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Hong Kong’s first electric coach is faster, lighter

Friday, 10 May, 2013, 12:00am

NewsHong Kong


The vehicle, bought by CLP for staff transport, is a third cheaper to run than the diesel version

Power company CLP, which introduced Hong Kong’s first electric coach yesterday, says it plans eventually to replace all its staff shuttle buses with the non-polluting vehicles.

Mainly for staff transport, the 49-seater will also be available for trials by other organisations.

Managing director Richard Lancaster said that while the coach cost HK$3 million – double the price of an equivalent diesel vehicle – he believed it would prove economical as the power cost was 27 per cent that of diesel.

The coach – built in Shandong province – joins CLP’s fleet of almost 60 electric vehicles, and can travel 250 to 300 kilometres on a three-hour charge. Chinese University, the Science and Technology Parks and Caritas have joined the test programme.

Lancaster gave no timetable for switching CLP’s staff transport from diesel to electric.

“We are building [our electric vehicle fleet] over time. As new vehicles come onto the market, we would be buying those and introducing them to Hong Kong,” he said. The coach can be charged at stations in Tsing Yi and Lung Kwu Tan.

Edmond Chan Kwai-wah, a senior manager for the company’s smart grid infrastructure, said the extra cost could be nullified in a few years.

Raymond Lo Yuk-shun, managing director of dealer Great Dragon, said the public would soon see electric buses in Kowloon Bay and Discovery Bay. He said Hopewell Holdings had bought two coaches for its feeder service between the Kowloonbay International Trade and Exhibition Centre and Kowloon Bay MTR station, and two electric buses could be running in Discovery Bay by the end of the year.

Lo said many companies were interested in electric vehicles, but they hoped to see more examples in the city before buying them. Electric coaches were more common on the mainland, with more than 100 of them on the roads, he added.

The coach is made of aluminium alloy, 15 per cent lighter than diesel coaches, and has a lifespan of 17 years. The battery lasts for five to six years. The vehicle can travel at 80 km/h.

Buses in Hong Kong have a speed limit of 70km/h.

Meanwhile, mainland carmaker BYD is launching its first batch of 45 electric taxis in Hong Kong on Wednesday. The company plans to replace 3,000 taxis running on liquefied petroleum gas within two years.


Electric Vehicle


Roadside pollution


Exxon turns to auction for Hong Kong power stake: sources

By Denny Thomas

HONG KONG (Reuters) – Exxon Mobil Corp (XOM.N: Quote, Profile, Research, Stock Buzz) has launched an auction to sell up to $2 billion worth of shares in a Hong Kong power venture after a year-long effort to offload its holding to its partner yielded no result, sources familiar with the matter said.

The world’s biggest oil company by market value has hired Barclays Plc (BARC.L: Quote, Profile, Research, Stock Buzz) as an advisor for the sale of nearly half of its 60 percent stake in Castle Peak Power Co Ltd as part of its plan to divest non-core assets.

Talks to sell the entire stake to CLP Holdings (0002.HK: Quote, Profile, Research, Stock Buzz) and state-owned China Southern Power Grid had stalled due to disagreements over valuations, the sources said. CLP owns 40 percent of Castle Peak.

The auction may attract interest from infrastructure funds, Japanese trading houses and sovereign wealth funds, they added without specifying names.

The process is in its early stages and potential suitors are assessing whether to bid for the stake. First-round bids are due in early April.

China’s cash-rich state power groups have also been scooping up assets worldwide, with dominant power distributor State Grid Corp establishing a presence in the Philippines, Spain, Brazil and Portugal.


CLP, controlled by Hong Kong’s wealthy Kadoorie family, remains attracted to the stake because Castle Peak offers guaranteed returns, one source familiar with CLP’s strategy said.

But “the ball is in Exxon’s court now,” the source added.

Castle Peak operates three coal-fired power stations and has a generation capacity of 6,908 megawatts.

CLP and Power Assets Holdings Ltd (0006.HK: Quote, Profile, Research, Stock Buzz), Hong Kong’s other power supplier that is controlled by tycoon Li Ka-Shing, garner an annual return of 9.99 percent on net fixed assets until 2018 under a program known as Scheme of Control.

The sources, who declined to be identified as the sale process is confidential, said the 60 percent stake was valued at around $3 billion last March. Around half of that plus a premium would bring the deal value closer to $2 billion, they said.

Exxon Mobil said in an emailed statement that it does not comment on rumors or speculation and that it routinely assesses its global portfolio of businesses.

A CLP spokeswoman and a Hong Kong-based spokesman for Barclays declined to comment.

