Experts split over 'trust issue' in city's fuel-mix debate

Those who reject the idea of importing fuel are worried about the reliability of the mainland power grid, but others say it is the lesser evil

PUBLISHED : Monday, 28 April, 2014, 6:05am
UPDATED : Monday, 28 April, 2014, 6:45pm

Experts are deeply divided over Hong Kong's energy future.

Dr Chung Chi-yung, of the Polytechnic University's electrical engineering department, believes that the electricity-importing idea "makes no sense for Hong Kong".

Rather, he said, mainland supply could be used as an emergency backup.

"It takes a lot of investment and time to build a highly reliable power supply network, but it takes almost nothing to trash it," he said. "Hong Kong should not go down this road."

Chung said using the mainland power grid could "drag down" the Hong Kong grid when there was a power disruption across the border.

And unlike Macau, where most casinos had installed uninterrupted power supply systems, Hong Kong's diversified economy meant that an outage could lead to huge economic losses, especially to small and medium-sized businesses.

But government energy adviser Dr Mak Sui-choi said "it was all a matter of money" when it came to securing priority supply from the mainland during power disruptions.

Mak, of Baptist University's finance department, said he believed there was technology available to prevent a knock-on effect from a power failure.

He said the public had so far been driven by reliability fears because "they either did not have the information about the mainland supply, or simply refused to believe in it".

"The import option will allow [Hong Kong] to pass on the risks of the gas price fluctuation that we would otherwise face if we adopt the local-generation option," Mak said.

According to China Southern Power Grid (CSG), Shenzhen had an average of 1.12 hours of both planned and unplanned "system interruption" per consumer.

This meant a reliability rate of 99.98 per cent, based on an internationally used average service availability index (Asai).

Macau, which imports about 90 per cent of its power from CSG, reported a reliability rate of 99.9999 per cent in 2012.

CLP Power said in its annual report that it had a recorded three-year average of 0.48 hours of both planned and unplanned power disruption. But it refused to disclose its detailed Asai for each of the past five years.

In its annual report, Hongkong Electric said it had achieved a "five nines" reliability rate every year since 1997.

Dr Chan Fuk-cheung, former Institution of Engineer chairman and a power system specialist who has worked for CLP Power, said he saw no cross-border interconnection problems if Hong Kong went with the option of importing electricity.

He said Hong Kong could always "decouple" from the mainland grid when necessary.

"The southern China grid is more than 10 times bigger than Hong Kong's. In theory, they should have more worries than us about grid failure," he said.

Chan said the real challenges of interconnection lay in the local grid reinforcements required to transmit and distribute the imported power.

But he could not find anything about the issue in the consultation documents on the government's proposed energy options, he said.

Dr Tso Che-wah, of City University's School of Energy and Environment and a former Hongkong Electric executive, said there was an information vacuum in the consultation that made making an informed choice difficult.

"Populism prevails in the debate … as you can see, many are asking why Hong Kong has to rely on the mainland for everything from fresh water to electricity," he said.

Tso said picking the local-generation option would be almost like a nail in the coffin for electricity market liberalisation.

Many have been banking on the liberalisation to break the 50-year-old duopoly of CLP Power and Hongkong Electric and possibly bring in cheaper power from other sources.

"The local option will see the power firms' assets snowball," Tso said. "Once this momentum is set, it will be costly and complicated to reverse it."

Professor Peter Woo Chi-keung, head of Baptist University's economics department, said it would be difficult to determine whether electricity imports brought more benefits than costs unless more details on the terms of the purchase were revealed.

These included non-performance, payment default, and the mechanism to handle power shortages.

Local power generation would eliminate all these risks, the professor said.


Energy Choices

- Import option
By 2023, the city's fuel mix would be 10 per cent coal, 20 per cent nuclear, 30 per cent imported electricity and 40 per cent gas

- Local generation option
By 2020, the city's fuel mix would be 20 per cent coal, 20 per cent nuclear and 60 per cent gas