Parallel power grids seen as a shock to the system

China Hong Kong Power Development's plan to plug into the local electricity market may give more choice to consumers but industry experts have cast doubts on its technical and economic viability.

In a move to challenge CLP Holdings and Hongkong Electric Holdings, the newcomer, a consortium led by former Chinese premier Li Peng's daughter, Li Xiaolin, intends to source 'clean electricity' from Guangdong to consumers in Hong Kong through a power grid it plans to build.

Although Ms Li said on Wednesday that a business plan was in the making and was expected to be available by the first half of this year, her so far sketchy outline of the project would see a brand new power transmission and distribution network running parallel to that of CLP and Hongkong Electric and a battle for bigger customers.

'Nowhere in the world have I seen any parallel power grids,' said an electricity engineer with 30 years experience in Hong Kong and Australia power markets. 'Constructing a power network is expensive and a parallel network doesn't create any economic efficiency at all.'

Ms Li, president of state-owned power producer China Power International Holding which holds 50 per cent of China Hong Kong Power, said it wanted to source electricity from ally China Southern Power Grid, the state monopoly in power transmission and distribution in southern China.

China Southern Power Grid is the second-largest shareholder of China Hong Kong Power with a 35 per cent stake with the rest held by media firm, Vertex Communications & Technology Group.

Few engineers have disputed the newcomer's source of electricity but many have raised questions on how it can bring electricity into the city, a tiny market with mature growth, high operating costs and lack of natural resources.