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September, 2008:

Doubts Cloud Gas Deal

Sep 28th, 2008
by AdminCTA.
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Sara Yin – Updated on Sep 28, 2008 – SCMP

The pink dolphins are safe, at least. The memorandum of understanding between Beijing and Hong Kong for gas supplies tied local energy needs and planning to those of the mainland. And although that meant the end of plans for a US$10 billion gas terminal on South Soko Island – which pleased environmentalists – it remains to be seen whether the deal is good for Hong Kong’s long-term interests.

Last month, Chief Executive Donald Tsang Yam-kuen announced an agreement that he had signed with the National Energy Administration, Beijing’s new energy body. It put a significant amount of Hong Kong’s gas needs into the hands of the mainland’s state-owned oil companies.

Under the memorandum, the central government ensures a supply from several sources: offshore natural-gas reserves, piped gas, and possibly an LNG (liquefied natural gas) terminal built on the mainland.

“Hong Kong will see a net increase of at least 1 billion cubic metres of natural-gas supply for clean power generation,” an Environment Bureau spokeswoman said. “This certainly provides for a higher stability and reliability of gas supply in the long run.”

The agreement halted the HK$10 billion plan – more than two years in the making – for local company CLP Power to build the terminal to supply LNG, a costlier but greener fuel, off Lantau Island.

Mr Tsang described the new deal as “extremely good news” for consumers and the environment. Instead of paying for an expensive LNG terminal on South Soko Island, he said, taxpayers would only have to pay for gas pipelines to the mainland.

Local green groups such as Friends of the Earth and WWF applauded the decision to abandon construction in an area populated by pink dolphins and finless tortoises. But many are concerned over what the government’s intervention means for the public.

“This memo is what I would call a potential game-changer,” said Civic Exchange chief executive Christine Loh Kung-wai. “It represents a major departure of Chinese energy policy for Hong Kong.”

Historically, Hong Kong’s two private power companies, CLP Power and Hongkong Electric, have negotiated the securing of raw materials on their own. Thanks to a scheme of control set in the early 1990s, the two utilities have been among the most profitable in the world. The government has tried to undermine this in the past by flirting with new market players. It had been considering a proposal from China Power, a mainland energy giant run by Li Xiaolin, the daughter of China’s former premier, Li Peng.

As well, a new scheme of control that reduces CLP Power’s profit margins begins next month.

“The government always seemed very supportive and positive about the terminal,” said a CLP Power employee. “We were all surprised” by the memorandum. Officially, CLP Power denies being blindsided and remains supportive.

Said Ms Loh: “The government did not let on that it was actively negotiating with the mainland … if [the government] has a new energy policy, it should make an announcement.”

While the memorandum of understanding might have come as a surprise to the public, CLP Power’s new terminal was not a done deal.

The Environment Bureau spokeswoman pointed to a Legislative Council paper dated June 30, available on Legco’s website, saying that due diligence on CLP Power’s plan was still continuing.

As early as 2003, CLP Power, which supplies 25 per cent of the city’s electricity, reported that its gas supply – Hainan Island’s Yacheng fields – would dry up by 2013. This prompted the company to propose building Hong Kong’s first LNG terminal to receive a sufficient amount from suppliers around the world. The facility would import more than 4 billion cubic metres of natural gas a year at a predetermined cost, and take at least four years to build.

After an exhaustive third-party study to assess the environmental impact of CLP Power’s proposed sites, the Environmental Protection Department chose South Soko Island and granted its approval early last year. Environmental Secretary Edward Yau Tang-wah asked CLP Power to launch a public website detailing its planning efforts, and to find a way to reverse its environmental impact around the site; CLP complied.

The only approval needed then was the Executive Council’s, and even as late as July, Mr Yau seemed to think it was a foregone conclusion. With Hong Kong’s gas supply expected to run out in less than five years, he said the statutory planning process for the Soko Island terminal would start soon “although no final decision had been made”. CLP Power even had a contract with its first supplier, the British gas company BG Group.

In a statement in late June, CLP Power said: “The terminal is expected to start up no later than 2013, subject to final approval by the Hong Kong SAR government.”

Although some observers are applauding the opportunity for the city to be drawn into the mainland’s energy framework, others argue that the National Energy Administration’s policies may clash with Hong Kong’s interests. The mainland energy industry is heavily regulated, and a new, long-awaited law to commercialise the industry is yet to be enacted.

This month, a government source told the oil-industry magazine Platts: “The public consultation of the draft new energy law finished early this year, in late February, but the draft law is still held in the National Energy Administration, which was recently [created] to strengthen the government’s management of the energy sector.”

Industry observers are also wondering how the government’s deal will save consumers more money than CLP Power’s project.

