CHINA REPORT
Sichuan’s worst drought in more than a half century spurred the Chinese province to extend industrial power cuts and activate its highest emergency response, adding to manufacturers’ woes as they shut down factories in the region.
Source: Bloomberg Read The Article
Xinhua News Agency Read The Article
Shanghai Daily Read The Article
China.org.cn Read The Article
PSR Analysis: In the old days of the internal combustion engine, this piece of news tells people what a significant role the ICE plays in backing up the power grid. It still plays a role, except that now it has a great deal more to do with the future of the combustion engine.
Will these power shortages set back China’s ambition to promote more EVs nationwide? It’s important to note that Sichuan accounted for 29.8% of China’s hydro power generation in 2021. This year, we witnessed shutdowns of the river light show on the Bund waterfront. If there are any more severe climate change affects in this province, we may see electric vehicles, be it Nion or Tesla, stalled in cities across the country, waiting to be towed to charging stations by gasoline-powered vehicles, only to find that power there is out, too.
Fortunately, this round of power outages caused by drought lasted less than 30 days. It is a wake-up call for the State Grid, a state-owned grid company to transmit power to most of the country. “One Country, One Grid” used to be the motto of the State Grid. It is not too late for people to focus on power grid resilience and flexibility. After all, the poles and lines are already built there to transmit power from Sichuan to Wuhan and Shanghai. Now, they must upgrade it to go both ways.
So, for those who are pessimistic about the future of EVs, they can point to this power shortage caused by drought, which left EVs and blackouts behind. For people who argue otherwise, the situation represents a new round of investment opportunities. Imagine how much Chinese government might invest to transmit wind, solar or nuclear power anywhere it’s needed in case of future power shortages.
The table is set, the bet is on. PSR
Qin Fen is Business Development Manager-China, for Power Services Resources
