The Legislative Council’s Panel on Environmental Affairs has recently conducted an annual tariff review with the two power companies. Hong Kong’s electricity charge composes of the basic tariff rate and the fuel clause charge. In recent years, electricity charges have continued to rise as a result of geopolitical factors causing a surge in international fuel prices. CLP and HK Electric announced that their respective electricity charges will raise to 144.3 cents and 167 cents per kilowatt-hour next year, increasing by 0.98% and 0.9%.

The International Renewable Energy Agency reported that renewable energy capacity broke new record in 2023 with 473GW installed; 81% had lower costs than their fossil fuel counterparts, showing continued improvements to cost-competitiveness.[1] Friends of the Earth (HK) stresses the urgent need for Hong Kong to decarbonise its power grid. Hong Kong has to increase the share of renewable energy at a greater scale and faster pace to respond to climate change.

To support this green transition, Friends of the Earth (HK) also makes the following recommendations:

1. The two power companies can fully pass the impact of rising fuel prices onto consumers under the Scheme of Control Agreements (SCAs). The two power companies should be made to fulfill their social responsibility and bear the risk of rising fossil fuel prices, alleviating burden on citizens and encouraging a transition to clean energy;
   
   
2. The two power companies should enhance interconnection to improve efficiency and reliability, reduce operating costs, and facilitate renewable energy integration;
   
   
3. The government should strengthen oversight of the two power companies’ operating expenses, improving transparency, resource allocation, and cost control;
   
   
4. In view of the increasing competitiveness of renewable energy, the government should actively review the SCAs expiring in 2033, with the goal of opening up the electricity market, introducing innovative technologies and renewable energy producers, and promoting the long-term development of green energy;
   
   
5. Hong Kong should optimise the electricity charge structure to encourage more energy -efficient electricity consumption habits and save on electricity bills, such as implementing time-of-use tariff and adopting more progressive charging models.

The 29th session of the Conference of the Parties (COP29) to the United Nations Framework Convention on Climate Change (UNFCCC) is currently being held in Azerbaijan. With global temperatures breaking record highs and extreme weather becoming more frequent, governments around the world are actively seeking solutions to tackle the climate crisis. Electricity generation is the largest source of local greenhouse gas emission in Hong Kong. The government must make use of the interim review of the SCAs to accelerate renewable energy development for the sake of achieving carbon neutrality before 2050.