“We don’t know anything about the price of the gas. At least with CLP, they would have entered a long-term contract with a known price … now it’s not clear what price the government has agreed to,” said Bill Barron, an environmental economist at the Hong Kong University of Science and Technology.

“The situation reminds me of the Disneyland thing, where we didn’t know how bad the deal was until years later.”

Baptist University’s director of energy studies, Larry Chow Chuen-ho, said the Soko Island terminal would have insulated Hong Kong from supply disruptions from the mainland.

Like Professor Barron, Professor Chow is concerned about the lack of discussion about price. At least with the Soko Island terminal, he said, “we can have complete control on how much to buy and how much to pay”.

Furthermore, the amount of gas supplied can only be estimated at this point. The memorandum does not define a specific volume of gas imported each year, only a non-legally binding assurance to keep Hong Kong’s level of gas supply “over and above the current level”.

Professor Chow said he trusted Beijing to provide a sufficient supply of gas, but Professor Barron was more sceptical. “Even if everything goes well – like the new wells at Yacheng actually produce gas – the supply won’t add up to the reliable supplies the Soko Island LNG terminal would have provided. We’ll be burning more coal and creating even higher levels of pollution.”

And although the memorandum renews existing contracts with the China National Offshore Oil Corporation and China Guangdong Nuclear Power Holding for another 20 years, these two companies will have to tap new wells in Yacheng. And no one seems to know when these wells will run out (if any gas is found in the first place), according to Professor Barron.

In fact, based on the memorandum, both governments will devote resources to study the feasibility of building an LNG terminal in Guangdong.

But according to the Hong Kong government, fixing price and supply was not the point of the memorandum. It was only meant to provide “new opportunities for collaboration between energy enterprises on both sides, and is by no means a supply contract binding any companies”, said an Environmental Protection Department spokeswoman. “Detailed arrangements for supplying natural gas and electricity to Hong Kong, such as pricing and quantity, will be worked out on commercial principles … on both sides.”

Professor Barron found this point “disingenuous”. With only one country to supply Hong Kong’s gas, he wondered, “How can a power company negotiate price from a strong position? The government has seriously restricted the options faced by the buyer.”

After seeing its gas-terminal plan axed, CLP Power – publicly at least – supports the government’s deal with the mainland.

“CLP, under the guidance of the Hong Kong government, is now working directly with the National Development and Reform Commission and other mainland parties on the implementation of the memorandum,” a company spokeswoman said.

Power Struggle – Human and Environmental Cost For Chinese Booming Economy

Sep 28th, 2008
by AdminCTA.
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Simon Parry – Updated on Sep 28, 2008 – SCMP

On average, 10 mainland coal miners die each day and while the government recognises the dangers posed by privately run mines, it needs to keep a booming economy supplied with fuel. Simon Parry reports on the human cost of doing so

The grubby, ramshackle clinic for injured miners is hidden away like a guilty secret at the end of a dirt track in a village near Datong, Shanxi province, China’s coal capital. Outside, Zhu Jiaching hobbles along on crutches and speaks through broken teeth about the day last September when luck was on his side.

“I was working underground when the scaffolding collapsed on me. My legs were broken and my teeth were smashed when I fell face down into the coal.” He points to his black and swollen upper lip. “I still have pieces of coal lodged in here.”

Zhu was carried unconscious out of the mine. He was one of the lucky ones. Last year, 4,000 mainland miners were killed in underground accidents. “A fortnight after my accident, there was another scaffolding collapse in the same stretch of mine,” the 39-year-old father of two says with a grimace. “Four miners were killed. All were from my home province.”

With no salary and only hospital meals to live off, Zhu is waiting to be well enough to return to his wife and children hundreds of miles away. “The mine manager came to see me a few weeks after my accident and offered me 10,000 yuan [HK$11,390] compensation if I took the money and went straight home,” he says.

“I refused. At the time I couldn’t even walk.

“The manager left and hasn’t been back. He won’t discuss the matter and I’ve been living in the hospital ever since. I want him to pay for the treatment to repair my broken teeth and give me proper compensation – then I’ll go home for good.”

In nearby Ganzhong village, Wan Mingyong, 35, smokes and chats with friends as he waits to begin his eight-hour underground shift. Luck was on his side too when, in another privately run coal mine in May last year, a wall of coal exploded in his face. Wan’s face and neck are still peppered with tiny lumps of coal.

“There was a roar and a bright flash and then I was blinded. Pieces of coal shot into my face like bullets and I was covered in blood. My first thought was `Am I blind?’ I spent a month in hospital but I was very lucky. I could have been killed,” he says.

“I was given 5,000 yuan compensation by the coal mine’s bosses. I wasn’t happy with it but what could I do? I had to look after my family so I got out of hospital as quickly as I could and went back to work at the coal face.”

