Reliability issues raised in proposal to power Hong Kong from mainland grid

The first part in a series on Hong Kong's energy mix looks at whether a proposal to tap into mainland grid can meet city's standards

PUBLISHED : Monday, 28 April, 2014, 6:05am
UPDATED : Monday, 28 April, 2014, 4:31pm

The mainland grid from which Hong Kong proposes to buy electricity has made remarkable progress in improving its reliability but still falls short of the stringent standards set for local power firms, research by the South China Morning Post shows.

The performance of the China Southern Power Grid (CSG) has been in the spotlight since Hong Kong environmental officials put forward a proposal to import up to 30 per cent of the city's electricity from it by 2023.

Part of a proposal to meet rising power demand that also included nuclear energy imports, it is an alternative to another scheme under which natural gas use would account for 60 per cent of demand by 2020, versus 22 per cent now.

Some experts have warned against exposing the city's supply network to disruption risks from a mainland grid that is perceived as less reliable. But others said the fears were overstated.

In the past five years, power disruptions in major cities in Guangdong and its neighbouring provinces have fallen sharply, according to CSG, which owns and operates grids in five provinces.

In 2012, Shenzhen, the best-performing city in the grid, had an average of 1.12 hours of "system interruption" per consumer - planned and unplanned - a 77 per cent improvement on the five hours of 2008.

Guangzhou has also cut disruptions by 74 per cent, with just 1.79 hours of unavailable service per consumer in 2012.

Translating these interruptions into the internationally used average service availability index (ASAI) - the percentage of time during the year that the average customer has power - Shenzhen's reliability reached 99.98 per cent and Guangzhou's 99.97 per cent, both above the national standard of 99 per cent.

But they still fell short of the minimum standard Hong Kong sets for its power firms of 99.99 per cent. Under Hong Kong law, utilities performing below that level will be penalised.

And experts who did not support the power import option warned that Hong Kong's diversified economy meant an outage could lead to huge economic losses, especially to small and medium-sized businesses.

Dr Chung Chi-yung, of Polytechnic University's department of electrical engineering, said he was not optimistic that the quality of the Hong Kong and CSG grids would match.

"It is virtually impossible for the southern grid to meet such a high reliability standard," he said.

Hong Kong's regulation of its power firms - favouring infrastructure investments - and its high density are key to making power reliable and cheap, factors missing across the border.

Dr Mak Sui-hoi of Baptist University and a government energy adviser, was more optimistic. He said the importation of power would not start for 10 years. "We can expect that the mainland grid will continue to invest in new and more advanced facilities."

Macau, which imports about 90 per cent of its power from CSG, reported an ASAI of 99.9999 per cent in 2012.

CLP Power said it had outperformed the government reliability targets since 2009.


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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.