At Least Temporarily, the Demand for Uninterruptible Power Supplies in China will Soar

Recently some recurring news out of China has been about the shortage of diesel fuel. The reason for this shortage is rooted in China's goal to increase energy efficiency. At the top level, the plan makes sense as they set the goal to reduce energy use by 20% as measured against GDP. The devil is in the implementation as many local governments desperate to meet the targets have chosen to employ a system that involves a type of rolling blackouts. This creates the problem or, if you are a UPS supplier, the opportunity.

Imagine that you are a factory owner or manager in China. You have goals too. They are probably based on productivity and efficiency. So what do you do in this situation? You crank up your diesel power generator. This is creating the shortage of diesel fuel as the now unprecedented demand had not been accounted for. This situation is also creating more air polution as the diesel generators are a lot less green than a typical power plant. This is actually defeating one of the goals that the original plan was trying to solve.

What does this have to do with Uninterruptible Power Supplies (UPS) if the factory owners are using generators? The answer lies in the type of manufacturing being done. If the processes in the given factory are entirely manual, then you can tolerate the short delay between the time the grid power is interrupted and the generator kicks in. Even so, in this case, you still might have some UPS protecting computers and IT equipment. If the factory has any kind of automated machinery, you probably want to have a large UPS to avoid the in-process manufactured products from being damaged as well as avoiding the lost productivity and costs from repairs, re-setting up the production cell, and machine/instrument re-calibration. If you have any doubt about the worst case impact of a power interruption on a manufacturing plant look into the previous blog about the Toshiba incident.

In summary, VDC estimates that this situation, until remedied will create a temporary 20 - 30% increase in localized Chinese demand for UPS products. Some of the main beneficieries of this demand will be major UPS manufacturers such as, Emerson and APC, as well as Chinese, Asian, and Industrial UPS specialists like Kehua, Kstar, Fuji, Toshiba and Mitsubishi. Our recently published UPS reports give details on these companies and the APAC market for power protection products.