Wan is well aware of how lucky his escape was. “My brother-in-law was crushed when scaffolding collapsed on him in the same mine in 2004. He should have lived but was left to die in hospital on the orders of the coal-mine owner so that he wouldn’t have to pay more compensation,” he says. “We believe they may have even given him a lethal injection.

“At that time, if a miner died, his employer had to pay the family 50,000 yuan compensation. If a worker was crippled, the amount would be three times as high because he had to be paid disability benefit. So it was much cheaper to make sure that my brother-in-law didn’t survive and that’s what they did.”

The stories of Zhu and Wan are typical. The men are part of an army of workers labouring in privately run mines in Shanxi and Inner Mongolia, in northern China, helping dig up the coal that accounts for nearly 70 per cent of the energy needs for the world’s fastest-growing economy.

China has overtaken the US as the world’s biggest producer of greenhouse gases, according to a University of California study released earlier this year, and 75 per cent of its carbon-dioxide emissions come from the coal-fired power stations that are being opened at a rate of almost one a week.

Greenpeace will this autumn release what is expected to be a highly critical report on China’s overdependence on coal, warning that it is heading towards an environmental disaster unless it increases the price of coal – heavily subsidised to support the booming economy – to restrict its use.

“The price of coal should reflect the full cost of using coal,” argues Beijing-based Greenpeace coal campaigner Liu Shuang. “These power stations are causing serious air pollution. They are not only causing problems for human health but they’re polluting the water and land as well.

“Action must be taken soon. The government did everything it could to stop pollutants during the Olympics but this is a problem that is visible in Chinese cities every day. The Chinese government is taking the coal issue seriously, but it has not done enough.”

It is an industry that exacts a devastating price not only in environmental terms but in human terms. China has 5 million miners and the annual death toll, mostly in smaller, privately run mines, accounts for 80 per cent of all mining deaths worldwide. An average of 10 miners die every day on the mainland. Last Sunday, 37 miners were killed in a gas explosion at a private mine near Dengfeng city, Henan province. The same day, at least 19 miners died after a fire in a coal mine in Hegang city, Heilongjiang province.

Alarmed at the accident rates, the mainland in 2006 announced a series of measures to improve safety, increasing inspections, improving compensation for injury or death and ordering thousands of smaller mines producing less than 90,000 tonnes of coal a year to close. The idea is to concentrate production in state-run mines, which employ tens of thousands of miners and where both safety standards and the quality of the coal are easier to control. The policy has had a degree of success, with death rates in the industry falling substantially from a peak of almost 7,000 in 2002 to 4,700 in 2006 and less than 4,000 last year.

But this year, in the brown and barren hills of northern China, where the country’s biggest coal reserves lie, the huge trucks that move between the privately run mines are once again rumbling back and forth as dozens of mines reopen.

“Since the beginning of this year, when coal shortages became acute, mines everywhere have started opening again,” a retired mining supervisor in Datong says. “The government knows what is happening but provided they allow inspectors to visit every now and again to check on safety standards, they are turning a blind eye to it.”

The reason is overwhelming demand. The mainland needs every last lump of coal to satisfy the demands of its industrial revolution, its booming urban electricity consumption and the additional strain on resources that the Olympic Games in Beijing has had. On top of that, China has just had its harshest, coldest winter in half a century, causing fuel shortages so severe President Hu Jintao travelled to Datong to personally appeal to its 200,000 government mine workers to dig harder to help their snowbound compatriots.

“The president’s visit made us very happy,” says Li Mingxin, 58, a retired miner working as watchman at the Datong’s Xin Zhaoyiu coal mine – known as Government Coal Mine No 5 – where more than 10,000 miners are employed. “We felt very proud. The president of our country had come and asked us for more coal to help save the country, so we all made a special effort.

“Everyone gave up their Lunar New Year holidays. We increased production dramatically and all the coal went to the south for electricity production. We were very happy to be called upon to help at the time of our country’s great need.”

Sitting beneath a portrait of Chairman Mao in his watchman’s hut, Li – who spent 41 years working as a miner – frowns as he speaks of the dangers facing workers at the smaller, privately run mines. “Here, we have very few accidents because the attention to safety these days is much greater than in the past.”

“But the private mines are so small and they use mules and oxen to pull the coal carts from underground. There is also the risk of gas explosions because management is poor, ventilation isn’t good and the machinery to test the density of the gas is not good enough,” he says.

In Datong, the vast majority of workers in the 18 government-run mines are locals and in many cases, jobs are passed on from generation to generation, with the sons of miners being given priority for jobs.

