Tariff fears eased amid nuke push

Hong Kong hopes to invest in new nuclear facilities in the mainland as it plans to import 70 percent of its electricity needs from up north by 2035, Secretary for Environment and Ecology Tse Chin-wan said.

He assured people that electricity tariffs should not increase significantly in the near future as the impact from current wars was starting to fade.

Hong Kong's two power giants have slashed net tariffs next year, 16 percent for Hongkong Electric and 7.4 percent for CLP Power, due to drops in global fuel prices.

Tse said yesterday fuel prices might drop further, if only slightly, in the coming year, but authorities cannot be sure of that.

"We use a conservative method to estimate fuel costs for the coming year. According to our calculations, fuel prices have yet to return to prepandemic levels but they have dropped 50 to 60 percent from the peak," he said.

"The Israel-Hamas war had a brief impact on the fuel cost but prices have stabilized. We think fuel prices will drop slightly in the coming year if there are no major changes," he added.

Tse believes there will not be a significant increase in power bills next year.

He also said the power giants have agreed to set up a special subsidy for users if fuel prices surge sharply due to geopolitical tensions or natural disasters.

That will see people with low levels of power usage will get it if tariffs surge by 20 percent for HKE users compared to January, or 10 percent for CLP users.

But subsidies will be capped at HK$180 million for CLP and an amount equal to shareholders' earnings for HKE which was around HK$55 million last year.

"Although it's not the most ideal arrangement, it's an important step as the suppliers agreed they have to bear social responsibilities and we included the subsidy for fluctuating fuel prices in the agreement with the companies," Tse said. "The subsidy will target the grassroots who are affected the most by rising fuel prices. " he added.

Tse indicated Hong Kong's nuclear investment push on Saturday.

"We are seeking cooperation with the mainland instead of just buying electricity from them, and we hope to make investments. The mainland also has its goal of reducing carbon emissions and it would be difficult for everyone if we take the credit from their zero-carbon energy efforts. We hope to build more facilities to achieve a win-win situation," Tse said.

He did not rule out the possibility that Hong Kong will invest in the construction of a new nuclear power plant in the mainland.

"We need some time to discuss with the mainland about where and how the facilities can be builtBut we should get more mainland power supply by 2035," he said.