We Must Not Compromise the Safety and Reliability of Hong Kong’s Electricity Supply

The Hong Kong General Chamber of Commerce has long supported the Government’s energy policy objectives. In response to the public consultation on “The Future Development of the Electricity Market,” our submission points out it is crucial that we do not compromise the safety and reliability of electricity supply just for the sake of providing more choices.

The Chamber supports a clear and effective energy policy to ensure a high level of reliability and stability, while at the same time giving full consideration to affordability and environmental performance. However, with the current system still functioning effectively, it requires serious justification to alter such a model, especially when it will not deliver noticeable benefits to consumers over the short term.

The Chamber believes that the Government’s energy policy objectives of safety, reliability, affordability and environmental performance in the consultation are competing objectives, in that the achievement of one may come at the expense of another. Therefore, it is unrealistic to anticipate that a perfect model can be developed to satisfy all objectives.

“The Government’s role is to ensure there is a balance amongst all the objectives. The community as a whole needs to agree on the priorities and specify clearly the key problems that need to be addressed,” said Chamber Chairman Y.K. Pang. “The business community firmly believes that ensuring the safety and reliability of electricity supply should be the overarching objective of our policy goal.”

There is no conclusive evidence to suggest that market liberalization will help improve the environmental performance of our electricity supply, and the experiences of other areas show that there is a heightened possibility of adverse results, such as increased complaints about services and tariffs.

In addition, given that Hong Kong is a densely populated “vertical city” served by an extensive mass transit network, a reliable energy supply is not only essential to the city’s daily operations, but also for the safety of the general public.

Chamber CEO Shirley Yuen suggested that the Government and power companies go back to the negotiation table and carefully reconsider the issue, in particular the side effects that it might have on the public and businesses. “Given that electricity is an integral part of doing business in Hong Kong and of the public’s daily lives, they should discuss ways to enhance the transparency of the cost structure,” she said. “They also need to give due consideration the cost implications on the public and businesses, in particular SMEs.”

Yuen concluded that any policy change should be based on clear, viable and prioritized objectives. Moreover, any change should allow sufficient time for businesses to make necessary adjustments.