As Hong Kong’s power bills surge, let’s get creative on cheaper, cleaner electricity
- We should consider allocating carbon-free electricity to commercial users who can monetise this, then charging a premium so residential users pay less
- The point is to generate new ideas and multiple benefits as Hong Kong moves towards a carbon-neutral 2050
Furthermore, with severe weather predicted under the influence of climate change, system resilience is essential, and Hong Kong’s power generation and transmission systems are robust.
The two companies also provide a high level of service at lower prices when compared to many other developed cities, and this is a competitive advantage for Hong Kong.
The cost pass-through arrangements are not in themselves unfair because energy prices do fluctuate, and prices can rise substantially. This is the case today.
As bus fares and power bills surge, whose side is the government on?
What this means is, the Hong Kong government and the power companies will have to come to new agreements before the current deals expire in 2033.
Where will the clean power come from? It is likely to be from the mainland. How much will it cost? It is likely to be higher as there will be competition for clean power from other mainland users. Will the structure of the scheme of control agreements remain as they are today? The answers to all these questions are unclear and will require a lot of hard thinking and work to sort out.
It may help if we start to think of ways that could achieve multiple benefits in the near and longer term, bearing in mind we have a date with destiny to become carbon neutral by 2050, and that considerable investments for clean power would need to be made.
About 36 per cent of CLP’s electricity already comes from a carbon-free nuclear source. What if this portion of electricity is allocated to commercial users? It would mean that the businesses could reduce their carbon footprint quite substantially, which can translate into better competitiveness. For example, property developers would be able to offer tenants office space with a lower carbon footprint, which high-end global tenants tend to want.
This would not really make any difference to residential electricity users since they can’t monetise cleaner electricity. But what benefits could there be for non-commercial users?
Well, commercial users could pay more for clean power and that premium could be put in a pool for various uses, including to help lower electricity charges for households, with priority going to low-income families.
What if some commercial users don’t want to pay a premium for clean power because they can’t monetise it? Well, their allocations can go to those who want it. It may well mean that those who have ways to monetise the extra allocation would get more.
It might be argued that such a scheme would disadvantage commercial users on Hong Kong Island. But it is not far-fetched to imagine the two power companies can come to some arrangement with the government so that those businesses in HK Electric’s service area who want clean power can also benefit. The government states that 28 per cent of Hong Kong’s electricity is nuclear-generated.
The point is to generate new ideas and multiple benefits for Hong Kong as it continues to invest in obtaining more carbon-free energy to meet our 2050 date with destiny.
Christine Loh, a former undersecretary for the environment, is an adjunct professor at Hong Kong University of Science and Technology