China’s worst heat wave on record is crippling power supplies. How it reacts will impact us all

And now, climate change is threatening to disrupt that sense of security and economic growth.

The ongoing heat wave is the worst China has seen since records began more than 60 years ago. It has stretched over 70 days, sweeping through large swathes of the country and smashing temperature records at hundreds of weather stations.

The sheer size of China’s economy and population means any major disruption to its power supply can cause massive loss and suffering.

“These so-called extreme weather events will have more impact on our lives and electricity supply,” said Li Shuo, climate adviser with Greenpeace in Beijing. “And perhaps we all need to reconsider whether these extreme events will become the new normal.”

Experts say the Sichuan power crunch is an example that China’s energy system is far less robust than it needs to be to face the growing challenges from climate change.

Some believe the industry is heading in the right direction toward reform, while others worry it will turn to building more coal-fired power plants to secure energy supply — and risk undermining China’s pledges to reach peak carbon by 2030 and carbon neutrality by 2060.

How did the power crunch happen?

Located along the upper reaches of the Yangtze, China’s longest and largest river, Sichuan is famous for its rich water resources and relies mostly on hydropower.

Amid scorching temperatures and a prolonged drought, reservoirs across Sichuan are drying up — crippling the hydropower stations that account for nearly 80% of the province’s power generation capacity.

“China’s electricity demand has been incredibly flat in the past, because so much of it has come from the industry, not from households or services. Now with air conditioning becoming more common, the demand is becoming higher,” said Lauri Myllyvirta, lead analyst at the Centre for Research on Energy and Clean Air in Helsinki, Finland (CREA).

“At the same time, rains are becoming more errant. Heavy rains and periods of drought make hydropower much less reliable as a source of available capacity during those peaks.”

To make matters worse, Sichuan is traditionally a huge exporter of power during the rainy season, sending about a third of its hydropower generation to provinces in eastern China, according to David Fishman, an analyst on Chinese energy at consultancy The Lantau Group.

Despite its crippled power generation capacity, Sichuan must still honor its export contracts with other provinces, which Fishman said could “be really hard to get out of.”

“But even if they could, the generating facilities in Sichuan were built to export power to the east coast,” he said. “They don’t really have great connectivity to the rest of the Sichuan grid. They were never intended to serve Sichuan power consumption needs.”

‘Quenching a thirst with poison’

To ease the energy crunch, Sichuan is firing up its coal power plants, raising concerns among environmentalists about the potential increase in greenhouse gas emissions.

The province is also mining more coal. Sichuan Coal Industry Group, its largest coal miner, has more than doubled its thermal coal production since mid-August. And last week, Sichuan opened its first national coal reserve.

Nationwide, the daily consumption of coal at power plants was up 15% in the first two weeks of August compared with the same period last year, according to the National Development and Reform Commission.

Last week, Chinese vice-premier Han Zheng said the government would step up support for coal plants to ensure stable power supply.

While the jump in coal consumption is likely a temporary fix, Li, the Greenpeace adviser, feared the hydropower crisis could be used by coal interest groups to lobby for more coal plants.

“There is a possibility that power shortages caused by future extreme weather events might become a new motivation for China to approve more (coal-fired power) projects,” he said.

In the first quarter of this year, provincial governments approved plans to add a total of 8.63 gigawatts of new coal power plants, nearly half the amount seen in all of 2021, according to the report.

“Energy security has become a sort of code word for coal, rather than for reliable supply of energy,” the report said.

Yu Aiqun, China researcher at Global Energy Monitor, likened turning to coal — the largest cause of global warming — for energy security to “quenching a thirst with poison.”

“China has an obsession with coal power — there is a very strong sense of dependence. Whenever an energy problem occurs, it always tries to seek answer from coal power …This is running in the opposite direction from its climate goals,” she said.

‘Big challenge’

But some analysts say boosting coal capacity is only part of China’s answer to the much-needed energy reform.

Following the power shortages last year, the Chinese government has taken important measures to increase the flexibility of pricing and the profitability of clean energy, said Myllyvirta with CREA.

“The big challenge in China’s system is the grid is being operated in a very rigid way,” he said. “Different provinces aren’t sharing their capacity and using their capacity in an optimal way to to balance the loads within the region.”

Therefore, the need to build more thermal power plants can be significantly reduced if China’s electricity grid can be managed more efficiently and flexibly, Myllyvirta said.

Fishman, the energy consultant, said the new coal power plants are not necessarily going to be used; instead, they were built as backup for the fast expanding renewable energy sector — in case it runs into problems, like the ongoing drought in Sichuan.

“Capacity doesn’t equal generation. The capacity being there creates a lot of optionality and flexibility for all these other (renewable energy sources) they’re building.” he said. “For now, I see the coal capacity additions, as for the most part, targeted at being able to support wind and solar.”

Fishman said China’s power system planners are aware of the challenges they face, and that the industry overall is moving “in the right direction.”

The record heat wave and the power crunch in Sichuan highlight the need to reform the grid system, he said. “Because without them, this would be an event that could happen every five or 10 years, and it would be crippling every five or 10 years — or maybe even more frequently,” he said.