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Large-scale use of solar power not feasible in Hong Kong

Nov 5th, 2016
by Editor.
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http://www.scmp.com/comment/letters/article/2043067/large-scale-use-solar-power-not-feasible-hong-kong

Hong Kong is facing serious air pollution, which can cause irreversible damage to our society. To cope with the problem, some may suggest the adoption of larger-scale usage of solar power. However, I don’t think that it is feasible to widely use solar power in Hong Kong.

Firstly, from the economic perspective, I think it is very difficult to instal a lot of solar panels in our city. The cost of solar power is very high, even higher than that for conventional fossil fuels (for example, coal and natural gas). That is because we have to buy not just one, but a large number of solar panels. Also, we have to rent a big flat for enough area to place the solar panels, and it will be very expensive to do so.

Moreover, we have to purchase new generating units, as we cannot possibly use the old units for solar energy. Despite its unbelievably high cost, the efficiency of converting solar energy into electricity is very low.

Secondly, considering Hong Kong’s geographical structure, I think it is difficult to use solar power widely here. Solar panels require large open areas for instalments, while Hong Kong is fairly mountainous. So it would be difficult to find open and flat spaces to place solar panels in a place this hilly.

Moreover, Hong Kong’s high population density and scarce land already makes it difficult to find enough space for living. If Hong Kong had enough space, it should be used to build public housing, which is a much more serious problem. We cannot possibly try to solve one problem if it gives rise to a worse one.

If citizens oppose the promotion of solar energy, it will surely not be feasible, and it is very unlikely that they, especially the underprivileged, will support such an idea when using solar power would mean higher electricity bills for them.

All in all, I do not think it is practical to have wide use of solar power in Hong Kong. We should be looking at other forms of renewable energy that would have a much greater chance of success.

Eiman Arif, Tuen Mun

Paris changes everything

Oct 3rd, 2016
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The Paris Agreement constitutes a global turning point away from fossil fuels and toward 100% renewable energy.

http://airclim.org/acidnews/paris-changes-everything

For the first time in history all countries have agreed to take drastic action to protect the planet from climate change, to jointly pursue efforts to limit temperature rise to 1.5°C and eventually reduce emissions to zero. Following this historic outcome, the next step is to translate these Paris commitments into deep emission reductions in all countries. There is no doubt that implementing the Paris Agreement will require a complete overhaul of the EU’s current climate and energy policies.

Since the Paris Summit we have already witnessed the transition to a 100% renewable energy economy speeding up. It is in the EU’s own interest to be a frontrunner in the race towards the zero-emission economy.

Increasing action before 2020 is a prerequisite to achieving the long-term goals of the Paris Agreement. Cumulative emissions determine the level of global warming, so in order to be consistent with the long-term goal of 1.5°C adopted in Paris, it is paramount to consider the cumulative emissions budget – the total amount of carbon dioxide emitted into the atmosphere. The IPCC’s 5th Assessment Report provides numbers for different global carbon budgets allowing for different levels of warming. With current emissions of 38Gt of CO2 per year, the entire carbon budget that would allow a 66 per cent chance of staying below 1.5°C would be completely exhausted in five years. A budget allowing only a 50 per cent chance would be gone in nine years (figure 1).

Figure 1. How many years of current emissions would use up the IPCC’s carbon budgets for different levels of warming? Source: Carbon countdown graph by Carbon Brief Data IPCC AR5 Synthesis Report table 2.2.

Figure 1. How many years of current emissions would use up the IPCC’s carbon budgets for different levels of warming? Source: Carbon countdown graph by Carbon Brief Data IPCC AR5 Synthesis Report table 2.2.

For any fair likelihood of keeping temperature rise to 1.5°C, global mitigation efforts need to be stepped up between now and 2020, and extended to all sectors, including international shipping and aviation.

Increasing mitigation action before 2020 is vital for achieving the long-term goals of the Paris Agreement, and will be one of the key issues if the UN climate conference COP22 in Marrakech in November 2016 is to succeed. Keeping in mind that the EU has already achieved its -20% by 2020 target several years in advance, and is progressing towards 30 per cent domestic reductions by 2020, the EU can make a significant contribution to this discussion by, among other things, cancelling the surplus of pollution permits under the Emissions Trading Scheme and the Effort Sharing Decision.

We urge the EU to seek solutions that can help drive global emissions to a deep decline as of 2017, both in the context of the Global Climate Action Agenda as well as strengthening the national pre-2020 commitments on mitigation and finance.

