Desperate Chinese factory owners are increasingly turning to diesel generators to maintain their business during the power crisis that threatens the country’s economic growth and green ambitions.
Power shortage Hindered industry, leaving some households without electricity. In order to limit fuel, some provinces have ordered factories to close for a few days a week, employees have been told to take the stairs, and offices have also been forced to avoid using air conditioners in low temperatures.
As the winter heating season approaches, China also instructs coal miners Expand production Significantly, and hinted that it will allow energy producers paralyzed by high coal costs to raise electricity prices.
The manager (surnamed Pan) of Weifang Yuxing Electric Power Company in Shandong Province told the Financial Times that the company had sold out after a surge in orders following the tightening in September.
“We have a lot of orders from southern provinces such as Jiangsu and Guangdong,” Pan said, adding that the cost of generator parts has also risen. “I have to tell my customers that it may take 15 to 20 days to deliver a generator, and we have to wait for key components to arrive.”
President Xi Jinping promised that China will reach its peak carbon emissions in 2030 and achieve net zero emissions in 2060. But when diesel generators emit smoke, carbon monoxide and carbon dioxide, the decision to increase coal production threatens this promise.
Given the shortage, investment banks have been lowering China’s growth prospects. At the end of last month, Goldman Sachs lowered its forecast for China’s economic growth in 2021 from 8.2% to 7.8%, citing “huge downward pressure” brought about by energy shortages.
Chinese power generation companies said that the inquiries they received have increased significantly. Shandong Huali Electromechanical said, “Recently, it has received many inquiries from new and old customers, mostly because of power restrictions and want to know about generators.”
In an advertisement published on the news website Netease, Shandong Huali advised companies not to install solar panels. The company said: “The installation of solar panels takes a long time, and the immediate difficulties cannot be resolved quickly.”
Analysts said that China’s renewable energy and energy storage have not yet reached the level of replacing coal. The extreme weather this year has also disrupted the supply of some renewable energy sources, such as hydropower in southern China.
Danny Liu, who runs an aluminum manufacturing plant in Dongguan, said that the industrial cities in the Pearl River Delta are manufacturing centers, and demand for generator leasing has suddenly risen.
“The demand is huge,” he told the Financial Times. When he relied on three backup generators to power his business, a neighboring factory now pays 180,000 yuan (US$27,900) a month to rent each piece of equipment, up from 60,000 yuan in June.
Klaus Zenkel, chairman of the European Chamber of Commerce in South China, said that some members of his manufacturing center in the western province of Hong Kong rely on generators. A member of the Chamber of Commerce who normally uses 1,600 kWh of electricity per day was forced to reduce his daily usage to 640 kWh.
“They need to save themselves, but diesel is bad for the environment and it increases emissions,” Zenkel said.
Additional reporting by Emma Zhou in Beijing and Xueqiao Wang in Shanghai