CLP posted a 10.5 percent drop in its earnings last year because of weak performances at its operations in Australia and India. Hong Kong accounts for the bulk of CLP’s earnings.

(Additional reporting by Anna Driver and Charlie Zhu; Editing by Michael Flaherty and Edwina Gibbs)

Hong Kong needs to rethink power company’s sweet deal

Thursday, 07 March, 2013, 12:00am

Comment›Insight & Opinion


SCMP Editorial

The warning of hefty tariff increases by the city’s top energy supplier is a case of déjà vu. After imposing a 5.9 per cent tariff increase early this year, CLP reiterated that electricity prices could rise 40 per cent within a few years, saying the switch to natural gas has pushed up fuel costs. The gloomy picture should not come as a big surprise. The power giant first sounded the warning last year after being forced to cut back its annual increase substantially. The rhetoric is nothing new but it is guaranteed to generate outrage, coming from a monopoly that earned HK$8.3 billion last year.

It does not take an expert to tell that clean energy comes at a price. For the sake of a better environment and public health, households and businesses should be prepared to pay more under the user-pays principle. The company is perhaps just being frank about rising costs as it uses more natural gas. Tariff increases appear to be inevitable. The question is how much more people are willing to pay, and whether there is an effective mechanism to ensure the company is not charging more than it should.

Regrettably, energy users are not in a position to tell whether the increase sought by the utility every year is justified or not. A deal with the government currently guarantees CLP and Hongkong Electric a 9.9 per cent rate of return annually on their investment. The so-called scheme of control, a colonial legacy in which utilities are promised hefty profits in return for reliable services, will stay at least for another five years. It is difficult to see how such a sweet deal can be preserved amid growing pressure for tighter government monitoring of public utilities.

Announcing an 11 per cent drop in profits, the company vowed not to accept any “unfair or one-sided” changes to the agreement. It is true that the political environment has put CLP and other public utilities in an increasingly difficult position. But the days of lucrative business deals have long gone. While the company is entitled to reject unfair terms, the public is also unlikely to swallow deals that put commercial gains ahead of public interest.

The century-old company prides itself on being socially responsible. It should take into account the affordability of its services when adjusting tariffs. A strong balance sheet and good business prospects mean the company is in a position to adopt measures to ease the impact on users. Officials are also expected to play a better gate-keeping role on adjustments.


so who negotiated the current Scheme of Control from the Government’s side to sign the bilateral contract ? was that Edward Yau ? Seems like CLP is just asking for what was agreed in the contract. Was it Edward Yau who signed off on the renewed KMB and Citybus / NWFB bus franchises as his farewell from his failed tenure as ENB Secretary ? why does he still have an overpaid office manager job in Government ?

Source URL (retrieved on Mar 7th 2013, 6:13am):

Power giant talks tough

Energy giant CLP is ready to fight any “unfair” move to rewrite the deal that governs its profits, but it is also pointing to hikes in electricity over the next few years.

Kelly Ip and Victor Cheung

Tuesday, February 26, 2013

Energy giant CLP is ready to fight any “unfair” move to rewrite the deal that governs its profits, but it is also pointing to hikes in electricity over the next few years.

The line was drawn yesterday as the electric company reported an 11 percent drop in earnings last year to HK$8.31 billion.

It comes ahead of a interim review of the pact that CLP has with the government – the scheme of control – that allows it a maximum profit of 9.99 percent.

CLP will approach discussions “in a constructive and open-minded spirit,” a statement read. But it “will not be ready to accept amendments which are unfair or one-sided and which run counter to the fundamental character of the SoC agreement as a binding contract.”

There have been calls for government officials to review the maximum profit after the power company raised its tariff by 5.3 percent from January 1 this year. On that, CLP chairman Michael Kadoorie blamed an increase in the cost of natural gas plus a need to use more of it for clean energy production. That includes hitting an official target to cut emissions by reducing the use of coal for generating electricity.

“Fuel costs alone will increase by around 250 percent between 2011 and 2015 because CLP will be required to use twice the current volume of natural gas,” Kadoorie said.

“The cost of this gas will be three times the price of gas secured 20 years ago.”

So Kadoorie hopes officials will extend the scheme of control pact by five years beyond 2018 so that the CLP can continue “to invest in the future.”

The vice chairwoman of CLP Power Hong Kong, Betty Yuen So Siu-mai, said the group sees tariffs increasing from 30 to 40 percent.

“We will try to delay the tariff hikes as much as we can,” she said, “but the upward direction has little room for change.”

She did not directly respond to questions on whether CLP is “threatening” the government ahead of any talks for extending the agreement, but she did remark that there is “sufficient time” for both sides to forge a deal and ensure stability in the supply of power. She also denied that CLP would consider pulling out of Hong Kong if the review of the scheme of control does not go as the company wants.

