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CLP’s Castle Peak Power Station in Hong Kong. The company posted a net profit of HK$4.6 billion for the year’s first half, down from HK$6 billion in the same period last year. Photo: Martin Chan
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Hong Kong power utility CLP eyes regional clean energy imports, domestic renewable energy to help city decarbonise

  • CLP Holdings unveils a 23 per cent decline in interim profit
  • Company will only switch to green hydrogen when supplies are ‘commercially available in sufficient volumes’
Business of climate change
Eric Ng
Eric Ng
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CLP Holdings, the larger of Hong Kong’s two power utilities, said it will rely on regional clean energy imports and domestic renewable energy development to help the city decarbonise in the short to medium term, as economically viable zero-carbon hydrogen was not expected to be available for almost another two decades.
Betty Yuen So Siu-mai, the vice-chairman of local unit CLP Power Hong Kong, the city’s biggest carbon dioxide emitter, revealed the plan on Monday when asked when hydrogen would be introduced to help fuel its natural gas-fired power plant, and whether such a move for cutting carbon emissions would lead to higher power bills.

“In the short to medium term, we believe the bulk of our contributions towards the government’s carbon reduction target will be through developing more renewable energy projects and regional cooperation to introduce more clean energy supply,” she said after CLP Holdings unveiled a 23 per cent decline in interim profit. “We are closely monitoring trial projects in different countries. The key to this is establishing a reliable supply chain and economic viability of the clean fuel.”

Richard Lancaster, the utility’s CEO, said in April that a viable supply chain using surplus renewable energy to produce, transport and deploy so-called green hydrogen in power plants and replace natural gas was expected to emerge in a decade.

On Monday, the company noted in its results statement that it will only make the transition to green hydrogen when supplies of the carbon-free fuel were “commercially available in sufficient volumes”. The earliest time frame for the commercial deployment of hydrogen in CLP’s Black Point power station in Tuen Mun, New Territories, was late 2030s to early 2040s, depending on the progress of global technological developments, Yuen said.

04:56

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CLP on Monday posted a net profit of HK$4.6 billion (US$591.7 million) for the year’s first half, down from HK$6 billion in the same period last year. It was largely pulled down by a 30 per cent earnings decline to HK$837 million in Australia, as heavy rain cut coal supply for one of its mainstay power plants, and a 23 per cent profit fall to HK$962 million in mainland China due to higher coal costs.

In Australia, CLP will build a power plant in New South Wales that will be capable of burning both natural gas and hydrogen. Hydrogen will account for 5 per cent of its fuel mix when it starts operations in 2025, which may be lifted in subsequent years. CLP has committed to buying verifiable carbon offset credits for emissions generated from the plant’s natural gas burning, so that it will achieve net zero emissions over its lifetime.

The Hong Kong government set a target in November last year for the city to become carbon-neutral by 2050. It has yet to unveil implementation details for the power sector. Fossil fuels at power plants account for about two-thirds of Hong Kong’s carbon emissions currently. The transport sector contributes around 18 per cent.

CLP said it was studying the feasibility of building a large-scale offshore wind farm in Hong Kong, after substantial declines in construction costs over the past decade had made these more economically viable. The plan, which may form part of its 2023-28 development plan, will be subject to approval by the government, Lancaster said.

The company said on Monday it planned to “significantly strengthen” its climate targets ahead of November’s global negotiations on climate change mitigation and adaptation in Glasgow. Its current target is to cut emission intensity from 0.57 kilogram per kilowatt hour last year to 0.5kg in 2030 and 0.34kg in 2040.
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