2025 and 2030 targets must be revised in 2018 at COP24. The post-2020 commitments (INDCs) put forward by countries are inadequate for keeping warming to 1.5°C (or even 2°C). Last May the UNFCCC Secretariat published a report assessing the aggregate effect of countries’ post-2020 targets. The report’s graph below concludes that while most of the carbon budget was already consumed by 2011, countries’ unrevised INDCs will entirely consume the remaining 50 per cent chance of achieving a 1.5°C compliant carbon budget by 2025.

All COP22 countries need to commit to prepare their respective assessments on how to raise the level of post-2020 targets to bridge the adequacy gap by COP24 in 2018. To facilitate this process we urge countries to put forward updated and improved post-2020 INDCs as soon as possible and latest by 2018, and to finalise their long-term strategies as soon as possible, and latest by 2018 (figure 2).

Figure 2. Cumulative CO2 emissions consistent with the goal of keeping global average temperature rise below 1.5°C, with >50% probability by 2100. INDCs = intended nationally determined contributions. Source: IPCC Fifth Assessment Report scenario database and own aggregation.

Figure 2. Cumulative CO2 emissions consistent with the goal of keeping global average temperature rise below 1.5°C, with >50% probability by 2100. INDCs = intended nationally determined contributions. Source: IPCC Fifth Assessment Report scenario database and own aggregation.

The EU’s ongoing legislative work on ETS and non-ETS emissions should be used to align the EU’s 2030 targets with science and the commitments made in Paris, and make them economy-wide, covering EU-related emissions from international aviation and shipping.

International shipping and aviation currently account for around 5 per cent of global CO2 emissions, and these emissions are anticipated to have vast growth rates (50–250% by 2050 for shipping, and 270% for aviation). As these sectors’ emissions are not counted under national inventories, the 2018 stocktake must ensure that these sectors too are in line with the Paris Agreement and the 1.5°C compatible carbon budget.

Long-term strategies for zero greenhouse gas and 100 per cent renewable energy. The Paris Agreement includes a long-term goal to pursue efforts to limit temperature increase to 1.5°C requires a reassessment of the EU’s climate and energy policies, and an increase in action by all. The goal to reduce the EU’s domestic emissions by 80 per cent by 2050 is not consistent with the Paris Agreement and has to change to be consistent with the long-term goals governments decided in Paris.

The Paris Agreement also contains a commitment to reduce net global emissions to zero during the second half of the century. Achieving this requires most sectors in the EU to achieve zero emissions earlier, within the next couple of decades. Most urgently, the EU should adopt timelines for fully phasing out the use of coal, gas and oil.

In order to facilitate the process of aligning all policies with the long-term targets of the Paris Agreement, all countries should swiftly proceed in the development of their respective 1.5°C compliant mid-century strategy. Having a long-term strategic vision will help to guide their short- and medium-term decisions and will have a positive impact on a long-term framework for innovation and business development. The updated EU 2050 roadmap should be finalised latest by 2018, and take fully into account the recent striking developments in renewable energy. A COP decision in Marrakech setting the deadline of finalised mid-century roadmaps by 2018 would ensure that all countries begin preparations swiftly.

Shifting of financial flows. The Paris Agreement also includes a requirement for making all financial flows consistent with low greenhouse gas emissions and climate resilient development. In the first instance this requires the EU to tackle those financial flows that are obstructing emission reductions, and which hinder progress towards the EU’s broader economic and social objectives. They include fossil fuel subsidies, public finance for high-carbon infrastructure through European development banks, and policy frameworks that facilitate financial support of fossil fuels.

The climate finance roadmap to raise 100 billion US dollars by 2020 should be launched in advance of Marrakech COP22. The roadmap must not be an accounting exercise for already existing financial flows, but rather guarantee stronger transparency, as well as adequate and reliable support for tackling the causes and impacts of climate change. It should also explicitly spell out to what level the EU and other donor countries will increase annual adaptation finance by 2020.

The current review of the EU ETS provides a key opportunity to showcase the EU leadership on climate finance, committing to direct a portion of the revenues from auctioning directly to the Green Climate Fund. Setting up an EU ETS International Climate Action Reserve would give a clear signal to developing countries that the EU is committed to continue to provide additional finance for climate needs in predictable and transparent ways. The Financial Transaction Tax should be implemented as soon as possible.

