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November, 2013:

SCMP: CLP Power and China Southern Power buy Exxon Mobil’s power plant stakes

from Anita Lam and Denise Tsang of the SCMP:

City supplier teams up with mainland giant to grab Exxon Mobil’s stake in three electricity plants Hong Kong’s biggest electricity provider, CLP Power, and state-owned China Southern Power Grid (CSG), will each pay HK$12 billion to acquire Exxon Mobil’s 60 per cent stake in Castle Peak Power Company (Capco).

The deal strengthens CLP’s presence in Hong Kong and brings a mainland player into the city’s closed electricity market for the first time. It is not expected to affect tariffs as it involves only shares, without adding fixed assets. But analysts said a strengthened partnership between the largest power suppliers in Hong Kong and southern China could help CLP meet a new 2020 emissions target that may require more clean energy to be imported from the mainland.

After the transaction, CLP’s stake in Capco – which owns three power plants in Hong Kong – will jump from 40 per cent to 70 per cent. CSG will hold the remaining 30 per cent.

CLP vice-chairwoman Betty Yuen So Siu-mai said it was a natural commercial decision to bring CSG into talks that started more than a year ago when Exxon Mobil, the world’s biggest independent oil company, expressed a desire to exit the market.”All electricity imported into Hong Kong must pass through the CSG network,” Yuen said. “Our partnership with CSG will make any transmission of cleaner energy from the mainland easier.” Pierre Lau, managing director and head of Asian utilities research at Citigroup, said the closer ties might also cushion CLP from competition if regulators open up the city’s electricity market.

“Any power supplier who wants to enter Hong Kong must first get past CSG. Of course, it would give CLP an edge if it has a good relationship with CSG,” he said. CLP will also buy out Exxon Mobil’s 51 per cent stake in Hong Kong Pumped Storage Development for HK$2 billion in cash. The whole deal will remove Exxon Mobil from the city’s commercial power generation market – its only such investment worldwide. An Exxon Mobil spokeswoman said it planned to explore other opportunities. Citigroup expects the deals will raise CLP’s net profit by up to 3 per cent next year and 5 per cent in 2015 if the deals are finalised by the middle of next year. CLP said it had secured a HK$10 billion loan facility from HSBC to fund the deal, but in the long run it may have to refinance the loans through corporate bonds or perpetual securities.

Credit rating agency Standard & Poor’s said it had placed it’s A- long-term and A-2 short-term corporate credit ratings on parent company CLP Holdings on credit watch with negative implications. “We placed the ratings on credit watch because we believe the leverage of CLP Holdings could increase substantially if it mainly uses debt to fund its proposed significant acquisition,” S&P credit analyst Gloria Lu said.

20 Nov 2013

SCMP: CNOOC backs planned trial of LNG vehicles in Hong Kong; HK Gov: LNG ‘not the best transport fuel choice for Hong Kong’

from Cheung Chi-fai of the SCMP:

CNOOC backs planned trial of LNG vehicles in Hong Kong

The mainland’s biggest LNG supplier is backing a move to introduce the fuel into Hong Kong’s transport market as an affordable solution to the city’s notorious roadside pollution problems.

China National Offshore Oil Corporation (CNOOC) is working with a local company on plans to introduce liquefied natural gas as vehicle fuel, with a vision of building a network of LNG refuelling stations similar to those found in mainland cities.

The partnership between CNOOC and the Hong Kong LNG Company will see the companies work with a cross-border coach operator to trial an LNG bus. But no refuelling facilities will be built yet because LNG is not covered by local laws. The bus will be refuelled in Shenzhen, which has at least 13 LNG refuelling stations to support hundreds of vehicles.

Zhu Jianwen, president of CNOOC Gas and Power Trading & Marketing, said Hong Kong was surrounded by a massive, robust LNG supply network and could take advantage of this.

The world’s third-largest LNG buyer, CNOOC imported almost 22 million tonnes last year. The Dapeng LNG terminal in eastern Shenzhen also supplies Hongkong Electric and Towngas via an underwater pipe.

(more…)

Standard: Return stays at 9.9pc for power firms

from Kelly Ip for the Standard:

Power suppliers CLP and Hongkong Electric will continue to enjoy the 9.99 percent permitted return on capital investment.

The decision – following a just- completed mid-term review of the Scheme of Control Agreements between the government and power companies – was expected, said an Energy Advisory Committee member.

During the review, the two firms agreed to set up an energy efficiency fund from shareholders’ earnings to provide subsidies on a matching basis to owners of non- commercial buildings so they can make their structures more energy efficient.

The scheme is expected to be launched in the first half of next year.

According to previous records, the two companies are expected to invest HK$100 million into the fund, with HK$70 million coming from CLP and spread over four years.

CLP and Hongkong Electric also agreed to raise performance thresholds for both incentive payments and penalties with regard to supply reliability, operational efficiency and customer services.