Salaries are about 3,000 yuan a month, much higher than the national average, with a pension of 2,100 yuan for retired, long-serving miners such as Li. “Many men of my age have no salary at all while I receive a 2,100 yuan pension and another 500 yuan a month for working as a watchman,” he says. “We are paid like civil servants but we deserve it because of the duty we did for our country.”

Private mines – usually owned by county or village governments but leased to private companies – are staffed by migrant workers from poor provinces who move from mine to mine to find better salaries and conditions. They can earn up to twice the monthly salaries of their counterparts in state-run mines, taking home up to 6,000 yuan, but the high salaries come at a terrible price: accidents in privately run coal mines account for about 70 per cent of China’s mining deaths.

One miner who works as an explosives specialist in a private mine outside Datong rues the day he turned down the chance to work in a state-run mine because he wanted to maintain a higher salary.

“I didn’t realise at the time that if you work in a government mine for 10 years, you get a pension for the rest of your life,” says Yang Hua, 39.

“As migrant workers in privately run mines, we take greater risks and move from mine to mine. I will have to carry on working until I am 60 to support my family. It’s very different for the mine owners. They drive luxury cars and can make 10 million yuan in just one month. Because of the coal shortage, they have never been able to make so much money.”

Stung by the government criticism of their safely standards, private mines now operate amid tight security, behind high walls and fences, with teams of security guards patrolling the premises to keep unwanted observers away. “No one is allowed in without the owner’s written permission,” a security guard at one private mine says.

In the present sensitive climate, even government-run mines are reluctant to let outsiders visit. Even though guided underground tours are advertised on fading billboards outside the showpiece Government Mine No 9, an official at the visitor’s office eyes us suspiciously and says: “Sorry. We can’t take you in. Our visitor insurance has expired.”

When we assure him that our own insurance will cover the visit, he flicks distractedly through a pile of papers before looking up and announcing: “The tour is very time-consuming and expensive and there are only the two of you. I’m afraid we can’t afford to take you inside.”

Reflecting on the accident that crippled him just three months after he began work at a privately run mine outside Datong, Zhu says: “It happened because of neglect. The managers knew there were cracks in the scaffolding but they still made us carry on working beneath it.”

As a relatively new employee, Zhu was earning only 100 yuan a day to work underground, laying explosives to blast into virgin coal faces, and would work 26 or 27 days a month to earn money to send home to his family in western Sichuan province.

“I used to be a farmer but I have a daughter aged 17 and a son aged 14 and I couldn’t earn enough to pay for them to go to school, so I decided to come to the coal mine to work,” he said.

“Now my family is in an even worse situation because of what has happened to me. My wife has had to borrow money to pay for the education of our two children and we also have my parents to support. It is very hard for them. I will go back to farming when I recover – I can never go back to working in a mine.”

His wait for a fair payout could be a long one if the experience of other injured miners is anything to go by. “I’ve been in this clinic for five years since I broke my legs in an accident and I still haven’t received a proper settlement,” says He Yao, 65, from Inner Mongolia. “I’ll never work again now and I have three children to support – so I’m not going home to my family until I’ve got the compensation I deserve.”

For Wan, the trauma of his accident last year and his relative’s death in 2004 have left deep and permanent scars. “My brother-in-law was only 30 when he died and he had a seven year-old son. The family hired a lawyer and proved in the court case that he should have survived. In the end, they got compensation of 180,000 yuan for his death – more than three times what they were originally offered,” he says.

“We have higher safety standards too. The Olympic Games made inspectors stricter and they are doing more to guarantee the safety of workers. If they check a mine and it isn’t safe, they close it down. The government policy is good because the government is more concerned about the situation of mine workers.”

However, despite the new level of official concern, coal mining in China is like a game of Russian roulette. “I do this work because the salary is better than working in a factory but I risk my life earning the extra money,” says Wan, speaking at the end of his shift in the communal miners’ home outside Datong where he lives with his wife and 12-year-old son.

“Every day when I go to work, my family worries about me, especially after the accident last May. It is only when I come back home at night that they can relax, knowing that another day’s work is behind me and that I am safe from harm.

“I keep doing this because I need to pay for my son’s education. I became a miner because I didn’t have a choice. I want my son to go to university and find a good job. I don’t want him to suffer the same hardships as me.”

Red Door News

A Cleaner, Cheaper Energy Future For Hong Kong

Sep 23rd, 2008
by AdminCTA.
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Edward Yau – SCMP – Updated on Sep 23, 2008

Building on our long history of energy co-operation with the mainland, the memorandum of understanding (MOU) signed between the National Energy Administration (NEA) and the Hong Kong government last month provides a firm backing for an agreement that will help ease the pressure for tariff increases.

The agreement will underpin our city’s economic development in the next 20 years, and ensure that our energy comes from clean sources that are close to home, an arrangement that will keep electricity prices at a relatively low level.