Resilience, adaptation and loss and damage. Even with the existing and future measures to mitigate climate change, the adaptation needs of all countries will continue to grow, undermining the rights of the poorest and most vulnerable communities in particular. The EU should lead efforts to strengthen human rights in all climate action, as mandated in the Paris Agreement.

Ratification of the Paris Agreement and its early entry into force. A rapid entry into force of the Paris Agreement would demonstrate that there is a strong international support for ambitious climate action and would serve as a strong signal to the private sector. All COP22 countries should set 2018 as a deadline for full entry into force of the Paris Agreement, including finalising all the outstanding work on rules and modalities for countries to be able to implement the Agreement.

Ulriikka Aarnio
Climate Action Network Europe

World first for Shetlands in tidal power breakthrough

Aug 29th, 2016
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Nova Innovation deploys first fully operational array of tidal power turbines in the Bluemull Sound

https://www.theguardian.com/environment/2016/aug/29/world-first-for-shetlands-in-tidal-power-breakthrough

A power company in Shetland has claimed a breakthrough in the race to develop viable offshore tidal stations after successfully feeding electricity to local homes.

Nova Innovation said it had deployed the world’s first fully operational array of tidal power turbines in the Bluemull Sound between the islands of Unst and Yell in the north of Shetland, where the North Sea meets the Atlantic.

It switched on the second of five 100kW turbines due to be installed in the sound this month, sending electricity on a commercial basis into Shetland’s local grid.

Existing tidal schemes use single power plants or installations rather than a chain of separate turbines. A French company, OpenHydro, says it too is very close to linking two tidal machines, off Brittany, to build a more powerful 1MW array.

After a series of commercial failures in Scotland’s nascent marine power industry, including the collapse of two wave power firms, Pelarmis and Aquamarine, Nova Innovation’s announcement was applauded by environmental groups.

Lang Banks, director of WWF Scotland, said: “News that power has been exported to grid for the first time by a pair of tidal devices marks yet another major milestone on Scotland’s journey to becoming a fully renewable nation.

“With some of the most powerful tides in Europe, Scotland is well placed to lead in developing this promising technology, which will help to cut climate emissions and create green jobs right across the country.”

The islands, which are not connected yet to the UK grid, get most of their electricity from a diesel-fuelled power station which is supplied by tankers, despite having some of the world’s strongest and most reliable wind, wave and tidal resources.

Shetland has also been the site of one of the UK’s most bitter disputes over renewable power. Thousands of islanders campaigned against an ambitious scheme backed by the local council to build the 370MW Viking windfarm, involving 103 turbines erected on the main island.

That scheme finally won legal approval in 2015 but construction has yet to begin; it is waiting for a UK government announcement on new energy supply deals and the installation of a national grid connection to mainland Scotland.

Nova Innovation said the two turbines installed so far were operating at 40% of their installed capacity. The company hopes its turbines, which were cofunded by the Belgian renewables company ELSA, will be sold worldwide now they have been commercially proven.

“We are absolutely delighted to be the first company in the world to deploy a fully operational tidal array,” said Simon Forrest, the firm’s managing director.

$40m Waste to Energy Research Collaboration in Singapore

Aug 11th, 2016
by Editor.
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Singapore’s National Environment Agency has joined forces in a Collaboration Agreement with the NTU Singapore to develop a S$40 million waste to energy research facility.

https://waste-management-world.com/a/video-40m-waste-to-energy-research-collaboration-in-singapore

Singapore’s National Environment Agency (NEA) has joined forces in a Collaboration Agreement with the Nanyang Technological University, Singapore (NTU Singapore) to develop a S$40 million ($30 million) waste to energy research facility.

According to the NEA the facility will be the first of its kind in Singapore and is planned to enable the translation of emerging waste to energy technologies, such as the use of syngas in demonstration and test-bedding projects.

Possible projects to be conducted at the facility include turning waste and biomass into synthetic gas, cleaning and upgrading syngas to run an gas engine or turbine for higher energy recovery efficiencies, the utilisation of slag in engineering applications, novel flue gas treatment module for lower emissions, low-grade heat recovery and using a gas separation membrane to extract oxygen from air.

History of Collaboration
The collaboration agreement was signed by Ronnie Tay, CEO of NEA, and Professor Ng Wun Jern, executive director of NTU’s Nanyang Environment & Water Research Institute (NEWRI).

“NTU has an established track record of industry collaboration and for translating research into impactful commercial applications,” commented Prof Freddy Boey.

