China’s Sweltering Heat Pushes Shanghai Power Demand to Record

(Bloomberg) -- Punishing heat throughout southern China is stressing power networks and farmland as extreme weather continues to exact a deadly toll in the world’s second-biggest economy.

Electricity demand in Shanghai has hit a record as temperatures surged to 40.4C (105F) on Sunday, close to the city’s all-time high of 40.9C first recorded in 1873 and repeated two years ago. Nearby provinces are also closely tracking the heat to ensure power supplies, while officials have warned rice farmers in Jiangxi and tropical fruit growers in Fujian to protect crops from the blistering conditions.

So far, the grid is holding up, supported by ample stockpiles of coal, China’s mainstay fuel, as well as increased contributions from solar and hydroelectric power, which is still the nation’s chief source of renewable energy. Having learned the lessons from crippling power outages in recent years, the authorities have lifted coal imports to all-time highs and domestic production to near-record levels. Heavy rains, meanwhile, have swelled the reservoirs that supply the nation’s hydropower.

Climate change is now making extreme weather events more frequent and intense, and the searing heat comes even as parts of the country continue to be buffeted by torrential rain and floods. A mudslide in the southwestern province of Sichuan on Saturday killed at least eight people, according to state media. 

In Shanghai, the coastal metropolis of 25 million people, the local grid announced that power demand soared to over 40 gigawatts on Friday, more than the entire capacity of the Philippines. The financial center of Lujiazui, filled with glass-encrusted skyscrapers and designer malls, consumes twice as much electricity per square meter as Manhattan. 

The city’s efforts to decarbonize and shift away from heat-trapping coal involve importing 22% of its power from hydroelectric dams, as well as plans to develop 29 gigawatts of offshore wind turbines. 

Nearby provinces including Zhejiang, Jiangsu and Anhui — some of the richest and most industrialized areas of the country — are also facing extreme heat, according to the China Meteorological Administration, although widespread power outages have so far been avoided. 

On the Wire

China has updated its provincial-level consumption targets for renewables in 2024-2025, and introduced a mandate for aluminum makers for the first time.

China’s oil demand could peak at 16.5 million barrels a day in 2027 — 3 years ahead of schedule — due to more stringent policies on energy intensity and carbon emissions, according to Bloomberg Intelligence.

China’s government on Saturday laid out its priorities to spur consumer spending as weak domestic demand continues to weigh on growth.

China is planning a shift in the way it aims to control greenhouse gases, favoring hard targets for total carbon emissions over its current method of measuring them against economic growth. 

This Week’s Diary

(All times Beijing unless noted.)

Monday, Aug. 5:

• Caixin’s China services & composite PMIs for July, 09:45
• EARNINGS: CLP Holdings

Tuesday, Aug. 6:

• Nothing major scheduled

Wednesday, Aug. 7:

• China’s 1st batch of July trade data, including steel, iron ore & copper imports; steel, aluminum & rare earth exports; oil, gas & coal imports; oil products imports & exports; soybean, edible oil, rubber and meat & offal imports ~11:00
• China foreign reserves for July, including gold
• CCTD’s weekly online briefing on Chinese coal, 15:00

Thursday, Aug. 8:

• Nothing major scheduled

Friday, Aug. 9:

• China inflation data for July, 09:30
• China to release July aggregate financing & money supply by Aug. 15
• China weekly iron ore port stockpiles
• Shanghai exchange weekly commodities inventory, ~15:00

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