Public shows way with energy saving
Friends of the Earth successfully mobilised the public to save 52 million kilowatt-hours (kWh) in three months in our Power Smart contest while Hongkong Electric has failed to save as little as three million kWh.
Secretary for the Environment Wong Kam-sing said that there is not much room for adjustments in the interim review of the Scheme of Control Agreements this year.
This sounds like the government has decided to throw in the towel even before any negotiations have taken place and it is simply unacceptable.
The voluntary energy conservation targets set in the current scheme of control constitute a meagre 0.03 and 0.04 per cent of Hongkong Electric's and CLP Power's respective annual sales.
The government must take the opportunity in the interim review to formulate more aggressive energy-saving targets, and introduce a carrot-and-stick approach.
On top of this, energy conservation would help ease the pressure for tariff increases.
Our analysis is based on CLP data. Assuming that future purchases of natural gas are three times higher than that of 2011, and given other factors remain unchanged (for example, the volume of power sold, the level of permitted return), the average cost of fuel material required to generate each unit of power will increase by approximately 17 cents.
If the power companies burden 100 per cent of the cost increase onto users, the net tariff could go up by 18 per cent in one year.
However, if energy consumers together were able to save 1 per cent, CLP's electricity sales would reduce by 300 million kWh which would save the company approximately HK$410 million in natural gas expenses, meaning the tariff increase could be avoided.
So even with a decline in electricity sales, and given that CLP has the right to raise tariffs to achieve its guaranteed profit, it might not need to, as the energy savings means the volume of expensive natural gas required is reduced, resulting in the average cost of electricity generating fuel per kWh being lowered.
So the overall concept is that the loss of income from sales would be balanced out by the reduction in expenses.
Therefore, we urge the Environment Bureau not to miss any chance of setting higher targets of energy conservation and of demanding corporate responsibility from the two power companies.
Frances Yeung, senior environmental affairs officer, Friends of the Earth (HK)