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Electricity market consultation launched

March 31, 2015

The Government today launched a three-month public consultation on the future development of the electricity market.

 

Briefing reporters today, Secretary for the Environment KS Wong said as the power companies' Scheme of Control Agreements expire in 2018, the public must consider how to further develop the electricity market to fulfil the four energy policy objectives: safety, reliability, affordability and environmental protection.

 

While the Government aims to introduce competition to the market, it is unlikely to have new suppliers either from the Mainland or locally in the near term, he said.

 

Most respondents in the previous fuel mix consultation preferred local generation instead of importing power from the Mainland, but new local suppliers will not be available in the near future due to land constraints, he added.

 

The Government will, however, conduct the necessary preparatory work for introducing competition in the longer term, including studying new suppliers' grid access arrangements and the interconnection of the power grids of Mainland and local companies, he said.

 

Speaking on the future regulatory arrangement, Mr Wong noted the current contractual arrangements have been effective. Reviews will be carried out in areas including permitted rate of return, the tariff approval process, promoting information transparency, enhancing power companies' performance, and promoting energy saving and renewable energy.

 

To achieve the 2020 environmental target, the Government also plans to boost natural gas generation to around 50% in 2020, and maintain nuclear power supply at 25%. More renewable energy will also be developed and the remaining demand will be met by coal-fired generation.



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