They also reached a consensus on lowering the cap on the Tariff Stabilisation Fund balance, from 8 percent to 5 percent of annual total revenues from sales of electricity to local consumers, to ensure the balance of the fund can be used to alleviate the impact of tariff increases on customers.

To promote transparency, both firms will set up dedicated websites to show information relating to financial and operating data. The current Scheme of Control Agreements run for a term of 10 years and will expire in 2018.

Energy Advisory Committee member William Yu Yuen-ping said the energy efficiency fund is a breakthrough to help buildings save power.

“Since the fund is from shareholders’ earnings, it will not be included in operational costs and should not affect tariffs,” he said.

An Environment Bureau spokesman said electricity consumers can expect some benefits from the modifications.

Conservation group World Green Organization predicted CLP will increase electricity charges by 4 to 5 percent and Hongkong Electric by up to 1 percent.

22 Nov 2013

SCMP Letters: HK biofuels company makes case for biofuels advantage

Anthony Dixon, CEO of ASB Biodiesel, writes in to SCMP to counter the lack of consideration given to biodiesel by Hong Kong official officials:

There are some encouraging signs that the government is beginning to recognise our local waste-to-biodiesel industry as an excellent already-working model of what it hopes to achieve more broadly for recycling and food waste in Hong Kong.

But I must disagree with the Environmental Protection Department’s ongoing assertion that the introduction of biodiesel will have little impact on roadside emissions (“Biodiesel maker pushes product use in market”, October 28). Surely, given the World Health Organisation’s recent pronouncement that air pollution is a leading cause of cancer, no government can afford to ignore any positive incremental impact.

(more…)

SCMP: Loh defends Hong Kong over downgrade in UN ranking

The World Energy Council, the UN-accredited global energy body, published the 2013 edition of its Energy Sustainability Index, for which Hong Kong fared poorly. Cheung Chi-fai of the SCMP reports the response from Christine Loh, undersecretary for the environment in Hong Kong:

The environment undersecretary has defended Hong Kong following its downgrading in an energy index compiled by a United Nations-accredited body, saying the score does not fully take into account the city’s unique situation.

The annual World Energy Council index ranked Hong Kong 40th among 129 nations and regions, two places lower than last year, based on its ability to balance the “energy trilemma” of security, equity and environmental sustainability.

Hong Kong’s ranking was dragged down by concerns over the security of its energy supply – given its heavy reliance on fossil fuels – and its economic stability.

But Christine Loh Kung-wai said the compilers had failed to note that Hong Kong obtained nuclear power and gas from the nation it was part of, making its supply “very secure”. She also disputed the assessment of the local economy.

(more…)

RSN: We Have the Renewable Energy We Need to Power the World – So What’s Stopping Us?

from Tara Lohan of Alternet, writing for Readers Supported News:

he environment is one bad news story after another.

The Pacific Ocean is warming at a rate faster than anything seen in the last 10,000 years and we may have the warmest Arctic in the last 120,000 years. We’re told to brace for more and worse droughts, floods, heat waves, and storms. Coastal communities may disappear from rising seas, entire island nations are going under.

If that all weren’t bad enough, there is a global wine shortage.

The bright side is that we aren’t being blindsided by an unknown enemy: Our relentless burning of fossil fuels is the big thing pushing us toward the brink. So it would figure that a solution to get us out of this mess would be pretty obvious.

That’s why it’s great that there are people like Mark Z. Jacobson, a professor of civil and environmental engineering at Stanford University. While it is one thing to say we want to stop burning fossil fuels, Jacobson (and a team of researchers) are telling us how to do it.

Jacobson was recently on the “David Letterman Show,” where he proclaimed that we have enough wind and solar to power the world.

Is he right? Can renewables really replace fossil fuels? If so, are we willing to do what’s necessary to get there? Let’s take a look at his work and some other new developments.

(more…)

Difficulties of establishing biofuels exposes poor thinking of HK policymakers

In 2011, Eric Ng of the SCMP wrote an article about a biofuels plant in Tseung Kwan O Industrial Estate that had to suspend construction, likely due to a lack of funding. At the same time, the article shed light on the difficulties faced by current biofuels producers in Hong Kong: stiff competition on the waste oil market, import levies for feedstocks, lack of mandatory legislation to promote biofuels use, and so on.

One of the main advantages of using biofuels is that it achieves more than some 85% reduction in greenhouse gas emissions. The European Union has already mandated a policy of fuel blending: at least 5.75 per cent of all fuel sold has to be biofuel, with the percentage to increase further in the future, and other countries in Asia also have policies encouraging biofuel consumption. Hong Kong lags behind in such initiatives, and it is not difficulty to see why: Eric Ng, in a recent update on the issue, reports official Mok Wai-chuen of the Environmental Protection Department as saying in 2007 that “biodiesel did little to improve roadside air quality”, backed up by 2002 reports from the US National Biodiesel Board and the US Environmental Protection Agency that “suggested the use of biodiesel would result in a relatively modest reduction in roadside emissions”. The irrelevance of such an analysis – blending 5% biofuel into Euro V standard diesel containing 0.001% sulphur could never have meant reducing roadside pollutants – escapes officials; much of the roadside pollutants are carried by prevailing winds from shipping lanes and industries across the border.

