and environmental damage throughout the country's southwest.

Industrial firms were originally ordered to restrict output from Aug. 17 until Aug. 24, but formal curbs have been extended until Aug. 25, according to a notice issued by the Chongqing authorities on Wednesday.

Curbs will be gradually relaxed "in an orderly manner" once weather conditions have improved, it said.

Register now for FREE unlimited access to

Pangang Group Vanadium & Titanium Resources Co Ltd (000629.SZ) told the stock exchange in a filing on Wednesday its Chongqing subsidiary had received the notice and would continue to suspend production.

"The specific recovery time will be subject to the notification of relevant departments in Chongqing," it said.

Chongqing and Sichuan province, and large swaths of China, have been broiling under several days of 40 Celsius (104 Fahrenheit) heat - causing major crop damage in some areas and forest fires. read more

Power rationing in the region has shortened mall hours in Chongqing and impacted firms across sectors including battery makers and solar panel equipment manufacturers. Toyota Motor (7203.T) said it had used an in-house generator at its Sichuan plant to resume operations.

Although national forecasters reduced their heat alert level from "red" to "orange" from Tuesday, temperatures are still expected to exceed 40C in some places in Chongqing, neighbouring Sichuan and other parts of the Yangtze delta until the weekend.

Sichuan depends on hydropower for around 80% of its electricity, and dwindling water levels have left its generators operating at much lower than their normal capacity.

Sichuan normally delivers large amounts of its surplus hydropower to other provinces, and coal-fired power plants in Anhui province and elsewhere have been under pressure to pick up the slack, according to state media.

"It's unclear how long this power will continue to be exported ex-province, considering the severity of the local power shortage, but cross-province transmission is usually given highest priority in China's power dispatch planning," said David Fishman, a power expert with the Lantau Group consultancy.

"If these exports are suspended, already-tight power supply in eastern China, which is enduring its own heat wave, will be further affected," he said in a research note.

China's State Grid Corporation is deploying tens of thousands of workers to help shore up electricity supplies to Sichuan itself, state broadcaster CCTV said on Wednesday, with 130 million kilowatt-hours now being delivered every day to the province through eight transmission lines.

Economists at ANZ said in a note on Tuesday it was unlikely China would see a repeat of last year's nationwide energy shortages, which were caused by tight coal supplies, adding that the impact of the current power crunch on gross domestic product was "negligible" so far. read more

Register now for FREE unlimited access to
Reporting by Beijing newsroom and David Stanway in Shanghai; Editing by Lincoln Feast and Tom Hogue

Our Standards: The Thomson Reuters Trust Principles.