“It will provide local institutions and industries access to the world-class research facilities and expertise at NTU, helping them to innovate and develop clean solutions that are globally competitive,” the professor continued.

Expected to be commissioned by late 2018, it is hoped that the facility will be an open platform to support research and its translation, as well as personnel training to build technical competencies in waste to energy.

Ronnie Tay added: “We hope that this facility will provide stakeholders such as research institutes, academia and industry with a platform to collaborate in and create more effective and sustainable waste management solutions through research, development, demonstration and test-bedding.”

Hong Kong must seize the opportunity to cut fossil fuel use in favour of renewable energy

Aug 3rd, 2016
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Albert Lai and John Sayer say the city’s negotiations for new terms and conditions with its two power companies offer a great chance to develop the green energy sector

Imagine if our chief executive announced that everyone had to pay an extra HK$5,600 next year for their electricity to cover the cost of dealing with the effects of fossil fuel use. While this is unlikely to happen, the government is nevertheless subsidising the use of fossil fuels here. Data from the International Monetary Fund shows that this annual subsidy came to more than HK$40 billion in 2015.

Electricity generation accounts for 54 per cent of the city’s fossil fuel consumption. As almost all local power generation uses coal and natural gas, we can conclude that power generation and consumption benefit from more than half of the HK$40 billion subsidy.

As a comparison, we note that the subsidy is equivalent to nearly 80 per cent of our health care budget – a good share of which is spent on treating the effects of poor-quality air on our lungs and hearts.

Attributing the real cost of fossil fuel use is important for several reasons. The profits that the two power companies are allowed to make are based on a formula in their respective scheme of control agreements, which is related to their capital investment and costs. If power companies and other direct users do not pay the real cost of the impact of fossil fuel use, the public has to bear this cost either directly in their bills or indirectly through taxes, which the government uses to clean up the effects of fossil fuels.

Fossil fuel subsidies stand in the way of changes needed to achieve the goals set at last year’s Paris climate summit of a net-zero carbon economy this century, according to both the UN and the World Bank.

In Hong Kong, the scheme of control agreements will expire in 2018, providing an important opportunity for change. The city has the potential for solar, wind, tidal and wave power. The key lies in shaping a beneficial renewable energy policy and an enabling market environment.

To shape policy, we can learn from the experience of similarly developed economies. First, market access and diversification is important. Beyond 2018, power company regulations should give priority access to all who are willing and able to generate renewable energy, with a guaranteed connection to the grid.

Second, investment in renewable energy must be supported by a guaranteed price for clean electricity. Guangdong province, for one, pays twice the rate for solar power as for coal-generated electricity.

Third, a redirection of existing funds is needed. The Environment Bureau wants to revise the scheme of control agreements so the return on fixed assets is lowered from 9.9 per cent to around 6 per cent. If all or part of the reduction went into a feed-in tariff fund, it could provide a stable source of funding to encourage the development of renewable energy in Hong Kong.

At a rough calculation, with 2 per cent return on revenue paid into such a fund, about HK$30 billion a year would be generated. Assuming the government would contribute another half, an annual HK$45 billion fund could be created. If the average feed-in tariff is set at HK$2.50 per kWh, the fund would be sufficient to buy 1.8 billion kWh of clean electricity per year. This would kick-start renewable energy power generation by raising its contribution to 4 per cent of total production.

Fourth, providing space for community participation is vital. Citizens and businesses with suitable rooftops could take advantage of clean energy programmes. The government could allot space in housing estates, public facilities and other suitable areas for groups to form social enterprises and plan community-based investment in solar or wind power facilities.

Germany has invested heavily in renewables, which now account for a third of its energy use. Some 92 per cent of Germans support the transition. One of the main reasons is that the government placed great emphasis on opportunities for ordinary citizens to participate in creating and benefiting from renewable energy programmes through funding and investment schemes.

In Hong Kong, there are 17 reservoirs suitable for the installation of floating solar power plants, similar to those now appearing elsewhere. Offshore waters are also suitable for the installation of wind farms.

Finally, there’s green finance for the new era. With a stable feed-in tariff, renewable energy schemes are predictable enough to attract green funds from around the world.

To allow more people to share the fruits of renewable energy development, the government could consider issuing green bonds.

There are many advantages to the transition to renewable energy. A transformation of our energy system to multiple technologies and diverse suppliers will stimulate the economy and create green jobs.

