China’s economy is hampered by the dryest riverbeds since 1865

WUHAN (BLOOMBERG) – Wan Jinjun, a 62-year-old retiree who swam the Yangtze River almost every day for the past decade in Wuhan, said he had never seen such drought before.

An extreme summer has wreaked havoc on Asia’s longest river, which crosses China for around 6,300 km and powers farms that provide much of the country’s food and massive hydroelectric power stations, including the dam of the Three Gorges – the largest power station in the world.

A year ago, the water lapped almost as high as the bank where Wan swims. Now the level is at its lowest for this time of year since records began in 1865, exposing stretches of sand, rock and seeping brown mud that smells of rotting fish.

“And it keeps going down,” said Wan, who last week had to descend nearly 100 steps – usually hidden below the waterline – to cool off on a sweltering 40 degree Celsius day.

Falling Yangtze water levels have slowed power generation at many key hydropower plants, causing energy chaos in many parts of the country.

Megacities, including Shanghai, are turning off lights, escalators and reducing air conditioning. Tesla has warned of supply chain disruptions at its Shanghai factory, and others like Toyota and Contemporary Amperex Technology, the world’s top maker of batteries for electric vehicles, have closed factories.

Although the energy crisis is far less severe than in 2021 – when a shortage of coal led to nationwide power cuts – it adds to the challenges authorities face in reviving an already battered economy. frequent Covid-19 closures and a real estate crisis.

And the time comes months before President Xi Jinping seeks an unprecedented third term. Senior Chinese officials, including Mr. Xi and Premier Li Keqiang, had earlier promised to prevent such repeats.

The southwestern province of Sichuan, which is suffering the region’s worst drought since the 1960s, is by far the hardest hit given its heavy reliance on hydropower. As dam output has halved in the region, a grueling heat wave has boosted electricity demand by about a quarter.

It’s an added strain on an energy grid that serves a population the size of Germany and supplies the industrial centers that house the factories of Tesla’s suppliers.

Hydropower is China’s biggest source of clean energy, accounting for about 18% of the country’s electricity generation in 2020, according to BloombergNEF. The country also has the largest fleet of solar panels and wind turbines in the world, and is increasing investment in renewable energy as it tries to reduce its reliance on imported fuel. Chinese companies invested US$98 billion (S$136 billion) in clean energy in the first half of 2022, more than double the amount in the same period of 2021.

The power shortage in Sichuan shows that hydropower, generally considered the most stable renewable energy source, is still not as reliable as coal, according to BloombergNEF analyst Wei Hanyang.

This raises questions about how easily China can move away from its dependence on fossil fuels, given that wind and solar are even less stable, Wei said.

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