That it has already stated it is ready to buy Exxon Mobil’s 60 percent holding in the Castle Peak power plant “shows CLP’s commitment to Hong Kong,” she said. CLP currently owns 40 percent of the plant.

And “CLP has been serving Hong Kong for the past 111 years,” Yuen added.

But Secretary for the Environment Wong Kam-sing was lukewarm to the idea of talking any time soon on extending the SoC scheme, saying it is too soon.

“Attention should be focused on the mid-term review of the scheme of control and the possibility to combine different kinds of energy sources,” he said.

Wong also said fuel costs in the international market have little bearing on the consumer price index in Hong Kong, though the administration would have to think on it some more if people at the grassroots were affected.

New People’s Party and Executive Council member Regina Ip Lau Suk- yee thinks the fact CLP has pointed to a need to raise tariffs is a negotiating tactic.

“I believe CLP understands they will face criticism from society if they are to raise tariffs,” she said.

Larry Chow Chuen-ho, director of the Hong Kong Energy Studies Centre at Baptist University, remarked: “I don’t think the maximum profit of 9.9 percent can be amended easily.”

And in a Legislative Council panel meeting, the administration suggested that a 3.6 percent tariff increase by Towngas from April 1 could be viewed as “moderate.”

It is estimated that about 78 percent of Towngas domestic customers will pay no more than an extra HK$10 a month, and charges for low-income groups such as the elderly, disabled and single-parent families will remain unchanged.

CLP wants timely decision on regulatory extension

Submitted by admin on Feb 26th 2013, 12:00am

News›Hong Kong


Anita Lam and Cheung Chi-fai

The city’s largest power supplier, reiterating its claim that electricity prices could rise 40 per cent within a few years, yesterday urged the government to make a timely decision on whether to extend its regulatory regime on the scheme’s expiry in 2018.

The government has begun an interim review of CLP Holding’s scheme of control, which determines the company’s permitted return. But the group’s chief executive, Andrew Brandler, warned that they would not accept any amendment which was “unfair or one-sided”. The company said it would take more than 20 years for a power company to plan for its facilities.

The power company has come under repeated government and community pressure to reduce its tariff hike. CLP’s chairman, Michael Kadoorie, has said more than once that they also faced immense pressure as fuel costs surge by 250 per cent in the five years to 2015.

CLP will be required to use twice the current volume of natural gas, and the cost of this gas will be three times the price of the gas secured 20 years ago

“CLP will be required to use twice the current volume of natural gas, and the cost of this gas will be three times the price of the gas secured 20 years ago,” Kadoorie wrote in the company’s annual report released yesterday. “This is the equivalent of a 40 per cent increase in overall cost to consumers and will require regular and, at times, substantial tariff increases over several years.”

But secretary for the environment Wong Kam-sing said rising fuel costs were a problem for all. “The fuel price increase is a global trend and it is a question we must [all] think about.”

An analyst said CLP may propose a big tariff hike next year when the company lifted the use of the expensive natural gas to replace coal.

William Yu Yuen-ping, chief executive of World Green Organisation, said the firm was preparing the public for a future price hike with repeated warnings.

“The public might get numb about the warning and accept a level a bit lower than previously warned,” he said.



Michael Kadoorie

regulatory extension

Source URL (retrieved on Feb 26th 2013, 5:52am):

中電資料 Information from CLP says they intend to burn more polluting coal

Dear friends,

CLP Holdings today held a press briefing to announce its annual results. Following the briefing, there are enquiries regarding a news report which says, “…concerning the interim review of the Scheme of Control Agreement between CLP and the Government, CLP will not accept any unfair modifications, implying CLP’s withdrawal from supplying electricity in Hong Kong.”  The connection between the interim review and CLP’s commitment to Hong Kong is invalid. CLP made no remark that bears any implications about a market withdrawal.

At the press briefing today, Mrs Betty Yuen, Vice Chairman of CLP Power, made the following response to press questions:  “CLP has been servicing Hong Kong for 111 years…..reflecting our commitment to Hong Kong. We would like to continue to serve Hong Kong, and provide a reliable and clean energy supply to the city. We are confident that we can reach a consensus with our stakeholders regarding the post-2018 regulatory environment. CLP will actively and constructively engage the government and the community on refining the future regulatory framework.”

Regarding media and public concerns over future electricity tariff adjustments, CLP would like to reiterate that it will exercise strict discipline in cost control with prudent financial management. We expect that, in accordance with the Government’s increasing emissions requirements, the need to use more natural gas will increase future fuel costs. This will inevitably put pressure on tariffs. In anticipation of this trend, CLP is taking actions to defer and minimise the impact of high fuel costs as much as we can, and to contain the tariff increase to a reasonable level.

