Let's get now to Bloomberg Asia Energy reported down Mortel, who joins US from Beijing to discuss China's severe drought and power crosses factory shutting down as this extreme heat wave strains energy grids with Situan hottest hit, I mean, this is quite a dire situation down and just really adding to China's economic woes. Tell us what we're seeing and the impact here to these factories being shut down. Yeah, well, Jules, as you know, I lived in Singapore for several years,
and Central China is putting Singapore's heat to shame. It's been above above forty degrees for most of the last two months, uh, certainly above thirty five just about every day. The heatwave there has dried up the youngs River, one of the biggest rivers in the world, to the point that riverbanks are exposed for for more than ten meters in a lot of places in Wuhan where we visited. Uh and that's created two big problems for for China's
energy system. One is that air conditioning demand has gone through the roof in Sichuan Province, like the daily peak US has jumped by from just a year ago and at the same time, China is the world's biggest hydropower generator. Big damn projects like the Three Gorges produce a lot of energy, and the river is so low that they're producing about fifty less power right now than they were
just a little while ago. So those two things are going in and Sichuan has had to shut basically power off to almost all of its industrial users for basically the past ten days to be able to keep lights and air conditioners on at people's homes, and it's starting to spread beyond that too. Uh Shanghai, for example, has shut off the lights for its skyscrapers in the bund area, so you don't see that beautiful skyline right now. Um Juhan, We went to a mall where only half the escalators
were working. The air conditioner was kept up at a much higher rate than normal. So there's lots of little conservation efforts hate happening throughout the country. In addition to the really severe cuts in in Sichuan, the country also has the largest fleet of solar panels and wind turbans. I wonder whether or not that has helped has has has that been able to replace some of the laws supply honestly, not really. So Sichuan has a very unique uh power structure in that about eight percent of its
generation capacity is these hydro power dams. You know. So sich One is famously the mute, mountainous and beautiful with rivers everywhere, and so they've always been able to rely on hydro power dams. They only have a little bit of wind and solar, and they only have a little bit of cold power plants, so they haven't had much
to fall back on once this drought really took hold. Uh. I think if when you look out into the future, China's going to be doing a couple of things to try to uh make sure the situation doesn't happen again. One thing is that they're gonna try to improve the interconnectedness within its power grids within the country so that some of these wind and solar um installations all around the country that you're talking about can getting into Sichuan
and relieve the pre sure in the future down. What does this have in terms of an impact to China's growth? I mean, we're already grappling with the COVID zero policy, with the property slowdown. What are economists saying in terms of the power outages impacting GDP targets, it's certainly not going to help. Most economists say that, you know, we're it's basically August fifty have been the really severe power cutoffs in Sichuan, and Sichuan accounts for about five percent
of Chinese GDP. So unless the heat wave lasts longer, in the power outages lasts longer, or these ripple on effects in the other provinces get worse than it are than we're seeing right now, they don't think that there will be a noticeable impact on the national GDP. But what's happening is several industries have very key supply chain hubs in Sichuan. Um sich One is a big producer of polysilicon for solar panels, for example, or lithium chemicals for e V batteries, and so we're going to see
ripple effects in those industries. UH continuing down this pledge and for the next couple of weeks and maybe even months, with hydro power cuts so much that output is it likely we're just going to see a lot more coal burned in these these days. Yeah. Absolutely. Brand At the beginning of this year, the first half of this year, China actually burned less cold than last year because it was really rainy and hydropower generation surged. It was up about over the first six months, but that it has
just completely reversed. We've seen the in August so far coal burning has been up by about fift And you know, frankly, this isn't you know once once these heat waves go away and air conditioning goes down and the power curves end in sich One, this isn't going to be the end of the problem because we're going to spend the rest of this year. These reservoirs aren't going to get repleted right away, and so the hydro power generation is
going to be pretty low for a while. And that means China is going to have to go out and import more gas, and import more coal, and mind more coal to power its country. That's going to put in on a collision course with European nations that are out there right now driving up power or driving up prices of coal and gas to make sure that they get
heated for the winter. Just finally and quickly down. What does all this mean for for global food supply, because as you say, it's not just happening in China, and we know what's happening in India and affecting rice planning areas too. Yeah, I mean, this is the scary thing is we don't really know yet how bad the impact
on agriculture is going to be. We see pictures of crop lands or scorched torch and we're hoping that, you know, the farmers are able to maintain crop yields, but so far that that's going to be the big thing to watch in the coming months is how badly this damages crops and you know, the biggest food consuming country in the world. All right, terrible news. Thank you. Dan as always down at Bertel Bloomberg as Asia Energy reporter with
us in Beijing. Fascinating piece by the Bloomberg team. They're about China's historic drought, spawning this power crisis and being a new test for President. She