China’s Yunnan warns energy crisis could persist amid drought conditions, with a cap on smelting
- Aluminium production, a major source of electricity consumption that also raises the local gross domestic product, is being reined in by economic planners amid a hydropower shortage
- Power-supply dilemma has persisted for two years and threatens economic output at a time when China’s policymakers have made it a priority
China’s southwestern province of Yunnan has instructed its energy-intensive factories to cap production over the coming months, while also encouraging them to expand the capacity of coal-fired power stations, as it braces for the possibility of lower-than-expected water inflows and hydropower in the summer months.
The warning from the provincial economic-planning agency came as local rainfall this year has dropped by about two-thirds from the same period last year – a worrying sign for the hydropower-reliant province that also bears responsibility for supplying electricity to the southern economic powerhouse of Guangdong.
The electricity-supply dilemma, which has persisted for two consecutive years, punctuates a string of issues that Beijing’s policymakers must address. These include mitigating the impact of climate change and optimising industrial power distribution.
Yunnan, which borders Myanmar, Laos and Vietnam, is known as one of China’s favourite sightseeing destinations, but it made headlines last year amid a severe drought and subsequent power rationing.
In a recent draft government document, which is open to public feedback until May 10, the provincial development and reform commission plans to allocate power to aluminium smelters – major power consumers that also serve as pillars propping up the local gross domestic product – according to an overall assessment of their industrial chain strength, energy-intensive levels, equipment and pollutant discharge.
