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Supply more details for better debate on HK's future fuel mix


Edwin Lau Che Feng, Head of Advocacy and Education, Friends of the Earth (HK)
8 April 2014
South China Morning Post


The Environment Bureau has recently picked up what has been on hold since the completion of Hong Kong's Climate Change Strategy and Action Agenda consultation over three years ago.


At that time, it proposed a fuel mix with more natural gas and nuclear energy to lower the city's carbon intensity by 50 to 60 per cent by 2020 compared with 2005 levels.


One option is to import 30 per cent of our electricity supply from across the border; another is to increase the amount of natural gas to 60 per cent from the current 22 per cent


In 1998, the government commissioned consultants to study the local energy market. They recommended connecting the power grids and introducing competition to lower tariffs. But no action was taken; a concern about the power supply reliability of third parties was the "reason" given by the administration at the time.


Now the Environment Bureau has raised the issue again. One option is to import 30 per cent of our electricity supply from across the border; another is to increase the amount of natural gas to 60 per cent from the current 22 per cent.


It is difficult for anyone, even the experts, to judge which option would be environmentally and economically better, as well as in terms of reliability, as a lot of pertinent information is missing from the current consultation document. More work is needed by all stakeholders before any decision can be made.


The fact that neither option includes an increase in the amount of nuclear energy is probably due to public concerns about the risks of nuclear power. Some worry that connecting the grid with the mainland might pose stability and reliability issues for Hong Kong.


Such concerns are valid, especially if we recall the massive blackout in the US and Canada in the summer of 2003.


However, these issues can be addressed with robust contingency plans, such as having a stronger grid connection between the two local power companies that could provide instant back-up power for the other if the mainland grid showed any sign of instability or failure.


The consultation document also revealed that, in 2012, Hongkong Electric and CLP Power had reserve margins of electricity capacity of 50 per cent and 30 per cent respectively.


This seems high when compared with international practice of between 10 and 20 per cent.

The option of importing power from the mainland grid, if reliable monitoring mechanisms are added, could become another source of reserve power, strengthening our supply reliability.


Local renewable energy is unlikely to provide a large percentage of our power due to the city's geographical constraints. Therefore, the option to connect with mainland power grids will probably be the only opportunity for our two power companies to collaborate with mainland suppliers and develop cost-effective renewable energy for the Pearl River Delta region, including Hong Kong.


This may be a good time for Hongkong Electric and CLP Power to see through a wider lens their business in Hong Kong and the economic benefits for all.


One other option is to raise the proportion of relatively cleaner natural gas in the fuel mix. However, competition may not be welcomed in the oligopolistic energy market.


Still, the neutral position of the government seems to have reopened the window for discussion, allowing the community to express its preferences. While the consultation has only just begun, the government could provide more details so environmental groups, and the community in general, could more effectively take part in the debate.


Officials should look to organise a forum for meaningful discussion among energy experts in academia as well as the many other concerned parties.

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