Public consultation on Future Fuel Mix for Electricity Generation launched

     The Government launched today (March 19) a three-month public consultation on the Future Fuel Mix for Electricity Generation for Hong Kong.

     The Secretary for the Environment, Mr Wong Kam-sing, said, "The existing coal-fired generating units will start to retire from 2017. In order to meet future electricity demand and to improve the environment, we have to review and improve the future fuel mix for electricity generation for Hong Kong in a timely manner in order to enable the planning of necessary infrastructure."

     In 2012, coal accounted for more than half of the overall fuel mix in Hong Kong (53 per cent), followed by nuclear electricity imported from the Daya Bay Nuclear Power Station (DBNPS) in the Mainland (23 per cent), natural gas (22 per cent), and oil and renewable energy (RE) (2 per cent).

     Mr Wong said that the Government's energy policy is to ensure that the energy needs of the community are met safely, reliably, efficiently and at reasonable prices, while minimising the environmental impact of electricity generation.

     Having regard to the energy policy objectives and relevant considerations, the Government is putting forward two fuel mix options for public consultation. The first option is "grid purchase", under which importing electricity through purchase from the Mainland power grid (i.e. the China Southern Power Grid) is proposed. The second option is "local generation", under which use of more natural gas for local generation is proposed.

     Under the "grid purchase" option, a possible fuel mix ratio would see Hong Kong import electricity from the Mainland to meet about 50 per cent of demand. About 30 per cent would be purchased from the Mainland power grid, while nuclear electricity currently imported from DBNPS would be retained at 20 per cent; the other 50 per cent of electricity demand would be met by local generation. Generation by natural gas would increase from the existing 22 per cent to 40 per cent, and coal and RE would account for about 10 per cent.

     For the "local generation" option, a possible fuel mix ratio would increase the share of natural gas to about 60 per cent, coal and RE would account for about 20 per cent, and import of nuclear electricity from DBNPS would be maintained at about 20 per cent.

     Mr Wong said that, as long-term planning is required for building new electricity generating units or cross-boundary transmission infrastructure, a planning horizon of a decade has been adopted in the review. The future fuel mix option will provide a basis for planning the necessary electricity infrastructure in future.

     Each of the two proposed options has its merits. In the public consultation document, the Government has provided an analysis of these two options against various considerations, including the four major energy policy objectives of safety, reliability, affordability and environmental performance, as well as other important considerations including their implications for the future regulatory framework for the post-2018 electricity market, diversification and flexibility in meeting future demand, and more. On affordability, given that the existing coal-fired generation units will retire and we need to put in place new generation units or build a cross-boundary transmission network, that more natural gas will be used for electricity generation to improve the environment, and that the natural gas supply contracts at competitive prices entered into some years ago will expire, the rising trend of unit-generation costs has been set. Our preliminary estimate is that there would be no substantial difference between the unit costs of the two options.

     "The Government is adopting an open position on the two fuel mix options. We encourage the public to provide us with their views in the upcoming three months as we chart the way forward for Hong Kong's future fuel mix for electricity generation," Mr Wong said.

     The consultation document can be downloaded from the website of the Environment Bureau ( Members of the public are welcome to send in their comments by post to the Electricity Reviews Division, Environment Bureau, 15/F, East Wing, Central Government Offices, 2 Tim Mei Avenue, Tamar, Hong Kong, or by fax to 2147 5834 or by email to on or before June 18.

Ends/Wednesday, March 19, 2014
Issued at HKT 14:14