The Government launched a mid-term review of the Control Plan Agreement with the two electric power firms this year. The Secretary for the Environment and Ecology, Mr Tse Chin-wan, told the Legislative Council this afternoon (6 June) that the Government is open to the mid-term review and has not drawn a line on the scope of the review, and based on the views gathered, the Government initially intends to discuss with the power companies the scope of amendments to the agreement, including but not limited to reducing allowable profits and reviewing the incentive penalty mechanism, etc., and the Government will announce the results in due course upon completion of the mid-term review.

Some Members were concerned about whether the Government had started planning for the work of liberalizing the power grid, and Mr Tse said that the work involved the consideration of complex factors, such as the elimination of vicious competition, and the possibility of technological changes in the future development of power transmission, which may not be the most appropriate time to study at present.

Xie Zhanhuan's open grid will not be implemented until the end of 2033 at the earliest. (Photo by Liao Yanxiong)

Opening the grid does not necessarily mean reducing prices and maintaining a stable supply

Tse pointed out that based on overseas experience, opening up the grid will not necessarily reduce electricity prices and maintain stable power supply. He pointed out that a stable and reliable electricity market is crucial to Hong Kong's development, as the electricity market involves huge investment, as well as professional and reliable operational requirements and cooperation with neighbouring regions, and whether the grid should be liberalized in the long term will involve complex considerations, including the elimination of unhealthy competition. Under the current agreement, if changes are introduced to the regulatory framework for electricity supply, they will not be implemented until the end of 2033 at the earliest after the expiration of the agreement, adding that such work will not be excluded.

LegCo Member Chan Ka-pei was concerned about whether the Government would set a shorter-term target for the two powerhouses to gradually achieve carbon neutrality. Tse responded that through the five-year development plan of the two power companies, the government can regulate the development of the electricity market and ensure that the investment in the two power plants is placed in the most appropriate places. He added that planning and implementation are different, and that there are specific plans in Hong Kong to increase the supply of electricity supply to the mainland through regional cooperation, etc., and will require the cooperation of power companies, but the works involved will take a lot of time.

CLP had 166 power outages affecting more than <> households last year

In response to a written question from a member of the Legislative Council, the authorities also explained the power supply performance of the two electricity companies under the Control Plan Agreement, mentioning the fire accident at CLP Yuen Long Cable Bridge last year, which took 10 hours and 27 minutes to restore power, affected 17,5 customers, and 166 power outages affecting more than 100 households in the same year.

In addition, CLP was unable to supply power to a single customer on outlying islands due to submarine cable failure in 2020, with a power restoration time of 37 hours and 39 minutes, and 132 power outages affecting more than 100 households. According to the information, CLP received an additional profit reward of 0.015%, equivalent to RMB1.780 million, in the same year under the reward and penalty mechanism for restoring power supply calculated throughout the year.

As for HK Electric, the longest restoration time has been more than 2019 minutes per year since 200, but last year there were accidents that affected more than 8,200 households.

Tse agrees that the incentive and punishment mechanism for power outages should be amended It is expected that the two power companies should reduce the allowable profit stance by 8%, and the two power companies will be toughened on the mid-term review of the "Control Plan Agreement" A number of Members propose to cancel the incentive for restoring power supply, there is a reward for power outage|The Government and the two power companies review the electricity tariff agreement to allow a review of the controversial power outage incentive mechanism