25 January 2020
Reliable power supplies bolster Hong Kong's reputation as a business center. Photo: Bloomberg
Reliable power supplies bolster Hong Kong's reputation as a business center. Photo: Bloomberg

Do power imports signal lights out for reliability?

Hong Kong’s government once again finds itself at odds with public opinion — this time over plans to meet future power needs.

The government is pushing to increase the share of electricity imported from the mainland and cut the contribution from the two local power firms, leading some to see the invisible hand of mainland interests at work in the city’s strategic power supply market.

The government has floated two proposals for meeting future power needs and released them for public feedback. The first suggests sourcing up to 30 per cent of the city’s power from China Southern Power Grid by 2023. The second proposes tripling the share of locally generated electricity from natural gas to 60 percent.

Hong Kong enjoys a very reliable power supply and even though it can be affected by bad weather, electricity services continue uninterrupted more than 99.999 percent of the time. Over the space of a year, power cuts on Hong Kong Island generally amount to less than one minute and in Kowloon and the New Territories less than two minutes.

Reliable supplies help underpin the city’s reputation as an international business and financial center among the brokerage firms and fund houses that need to trade around the clock and all through the week. An unreliable power supply could threaten the development of the city’s financial industry.

The government proposal to increase imports from China Southern Grid has generated criticism from power firms, business as well as green groups. Critics say supplies from the mainland are less reliable and Hong Kong could end up paying more for electricity in the same way that it does for water from the East River.

The reliability of China Southern Grid’s supplies to Shenzhen was 99.98 per cent and Guangzhou 99.97 per cent in 2012. That might seem like a small difference but it adds up to 1.1 hours in Shenzhen and 1.8 hours in Guangzhou.

That has left many wondering whether China Southern would have enough capacity to supply Hong Kong during peak mainland demand, given the power use restrictions that have to be imposed across the border in summer to ease shortages.

It’s clear that the government aims to apply its approach to the import of water to the power supply market, diminishing the role of the two private players.

That could leave open the question of how the government will resolve the scheme of control agreement with Hong Kong Electric and CLP Power after the existing deal expires in 2018. In addition, if the government prefers to import electricity from the mainland, why not invite other mainland players to generate power here rather than putting the city at the mercy of the mainland grid?

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EJ Insight writer