#Climate Urgency, #Energy

SCMP: The Legislative Council’s review of the five-year development plans of Hong Kong’s two power companies, HK Electric and CLP Power, is expected to start today, as part of the interim review of the government’s agreements with the two companies that regulate electricity supply in the city.
The Scheme of Control Agreements are a policy framework between the government and the power companies that sets out the future fuel mix, shareholder returns and performance targets. Under these agreements, the government also conducts an annual review of the electricity tariffs.

While electricity tariffs are undoubtedly important, they should not be the sole consideration.

In 2014, when Hong Kong was deliberating on its fuel mix, one suggestion was to buy electricity directly from the mainland to keep electricity tariffs affordable. But this also means Hong Kong would have little control over the fuel mix and be restricted in exploring other net-zero alternatives.
Thus, rather than focus only on cost considerations, Hong Kong should aim to forge agreements that ensure fair resource competition and an alignment of standards in the Greater Bay Area, an environmentally sustainable energy mix, and greater resilience against unexpected events such as a power outage.

The upcoming review provides an opportunity for us to establish a forward-looking and long-term strategy for the zero-carbon transition, while keeping the costs of electricity affordable.

The Daya Bay nuclear power plant, a joint venture between CLP and Guangdong Nuclear Investment, could be a model to follow. A joint-venture zero-carbon power plant – prioritising wind, solar and nuclear energy – would provide a collaboration framework within the Greater Bay Area.

It would increase the capacity of net-zero energy, thus removing the need to construct new coal-fired plants in Guangdong, and give Hong Kong more control over electricity production, thus leading to more predictable tariff rates.

Given that electricity generation accounts for around 60 per cent of total greenhouse gas emissions in Hong Kong, it is critical that we use this review to effectively identify a decarbonisation plan that considers the broader aspects and not just the immediate costs. Only when we begin to consider long-term plans, such as a joint venture scheme or other comprehensive energy policies that encourage collaboration, can we reap the benefits of high-quality sustainable development.

Originally published on SCMP on 28 Nov 2023. Written by Lawrence Iu and Harriet Tsang.