To this end, the measures adopted by CLP include: working with Yacheng Supplier to optimise the use of the gas field in order to defer the use of the more costly replacement gas; increasing the purchase of low emission coals from worldwide sources to reduce gas consumption; and enhancing the operational performance of emission control equipment and the efficiency of coal-fired generating units. Nevertheless, there are uncertainties in pursuing these initiatives. CLP will try its very best to alleviate the pressure of rising tariffs.

Thank you.


Quince Chong

Chief Corporate Development Officer

CLP Power Hong Kong



事實上,中華電力有限公司副主席阮蘇少湄於發布會上,對有關傳媒提問時回應:「中電已經在香港服務了111年… 反映了中電對香港的承擔, 我們希望能夠繼續服務香港, 為香港提供可靠、乾淨的能源。我們有信心就2018年後的監管模式,能夠達至一個大家都可以接受的方案,中電會積極地、有建設性地和政府,以及所有香港市民,商量如何改善這個監管模式。」


所採取的措施包括:與崖城供應商合作,優化氣田用量,以延遲使用氣價較高的替代氣源 ;在國際市場增加採購低排放燃煤,以降低採用天然氣的比例 ;以及提升減排設備運行表現及燃煤發電機組效率。然而,以上各項措施仍面對一些不明朗因素,中電將竭盡所能,以減輕電價上調的壓力。




西氣東輸二線天然氣供港協議獲通過 Second West-East Gas Pipeline Gas Supply Agreement Approved

From: CLP News [] Sent: 21 December, 2012 19:28 To: Subject: 西氣東輸二線天然氣供港協議獲通過

Second West-East Gas Pipeline Gas Supply Agreement Approved

Dear Friends,

Subsequent to our announcement made last week on the 2013 tariff adjustment, I would like to give you another update on CLP’s latest business development – the commercial agreement to bring natural gas from the Second West-East Gas Pipeline (WEPII) to Hong Kong has recently been approved by the Executive Council of the HKSAR Government.

CLP requires new gas sources to timely replace the existing Yacheng gas field which is depleting rapidly. The new gas supply is also essential for CLP to sustain a green power generation to meet government’s increasingly stringent emissions requirement beyond 2015 and to help raise the city’s air quality. According to PetroChina, WEPII is the largest energy investment project in the history of modern China. It is one of the three new gas sources for securing Hong Kong a long term and stable gas supply as contemplated under the Memorandum of Understanding on energy cooperation signed between the HKSAR Government and the Central Government in 2008. Following ExCo’s approval on the Gas Supply Agreement, WEPII gas will arrive Hong Kong early next year, opening a new chapter in Hong Kong’s clean power generation history.

For more details about the WEPII project and the related gas supply agreement, please refer to the enclosed press release or visit the following website:

Thank you for your continuous support and CLP will continue to provide a safe, reliable, environmentally-friendly and reasonably priced electricity supply for Hong Kong, as we always do. May I take this opportunity to wish you a Merry Christmas and a Happy New Year!

Best regards,

Quince Chong
Chief Corporate Development Officer
CLP Power Hong Kong Limited






‘The World is in Our Hands’ – Think before you print


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Hong Kong should review the profit scheme of its two electricity companies

Submitted by admin on Dec 13th 2012, 12:00am

Comment›Insight & Opinion

SCMP Editorial

No one likes a tariff increase. In the case of electricity bills, public sentiment is even stronger. For decades, an archaic business agreement with the government guaranteed the two power companies a maximum return on their investment. Despite efforts to reduce the profit, CLP Power and Hongkong Electric are still allowed profits of up to nearly 10 per cent until 2018. Consumers have little choice but to live with higher tariffs every year. The only comfort is that the adjustments this year are not as steep as expected.

On January 1, CLP will raise prices an average of 5.9 per cent, while Hongkong Electric will charge 2.9 per cent more. The rises are moderate compared with the 9.2 and 8 per cent sought by the two power giants last year. The increases were eventually reduced to 4.9 and 6.3 per cent respectively after a public outcry. But CLP warned that hefty increases were in store.

Households and businesses are already weighed down by high inflation. The increases, however moderate, will add to their burden. It is, therefore, important for the power companies to reduce the impact. The rebate of the rents and rates overcharged by the government to all CLP customers in the coming year is a welcome step to take.

