Bottom line is missing in fuel debate

The new energy consultation paper raises more questions than answers, disappointing many who had expected officials to explain the impacts of the two proposed options put forward for the future of the city's power supply.

The first option involves sourcing 30 per cent of our electricity needs by 2023 from the China Southern Power Grid, while the second requires boosting the use of natural gas at the city's power plants so that it accounts for 60 per cent of energy production by 2020.

Officials said the costs of generating power would double in both options, but what these costs are and how they will affect household bills are not known. Sources close to the government said there were simply too many unknowns to make even a rough but responsible forecast.

With the document now open to public consultation until June 18, the lack of detail makes it harder for people to reach any conclusions and easier for the debate to descend to a case of "local" versus "mainland".

A key factor determining the tariff levels of the local option will be the number of new gas-fired generation units required.

Dr Tso Che-wah, former general manager at Hongkong Electric, estimated three to four extra gas generation units would be required to meet the 60 per cent target, estimating the total cost to be HK$12 billion, without pricing in extra operational costs.

How much of these investments will be apportioned to the end user is another uncertainty. What further complicates the matter is the expiry of the power firms' regulatory regime in 2018, which currently allows them to base profit levels on assets.