The power companies may see asset growth stemming less from generation and more from an expanded role as providers of a smart grid. A new energy model for Hong Kong can reduce pressure on the government to import power from the mainland. It will also mitigate pubic calls to merge the two existing power companies, or to separate power generation and distribution.

For the public, implementing a feed-in tariff does not increase electricity tariffs. On the contrary, introducing more diverse renewable energy sources would reduce future vulnerability to increases in gas prices and electricity costs. The public would also benefit from reduced pollution and avoid hefty health care costs.

Meanwhile, local business can find new opportunities in engineering design, equipment supply, installation and maintenance in the fast-growing renewables sector.

For the financial sector, the development of local renewable energy projects is the best opportunity for Hong Kong to become a credible green finance centre. By 2030, it is estimated the world needs US$2.4 trillion invested in renewable energy to reach targets set in Paris.

China’s National Energy Administration has set a national average target for utility companies to generate 9 per cent of total electricity from renewables by 2020, not including hydroelectric or nuclear power. For Guangdong province, the target is 7 per cent.

In this context, the plan outlined above for Hong Kong to put in place incentives to generate 4 per cent of its power from renewables should be seen as only a first step in the right direction.

Who in Hong Kong will have the decisiveness, courage and vision needed to set ambitious targets for renewable energy development? After all, Hong Kong’s contribution to national and international reductions in greenhouse gas emissions will ultimately be even more important for the city’s development and the well-being of its people than the next chief executive election.

Albert Lai is policy convener at the Professional Commons. John Sayer is director of Carbon Care Asia
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Source URL: http://www.scmp.com/comment/insight-opinion/article/1998542/hong-kong-must-seize-opportunity-cut-fossil-fuel-use-favour

While cities worldwide work together against global warming, Hong Kong stands aside

Jul 12th, 2016
by Editor.
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John Sayer says Hong Kong’s absence from international climate change initiatives destroys its own credibility as a centre for climate-smart investment funds and green bonds

It is now over six months since the landmark climate talks in Paris. City leaders and local governments have accepted the important role of city-level action in international efforts to reduce climate change.

More than 7,100 cities joined up last month to form the world’s largest city government alliance, known as the Global Covenant of Mayors for Climate and Energy. They are pledging greenhouse gas reduction goals, renewable energy targets and better exchange of information and ideas on green energy. The new covenant brings together the Compact of Mayors and the Covenant of Mayors to form a worldwide grouping of cities, which are home to some 600 million people.

Michael Bloomberg is a co-chair of the initiative, and he believes this city-level action can be “a giant step forward in the work of achieving the goals that nations agreed to” on climate action.

On the Global Compact of Mayors website is a map showing thousands of cities in 119 countries which have signed up to the initiative. The map highlights participating cities in countries such as Korea, Japan, Thailand, Malaysia and the Philippines as well as six cities in Taiwan. But regrettably there is a void on the south China coast.

Hong Kong is not represented.

The Chinese government played a positive role in ensuring that the Paris agreement was achieved. The agreement notes the importance of “sub-national” activity in slowing global warming. This has to be led by local and regional governments.

Yet more than six months after the signing of an agreement in which world leaders acknowledged that the timetable for change is very short, Hong Kong has neither prepared a more ambitious response, nor joined up to any significant international initiatives.

If Hong Kong joined other cities to set world-standard targets on renewable energy and carbon reduction, this could improve its credentials to become a hub for green finance. But Hong Kong’s conspicuous absence in this area diminishes its credibility as a centre to host climate-smart investment funds and green bonds. A city that displays little interest in renewables, zero-carbon buildings or green transport sends the message that we have not the motivation or capacity to be a leader of green finance.

Nations agreed in Paris that we must begin work immediately on a green transition. Among those cities recognising the challenge, Hong Kong ranks somewhere below 7,100th, behind many hundreds of cities in Africa, Asia and Latin America.

John Sayer is a director of Carbon Care Asia and was a member of the Hong Kong NGO delegation to the Paris Climate Change Conference in 2015
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Source URL: http://www.scmp.com/comment/insight-opinion/article/1988996/while-cities-worldwide-work-together-against-global-warming

Leaked TTIP energy proposal could ‘sabotage’ EU climate policy

Jul 11th, 2016
by Editor.
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EU proposal on a free trade deal with the US could curb energy saving measures and a planned switch to clean energy, say MEPs

https://www.theguardian.com/environment/2016/jul/11/leaked-ttip-energy-proposal-could-sabotage-eu-climate-policy

The latest draft version of the TTIP agreement could sabotage European efforts to save energy and switch to clean power, according to MEPs.