Under the MOU, Hong Kong will see a net increase of at least 1 billion cubic metres of natural gas supply for clean power generation. By sealing the document with Hong Kong, the NEA – which is responsible for regulation and oversight of oil supply and distribution – has undertaken, first, to support the China Guangdong Nuclear Power Holding Co Ltd to renew its supply agreement with Hong Kong for a further 20 years at the current level.

Second, the central government also supports supplying natural gas to Hong Kong, including China National Offshore Oil Corporation’s renewal of its supply agreement with us for another 20 years, also at the current level.

In addition to renewing the two existing sources of supply, it has been agreed in principle to study the feasibility of supplying natural gas to Hong Kong via a new conduit, the Second West-East Natural Gas Pipeline, with an estimated annual supply of more than 1 billion cubic metres.

In a related commitment, the NEA also agreed in principle that Hong Kong and mainland companies could jointly build a liquefied natural gas terminal on the mainland for supplying natural gas to Hong Kong. As the proposed LNG terminal on the mainland can also receive LNG from worldwide sources, Hong Kong will enjoy a greater flexibility in gas sources.

The MOU not only replenishes the current gas supply to CLP Power, it also opens up new sources through alternative pipelines. Importantly, the MOU provides new opportunities for collaboration between energy enterprises on both sides, and is by no means a supply contract binding any firms. It opens the door for energy enterprises on both sides to pursue opportunities on a commercial basis in line with market principles.

For the 2 million CLP Power customers, a more practical concern is whether the agreement helps reduce their power bills. Before the agreement, CLP Power proposed to build an LNG terminal in Hong Kong in anticipation of the Yacheng gas supply running out. Recognising the need for more natural gas to replenish the current gas supply from Yacheng, the government has adopted a dual track approach to process the application.

While proceeding with the initial statutory planning and land processes, it has conducted a due-diligence exercise to verify the need for an LNG terminal on the environmentally sensitive South Soko Island. With an estimated cost of HK$10 billion, the project would inevitably boost CLP Power’s net fixed assets, thus entailing a return to be borne by its customers in electricity tariffs.

As a result of the MOU, CLP Power decided on September 12 to abandon its LNG terminal plan. The imminent result of this decision is the removal of an initial capital outlay of HK$10 billion and the need for cost recovery from the tariff. The building of new pipelines to transfer the gas under the MOU will incur additional capital investment, but the amount will be less than the LNG terminal proposal.

Electricity generation is a major source of pollution in Hong Kong. Natural gas is one the cleaner and more efficient forms of fossil fuel. Replacing coal with natural gas in power generation will help improve air quality.

On top of its environmental benefits, the use of natural gas will also diversify the fuel mix in power generation, thereby improving the reliability of the electricity supply.

Edward Yau Tang-wah is secretary for the environment

Clear The Air Meeting with John Tsang Chun-Wah

Sep 22nd, 2008
by AdminCTA.
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Meeting with John Tsang Chun-Wah

Consultation on the 2008/09 Policy Address to be delivered by Donald Tsang, Chief Executive.

• Energy :

The recent agreement signed between the HK Govt and the mainland for the supply of gas to the SAR is a welcome step towards cleaning up electricity generation within Hong Kong. (Power generation by gas is 60% efficient and by coal only 38% since gas burns at approx 500degrees hotter than coal).

However Turkmenistan gas won’t be flowing into Hong Kong CLP power station before 2013 at least. Hong Kong Electric (HKE) already has its own LNG gas supply from Da Peng 93 kms pipeline but only has 335 Mwh capacity of gas generation.

China Light & Power (CLP) generated 23% of its output in 2007 by burning 2.5 billion m3 of gas. HKE generated 17% of its output in 2007 by gas.

Until such time as Hong Kong gets a guaranteed stable source of gas supply, CLP and HKE will have to burn more coal to match current production rates. In addition CLP needs to increase its sales to Southern China to help offset the burning of high polluting sulphur fuel by factories currently using their own generators due to a lack of grid supply.

We are aware steps are just now being taken by the two power companies to meet the 2010 targets and reduce emissions due to coal burning through the installation of FGD equipment and NOx burners – however recent research conducted by Clear The Air with what has been already implemented in the US revealed that NOx burners definitely increase the amount PM 2.5 released into the atmosphere since the Electrostatic precipitators in the stacks cannot catch the PM2.5.

It is precisely these PM 2.5 particles that contribute to our bad air quality, reduce the visibility and increase the burden of our healthcare to combat asthma and all kinds of respiratory diseases affecting all including the children. At the scale of the US, and based on published scientific studies alone, the American EPA estimates that the most likely benefits of meeting the revised 24-hour PM 2.5 standards will range from US$17 billion to US$35 billion.

