Power price jolt 'unavoidable'

Consumers will face higher electricity costs next year as power giant CLP says fuel prices continue to surge in the midst of the Russia-Ukraine war.

Managing director Chiang Tung-keung said the fluctuating global fuel market poses a heavy pressure on the power company, in which the fuel clause account balance will see a large deficit.

He said the rationing of natural gas in local electricity generation is helping push up costs.

"We expect that our fuel expenses will exceed HK$20 billion, as our fuel clause account has already recorded a deficit of about HK$2 billion at the end of June, compared to a HK$1.1 billion deficit at end of last year," Chiang said.

CLP is in discussions with the government about new tariff levels and will make an announcement in due course, he said.

"With such great cost pressures, we expect it is unavoidable that electricity costs will rise next year," he added.

"However, CLP Power will continue to help customers reduce their carbon emissions and lower their expenditure on electricity."

Chiang said the fuel cost adjustment from November is 54.8 HK cents per unit, up from 38.6 HK cents per unit in January, while the net tariff went up by 12.6 percent in the same period.

Chiang said compared to cities with similar levels of economic development - such as Singapore, Tokyo and London - the increase would be relatively mild in Hong Kong, which has a stable supply of natural gas from the mainland. Also one-third of the electricity generated by CLP is from nuclear energy.

"Many cities have seen a large increase in their electricity tariff, such as in Tokyo and Singapore. Their electricity tariff increased by 44 percent to 102 percent from early last year to September this year," he said.

HK Electric's fuel clause charge will also increase from 27.3 HK cents per unit in January to a projection of 78.8 HK cents per unit starting next month.

Last month, the Environment and Ecology Bureau said the energy crisis caused by the Russia-Ukraine war, alongside the impacts of the pandemic, have posed a great pressure to the fuel costs of the two power companies and so the electricity tariff will inevitably increase next year.

Lawmaker Chan Siu-hung, a senior consultant at CLP, called on the government to strengthen cooperation with cities in the Greater Bay Area to solve energy-related challenges in order to ease the tariff hike.

He said there should be local energy supplies, as well as external supplies from Shenzhen or distant mainland cities, so energy supplies can be more balanced and reliable.

sophie.hui@singtaonewscorp.com