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LCQ10: Energy policy

     Following is a question by the Hon Leung Yiu-chung and a written reply by the Secretary for the Environment, Mr Wong Kam-sing, in the Legislative Council today (June 19):


     Regarding the interim review of the Scheme of Control Agreements conducted by the Government with the two power companies, the Secretary for the Environment said earlier that "subject to public aspirations and the situations of the discussion, we hope that this task will be completed in the second or third quarter of this year". He also indicated that the Government would then commence a review of the fuel mix for generation of electricity. Besides, it has been learnt that the development planning and construction of nuclear power facilities on the Mainland have made new progress. In this connection, will the Government inform this Council:

(a) whether, during the interim review with the two power companies, the Government has encountered any difficulties in reaching a consensus in relation to the aspirations of members of the community (including setting mandatory energy saving targets, etc.), thus affecting the progress of the interim review; if it has, of the details;

(b) whether the Government will within this legislative session (i) complete the interim review and report the results to this Council, and (ii) commence the review of the fuel mix for generation of electricity; if it will not, of the relevant dates;

(c) whether the Government has sought information from the Mainland authorities on the latest progress of the development planning and construction of nuclear power facilities on the Mainland, including details of the completion dates for various nuclear power projects in Guangdong Province, models of the generating units selected, and whether the scale of the generating units has changed when compared with the past, etc.;

(d) whether it has assessed the impacts of the development planning and construction of nuclear power facilities on the Mainland on the future electricity supply for Hong Kong; and

(e) when the authorities plan to conduct public consultation on the review of the fuel mix for generation of electricity, and whether the relevant public consultation documents will set out the reference materials on the Mainland's nuclear power projects, including Hong Kong Government's assessment on their impacts on Hong Kong's safety risk and electricity tariffs, etc (e.g. the nuclear power station in Lufeng of Guangdong Province) upon the completion and commissioning of such projects?



     In developing the energy policy in Hong Kong, the Government has been guided by four objectives, namely safety, reliability, affordability and environmental protection. Having regard to these principles, the Government is conducting the mid-term review of the Scheme of Control Agreements (SCAs) signed with the two power companies, and preparing for the review of our fuel mix for electricity generation. Details are as follows.

(a) and (b) The SCAs signed between the Government and the two power companies set out the obligations of the power companies, the returns for shareholders and the arrangements by which Government monitors the power companies' financial affairs. The current SCAs run for a term of ten years and will expire in 2018. The SCAs stipulate clearly that the Government and the two power companies shall have the right during 2013 to request modification of any part of the current SCAs, and mutual agreement is needed before implementing any proposed modification.

     The Government has engaged experts, academics, green groups and other stakeholders on the mid-term review and relevant energy matters to solicit their views. We have also attended meetings of the Panel on Economic Development of the Legislative Council to listen to the views of Members and attending deputations. As we have informed the Legislative Council, we expect to complete the mid-term review by end 2013, and brief the Legislative Council and the public on the outcome.

(c), (d) and (e) At present, coal accounts for about 54 per cent of Hong Kong's fuel mix for electricity generation, natural gas 23 per cent and imported nuclear energy 23 per cent. In order to reduce carbon emissions from power generation and to combat climate change, we proposed in 2010 to improve our fuel mix in 2020 by substantially reducing the reliance on fossil fuels, which are highly carbon-emitting, gradually retiring existing coal-fired generating units, and increasing the share of non-fossil, clean and low-carbon fuels, including importing more nuclear energy.   

     While we were consolidating the views received during the public consultation exercise, the Fukushima nuclear incident took place as a result of the earthquake and tsunami hitting northeastern Japan. Following the incident, various sectors in the community have different views on the application of nuclear energy, and the Government has been closely monitoring developments in the international arena and in the Mainland. We understand that the Mainland has already decided to resume the approval process of nuclear projects, and a small number of fully vetted sites for nuclear projects in the coastal area would be considered during the "12-5" period. Furthermore, all new nuclear projects must be built according to the highest international safety requirements, and their generating units must meet the third-generation safety standards.

     Each fuel source has its own merits and demerits; we will strive to strike a balance among the considerations of safety, reliability, affordability and environmental protection in reviewing the overall fuel mix for electricity generation. We will also continue to maintain close liaison with relevant Mainland authorities and make reference to relevant planning and developments in the Mainland. In the light of the profound impact of the fuel mix review, we will engage various stakeholders, including experts, academics, industry and business sectors, and non-governmental organisations to solicit their views. We plan to consult the public on this matter in the latter half of 2013.

Ends/Wednesday, June 19, 2013
Issued at HKT 12:06


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