Factories across China are starting to cut electricity usage amid power curbing operations as the country faces a shortage of supply and strong demand from an upcoming winter.
Supply issues and strong demand have been driving up coal and gas prices, but power stations can only increase their rates by up to 10 percent to accommodate operation costs.
Factories have been cutting down production while some operations have halted entirely — China’s manufacturing hubs Jiangsu, Zhejiang and Guangdong are among the most affected.
“The power reductions surely had an impact on us. Production has been halted, orders are suspended, and all our 500 workers are off on a month-long holiday,” a manager of a Jiangsu-based textile factory told the Global Times.
Experts noted that the power shortage was partially caused by Beijing’s attempt to cut carbon emissions by next year, which was initially expected to hurt Chinese manufacturers.
With the shortage facing an upcoming winter, China may experience a severe shortage of coal and gas for heating.
Previous winter power shortages in China were offset by cheaper diesel generators, but experts warn that the government’s decarbonization policies might limit the country’s options to increase production this year.
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