If public policy on biofuels is to be decided on this factor alone, then the real benefits of biofuel would be ignored: once the biofuel industry is established, it can process the city’s waste and convert it to fuel; as mentioned before, biofuels hugely reduce greenhouse gas emissions; more importantly, by helping biofuel operations purchase waste cooking oil, the practice of smuggling waste cooking oil across the border to be converted into ‘gutter oil’ and re-used as cooking oil can be stemmed – which would happen to be quite the moral thing to do, given that such usage of recycled oil is carcinogenic and harmful to human health when ingested.

Click here to read the coverage from SCMP:

An alternative future for tobacco?

One of the big headaches that tobacco companies complain they have is that they are slowly losing the market for their products. Of course, since their products pose one of the greatest health hazards in the world, this is not a problem that the world shares in or sympathizes with.

A new piece of research, however, shows a possibility for an alternative to the tobacco business: by genetically modifying the tobacco plant, tobacco leaves would have a highly increased starch content, making them a viable source for biofuels. It would be neat if this eventually leads the tobacco business to turn into a renewable fuel industry.

from Science Daily:

Genetically modified tobacco plants are viable for producing biofuels

In her PhD thesis Ruth Sanz-Barrio, an agricultural engineer of the NUP/UPNA-Public University of Navarre and researcher at the Institute of Biotechnology (mixed centre of the CSIC-Spanish National Research Council, Public University of Navarre and the Government of Navarre), has demonstrated, for the first time, the viability of using specific tobacco proteins (known as thioredoxins) as biotechnological tools in plants. Specifically, she has managed to increase the amount of starch produced in the tobacco leaves by 700% and fermentable sugars by 500%. “We believe that these genetically modified plants,” she explained, “could be a good alternative to food crops for producing biofuels, and could provide an outlet for the tobacco-producing areas in our country that see their future in jeopardy owing to the discontinuing of European grants for this crop.”

Thioredoxins (Trxs) are small proteins present in most living organisms. In the course of her research Ruth Sanz demonstrated the capacity of the thioredoxins f and m in tobacco as biotechnological tools not only to increase the starch content in the plant but also to increase the production of proteins like human albumin. “For some time Trxs have been known to have a regulating function in living organisms, but in the thesis we have shown that they can also act by helping other proteins to fold and structure themselves so that they become functional.”

Human albumin is the most widely used intravenous protein in the world for therapeutic purposes. It is used to stabilize blood volume and prevent the risk of infarction, and its application in operating theatres is almost a daily occurrence. It is also used in burns, surgical operations, haemorrhages, or when the patient is undernourished or dehydrated, and in the case of chronic infections and renal or hepatic diseases.

Although commercial albumin is extracted from blood, the lack of a sufficient volume in reserve has prompted many researchers to seek new formulas for obtaining this protein on a large scale economically and safely. “We have come up with an easier, cheaper procedure for producing it in the tobacco plant and extracting it. By fusing the genes encoding the Trxs f or m, we increased the amount of recombinant protein (the albumin, in this case). We also managed to improve the solubility and folding of the albumin, which helps to extract it from the plant and lowers the costs involved in this process.”

Tobacco for producing bioethanol

As the research progressed, thioredoxin f was shown for the first time in vivo to be more efficient than Trx m in regulating the metabolism of carbohydrates, as it causes “a significant increase in the amount of starch in the leaves, which can reach 700% with respect to the amount obtained from non-modified control plants.” Ruth Sanz explained that this was also new, since “up until now both Trxs were thought to act in the same way, but we have shown that this is not so.”

Once the regulating function of Trx f in starch synthesis had been proven, the researcher focussed on its possible application in energy crops used to produce bioethanol: “We saw that the leaves of the genetically modified tobacco plants were releasing 500% more fermentable sugars. With these sugars, which could later be turned into bioethanol, one could obtain up to 40 litres of bioethanol per tonne of fresh leaves — according to the theoretical calculation provided by the National Centre for Renewable Energies where the enzymatic test was conducted — which would mean an almost tenfold increase in bioethanol yield with respect to the control tobacco plant that had not been modified.”

Genetically enhanced tobacco could be an alternative source of biomass in areas like Extremadura and Andalusia, the traditional tobacco producers. The estimated calculations of the starch production of these enhanced varieties would be the equivalent to those of crops like barley or wheat. “As cereals are currently being used as the raw material to produce bioethanol, genetically enhanced tobacco could be an alternative source of biomass and for obtaining clean energies.”

14 Oct 2013