South China Morning Post
Comment›Insight & Opinion
Gavin Edwards and Sarah Keung
Gavin Edwards and Sarah Keung offer two ways by which Hong Kong can cut carbon emissions – and begin to catch up with the leading Asian cities in the adoption of renewable energy
An “all-star” cast of Nobel Prize-winning scientists and leading academics descended on Hong Kong last month to share the latest science on climate change and sustainability, and to call for urgent action and solutions.
At the 4th Nobel Laureates Symposium on Global Sustainability, Hans Joachim Schellnhuber, director of the Potsdam Institute for Climate Impact Research, unveiled new findings of various climate tipping points. The disappearing Greenland ice sheet and the decimation of coral reefs were just a couple of examples of the nightmare scenarios he presented.
It is not all doom and gloom, though. World Bank president Jim Yong Kim urged the world to move to zero net emissions of greenhouse gases “as quickly as possible”, while Chief Executive Leung Chun-ying explained that “Hong Kong attaches great importance to combating climate change”. This is all very timely, because the Hong Kong government has recently begun a consultation to solicit opinion on how to regulate the electricity market, which is the city’s single biggest contributor to greenhouse gas emissions.
Today, local electricity generation relies almost 100 per cent on fossil fuels, using imported gas from Turkmenistan via a pipeline through mainland China, and imported coal shipped from Indonesia. Meanwhile, the sun and wind that falls on our territory remains unused – renewable energy sources account for less than 1 per cent of our electricity.
So how have our utilities responded to the challenge of climate change? The answer: CLP Power has just announced it wants to install two additional generators at its Tuen Mun power station, designed to burn gas for the next 30 years. So, as other parts of Asia begin to embrace energy efficiency and renewable energy, our utilities’ response is to ensure that we will be burning more fossil fuels for decades to come.
Hong Kong is lagging behind the rest of Asia in terms of the development of renewable energy. For example, the solar systems installed in Singapore and Seoul can provide 11 times and 23 times more electricity respectively than Hong Kong’s solar system. And both cities have rolled out road maps to substantially increase the installation of renewables.
Something does not add up. Taipei, Shenzhen and Seoul are busy installing solar panels on their rooftops, so why isn’t Hong Kong? To answer this question, you have to turn the clock back to the 1960s, when a set of scheme of control agreements was developed to regulate our electricity market. The framework was a unique, made-in-Hong Kong approach to meeting the city’s growing electricity demand. The agreements provided a high, guaranteed rate of return, motivating power utilities to invest in fixed assets. They served us well in the last century, helping to power our city.
But, in the 21st century, the shortcomings are all too apparent. As the Consumer Council recently pointed out, the current agreements fail to offer choice to consumers. Instead, they help protect the monopolies of our power utilities, delivering healthy, stable profits to them regardless of the local or global economy. The agreements have also failed to anticipate the evolution of technology, and have so far failed to reduce our absolute greenhouse gas emissions.
CLP recently explained that the reason for ignoring wind and solar power is the lack of space and high installation costs. Yet the company has installed wind farms and solar panels in other places where they operate, such as mainland China. This makes business sense because the central government provides policy support and encouragement for renewables, as they want to cut greenhouse gas emissions and air pollution. CLP benefits from these enlightened policies.
The Hong Kong government is fully aware of the current failings of the scheme of control agreements. As far back as 2002, a consultant’s report to the government said the agreements “have a pervasive influence on the current market for new and renewable energy technologies”. This is why Environment Secretary Wong Kam-sing has invited the public to provide input on how to deal with the scheme’s shortcomings. We have a rare opportunity to fix the situation in two key ways.
First, a “feed-in tariff” is needed. This mechanism obliges power utilities that operate electricity grids to buy any power generated by wind farms, solar panels and other forms of renewable energy at a set price. Once in place, consumers and renewable energy installers can figure out how profitable it is to install renewable energy equipment.
Back in 2009, the Nobel laureates gathered at St James’ Palace in London with Prince Charles and others and signed a declaration calling for governments around the world to adopt feed-in tariffs. Since then, cities as diverse as Shenzhen, Taipei and Canberra have tapped this policy tool of choice. Consumers with access to rooftops can generate power and earn a little extra money, and the cities they live in benefit from lower emissions and cleaner air. Hong Kong urgently needs this policy.
Second, we need to get serious about energy efficiency. In the existing schemes of control, an incentive was linked to energy efficiency. It states that if the utility companies could achieve or outperform a set energy efficiency level, they would enjoy an additional rate of return and receive a greater profit. The targets set are paltry, and much more ambitious ones are needed -such as 1 per cent of annual peak load demand – with financial incentives for meeting the targets and, significantly, heavy fines for failing to meet them.
By encouraging our power utilities to meet higher targets, they will find ways to encourage customers to use electricity as efficiently as possible.
We are deeply concerned about the very real impact of climate change, and keen to see Hong Kong move from being Asia’s climate laggard to its climate leader. This is why we will urge our government to set and meet strong targets for energy efficiency, and to put in place policies to encourage renewable energy. With such measures in place, CLP could shelve its plans to burn more fossil fuels, and we could all enjoy a powered, prosperous and more sustainable city, with cleaner air and an outstanding global reputation.
Gavin Edwards is conservation director of WWF-Hong Kong. Sarah Keung is senior campaign officer for climate at WWF-Hong Kong