Special interviews
Written by: Kuang Yueting
2021-04-12 07:00
Last update date: 2021-04-12 07:00
In response to climate change, the Hong Kong Government stated in its policy address issued in November last year that Hong Kong will achieve its vision of being "carbon neutral" by 2050.
At present, 65% of Hong Kong's carbon emissions come from power generation. For power companies, it is not a lot of challenges to achieve carbon neutrality within 30 years.
In an interview, Lan Lingzhi, CEO of CLP (0002), said that the company currently has the technology and knowledge to develop renewable energy, but there are still some difficulties in meeting the standards. "It takes ten years to build infrastructure. If we only have 30 years to do it, we have to do it right away, and we have to speed up the pace of work, but I believe it is feasible!"
Natural gas is a clean fuel, so CLP has gradually increased the proportion of natural gas power generation in recent years to reduce emissions from business operations.
(Screenshot of CLP website)
In line with the Hong Kong government’s vision of "carbon neutrality", Lan Lingzhi summarized CLP’s strategy of gradually eliminating coal-fired power assets in the future, and considering building wind farms in waters outside Hong Kong, and continuing to increase investment and development in China. Hydropower, solar power and nuclear power generation projects with diversified fuel combinations.
In 2020, natural gas power generation will account for 48% of CLP’s power generation fuel mix, nuclear power will account for about 36%, coal will account for about 15%, and others (such as oil) will account for about 1%.
Lan Lingzhi said that the company plans to replace natural gas power generation with hydrogen power generation by 2030, and the existing natural gas power generation equipment can be directly used to process hydrogen power generation projects.
"If there is sufficient sunshine during the day and the wind is strong enough, we can use solar, wind, and hydropower to generate electricity, and we will use more hydrogen to generate electricity at night."
Building small wind farms is not cost-effective
At this time, CLP is studying the construction of wind farms in waters outside Hong Kong.
He pointed out that Hong Kong’s waters are limited and may only be able to install small wind turbines. In addition, if the equipment is to be brought to Asia, the cost of building small wind farms will be very expensive. Therefore, the company hopes to choose suitable ones in waters outside Hong Kong. Locally build wind farms and place more large-scale wind turbines to make the project more economical. However, relevant plans need to be approved by the Hong Kong government.
When asked whether Hong Kong can achieve carbon neutrality by relying on "local power generation", Lan Lingzhi believes that Hong Kong is just a city and it is difficult to achieve carbon neutrality on its own. Even large cities such as New York and London have to purchase electricity outside.
CLP currently holds a 25% stake in the Daya Bay Nuclear Power Plant. The company also purchases about 80% of the electricity from the nuclear power plant. This power is supplied to Hong Kong users through transmission lines.
In the future, CLP will invest heavily in the development of renewable energy projects in the Greater Bay Area and continue to invest in the Yangjiang Nuclear Power Plant. If there are good investment opportunities in the future, it will also consider investing.
He emphasized that he did not think it was dependent on China, but just made good use of the land resources around Hong Kong.
This year marks the 120th anniversary of the establishment of CLP. Lan Lingzhi reiterated that the company has no plans to distribute special dividends.
(Photo by Kuang Yueting)
Spread infrastructure costs over a long period of up to 50 years
He continued that even though many commercial buildings and schools in Hong Kong have solar panels installed on their rooftops to generate electricity, there are still many difficulties in large-scale applications. For example, electricity cannot be produced when it is cloudy or rainy, and the electricity supply may be unstable and power generation. The amount may not be enough for the entire building, so electricity storage equipment must be used to store the electricity to provide a stable power supply.
Regarding the future trend of electricity tariffs, Lan Lingzhi revealed that the biggest variable in electricity tariffs is the cost of natural gas fuel. The decline in oil demand last year and the sharp drop in oil prices have also adjusted the price of natural gas, but it is difficult to predict what will happen in the future. People may gradually resume travel. Natural gas prices Will also pick up.
In addition, the company will calculate the amortization of infrastructure costs into the electricity bill. Some projects have a life span of 30 to 50 years, so the impact on the annual electricity bill is relatively small.
China will launch a carbon emission trading market in June. Lan Lingzhi feels that carbon trading has different practices in different countries or regions, and there is no uniform standard. For example, China and the European Union have their own carbon trading systems, but the Hong Kong market is relatively small. It is difficult for a small number of participants in carbon trading to establish a local carbon trading market, and it would be better if it focuses on regional markets.
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