I met with Hong Kong Electric Investments at a company meeting recently (they run power stations for HK Island). Bottom line is the way the utilities are incentivized is completly wrong!
They are currently a regulated monopoly where they are allowed to make a maximum of 9.99% return on their fixed assets (and additional capital investments). For renewables, they are allowed to make a return of 11% (hardly much of an incentive). The terms of that agreement will expire in 2018 or most likely 2023. Govt is suggesting that with interest rates so low, they should accept a lower return of 6-8%. They angrily said this is not going to happen and they will not accept it (and potentially hold HK for ransom) and would refrain from making major investments.
I was truly shocked.
I suggested to the management that they should negotiate with the government to come up with incentives directed at minimizes carbon footprint. In other words, if they reduce CO2 emmissions by X, they can make a bigger maximum return. The way it works in Hong Kong currently, just shows how corrupt the system is currently and how low a priority there is at minimizing carbon emissions.
There is a technology for instance, which can be fitted to coal plants that drastically reduce carbon emissions - it is expensive but they are doing it at some plants in china already. Some say the emissions can be reduced to close to that of gas fired power plants.
They kept saying that they are proud in that HK has the lowest incidence of outages globally while electricity prices are inexpensive globally. I felt like saying - duh! That's what happens when you burn cheap coal and the cost of transmission per customer is tiny given the density of population!
The current HK government really makes me feel ill sometimes.
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On the island side, most power generated is from Coal Fuel (HKE). On the Kowloon side and NT, coal firing plants are responsible for less than half (CLP). On Average, about 55% of electricity coming from Coal.
And if our EV use power generated in Hong Kong, the Tesla create more CO2 than a average normal petrol car. (the statistics use a LEAF). Our Government need to give up Coal firing plants. Otherwise even we use EV and government promotes it, it's meaningless.
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I am not sure this is correct. I think a lot of electricity in HK is wasted during off peak hours. HK does not have an off-peak/peak pricing policy. You pay more the more you use in any given month (price per kwh is tiered on usage levels).
Power plants run 24/7. A lot of electric cars will be charged during off peak hours (i.e overnight). This power is still being produced but wasted. So it depends on how you look at it.
