CLP & HK Electric Planning New FSRU in Hong Kong

SCI99

2019-04-29

CLP & HK Electric Planning New FSRU in Hong Kong

Hong Kong SAR Government intends to permit Castle Peak Power and HK Electric to construct and operate a new FSRU in the waters east of the Shek Kwu Islands. The new wharf will have two berths for an LNG storage vessel and an LNGC and matched facilities. The LNG will be regasified in the storage vessel and then transported via two independent submarine pipelines (45km and 18km) to the gas receiving stations at Lung Kwu Tan Power Plant and Lamma Island Power Plant. The construction is planned to start by the end of 2019 and end in 2020 or 2021.

Hong Kong, with a size of 1,100 sq. km, has a population of over 7.3 million. At present, 59% of Hong Kong’s power supply relies on coal-fired power, 19% of the total relies on gas power and the left 22% relies on nuclear power from Guangdong Province. Mainland China and Hong Kong signed a memorandum of understanding in 2008 to ensure the stable power supply from the Mainland to Hong Kong. According to the memorandum, the WEP II gas, the South China Sea gas and the imported LNG in Shenzhen’s terminals will be sent to Hong Kong via the submarine pipelines between Shenzhen and Hong Kong. In 2014, the Hong Kong government unveiled a plan to increase the proportion of the Mainland's electricity supply to more than 50% because of the outdated equipment at local coal-fired power stations. However, this plan was criticized to be “relied on the Mainland too much”. The Fukushima Accident also raised people’s worry about the safety of nuclear power. In fact, some social organizations required to close the Daya Bay Nuclear Power Plant and Ling’ao Nuclear Power Plant which were closed to Hong Kong immediately. Thus, the Hong Kong government changed the plan and decided to increase the proportion of gas power to over 50%.

Though the new FSRU could help to reduce the proportion of coal-fired power and protect the environment, public opinion shows complicated reactions to the new plan. Hong Kong's electricity supply is monopolized by two companies of CLP and HK Electric. Citizens are sensitive to the fluctuations in the electric charge and think the two companies are making extra profits. There is also criticism about the negative effect of the FSRU on the environment as many rare marine animals live in the waters around Shek Kwu Islands. WWF Hong Kong Branch said that the FSRU was “quite likely to destroy biodiversity”.

Both Hong Kong’s electricity and gas supply rely on the Mainland heavily. 70% of the annual electricity production of the Daya Bay Nuclear Power Station (10 billion kWh) is imported by CLP to supply Hong Kong, and this is the only source of CLP’s nuclear power import. Hong Kong’s natural gas is imported from CNOOC and CNPC. The import volume reached 3.296 bcm in 2018.

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