How can we now immediately and drastically reduce PM 2.5 levels and clean our filthy air ? It is by the use of agglomerators – the technology exists it is proven largely in Australia , USA and Poland; CLP would have to install 2 agglomerators per boilers that means 16 in total (15 more to install).

Today, only one is installed. At an average cost of HKD 10M for purchase and installation this means a total bill of HKD 150M, (or 10 days of CLP’s current summer cost for its supply of coal).

Let’s keep in mind that the PM 2.5 are the ultra fine particles that refract the light and cause our “haze” and stay in the lungs for the long term – they are the most harmful ones – the NOx burners cause the soot particles to superheat, crack and break into superfine particles and escape –

What agglomerators do, they charge them with an electrostatic device which causes them to cling to larger soot particles which the precipitators then catch. The agglomerator technology can collect more than 75 % of those superfine particles currently emitted from the stacks of CLP and HKE, They are easily retrofitted to meet with the 2010 emissions caps proposed by the HK Government.

Mr Tsang, the agglomerators are THE answer to the air pollution we will be facing until LNG comes significantly into play.

Meanwhile Hong Kong needs to mandate to use of low sulphur bunker fuel in maritime use here and to consider mandating aircraft run their engines for 2 minutes at half throttle prior to take off to remove the unburnt JetA fuel blasted in the Tung Chung air.

Clear the Air – Meeting With John Tsang Chun-Wah

Sep 22nd, 2008
by AdminCTA.
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Consultation on the 2008/09 Policy Address to be delivered by Donald Tsang, Chief Executive.

  • Energy :

The recent agreement signed between the HK Govt and the mainland for the supply of gas to the SAR is a welcome step towards cleaning up electricity generation within Hong Kong. (Power generation by gas is 60% efficient and by coal only 38% since gas burns at approx 500degrees hotter than coal).

However Turkmenistan gas won’t be flowing into Hong Kong CLP power station before 2013 at least. Hong Kong Electric (HKE) already has its own LNG gas supply from Da Peng 93 kms pipeline but only has 335 Mwh capacity of gas generation.

China Light & Power (CLP) generated 23% of its output in 2007 by burning 2.5 billion m3of gas. HKE generated 17% of its output in 2007 by gas.

Until such time as Hong Kong gets a guaranteed stable source of gas supply, CLP and HKE will have to burn more coal to match current production rates. In addition CLP needs to increase its sales to Southern China to help offset the burning of high polluting sulphur fuel by factories currently using their own generators due to a lack of grid supply.

We are aware steps are just now being taken by the two power companies to meet the 2010 targets and reduce emissions due to coal burning through the installation of FGD equipment and NOx burners – however recent research conducted by Clear The Air with what has been already implemented in the US revealed that NOx burners definitely increase the amount PM 2.5 released into the atmosphere since the Electrostatic precipitators in the stacks cannot catch the PM2.5.

It is precisely these PM 2.5 particles that contribute to our bad air quality, reduce the visibility and increase the burden of our healthcare to combat asthma and all kinds of respiratory diseases affecting all including the children. At the scale of the US, and based on published scientific studies alone, the American EPA estimates that the most likely benefits of meeting the revised 24-hour PM 2.5 standards will range from US$17 billion to US$35 billion.

How can we now immediately and drastically reduce PM 2.5 levels and clean our filthy air ?
It is by the use of agglomerators – the technology exists it is proven largely in Australia , USA and Poland; CLP would have to install 2 agglomerators per boilers that means 16 in total (15 more to install).

Today, only one is installed. At an average cost of HKD 10M for purchase and installation this means a total bill of HKD 150M, (or 10 days of CLP’s current summer cost for its supply of coal).

Let’s keep in mind that the PM 2.5 are the ultra fine particles that refract the light and cause our “haze” and stay in the lungs for the long term – they are the most harmful ones – the NOx burners cause the soot particles to superheat, crack and break into superfine particles and escape –

What agglomerators do, they charge them with an electrostatic device which causes them to cling to larger soot particles which the precipitators then catch. The agglomerator technology can collect more than 75 % of those superfine particles currently emitted from the stacks of CLP and HKE, They are easily retrofitted to meet with the 2010 emissions caps proposed by the HK Government.

Mr Tsang, the agglomerators are THE answer to the air pollution we will be facing until LNG comes significantly into play.

Meanwhile Hong Kong needs to mandate to use of low sulphur bunker fuel in maritime use here and to consider mandating aircraft run their engines for 2 minutes at half throttle prior to take off to remove the unburnt JetA fuel blasted in the Tung Chung air.

