CLP sticks to nuclear for HK as it ramps renewables elsewhere

The CLP Group has reaffirmed its intention to focus on nuclear power, together with some wind generation, to fulfil the requirements of Hong Kong's Climate Change Strategy and Action Agenda.

Unveiled in September 2010, Hong Kong SAR Government's proposed strategy is that by 2020 the city electricity needs will be met by a generating mix of 50 percent nuclear, 40 percent gas, 3 to 4 percent renewable energy and not more than 10 percent coal by 2020.

Speaking after CLP Holding's annual general meeting, chief executive officer Andrew Brandler said the utility would continue to invest in nuclear energy despite the greatly increased concern sparked by the crisis at Japan's Fukushima Dai-ich nuclear power plant.

"However ... the actual progress of our nuclear energy projects depends on the wishes of the Hong Kong government and the public," said Brandler.

The CLP Group owns a 25 percent stake in the 1,968MW Daya Bay Nuclear Power Station, 50 kilometres from Hong Kong. Last year it singed an memorandum of understanding with China Guangdong Nuclear Power Holding Corporation (CGNPHC) to spend 11.9 billion yuan (USD1.7 billion) for a 17 percent stake in the 6,480MW Yangjiang nuclear project in Western Guangdong.

CGNPHC currently has five nuclear reactors in operation: two at Daya Bay and three at Ling Ao, a sister plant located one kilometre away. A fourth Ling Ao unit is due to come on line later this year and a planned further expansion will add another four, raising concern that there will be 10 nuclear reactors operating relatively close to Hong Kong and Shenzhen, which have a combined population of more than 15 million.

At four sites elsewhere in Guangdong Province, including Yangjiang, CGNPHC has another 22 reactors under construction or at the advanced planning stage.

Addressing Hong Kong's Legislative Council in March, the SAR Government's Secretary for the Environment, Edward Yau, said that the administration would evaluate the cost-effectiveness, reliability, security and environmental-friendliness of using nuclear energy in the city. Industry observers have, however, pointed out that CGNPHC will almost certainly go ahead with its nuclear development plans, with or without the participation of Hong Kong and CLP.

And in an interview with CleanBiz Asia CLP Group's Hong Kong managing director, Richard Lancaster, said that given the SAR's lack of renewable energy potential, use of nuclear energy appears to be the best option to enable coal-fired electricity generation to be scaled down.

CLP does have plans to invest HK$7 billion (USD903 million) to build a 200MW wind farm in Hong Kong waters, which would be the largest off-shore plant in Asia but only generate about 1 percent of the city's electricity needs.

Elsewhere in Asia Pacific, however, the company is forging ahead with investments in renewable energy. It is already the biggest wind farm operator in India with around 450 MW of capacity and has aggressive expansion plans there and also in China and Thailand where it has wind, hydo and solar projects.

"CLP plans to add 172 megawatts of wind power capacity to its India energy portfolio this year. The company also started commercial operations at its mainland hydroelectric plant in Jiangbian, Sichuan province, on April 28. CLP entered the Thai solar energy market by acquiring a one-third stake in a 55-megawatt solar energy project at Lopburi," said CLP chairman Michael Kadoorie.

It spent USD250 million in both 2009 and 2010 on the Thai solar project and the wind projects in China and India. Last December, however, CLP subsidiary's Australian subsidiary, TRUenergy, reached an A$2.035 billion (USD1.96 billion) deal with the New South Wales Government to acquire two coal-fired generating plants with a combined 2,400MW of output, together with three development sites and an electricity distribution business.