The southwestern Chinese province of Sichuan is baking in the worst heatwave in six decades, with hydropower generation from the Yangtze River falling and factories closing to ease the pressure on the grids.
The heatwave is reducing water levels on the Yangtze River to the lowest on record for this time of the year, threatening crops and power supply in the Sichuan province, which relies on hydropower generation for a large portion of its electricity supply. Sichuan also typically sells hydropower-generated electricity to other provinces.
But this year, the worst drought and heatwave in decades has depleted water levels, threatening power supply in the region. China joins Europe in experiencing issues with power supply amid heatwaves. European hydropower reservoirs in Norway are at low water levels, while hot rivers curtail nuclear power generation at French nuclear power plants, which usually account for 70% of France’s electricity mix.
In Sichuan in China, the drought and heatwaves are so extreme that the province has ordered all factories to close for six days in order to help ease the pressure on the power supply, CNN Business reports.
Japan’s automobile manufacturer Toyota Motor Corporation has halted operations at its Sichuan plant in Chengdu until Saturday after the local authorities ordered factories closed for several days, a company spokesperson told Reuters. Other factories, including those producing fertilizers and processing lithium, have also been affected.
Not only is China’s Sichuan province a major hydropower producer, but it also hosts many factories that produce polysilicon and process lithium—two key components of the solar and battery industries, respectively. The power shortages and factory halts will tighten the market for these materials and drive prices higher, analysts say.
According to Morgan Stanley analysts cited by Bloomberg, Sichuan hosts almost 15 percent of all Chinese production of polysilicon—the key material in the solar photovoltaic (PV) supply chain.
By Michael Kern for Oilprice.com
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