Details For Supply Of Gas

Sep 21st, 2008
by AdminCTA.
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Details for supply of gas will be worked out on commercial principles

Sep 21, 2008 – SCMP

I refer to the report (“Experts express concern over gas deal”, September 14).

It is unfair to suggest that the government has agreed to any terms with regard to mainland gas companies that are not made public to the people of Hong Kong. The memorandum of understanding on energy co-operation, concluded between the Hong Kong government and the National Energy Administration on August 28, is a public document. It provides a guarantee on the continuous supply of clean energy including natural gas to Hong Kong in the coming two decades. Under the memorandum, the central government provides assurances on the supply of natural gas from three sources – offshore gas, piped gas and a liquefied natural gas (LNG) terminal to be built jointly on the mainland. The future level of gas supply to Hong Kong will be over and above the current level.

We have stressed from the outset that the purpose of the memorandum for the enhanced collaboration among enterprises is one of facilitation. As stated clearly in the memorandum, the detailed arrangements for supplying natural gas to Hong Kong, including pricing, should be worked out on commercial principles between the relevant enterprises on both sides. It is up to the enterprises concerned, and not the government, to negotiate the prices of the gas supply under the memorandum. For Hong Kong the private sector is best placed to meet our energy requirements in response to market demands.

For more than a decade, local power companies have been sourcing supply of natural gas from the mainland based on commercial principles. Future collaboration between energy enterprises across the border will continue to adhere to these principles.

With such solid backing and assured multiple sources of gas supply, it begs the question why Hong Kong consumers should be asked to pay for an LNG terminal at Soko. We welcome the decision of CLP Power (SEHK: 0002) Hong Kong Ltd to abandon its plan to build an LNG terminal in Hong Kong.

The government stands ready to provide every assistance towards realising the goals in the memorandum of understanding.

Katharine Choi, for secretary for the environment

Spotlights In Causeway Bay

Sep 20th, 2008
by AdminCTA.
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SCMP | 20 September 2008

I was dismayed to see extremely bright spotlights outside Windsor House, in Causeway Bay, which is currently under renovation.

Those spotlights are so bright that basically the whole area is lit up and it is difficult to tell the difference between day and night.

Maybe that is why we call Hong Kong the city that never sleeps.

I fail to understand why whoever is responsible for this has decided to use such bright lights, as there are no adverts on the wall being lit up. The spotlights are environmentally unfriendly and cause light pollution, which must affect people living in that part of Causeway Bay.

Stephen Leung, North Point

Imports Of Nuclear Power Opposed By Green Groups

Sep 15th, 2008
by AdminCTA.
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Cheung Chi-fai, SCMP – Sep 15, 2008

Environmental activists have opposed further imports of nuclear-generated electricity from across the border under a new energy agreement with the mainland, though a power supplier has hinted it might expand imports.

The activists maintain that nuclear energy is an unsustainable and unsafe option for meeting rising energy demand, though it is increasingly being revisited as an alternative to ease global warming without compromising energy security.

The remarks came after Hong Kong and the central government sealed a deal last month to extend natural gas supplies to the city and ensure a continuous import of nuclear power – at a level no less than the current flow – from the Daya Bay nuclear station.

Hong Kong has been consuming nuclear power since 1994 under a purchase agreement between CLP Power (SEHK: 0002) and Guangdong Nuclear Power Joint Venture Company, in which CLP had a 25 per cent stake through Hong Kong Nuclear Power Investment.

The agreement allows CLP to import up to 70 per cent of Daya Bay’s output.

In each of the past five years, CLP has imported between 4,700 and 5,100 gigawatt-hours at a price of about 50 cents per kilowatt.

Nuclear power and natural gas each account for about 20 per cent of Hong Kong’s total electricity supply, and 60 per cent comes from coal.

While Hong Kong imports nuclear power from Guangdong, CLP exports electricity to the province. In last year’s annual report, CLP said it wanted both to extend and expand the nuclear-import arrangement.

Edward Chan Yue-fai, a Greenpeace campaign manager, said Hong Kong would be taking the wrong approach towards clean energy by importing more nuclear power.

“We have strong reservations about expanding imports, as nuclear energy is neither safe nor sustainable,” Mr Chan said, citing nuclear plant incidents in Japan that jeopardised the safety of plant staff and nearby residents.

“It is too bad that the energy deal with the mainland did not include any renewable energy imports, like wind power. It is renewable energy we should expand, not nuclear.”

Hahn Chu Hon-keung, environmental affairs manager of Friends of the Earth, said the group was inclined not to support further imports, citing concerns about the disposal of nuclear waste and further efforts to conserve energy.

“We can’t just resolve one problem by creating another,” he said. “Instead of expanding our energy supply, we should consider managing our energy demand through conservation and efficiency.”

