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Following is the opening remarks by the Secretary for the Environment, Mr Wong Kam-sing, at today's (March 31) press conference on the Public Consultation on the Future Development of the Electricity Market:
The Government launched today a three-month public consultation on the Future Development of the Electricity Market.
The current Scheme of Control Agreements (SCAs) between the Government and the two power companies will expire in 2018. We need to consider how to further develop our electricity market and improve the regulatory framework, taking into consideration our four energy policy objectives and our goal to introduce competition when the requisite market conditions are present.
Building on various reviews and public consultations relating to electricity supply conducted over the past few years, in particular the one on the future fuel mix for electricity generation, the Government has reviewed the future development of the electricity market having regard to the views and suggestions received. In particular, we note the public attaches much importance to ensuring a high level of reliability of electricity supply and have reservation on importing electricity from the Mainland at this stage.
The Government has studied the overseas experiences and found that market liberalisation is a highly complex process. However, introducing competition remains our goal; and we have examined the readiness of introducing competition after the expiry of the SCAs.
To pave the way for Hong Kong to introduce competition in the longer term, we plan to conduct the necessary preparatory work, which includes conducting a joint study with the power companies on grid access arrangements by new players, and a study on the detailed arrangements required to enhance the interconnection with the Mainland grid and between the local power grids.
Another key focus of the review is the future regulatory arrangement. We consider that the present contractual arrangement has largely been serving Hong Kong well. However, there are some areas for review, including the permitted rate of return, the tariff approval process, promotion of information transparency, the incentive and penalty scheme to enhance power companies' performance, measures to promote energy saving and renewable energy, etc. Having regard to the views and suggestions received, we have set out suggestions to solicit further views from the public.
On the future fuel mix for electricity generation, some 86 000 submissions were received during the fuel mix consultation in 2014. Of the two fuel mix options, majority of the respondents preferred local generation. You may refer to the document for more details of the outcome of the fuel mix consultation.
We keep an open mind on the future development of the electricity market and welcome views from the public before the consultation ends on June 30.
Ends/Tuesday, March 31, 2015
Issued at HKT 19:50
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