Thermal Power in China, Market Outlook to 2020, 2011 Update - Capacity, Generation, Regulations, Power Plants, Companies
- Published: July 2011
- Region: China
BMI View: Thermal energy continues to account for the almost all of Hong Kong’s domestic energy production; while there have been some tentative steps towards generating energy from renewable sources, these have been few and far between. Concerns over Hong Kong’s access to gas in the medium term have abated, following the proposal of a branch line connecting Black Point Power Station with a natural gas supply in Shenzhen, China. Closer energy links with China raise questions about how best to reconcile Hong Kong’s reliable energy service with China’s more volatile market.
BMI’s 2012 Hong Kong power report forecasts that the country’s power consumption will rise by just 0.78% year-on-year (y-o-y) to 40.3TWh.
BMI is forecasting an average 2.3% annual average increase between 2012 and 2016, resulting in 44.8TWh at the end of this period. By the end of our forecast period in 2021, total generation is expected to reach 49.6TWh. Thermal generation, comprising coal, gas and oil, is expected to grow by 1.9% per annum between 2012 and 2016, and average 2.4% between 2016 and 2021. Thermal power generation will continue to account for all of domestic production, with imports sourced from nuclear and pumped storage capacity in China.
Apart from domestic thermal energy production, Hong Kong is making limited progress in the field of renewable energy, with both China Light & Power (CLP) and Hong Kong Electric Co. (HEC) drawing up plans for offshore wind farms. In addition, Hong Kong imports electricity generated by nuclear power stations in mainland China – Hong Kong has no plans to build its own nuclear facilities – and CLP is in negotiations with Chinese firms over long-term plans to import natural gas.
Hong Kong stands in 12th position in BMI’s Asia Power Risk/Reward Ratings (RRRs), thanks to its modest market size and below-average growth prospects. It scores above average for industry rewards, with its total score dragged down by the risks side of the matrix.
Key developments for Hong Kong’s power sector include:
- Hong Kong’s energy dependence on China is growing, with CLP in negotiations with PetroChina over natural gas supplies, which if approved, will be delivered to Hong Kong before Q113.
- CLP Holdings and China Southern Power Grid revealed in March 2012 that they are jointly seeking to acquire ExxonMobil’s majority stake in Castle Peak Power. If confirmed, this acquisition would be an important step forward for China Southern Power Grid, allowing it to generate revenues in Hong Kong.
- New electricity tariffs were implemented on January 1 2012, with the average net tariff raised by 4.9%.
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