A 14th round of the troubled negotiations on a Transatlantic Trade and Investment Partnership (TTIP) free trade deal between the EU and US is due to begin on Monday in Brussels.

A leak obtained by the Guardian shows that the EU will propose a rollback of mandatory energy savings measures, and major obstacles to any future pricing schemes designed to encourage the uptake of renewable energies.

Environmental protections against fossil fuel extraction, logging and mining in the developing world would also come under pressure from articles in the proposed energy chapter.

Paul de Clerck, a spokesman for Friends of the Earth Europe, said the leaked document: “is in complete contradiction with Europe’s commitments to tackle climate change. It will flood the EU market with inefficient appliances, and consumers and the climate will foot the bill. The proposal will also discourage measures to promote renewable electricity production from wind and solar.”

The European commission says that the free trade deal is intended to: “promote renewable energy and energy efficiency – areas that are crucial in terms of sustainability”.

The bloc has also promised that any agreement would support its climate targets. In the period to 2020, these are binding for clean power and partly binding for energy efficiency, in the home appliance and building standards sectors.

But the draft chapter obliges the two trade blocs to: “foster industry self-regulation of energy efficiency requirements for goods where such self-regulation is likely to deliver the policy objectives faster or in a less costly manner than mandatory requirements”.

Campaigners fear that this could tip the balance in future policy debates and setback efforts to tackle climate change.

Jack Hunter, a spokesman for the European Environmental Bureau said: “Legally-binding energy standards have done wonders to lower energy bills for homes and offices, so much so that energy use has dropped even as the British economy has grown and appliances have become more power-hungry.

“Voluntary agreements have a place, but are generally ‘business as usual’ and no substitute for the real thing. If they became the norm, it would seriously harm our fight against climate change.”

Another passage in the draft text mandates that operators of energy networks grant access to gas and electricity “on commercial terms that are reasonable, transparent and non-discriminatory, including as between types of energy”.

This could create an avenue for preventing the imposition of feed-in tariffs and other support schemes to encourage the uptake of clean energy, according to lawmakers in Brussels.

The Green MEP Claude Turmes said: “These proposals are completely unacceptable. They would sabotage EU legislators’ ability to privilege renewables and energy efficiency over unsustainable fossil fuels. This is an attempt to undermine democracy in Europe.”

The environmental law consultancy, ClientEarth, was concerned that the new proposal effectively derogated responsibility for urgent climate change actions agreed at COP21 to the business sector.

“Industry is not the right entity to lead the fight against climate change,” said ClientEarth’s lawyer, Laurens Ankersmit. “It is madness for the EU and the US to rely on it in this way.”

The energy chapter negotiations began as part of an EU push for unlimited access to exports of the US’s relatively cheap liquefied natural gas, much of it derived from shale.

The EU is committed to a reduction in greenhouse gas emissions of at least 80% by 2050, as measured against 1990 levels – and pledged a 40% CO2 cut by 2030 at the Paris climate conference, last December.

But the new text says that: “the Parties must agree on a legally binding commitment to eliminate all existing restrictions on the export of natural gas in trade between them as of the date of entry into force of the Agreement”.

Other countries wanting to trade with the EU or US would also find themselves up against requirements that they remove trade barriers.

The draft says: “The Parties shall cooperate to reduce or eliminate trade and investment distorting measures in third countries affecting energy and raw materials.”

In 2013, the EU’s trade commissioner Karel de Gucht promised the multinational oil giant Exxon that the energy chapter would remove obstacles to its expansion plans in Africa and South America.

Sludge facility contractor Veolia begins HK$2 billion legal proceedings against gov’t

May 24th, 2016
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Hong Kong’s Secretary for the Environment, Wong Kam-sing, spoke with pride at the official opening of the HK$5.5 billion state of the art Sludge Treatment Facilities (STF) last week. The facilities are to be renamed in less malodorous terms as the T Park with the T standing for transformation. “It signifies Hong Kong’s dedication to ‘transforming’ waste into energy, which is a key part in the waste management strategy for Hong Kong,” Wong said at the opening ceremony at which Chief Executive CY Leung officiated.

https://www.hongkongfp.com/2016/05/24/sludge-facility-contractor-veolia-begins-hk2-billion-legal-proceedings-against-govt/

But one aspect of this world class project Wong did not elaborate on is that Veolia, the main contractor, that built the STF, has started legal proceedings against the Hong Kong government to recover HK$2 billion in cost overruns associated with the project. Mediation proceedings are expected to start soon.

