The amount of nuclear-generated electricity Hong Kong imports from Daya Bay power station will rise by 10 per cent as part of a deal that could mean good news for consumers.
CLP Power - one of the city's two big electricity providers - says the deal announced yesterday gives the city more leeway to limit price rises amid more stringent emission targets.
But the deal has sparked criticism that the firm has pre-empted an upcoming public consultation over whether the city should increase its use of nuclear energy.
The deal will allow CLP to boost its import ceiling from 70 to 80 per cent of total output from two pressurised-water nuclear reactors in which it has a 25 per cent stake through a subsidiary.
The station, controlled by the China General Nuclear Power Corporation, has supplied the city since 1994. It exports about 10 billion kilowatt hours a year to Hong Kong, accounting for 23 per cent of power consumption.
The extra nuclear intake, which is expected to be cheaper than natural gas, is seen as part of measures adopted by the firm to ease projected tariff rises of up to 40 per cent by 2018 because of the need to hit emission targets.
According to CLP data, per unit nuclear power cost 47 cents in November, compared with 27 cents for coal and 68 cents for gas.
"We can bring in more nuclear in a small quantity … There will be no additional infrastructure required and it will not increase the risks," Chiang Tung-keung, CLP's planning and development director, told lawmakers at an economic development panel meeting yesterday.
Green activists criticised the deal, which they said would pre-empt a consultation on the city's future fuel mix - the proportion of gas, coal, renewable and nuclear in electricity generation.
Prentice Koo Wai-muk, a Greenpeace campaigner who has opposed more nuclear import since the Fukushima nuclear disaster in 2011, said: "The deal has ignored what the people want and choose."
But a spokesman for the Environment Bureau said the deal would not preempt the fuel mix consultation, which would look at the issue beyond 2020.
CLP will also be under pressure to raise tariffs as a gas reserve in Hainan that has supplied cheap fuel for years is depleted.
Paul Poon Wai-yin, managing director of CLP Power, said it would try to delay a switch to supplies from the West-East pipeline on the mainland, where gas will be three times more expensive.
Another option to secure cheaper supplies in the long term was to build a liquefied natural gas terminal in Shenzhen.