| HONG KONG, June 5
HONG KONG, June 5 Hong Kong-based utility CLP
Holdings is calling on the local government to boost
the use of natural gas for electricity generation rather than
opt for a sharp increase in power imports from mainland China to
cut pollution in the city.
Hong Kong has been reviewing its fuel mix that is currently
heavily tilted towards coal in a bid to cut emissions and has
been mulling two options - one calling for higher power imports
from the mainland and the other recommending a sharp rise in the
use of natural gas, a cleaner but more expensive fuel than coal.
The city, which is set to see its coal-fired power
generating units go offline from 2017, launched a three-month
public consultation on the proposals in mid-March.
CLP, a regional power investor that makes most of its money
from electricity generation in Hong Kong under a
profit-guarantee system, said the city should boost gas-fired
power generating capacity to have "sufficient backup", while
seeking to increase imports from the mainland over the long
"If we are ... reducing the amount of capacity we have in
Hong Kong, that position (supply security) would be
compromised," Richard Lancaster, CLP's chief executive officer,
told a business forum in Hong Kong on Thursday.
CLP is backed by the wealthy Kadoorie family and has been
providing electricity to Hong Kong for over 100 years.
Under a government programme known as Scheme of Control, CLP
and Power Assets Holdings Ltd, the city's other power
supplier, get an annual return of 9.99 percent on net fixed
assets until 2018. Critics say the scheme is too generous and
has led to over-investment in local power generating capacity.
With Hong Kong getting 53 percent of its power from coal,
according to government data for 2012, it has been suffering
from worsening air pollution - a situation exacerbated by
pollution from factories in the neighbouring Chinese province of
Guangdong, a major manufacturing centre.
Electricity supplied from the Daya Bay Nuclear Power Station
in Guangdong accounted for 23 percent of Hong Kong's power
consumption in 2012, natural gas accounted for 22 percent and
the remaining came from oil and renewable energy sources.
Under the first option that calls for higher power imports
from southern China, mainland power plants, including the Daya
Bay station, would account for half of Hong Kong's electricity
supply. Generation by natural gas would increase to 40 percent,
while coal and renewables would account for about 10 percent.
The other option calls for boosting the share of natural gas
in its fuel mix for power generation to about 60 percent. Coal
and renewables would account for 20 percent, and the import of
nuclear electricity from Daya Bay Nuclear Station would be kept
at about 20 percent.
(Editing by Himani Sarkar)