A power crisis in Sichuan province has added to the woes of manufacturers in China

The Chinese province of Sichuan activated its highest emergency response on Sunday to address a “severe” power supply shortage, adding to problems for manufacturers as factories in the region closed.

According to a statement issued by the Southwestern Province on Sunday, due to extremely high temperatures and low rainfall since July, the demand for electricity has decreased along with the supply of electricity. The local government has promised to minimize the impact of power shortage on economic growth, industrial production and households.

It is the first time Sichuan has launched a top-level emergency response since it introduced an energy supply contingency plan in January. Measures in the plan include starting emergency generators to meet the electricity demand of households, critical users and regions, and maximizing production of oil, gas and coal.

Sichuan is China’s most populous province and a major production center for electronic vehicles and solar panels. Companies including Toyota Motor and Contemporary Amperex Technologies have closed plants in the region for days.

The power shortage has added another challenge to companies already struggling with the country’s adherence to Covid-19, including sudden lockdowns, continuous testing and movement curbs. This has affected consumer sentiment and devastated the manufacturing sector.

Jinko Solar Co., one of the world’s largest solar module producers, said two of its plants in Sichuan were affected by the power shortage and were operating at protective levels. The company said it was unclear when the units would be able to resume at full capacity and the limit would have a definite impact on its earnings.

Some office buildings and shopping malls have also adjusted air conditioning, lighting or escalators to save energy despite the heat, according to local media reports. Shanghai suspended landscape lighting near the Huangpu River for Monday and Tuesday, including a closed waterfront area to save electricity use.

According to Sichuan’s energy emergency plan, Level 1 emergency response allows it to seek crisis management help from the State Council, and increases the frequency of communication between energy suppliers and the provincial government.

Current peak load demand for electricity in Sichuan has reached 65 million kilowatts, up 25 percent from the previous year, local officials and power grid officials said at a press conference on Saturday.

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