The STF which is located at Tsang Tsui near Tuen Mun, was built by a joint venture in which Veolia had 60% and Leighton 40% under the auspices of a 15-year design build and operate contract. It has been quietly operating since April 2015, and is currently incinerating 1,200 tonnes of sludge per day that would otherwise be sent to landfills.

The sludge is delivered by trucks from Stonecutters Island Sewage Treatment Works and ten other wastewater treatment facilities. This is a considerable improvement over the situation 25-30 years ago when most of Hong Kong’s raw sewage went straight into the sea. The STF has a maximum capacity of 2,000 tonnes making it the largest facility of its kind in the world.

Hong Kong’s efforts in this area are gaining international recognition. In April this year, the STF together with Stage 2A of the Harbour Area Treatment Scheme, won a Distinction award in the category of Wastewater Project of the Year at the 2016 Global Water Awards. In addition, the architectural design of the STF was acknowledged by the Hong Kong Institution of Engineers and the Institution of Structural Engineers with the presentation of the Grand Award in this year’s Structural Excellence Award.

The EPD is naturally pleased to have one of the key elements of its waste infrastructure in place. However, the joint venture that built the STF is believed to be less than happy at the way events have turned out.

T-Park. Photo: GovHK.

T-Park. Photo: GovHK.

The project was more than a year late. According to people familiar with the STF, this was in large part due to delays by the EPD and other government departments in providing the permits and consents that were necessary to proceed with the project. As a result, the contractor incurred higher charges and significant costs in implementing work-around measures.

Immigration Department

One difficulty the contractor faced was that it had anticipated building a barging point at the site since both the nearby Pillar Point power plant and WENT landfill have permanent barging points. But its application to the Lands Department was not successful. This meant that, instead of delivering large sections of the incinerator to the site on barges, the incinerator had to be taken apart and delivered to the site in smaller pieces by trucks.

T-Park. Photo: GovHK.

T-Park. Photo: GovHK.

This created additional welding work which could have been manageable but the contractor then suffered a further setback at the hands of the Immigration Department which refused to grant visas for foreign specialist welders. They were necessary as boilers operate under high pressure and therefore require very specific welding qualifications that are not available in Hong Kong. Even though this was pointed out to the Immigration Department, the visas were refused. The contractor therefore had to train local welders to overcome this issue. Even then very few passed the required test leading to significant delays in the installation of the boiler.

Fire Services Department

There were also problems with the Fire Services Department (FSD) in getting a Dangerous Goods License and Fire Services Certificate. The FSD was not familiar with the STF’s incinerator since there are no others like it in Hong Kong. Veolia therefore had to train FSD officers to enable them to better understand the plant and what the fire risks are. The contractor had to organise a trip to Europe to visit incineration plants with FSD officers and again a year later as the FSD officers had changed. This also generated significant delays.

Surplus power

One of the key features of the STF touted by the EPD is that it is a waste to energy plant. Indeed, waste-to-energy has become the central mantra of the EPD’s waste management strategy. However, the Environmental Impact Assessment for the project that was completed in 2008 notes: “As the surplus power is anticipated to be minimal and it would be unlikely for CLP to purchase the surplus power, the surplus power would not be sold. Therefore, no power transmission line will be constructed outside the STF site.”

While it was always envisaged that the plant would generate its own electricity, the idea of exporting it appears to have been an afterthought and to have first surfaced in the tender documents. But it is clear that there is no economic incentive for this move given the small amount involved – a maximum of 2MW per day when the plant is operating at maximum capacity possibly in ten years’ time. It is a political initiative to try and broaden the appeal of the EPD’s environmental strategy.

The EPD appears to have left it to the contractor to discuss this issue with a reluctant CLP. This is why the need for an export transmission line only became evident relatively late in the day. As a result, people say it took a long time for CLP to produce the final requirements as to where the connections should be located resulting in long delays before the design of the electrical plant could be finalised.

The EPD’s response to the claim appears to have been to do literally nothing and to pretend it didn’t exist. Faced with this inaction the contractor initiated mediation proceedings as stipulated in its contract.

‘Standard ploys’

But Veolia is not alone in encountering delayed payments by the Hong Kong government which has a number of standard ploys for dealing with claims. One approach is to attempt to bully contractors by pointing out that aggressive pursuit of a claim might hinder consideration for future government contracts. Another tactic is to delay payment for as long as possible in the hope this will encourage the contractor to settle for a lower amount.

