Power options short on detail

PUBLISHED : Wednesday, 26 March, 2014, 5:12am
UPDATED : Wednesday, 26 March, 2014, 5:30am

Hong Kong has to choose between two energy supply options for the future - use more natural gas or buy more from the mainland. The options are mapped out in the long-awaited consultation on how to adjust the fuel mix, which officials say is a necessary step to meet rising power demand and to reduce pollution. Whatever proposal is adopted, the outcome is clear - production costs will increase, and so will tariffs.

Clean energy comes with a higher price. That the public has to pay more for a better environment is to be expected. But by how much bills will rise remains unclear at this stage. Secretary for the Environment Wong Kam-sing said only that the unit costs of the two options would be similar, but the actual tariff would depend on different factors.

It may well be a government strategy to play down the money issue at this stage. This is typical of controversial issues put to consultation. But affordability is a valid issue. The public needs to know how much they will pay before buying in. It's a pity that the consultation document stopped short of giving more information. Officials also failed to make a convincing case for why using more nuclear energy - an option favoured by the previous government - is no longer being pursued. Until there are further details, making an informed choice will be difficult.

Both proposals have pros and cons. Under the "grid purchase" option, up to 30 per cent of power will come from China Southern Power Grid, in addition to the existing 20 per cent nuclear energy from Daya Bay. This will inevitably increase our dependence on the mainland. Whether the supply will be as reliable as CLP Power and Hongkong Electric's is also a matter of concern. On the other hand, the option will effectively open up the local energy market, and gives more room for the government to manoeuvre beyond 2018, when the much-criticised scheme of control for the two power giants expires.

The local generation option - by raising the natural gas ratio to 60 per cent - appears to be a better deal in terms of reliability and upfront capital expenditure. But it also means tariffs will be more susceptible to global fluctuations in gas prices. Careful consideration should be given to all the issues involved.

The revamp goes beyond striking the right fuel balance for cleaner power supply. The decision will have an impact on the future power regime. The public awaits more information to help them make an informed choice.