EDITOR’S NOTE: Utilities the world over are changing their business models as governments, regulators and consumers embrace a more sustainable energy future that mitigates the problems of climate change. The Hong Kong SAR Government consulted its citizens about the future development of the electricity market. Paul Poon, managing director of CLP Power Hong Kong, the city’s largest power company that serves over 5 million citizens, believes that making electricity use smarter and greener as well as enhancing customer experiences will be the key guiding principles to deliver long-term value for Hong Kong. Mr. Poon will be a keynote speaker at a major utility conference, Empowering Customers and Cities, in Chicago November 4-6, where he will share more his thoughts about the changes ahead. CLP Power Hong Kong submitted this commentary at the request of The Energy Times.
Known as an Asian World city with the largest number of skyscrapers in the world, Hong Kong is highly dependent upon reliable and efficient electricity supply to power the city’s operation. Power interruption in Hong Kong is at an extremely low level, where on average a customer might experience about 2.3 minutes unplanned power interruptions every year.
For fifty years the electricity sector there has been regulated under the “Scheme of Control”, an agreement signed between the government and the privately-funded power companies. To meet the global call for addressing the climate change, the Hong Kong government conducted a public consultation from March to June this year to decide the city’s future energy policy.
As stated in the consultation paper, the Hong Kong government recognizes that the Scheme of Control has served Hong Kong well. On this basis, Poon opined that “we should build on what we have to ensure our current achievements regarding the government’s energy policy objectives are maintained and that a greener Hong Kong and enhanced customer experience are properly delivered.”
In its submission to the government, CLP Power believed “a greener and smarter electricity sector” and “enhancing customer experience” should be the guiding principles to further raise standards in the years ahead.
Poon said CLP Power is supportive to the development of small distributed renewable energy schemes despite the constraints Hong Kong faces. The company has a simple procedure in place for grid connection and offers Solar Energy Assessment Service to support installations in the community. Over 200 small-scale distributed renewable energy systems are now connected to CLP Power’s grid.
CLP Power is also prepared to discuss with the government on how financial support can be provided, such as “net metering” or a pilot-scale “feed in tariffs” scheme, for owners of distributed renewable generation to receive payments from the power company for any electricity that they produce in excess of their own requirements.
Echoing Hong Kong government’s policy paper, “An Energy Saving Plan for Hong Kong’s Built Environment,” published in May, Poon said, “We see our part to play in the plan to help deliver the targets.” The government aims to reduce energy intensity by 40 percent by 2025 using 2005 as the base.
“We can help customers reduce their total bills through a greater focus on energy conservation and efficiency while giving them more choices,” Poon continued, “for example, through a variety of tariff plans enabled by smart meters.”
CLP Power conducted a smart metering trial involving 3,000 residential customers and 1,400 small and medium-sized enterprises earlier. Poon said the preliminary analysis shows that customers who participated welcomed the opportunity to understand more about their electricity consumption pattern and many took active steps to reduce electricity use.
Whatever decisions were taken over the future of Hong Kong’s electricity industry, the CLP Power submission recommended the policy should align government, investor and community interests as far as possible while adapting to society’s needs.
“We believe the Scheme of Control can evolve and form a solid and effective basis for any new arrangements,” said Poon.