According to the Wall Street Journal, people related to Vietnam’s manufacturing business said that some production plants of Apple suppliers such as Hon Hai and Luxshare, as well as Samsung Electronics’ factories in Northern Vietnam, have received requests from local power companies to consider alternate power cuts, or at least reduce power consumption during peak periods. These people stated that the power supply was tight in mid May, and local government officials told them to prepare for a power shortage that will continue until at least the end of June.
Canon, Foxconn and other factories affected
According to CCTV Finance, every year from April, Southeast Asia will experience the hottest season of the year, and this year the region has been hit by an unusually high temperature. Thailand experienced its hottest day on record on April 15, when the temperature reached 45.4 ° C. Laos recorded 43.5 ° C for two consecutive days in May, while Vietnam recorded a record high of 43.8 ° C on the first day of June. Under the high temperature, people’s demand for electricity has soared, and many parts of Vietnam are facing the problem of electricity shortage.
Electricity is tight in many parts of the country, especially in the northern provinces where industrial parks are clustered. Since the beginning of June, some industrial parks have experienced sudden power outages, and factory production has been interrupted. Vietnamese media reported that the park, including the factories of multinational companies such as Canon, had experienced 24-hour rolling blackouts, and the normally busy factories were quiet.
Vietnam’s Bac Ninh and Bac Giang provinces have developed industries, especially in the field of electronic components manufacturing, where Samsung, Canon and other large multinational companies have set up factories in industrial parks. Large capacity machines are used in the production of electronic components, and the demand for electricity is great.
As a result of this year’s heat wave, many provinces in northern Vietnam, where industrial parks are dense, have experienced larger power supply gaps than in previous years. A recent report submitted to the government by the Power Company of Vietnam said the power supply in the northern region could be short by 8,000 megawatts, much higher than the previous forecast of 5,000 megawatts.
“In the past year, too many electronics factories have expanded production in the region, and electricity consumption has skyrocketed,” one of the people said, according to Beijing Business Daily. According to Apple’s latest supplier list released this year, Foxconn and Lishun Precision are both in Vietnam’s Bac Giang province for Apple’s contract manufacturing.
Generator rental market is hot
Power outages have become a part of daily life in Vietnam, Beijing Business Daily reported, citing local media. An industry ministry official was quoted as saying that as of June 6, total hydropower generation was less than a quarter of its designed capacity due to low water levels, and power generation was down by thousands of megawatts.
For these factories, a power outage means a shutdown. According to people familiar with the matter, the local government has asked some of Foxconn’s Vietnam manufacturing plants to consider suspending production from dusk to midnight for 20 days, but allowing them to restart production from midnight to dawn. The Vietnamese plant is now managing to maintain most of its operations and is considering building its own power generation facility next year, they said.
According to CCTV finance, due to the continued heat wave and the planned power outage measures implemented by the government, Vietnam’s Hanoi city and nearby provinces and cities generator rental market is hot.
Li Qingxuan, owner of a generator rental shop in Vietnam: Because of the shortage of electricity, some families and business people have to rent generators from me. Compared with the same period last year, the orders in my shop have increased by 70%.
For most families in Vietnam, spending about $50 a day to run an independent generator is a luxury, as it is often enough to cover the electricity bills of a family of six for an entire month. In order to avoid the high temperatures, many people choose to go to air-conditioned shopping malls to cool off.
In addition, high temperatures and frequent power outages have also taken their toll on Vietnamese farmers. According to Vietnamese media reports on the 4th, in the central province of Nghe An, a chicken farm because of a sudden power failure, the generator in the chicken house can’t start in time to power the ventilator, more than 1,000 chickens to be sold died of heat shock, to the chicken farm has brought nearly 100 million Vietnamese dong losses, about 30,000 yuan.
According to the news agency, the biggest complaint of industrial enterprises is that power outages in Vietnam do not always go according to schedule. The European Chamber of Commerce in Vietnam said on June 5 that it had sent a letter to Vietnam’s commerce ministry asking for a quick solution to “frequent and unexpected power outages.” The chamber’s deputy Jean-Jacques Bouflet said Vietnam needed to find a response as soon as possible and take urgent measures before the country’s reputation as a reliable global manufacturing hub is damaged.
In response to the situation, Deputy Minister of Industry and Trade Do Thang Hai said earlier that the government has asked relevant agencies to increase coal and natural gas production. According to media reports, the Vietnamese government is now busy looking for ways to increase electricity supply, such as fast-tracking the approval of completed renewable energy projects or approving the import of liquefied natural gas for the first time.
In addition to industrial power consumption, Vietnam’s Prime Minister Pham Minh Chinh warned that 100 million residents could face nationwide blackouts amid record temperatures and unprecedented power demand. Vietnam’s public utilities department noted that further disruption of power supply may be inevitable as demand exceeds the load of the grid, and power in northern Vietnam is expected to continue to increase during the hot weather in early June.
It is worth noting that, according to CCTV news, on May 23, in Dongxing City, Fangchenggang, Guangxi, Guangxi and Vietnam officially signed a 110 kV Shengou to Mong Cai network project purchase and sale of electricity agreement. The resumption of power supply is the first in seven years and will greatly ease the recent shortage of electricity in northern Vietnam due to drought.
According to the agreement, starting from May this year, Guangxi will supply electricity to Vietnam through the 110 kV power network line of Dongxing Shengou and Mong Cai in Guangxi, China. The main power supply scope is the area of Mong Cai in Vietnam, which is expected to supply 30 million KWH of electricity per month, and the first stage will send nearly 68 million KWH of electricity to provide green and stable power supply for the economic and social development of northern Vietnam.