Renewable energy applications skyrocket, but attaching remote Hong Kong houses to the grid is proving to be a challenge

  • Interest soars after changes announced in Chief Executive Carrie Lam’s policy address
  • But not everywhere in city has infrastructure capable of dealing with power surge
PUBLISHED : Monday, 24 December, 2018, 8:01am
UPDATED : Monday, 24 December, 2018, 8:01am

Hong Kong’s biggest electricity supplier has received more than 1,100 applications to sell renewable energy into the grid since the scheme was announced earlier this year, with applications skyrocketing after the government dismantled some of the red tape in October.

But CLP Power said there were multiple challenges in connecting premises in remote and rural areas, and not all interested applicants were able to secure the price range because of voltage and infrastructure issues.

Under the new “feed-in tariff” scheme announced by the government in April, households, businesses or institutions with rooftop solar panels, or wind systems, will be able to sell the clean electricity to the power grid at higher than market rates.

Of the 1,100 applicants, 85 per cent have been vetted and given the go-ahead. Together, they account for about 25,000 kilowatts of installed capacity, and about 62 of these account holders are already hooked up and selling clean power to the grid.

More than two-thirds of approved applicants lived in village houses, while about 30 per cent came from owners of industrial or commercial premises. It is uncertain how much electricity they will produce for now.

About 15 per cent of applications are still pending, the utility said.

Apart from problems of incomplete paper work, there were challenges in connecting some applicants to the grid due the shear remoteness of their homes. In some places, power lines were not thick enough to carry the increased voltage.

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Ko Chi-kwong, who owns a village house in Sai Kung, applied in July and had his 15 panels with a capacity of 5kW connected by October.

The roughly HK$100,000 system has been generating about 15 to 20 kilowatt-hours of power per day, but he has yet to find out how much he has earned.

“I had initially aimed for a higher tariff, but of course it really depends on the position of the house, and how much you can install,” he said. “My contractor told me the monthly savings would be enough for one yum cha [tea and dim sum] meal. I am expecting to recoup the investment in roughly five years.”

Many applicants were forced to either accept a lower rate or install a smaller system, a CLP spokesman said. “In some places, you only have trees, grass and dirt. In others, it might not even be clear who actually owns the land.

“In some places the cables are not thick enough to handle the voltage. Enhancing the lines could take months, or even years, and require affixing things to people’s property, which in itself is a challenge.”

CLP Power – which supplies Kowloon, New Territories and Lantau Island – rolled out its scheme in October. The city’s other power firm, HK Electric – which supplies Hong Kong Island and Lamma Island – will begin its scheme next month.

The pledge to launch feed-in tariffs to help the city boost renewable energy generation was agreed as part of the negotiations for the two monopolies’ new 15-year regulatory framework with the government up to 2033.

The pricing scheme is HK$3 (US$0.38) per unit of electricity for systems above 200 kilowatt in capacity but below 1MW, HK$4 for systems between 10kW and 200kW, and HK$5 per unit for those smaller than 10kW.

The idea is to incentivise private development of renewable energy installations by speeding up the return period of their investments.

The number of applicants soared from an average of 100 a month to almost 350 in November, following an announcement by Chief Executive Carrie Lam Cheng Yuet-ngor in her October policy address to relax height restrictions at village houses.

In 2014, developer Wharf Estates installed a 320- panel, 80 kilowatt photovoltaic (PV) system for a cost of HK$4.4 million at its Harbour City mall in Tsim Sha Tsui – a hefty investment that would have reaped a payback period of 52.8 years.

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Under the new feed-in tariff plan it will be able to earn about HK$4 per unit, four times the regular rate of electricity. This will shrink the payback period down to 12 years.

“It might be a small percentage of the amount of electricity we use compared to the size of the investment, but we really did feel that it was our corporate social responsibility [for the environment],” Wharf executive director Leng Yen Thean said. “We calculated that it would have helped us cut our carbon emissions by 43,000kg per year.”

The Sino Group have also made plans to install more than 800 PV panels across its Gold Coast hotel, residential and private club development by next year, and when complete it will be the biggest private undertaking in Hong Kong.

“We’re talking about 250,000 kilowatt-hours of power annually,” said managing director Robert Kaiwai. “It won’t make us self-sufficient, but anything you can do to supplement your main power source and reduce reliability is good.”

Residential and commercial buildings account for 90 per cent of the city’s electricity use.

A spokesman for HK Electric said the company had received about 60 applications so far. A third of them have been approved and the rest were still pending.