Filibustering?

The problem has become so pervasive that 14 international chambers of commerce in Hong Kong sent a letter to Jasper Tsang, the president of the Legislative Council, last February outlining their concerns. The letter pointed out that the delays in payment to contractors was jeopardising the health of consultants and contractors and the whole construction supply chain and could lead to financial problems, the need for layoffs and job losses.

The letter was sent to Tsang in the belief that it was the filibustering and political posturing in Legco that was delaying the approval of funds to be paid to contractors.This is certainly one reason. Another is the chronic culture of risk aversion and self-preservation that pervades the civil service which discourages people from taking big decisions.

The management of the STF project and the handling of its claim is a prime example. The default position of ministers is to avoid taking decisions, and thus responsibility, which could result in criticism, public humiliation and possibly harm their pensions. This aversion to risk is immediately picked up by their civil servants who know they cannot rely on support from their seniors. So for the same reasons they too will avoid involvement with ‘risky’ projects and taking responsibility for decisions.

Government departments can just about bring themselves to ask Legco for additional funds so long as they can justify it in terms of increasing costs of materials and labour. But this approach is unlikely to be successful with Veolia’s claim since it involves additional funding amounting to some 40% of the original price of the project. That will take some explaining. The EPD appears to have taken the view that if the mediation process is able to achieve a settlement, this will make it easier to approach Legco for funds.

The EPD is still smarting from the mauling it received at the hands of the Public Accounts Committee in December 2015 when it was accused of deliberately misleading Legco over the remaining life of Hong Kong’s landfills. It denied the accusation but the experience has increased the EPD’s reluctance to return to Legco since it is aware its reputation has been undermined and that it will be subjected to close scrutiny.

None of this bodes well for an early resolution of the STF claim or indeed other infrastructure related claims. Nor will it enhance Hong Kong’s reputation as place in which to invest and do business. The Hong Kong government has already acquired a reputation for being a slow payer. This will encourage contractors to further pad their tenders as they factor in government risk. This will ultimately increase the cost of Hong Kong’s infrastructure to the taxpayer.

It is unlikely this situation will improve in the near future since there is nothing to suggest that the political situation in Hong Kong will improve sufficiently to allow Legco to get on with its work in a less partisan manner. Further the civil service is unlikely to break out of the current culture which is paralysing government and exerting a dead hand over Hong Kong.

From Waste to Energy – Development & Use of Renewable Energy in Sewage Treatment Facilities

May 21st, 2016
by Editor.
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Slimy, grimy and good for the city: Hong Kong plant treating 1,200 tonnes of sludge daily to welcome the public

May 19th, 2016
by Editor.
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State-of-the-art facility to feature guided tours, rooftop garden and spa services

A waste treatment facility located next to a Hong Kong landfill is due to open to the public and reveal that it offers even more than processed sludge.

Located next to West New Territories Landfill [1] in Tuen Mun, T.PARK [2] is set to offer the public a chance to learn about the state-of-the-art facility featuring interactive guided tours, a rooftop garden with views of Deep Bay and neighbouring Shenzhen, and even spa treatment services.

The facilities are due to open to the public free of charge on June 29. An online reservation is required in advance.

While T.PARK is set to be unveiled, its sludge treatment operation has been up and running since April last year. The HK$5 billion project was approved by the Legislative Council [4] in 2009.

Currently it absorbs 1,200 tonnes of sludge daily – the output of the city’s 11 sewage treatment plants. It reduces the volume of sludge by 90 per cent before the waste by-product is transported to the adjacent landfill.

The facility can treat up to 2,000 tonnes of sludge daily, a figure projected to be achieved by 2030.

The publicly funded project adopts a “full life cycle” approach as it employs renewable energy, mainly from heat discharged during the incineration of sludge.

sludge-plant

Steam generated from the incineration process is then used to drive a turbine capable of producing enough electricity to power not just the facility but also 4,000 households.

sludge-plant-2

Wastewater is also processed in the project through a seawater desalination plant and reused for irrigation, flushing and cleansing purposes.

sludge-plant-3

The estimated annual operating cost is HK$220 million for the next 15 years. French waste management company Veolia is overseeing the project’s design, construction and operation.
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Source URL: http://www.scmp.com/news/hong-kong/health-environment/article/1947337/slimy-grimy-and-good-city-hong-kong-plant-treating

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