Rewarding low-use customers is also a commendable strategy to promote energy efficiency. Under the CLP rebate scheme, those who can keep usage below 400 kilowatt hours during the two-month billing period can get a rebate of 7 to 9 cents a kilowatt hour. About 700,000 households and 130,000 general businesses may end up paying the same tariff as before or HK$3 to HK$6 less per month. But for heavy users, their bills will be even higher than previously.

Clean energy comes with a price. The increasing use of natural gas to meet more stringent emission targets is likely to push up tariffs in the future. Like it or not, there will be steeper adjustments ahead. That is the price to pay for a greener environment, and the community should be prepared for it.

But that does not mean excessive charges can be tolerated. The profit scheme for the power giants has put customers in a helpless situation. With the agreement due for a mid-term review next year, the government should explore options to protect consumers’ interests. Sadly, the environment chief has already said there is little room to manoeuvre. The remarks are not reassuring to people who count on the government to play a better role in monitoring public utilities.



CLP Power

HK Electric

profit scheme

Source URL (retrieved on Dec 13th 2012, 6:15am):

中電公佈2013年電價調整 推出節能回扣 CLP Announces 2013 Tariff Adjustment and Introduce Energy Saving Rebate




1.     我們嚴格控制成本加上2012年炎夏帶動銷售,令2013年平均基本電價可維持不變。

2.     儘管燃料價格不斷上升,我們仍然能夠將燃料價條款收費加幅限於4.6仙。目前中電的天然氣供應主要來自南中國海的崖城氣田。因其快將枯竭,而即將引入來自「西氣東輸二線」的新天然氣將按國際市場價格釐定,是目前使用的崖城天然氣的三倍。崖城天然氣價格早於20年前簽訂,當時燃料價格比今天顯著為低。

3.     連同在2013年提供一次性地租及差餉特別回扣2.1仙,平均淨電價加幅為5.9%。

4.     中電希望可以協助低用量客戶和鼓勵客戶節能,推出新的「節能回扣」計劃。在計劃下,每兩個月使用少於400度電的住宅客戶,以及每個月使用少於400度電的小型商業客戶將可獲電費回扣。

5.     在新的電價方案下,約有70萬個家庭(即35%的住宅客戶)和約13萬的小商戶(即44%的商業客戶)的電價將不受影響,甚至有輕微的減幅。







Dear Friends,

I would like to give you an update on the CLP 2013 Tariff Review Proposal that we submitted to the Environment Bureau, which was presented to members of the Legislative Council this afternoon.

We fully understand the community’s concerns on electricity tariffs and the need for energy conservation. We have therefore taken a number of factors into consideration and put forward measures to contain the 2013 tariff adjustment to a reasonable level.

  1. CLP has managed to maintain its Average Basic Tariff for 2013 unchanged due to stringent cost control and higher electricity sales as a result of the hotter weather in 2012.
  2. Despite rising fuel costs, CLP has managed to contain the increase in the Fuel Clause Charge to 4.6 cents. CLP’s main natural gas supply, from the Yacheng field in the South China Sea is depleting fast and our replacement supplies will come from the new second West-East Gas Pipeline. The new gas price, which is priced in line with current international benchmarks, is three times that of the existing gas supply, which was contracted 20 years ago when fuel prices were significantly lower.
  3. The average net tariff increase for 2013 will be 5.9%, after taking into account an adjustment to the Rent and Rates Special Rebate, which will be at 2.1 cents.
  4. To help low consumption customers and encourage energy efficiency, we are introducing the new Energy Saving Rebate Scheme. Under this Scheme, domestic customers using 400 units or less on a bi-monthly basis and small business customers using 400 units or less per month can enjoy savings in their electricity bills.
  5. The new tariff will result in 35% of domestic customers (about 700,000) and 44% of small business customers (about 130,000), seeing no increase or even enjoying a small reduction in their electricity bills, depending on their consumption level.

After the tariff adjustment, Hong Kong’s electricity tariff level is still much lower than that of other World cities such as Singapore and Sydney. We will continue to provide safe, reliable, environmentally-friendly and reasonably priced electricity supply for Hong Kong, as we always do.

CLP will also continue to expand its community support footprint including the introduction of a one-off community care subsidy, at HK$300 per eligible household, for targeted grassroots families in its service area in 2013, a move that is expected to alleviate tariff pressure for thirty thousand families.

For details of the tariff package, please refer to the attached press release or visit CLP’s website at:

Thank you for your support!

Best regards,

Quince Chong
Chief Corporate Development Officer
CLP Power Hong Kong Limited
‘The World is in Our Hands’ – Think before you print


This e-mail is intended for the addressee(s) only. It is privileged and may also be confidential.
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Huge refund to CLP Power, Hong Kong Electric sparks questions

South China Morning Post