Friends of the Earth (HK) Comment on the Electricity Tariff Adjustment

The government approved of the electricity tariff increase yesterday, by 7% for HK Electric and 5.8% for CLP, due to rising international fuel prices. Friends of the Earth (HK) has the recommendations in response to the tariff adjustment and on the long-term development of the electricity market:

1.Rising electricity bills will burden grassroots citizens. The government should subsidise low energy users based on the polluter pays principle. On the other hand, a progressive approach should be applied to both residential and non-residential intensive energy users to promote energy conservation through economic incentives.

2.On demand management, the government must speed up the installation ofsmart meters in Hong Kong to allow users to better understand their own energy consumption patterns and plan energy use. The government should explore the use of time-of-use tariffsto smoothen energyuse during peak hours, savingenergy and reducing costs.

3.Buildings account for 90% of electricity consumption in Hong Kong. The government must tighten the Building Energy Code and assist building owners in improving energy efficiency, such as in electrical installation, air conditioning, lighting, lifts and escalators, and more, to cut electricity use and reducecarbon emission.

4.With high international fuel prices and the government’s move to replace coal with natural gas, electricity bills will continue to rise in the future. IRENA’s "Renewable Power Generation Costs in 2020” report published in June found the cost of over 60% of new renewable power generation is cheaper than the cheapestnew fossil fuel options. The government must accelerate local renewable energydevelopment, including offshorewind and solar energy,and strengthen regionalcooperation at the same time to increasethe supply of low-carbon energy in Hong Kong on a large scale.