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  • Dec 24, 2014
  • Updated: 9:42am
Jake's View
PUBLISHED : Sunday, 08 June, 2014, 5:30am
UPDATED : Sunday, 08 June, 2014, 5:30am

HK Electric may be right about idea of importing power from mainland China


Jake van der Kamp is a native of the Netherlands, a Canadian citizen, and a longtime Hong Kong resident. He started as a South China Morning Post business reporter in 1978, soon made a career change to investment analyst and returned to the newspaper in 1998 as a financial columnist.

The government is currently seeking public opinion on options for the future of the city's power supply. It boils down to a choice between importing about 30 per cent of power from the mainland grid or upgrading local power generation.

South China Morning Post, June 6


It is not only government seeking public opinion. HK Electric has been e-mailing customers recently, asking them to speak out against mainland power, and even China Light, careful with its words, says the Hong Kong-only option "provides a more certain result".

Let me put the background into immediate perspective. The red line on the chart shows you a 10-year average of electricity consumption growth in Hong Kong, down from more than 10 per cent 30 years ago to less than 1 per cent now.

This leads to an obvious question. Why now? Decisive measures to guarantee power supply might have been understandable 30 years ago but, as the chart shows, power consumption growth has fallen far below economic growth. An outright decline in electricity usage is now distinctly possible.

We shall have to build new power plants anyway, of course. They have finite lifetimes and the technology has advanced considerably from the 1980s. The future lies in small, highly efficient, gas turbine plants, assuming that we rule out nuclear because of the Fukushima disaster.

But with no urgent, pressing need for more power right now, the question comes down to whether mainland power can be more reliable, cheaper and less polluting than domestically sourced power.

No, and decisively so, on all three counts, says HK Electric.

Well, yes and no, because in the distant future we may perhaps get a lower carbon footprint from mainland power, says China Light (and I shall never comprehend why a company with a name of such grand mystique changed it to CLP Holdings).

The China Light submission is a thorough and superbly crafted document. To me, however, it seems to say, "Let's stall 'em and maybe they'll go away."

I understand the equivocation. There is an undercurrent of thought in the government (instantly denied, of course) that China Light is perhaps not quite enough of a Chinese company for such an important position in Hong Kong. The founding Kadoorie family were Iraqi compradors, you know.

Thus when chairman Michael Kadoorie complained in public of official inattention to pressing questions of power supply there were protests in the Legislative Council of his having insulted the government.

One suspects that just perhaps, maybe, the reaction would have been more reserved if the complaint had come from a company backed by tycoon Li Ka-shing, such as HK Electric, for instance.

But what has really stood out recently is how robustly our bureaucrats speak out for the mainland option. Why should they care so much if all we have is a dispassionate consultation asking the public's opinion on which way we should go in the future?

I think the answer is that the consultation, ending on June 18, is a fraud. Someone in Beijing has sent down instructions that Hong Kong is to source 30 per cent of its power from the mainland and the bureaucracy has been told to make it appear that this has full public backing. There is really no consultation. It has all been settled.

And I think the reason Beijing wants it this way is, first of all, the old-fashioned central planning notion that government must have direct input in key industries and, secondly, that sales to Hong Kong would be paid for in hard currency rather than funny money.

I think HK Electric has the right of it this time.


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This article is now closed to comments

So what are being asked to do is displace 30% of Hong Kong electricity supply from 1st world class, private companies supplied competitively by the best equipment and service suppliers in the world and have that replaced by 3rd world class SOEs supplied by some of the most corrupt and incompetent crony capitalist suppliers in the world. And this is supposed to be a good thing?
We have 2 electric utilities that both offer superb reliability and have done so for over 3 decades. When was the last time any one in HK suffered from a power failure caused by either utility ? Compare this to US/Canada, with an average of 3 major failures per year. Last year in Toronto, some customers were without power for more than one week in winter.
By comparison, the level of electrical supply/distribution expertise within government is so low, is cannot even be measured.
Allowing incompetent bureaucrats to meddle, is akin to the asylum being run by its patients.
And thirdly and by far most importantly, Jake, the more Hong Kong is intertwined with the mainland, the more power is exerted by the CCP over every breath we take.
" rather than pleasing their CCP gang masters"
I sometimes wonder who our bureaucrats are listening to. Are they truly Beijing top officials that really matter, or are they perhaps aspiring wanabee's who are trying to make themselves noticed to their superiors at HK's expense.
This type of intimidation goes on all the time in large private companies, and managers need to understand who matters, and who doesn't in order to succeed within a large corporation.
I repeat my comment here: Buying electricity from the mainland will be another way to give away Hong Kong's GDP and local job opportunities. Bringing in competition was said to be good for Hong Kong but nobody can really provide convincing arguments and figures to support such claim. All we know is that the Southern Grid is a monopoly in China in the South (along with the National State Grid in the North). Perhaps we should instead ask the HK government to help CLP and HKE to set foot in the mainland electricity market to break up the monopoly there notorious for massive corruption, unfair business practices, and in the name of development destroying thousands miles of beautiful Guangdong coastal lines. In the last decade, the Guangdong province has built and prepared to build so many coal-fire and nuclear power plants that they are more than happy to export surplus to HK to save their investments. It will be too sad to see Hong Kong to give up her own energy autonomy, her GPD, her jobs and live on the mercy of a colossal and corrupted monopoly from across the border.
Aren't all public consultations frauds with govt. having previously decided on who wins the spoils of their decisions?
I will choose any form for generating electricity for Hong Kong as long as it has the least carbon footprint. Even nuclear power wouldn’t be ruled out despite Fukushima incident.
Political concern in opposing our electricity supply from mainland is meaningless when electricity like water is so easily deliverable across a border of an artificial divide.
Politics shouldn’t be use when searching for cleaner way to generate electricity. Hong Kong Electric is looking after its own interest only. Why not HKE build nuclear power plant in mainland like China Light has done?
Ant Lee
this similarly applies to most other so called "consultations" by the government, where you know at the end the government will have its way - i.e. the mainland Chinese way.
I really want to voice out. I don't trust China as they are still very unreliable and uncertain. Our HKSAR government only please and flatter China. How our government do so bad although it is not easy to do well under this kind of sovereignty.
To dun...
Unfortunately there is no competing market in electricity supply despite we have two sources. The market is divided geographically and it is not known people or company moves within Hong Kong because there is a cheaper rate to be had. A cheaper rate usually could be possible from a provider when electricity is used during the off peak hours.


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