Senior Hong Kong official urges sourcing of electricity from China to diversify city's supply

No 2 environmental official says long-term benefits should be focus

PUBLISHED : Tuesday, 16 May, 2017, 8:00am
UPDATED : Tuesday, 16 May, 2017, 12:55pm

There is no reason why Hong Kong should not consider buying electricity from the mainland grid in the future to diversify its energy sources and tap into the cleaner fuels available, according to the city’s No 2 environment official.

In an interview with the Post , environment undersecretary Christine Loh Kung-wai, said the city should look at the possibility “dispassionately” and start thinking about the future infrastructure investments required for it.

“We are talking energy, not politics here,” she said, acknowledging the sensitivity of the suggestion. She explained that as China builds its energy system and “becomes more and more reliable” Hong Kong could “obviously consider buying power” from the mainland in the future.

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Loh said the government currently had no policy on whether to keep buying a quarter of its electricity needs from the Daya Bay nuclear plant in Shenzhen after its supply agreement ends in 2034.

But she believed the “bigger discussion” should be whether Hong Kong should be tapping power from the mainland grid, which includes hydropower, atomic energy and fossil fuels.

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“These are all possibilities. Why shouldn’t Hong Kong look at it dispassionately?”

A public consultation in 2015 on the city’s future fuel mix floated the option of importing from the grid to help achieve “greater fuel diversification” and tap into clean sources such as hydro that are otherwise unavailable to the city.

The consultation results showed most residents and businesses opposed buying more electricity from Guangdong province’s China Southern Power Grid, citing reliability concerns. The option was temporarily shelved in favour of one requiring the use of more natural gas for local generation.

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But Loh expected things to change. She said the government has included specific agreements to conduct joint studies looking into bolstering cross-border grid interconnection with the two power firms in the post-2018 regulatory framework, known as the scheme of control agreements.

“I think it’s important to have a bigger discussion about energy and what infrastructure is necessary to bring it to Hong Kong. Even if we said today we wanted to buy power from the mainland grid, we couldn’t do it tomorrow,” she said. “The infrastructure ... is not in place.”

I think it’s important to have a bigger discussion about energy and what infrastructure is necessary to bring it to Hong Kong
Christine Loh Kung-wai, environmental official

A renegotiated framework, announced last month, lowered the cap on guaranteed earnings for the city’s two power companies – CLP Power and HK Electric – from 9.99 to 8 per cent for another 15 years, beginning in 2019. Loh called the framework “a fair deal”.

“These are long-term contracts involving significant investments ... What you don’t want is there to be a breakdown in relations or a kind of risk [to] electricity reliability and safety.”

She said 15 years would give the government enough leeway to supervise replacement of the city’s coal plants with gas-fired ones up to 2033. Either way, she added, more price-volatile, gas-fired generation meant a “very high” likelihood of fuel prices rising in the future.

Baptist University business school’s Dr Billy Mak Sui-choi said whether the option was feasible depended on how reliable the supply was, and, more importantly, on its political acceptability.

“Cost is another factor, but power from the grid may not necessarily be cheaper than local generation,” said Mak, who also serves as a government adviser on energy policy.

CLP said further interconnection with the mainland grid could provide more opportunities for clean energy supply in the long term and was worth studying.

HK Electric did not reply as of press time.