Besides, Mr Chu said, further imports might also be undesirable since the mainland still had a shortage of power.

A CLP spokeswoman said it was too early to tell if the company was going to increase imports of nuclear power. “We will further discuss arrangements on generation with the government and continue to explore opportunities to participate in nuclear energy in China.”

The company noted that the Daya Bay station operated in line with international safety standards, with no major incidents reported since commercial operations began in 1994.

Use Of Natural Gas Must Balance Reliance On Fossil Fuels

Sep 12th, 2008
by AdminCTA.
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Green group says use of natural gas must balance reliance on fossil fuels

Ng Kang-chung – Updated on Sep 12, 2008

Green groups have urged CLP Power to continue investing in renewable energy in Hong Kong and want rules imposed that would require natural gas to account for at least half of the fuel mix for power generation.

Friends of the Earth environmental affairs officer Angus Wong Chun-yin described CLP Power’s decision to drop its plans for a liquefied natural gas terminal on South Soko Island as “natural and sensible”.

“Now the Chinese government has promised a stable supply of natural gas. There is no need for CLP to continue the Soko Islands project,” said Mr Wong, referring to a power supply deal struck last month between Hong Kong and Beijing.

He added: “Dropping the Soko Islands project should not be the end of the story. The Hong Kong government should press harder to require power companies to use more natural gas to generate power.”

At present, coal accounts for about 60 per cent of CLP Power’s fuel mix, with natural gas and nuclear power at 20 per cent each.

Coal burned by power plants has been blamed as a major source of air pollution in Hong Kong. Carbon dioxide emissions could be reduced by half and sulfur dioxide by more than 90 per cent if liquefied natural gas was used to generate power, environmental officials said.

Mr Wong said the fuel mix should be set at 50 per cent natural gas.

Green Sense chairman Roy Tam Hoi-pong offered similar views.

“Dropping the Soko Islands plan means more than reducing the need to raise power fees. The government should look at it from an air quality viewpoint and ask CLP to develop renewable energy, say, wind energy.”

Using more natural gas might still push tariffs up because of higher costs, but Mr Wong and Mr Tam said social benefits could offset the costs.

Hong Kong and Beijing struck an energy agreement last month under which state-owned supplier China National Offshore Oil Corporation will continue to supply Hong Kong with natural gas for another 20 years.

Hong Kong will also receive gas from the country’s second west-east pipeline, which is being built to transport gas from Central Asia to the Pearl and Yangtze River Delta regions.

The pipeline is expected to reach Shenzhen in about five years. Hong Kong officials have estimated the city would receive about 1 billion cubic metres of gas a year from this source.

CLP Eyes Mainland For LNG Terminal

Sep 12th, 2008
by AdminCTA.
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The Financial Times By Tom Mitchell in Hong Kong – September 12 2008 02:51

China Light and Power, Hong Kong’s largest energy company, has signalled its willingness to invest in a new liquid natural gas-receiving terminal on the Chinese mainland, possibly with ExxonMobil.

CLP and ExxonMobil, which jointly operate three power plants in the self-governing territory, had planned to build a $1bn terminal on an ecologically sensitive island, angering local environmentalists.

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Last month, however, the Chinese and Hong Kong governments signed a memorandum of understanding allowing state-owned energy companies to sell gas to CLP from offshore oil fields and via an overland pipeline.

The MoU also called for the construction of an LNG receiving terminal in Guangdong province, averting the need for CLP’s planned receiving terminal in Hong Kong.

“Having a role in that [Guangdong] LNG terminal would be very important for us,” said Richard Lancaster, CLP commercial director, on Thursday, adding that the company had axed plans for a Hong Kong terminal.

The Guangdong project would be led by a Chinese state oil company and possibly also involve ExxonMobil. The US oil major confirmed that it would participate in a feasibility study for the proposed Guangdong terminal.

Both CLP and ExxonMobil have substantial investments in China but participation in the LNG terminal would be their first such venture on the mainland.

Mr Lancaster also reiterated CLP’s intention to finalise a provisional LNG supply agreement reached earlier this year with BG Group of the UK, which would be delivered to the terminal in Guangdong. In June, BG Group agreed to supply CLP and ExxonMobil with 1.3bn cubic metres of gas a year from 2013 to 2033.

CLP estimates that its gas requirement will reach 3.4bn cu m per year by 2013 and 6bn cu m by 2023.

According to Mr Lancaster, China National Offshore Oil Corp has indicated that it could supply another 2bn cu m per annum from gas fields in the South China Sea.

Under the terms of last month’s Sino-Hong Kong energy MoU, PetroChina will also examine the feasibility of supplying Hong Kong from its second west-east pipeline, which transports gas overland from fields in China’s northwest and central Asia.

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