Water shortages affecting hydropower supplies in Yunnan province in southern China have forced aluminum manufacturers there to cut back on production.
A report by Nikkei Asia said the province asked aluminum smelters to cut production three times since last fall: by 10% in September, then by 20%, and most recently by 40%.
“The power supply situation is severe, and hydroelectric electricity generation capacity is down. We received a request to reduce our power consumption,” the agency quoted Yunnan Aluminium as telling its investors in late February.
Yunnan accounts for about 10% of China’s total aluminum smelting capacity. Nikkei Asia said the cuts could impact a variety of industries, including housing and automating.
Hydroelectric power accounts for around 80% of the power generated in Yunnan province. A 2022 heat wave and low rainfall have impacted generation.
According to S&P Global, Yunnan had 81.12 GW of installed hydropower capacity at the end of 2022, the second largest after Sichuan province’s 97.49 GW.
Yunnan’s low-cost hydropower has been an advantage over other regions, attracting energy-intensive production operations, such as aluminum smelting. Smelters account for an estimated 30% of electricity consumption across the province.
Yunnan also supplies electricity to nearby areas, including the manufacturing hub of Guangdong province. The province has the country’s highest GDP and electricity consumption, which totaled 787.03 TWh of power in 2022, according to local government data quoted by S&P.
No major shortage issues have been reported outside of Yunnan, the Nikkei news agency said. It said that areas of southern and inland China that are similarly reliant on hydroelectric power previously have imposed restrictions on electricity usage due to droughts.
