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Hong Kong is facing severe challenges with
worsening air quality. The structure and performance of the future
electricity industry are crucial. We believe that the current
proposals in the Consultation document have fallen short of setting
out a sustainable energy policy to reverse the current deteriorating
trend and to safeguard public interests.
1. Transparency and Accountability in a new regulatory framework
In order to safeguard public interests, it is essential that the new
scheme be operated with a much-enhanced level of transparency so to
allow public scrutiny of the utility companies’ performance. All
proposals for capital investments, relevant needs analysis,
feasibility studies and sustainability assessments should be
released to the public before decisions are made by the
Administration.
We support the establishment of an independent, stakeholder-led
regulatory authority to develop sustainable energy policy, oversee
market reform, review environmental performance and decide upon
tariffs based on a public hearing process. It is essential that the
public be provided with not only access to information but also the
means to participate in decision-making within the agreed framework
with the market players. Prior to the establishment of a independent
authority, the operation of the Energy Advisory Committee should be
elevated to the level similar to the Advisory Committee on the
Environment through more broad-based stakeholder representation,
higher transparency and enhanced authority.
2. Grid Access in favour of Renewable Energy
It was proposed in the consultation paper to make the grid
connection more accessible to the Renewable Energy (RE) Users by the
establishment of official technical codes. We believe, however,
instead of the government acting merely as a facilitator, it should
take responsibility in setting the technical codes and grid access
charges for RE suppliers, with a bias in favour of the latter so as
to encourage the development of RE.
Since the bulk of future RE supplies will most probably come from
Guangdong, more solid commitment should be extracted from the
utility companies regarding interconnection between Hong Kong and
Guangdong in the near term. The government should specify that when
new electricity supplies become necessary because of increased local
demands, new supplies must come from an RE source, whether local or
across the border, and allow third parties to bid for the
opportunity of providing such supplies with a view to promoting fair
competition and achieving best outcome for the public.
3. Emission reduction and Sustainable Energy Policy
As stated in the consultation paper, the Kyoto Protocol was extended
to Hong Kong since May 2003 and Hong Kong was committed to reducing
greenhouse gases emission, especially carbon dioxide, as far as
practicable. In addition, according to the agreement reached with
the Guangdong Provincial Government in 2002, four main pollutants,
namely, sulphur dioxide, nitrogen oxide, respirable suspended
particulates and volatile organic compounds, would be reduced by
40%, 20%, 55% and 55% in 2010, as compared with 1997 levels.
Coal-fired generations are the major contributor of carbon dioxide
and sulphur dioxide emission. Therefore, efforts should be made to
minimize the impact made by conventional coal-fired generations. We
agree that the wider use of LNG would be a practical, though
inadequate, option for reduction of greenhouse gases and air
pollutant emissions. However, we believe that the selection of sites
for CLP’s proposed LNG receiving terminal should not be limited only
to Hong Kong territory. The government should commence urgent
discussions with the Guangdong government and explore the
possibility of a joint LNG terminal along the coast of Pearl River
Delta. By widening the selection pool, it is likely that a better
site may be identified outside of Hong Kong territory that may cause
the least environmental damage and safety concerns and that both
Hong Kong and Guangdong authorities may find it to be a win-win
situation.
In addition, other advanced technologies, such as the Clean Coal
Technology (CCT), ought to be accorded with higher priorities with a
view to searching for the best available technologies in the medium
to long-term.
We are disappointed that the government has not specified any
emission targets beyond 2010, as we believe that clear long-term
targets are not only essential for continuous improvement of air
quality, but also indispensable for the long-term planning of the
utility companies. The government should, as a matter of priority,
develop guiding principles for continuous improvement and specify
long-term emission targets as part of a sustainable energy policy
which should include, inter alia, a fuel mix policy and an energy
conservation policy.
4. Energy Conservation and Demand-side Management
The assimilative capacity of Hong Kong’s environment, and by
extension the Peal River Delta, is already under high stress. The
relief of this environmental stress is dependent on whether Hong
Kong can develop into a more energy efficient economy. The test is
whether we can continue to improve our quality of life without a
corresponding increase in energy consumption.
It is therefore important not to consider the development of the
electricity market in isolation. However emission-friendly the power
produces may become, our only hope of improving air quality in the
long term lies with a fundamental shift to sustainable production
and sustainable consumption. Dedicated efforts must be made to
promote more systemic changes in the economy through either
incentives or regulations.
For instance, if the peak electricity demand, which occurs for only
a day or two in every year, can be controlled, no new supply
facility will be necessary. The success of demand-side management
will have significant implication for not only the environment but
also the ultimate costs that consumers will have to shoulder through
electricity tariffs.
The proposed independent energy authority should be empowered to
develop a sustainable energy policy and to implement energy
conservation and demand-side management measures. This is an
important task which is left largely unattended in the current
government set-up, to the detriment of both the environment ant the
financial interest of the public.
The Conservancy Association
21 March 2006 |
