Power cuts will not be returning this summer

Despite scorching heat waves, China will get through another summer without power outages.

Since late July, the Yangtze River Delta – China's most economically important region – and other powerhouse provinces have experienced severe heat waves.

• Many cities have recorded temperatures above 35 degrees Celsius for over ten consecutive days.

ICYMI: Heat waves and droughts in summer 2022 triggered a spike in power demand and a collapse in hydropower.

• This caused crippling power cuts, including curbs on industrial activity and electricity rationing in retail stores and public buildings.

But that's not happening this year.

• A combination of high coal stockpiles and heavy rainfall in hydropower provinces provides ample power reserves.
• China has also added unprecedented levels of renewable and energy storage capacity since 2023.
• Provincial regulators have also improved grid management and implemented interprovincial power-sharing agreements, helping manage demand spikes.

Get smart: Previous power shortages were caused by exogenous shocks – like extreme weather – and weak regulatory oversight.

• But the past two summers have demonstrated that power shortages are preventable with proper planning and preparation.

The bottom line: Future power crises will become increasingly rare.

• That's great news for industry – and sweltering retail shops.