Fears of global supply shortage arise as nationwide power cut hits homes and factories in China

Several incidents in relation to the “unplanned and uninformed” power outages have been reported across the country. Header image: Andrey Metelev/Unsplash.

A nationwide power crunch has hit households in the northeast of China, including Liaoning, Jilin and Heilongjiang. Factories in at least 20 provinces have been forced to shut since 22 September, according to Chinese media Sina.

Cities in Xinjiang, Qinghai and Inner Mongolia have seen similar power cuts since as early as late August following the government’s criticism of “an increased rather than reduced energy consumption” and these areas were given the highest-level warning together with another six provincial-level jurisdictions.

Under the power rationing, some factories in Guangdong have been implementing an operating rhythm of opening for three days and leaving the rest of the week closed. While others are only allowed to open for one or two days per week with additional advice given to manufacturers to avoid peak hours.

Several incidents in relation to the “unplanned and uninformed” power outages have been reported across the country, including a resident in Jilin stuck in an elevator for 30 minutes and gas poisoning in Liaoyang caused by the ventilation in a factory being shut down led to 23 being hospitalised.

The power restrictions have also disrupted the water supply in Jilin, with the city’s water supplier issuing a statement on 26 September, where it indicated such shortages would be a “new normal” and “could last till next March”. The statement has soon been taken down and the company shortly issued an apology after the message was called out for “inappropriate wording”.

The government has attributed the power cut to an “imbalanced supply and demand”. Some speculate that an early economic recovery in China from the pandemic has played a part as mass production has pushed the consumption of energy, but coal mine output has failed to keep up, leaving an inverted coal price and generators short of fuel.

According to the National Bureau of Statistics of China, the nation’s electricity output capacity had reached 2.28 billion kWh as of August, a 9.5% year-on-year increase. Thermal power alone accounts for 71.9% of the country’s electricity.

Beijing doubled down its effort in cutting energy intensity by around 3 percent in 2021 in order to meet its climate goals and aims to be carbon neutral by 2060. And the recent power restriction has been viewed as a move to honour this pledge.

The dual impact of the power squeeze and tightening emission standards have hit the capacity of at least 23 listed companies in China, most of whom, are at the upper end of the supply chain. The domestic production fallout has also prompted global supply fears as the world’s second-largest economy is believed to be experiencing a dimming of growth, with warnings of possible shortages of textiles, toys and machine parts.

It is still unclear when the energy curbs will come to an end as the times and duration of such restrictions vary in different parts of the country. With the northernmost cities entering the winter much earlier than the rest of the country, local authorities said that the “best efforts” have been made to ensure a consistent power supply for civil use in the coming months.