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February, 2013:

Power giant talks tough

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

Kelly Ip and Victor Cheung

Tuesday, February 26, 2013

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

CLP wants timely decision on regulatory extension

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

News›Hong Kong


Anita Lam and Cheung Chi-fai

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

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

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

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

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

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

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

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

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



Michael Kadoorie

regulatory extension

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

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

Dear friends,

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

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

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

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

Thank you.


Quince Chong

Chief Corporate Development Officer

CLP Power Hong Kong



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


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





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Plasma Gasification progresses whilst HK Government regresses to the stone age with blinkered recalcitrance

BA and Solena Partner on Biofuel Plant using plasma gasification to convert 500,000 tonnes of MSW to create 50,000 tonnes of bio jetfuel per annum

The industry’s commitment to green aviation was on show throughout Farnborough this year. In this video, British Airway’s Jonathon Counsell and Solena Group’s Dr. Robert Do discuss a collaboration to build the first plant in Europe which will produce aviation jet fuel from household rubbish. The UK facility will produce 16 million gallons of fuel from 500,000 tonnes of waste. Watch the video and learn about the science behind and future for this innovative collaboration.

The Environmental Report

Gasification: The Waste-to-Energy Solution

The Gasplasma Plasma Conversion Process Published on Jul 3, 2012 An animation of the plasma gasification process that will convert waste at the Closing the Circle enhanced landfill mining project in Belgium, generating up to 100 MW.

NRG Energy: Plasma Gasification

British Airways GreenSky project

British Airways pledges 10-year offtake agreement as GreenSky project with Solena gathers momentum

Artist’s impression of proposed Solena facility

Fri 30 Nov 2012 – The British Airways and Solena GreenSky London project to build a sustainable jet biofuel facility in East London is gaining momentum, say the two partners. They won’t reveal the location but an exclusive option on a site for the facility and consent work has begun, with the aim of having it operational and in production by 2015. The airline has now confirmed its commitment to purchasing, at “market competitive” prices, the anticipated 50,000 tonnes of jet fuel produced annually by the plant for the next 10 years, which equates to around $500 million at today’s price for conventional jet kerosene. Barclays has been appointed as advisor to explore the optimal funding through export credit agencies and the consortium providing the facility’s key technology functions has also been announced. British Airways expects enough sustainable fuel be produced to power two per cent of its fleet departing from London Airports.

“We are delighted that the GreenSky London project is getting ever closer to fruition,” said Keith Williams, the Chief Executive of British Airways, which is aiming to reduce its net carbon emissions by 50% by 2050. “With world-class technology partners now in place, we are well on our way to making sustainable aviation fuel a reality by 2015.”

Around 500,000 tonnes of municipal waste normally sent to landfills will be converted annually into 50,000 tonnes of biodiesel, bionaphtha and renewable power at the facility as well as the 16 million gallons of jet fuel. Solena Fuels Corporation will provide the proprietary high-temperature gasification process that converts the waste into synthetic gas and the overall Integrated Biomass Gasification to Liquids (IBGTL) solution.

The Fischer-Tropsch reactors and catalyst that will convert the cleaned synthetic gas into liquid hydrocarbons, such as diesel and jet fuel, will be supplied by Oxford Catalysts. Marketed under the brand name Velocys, the company says its systems are significantly smaller than those using conventional technology, enabling modular plants that can be deployed more cost-effectively in remote locations and on smaller scales than is possible with competing systems. Fluor Corporation, which has extensive international experience in project execution and biofuel projects, is providing engineering services to support Solena and has started the pre-front end engineering and design for the project.

On the financing, a Competitive Letter of Interest has been obtained from one of the export credit agencies, including associated term funding. More than 150 jobs are expected to be created to operate the facility, with 1,000 workers involved during the construction.

An independent life-cycle assessment by UK-based North Energy Associates of the Solena jet biofuel showed that greenhouse gas savings exceeded both the 60% requirement of the EU’s Renewable Energy Directive (RED) and the 50% minimum of the methodology established by the Roundtable on Sustainable Biofuels (RSB).

“Our GreenSky London project will provide clean, sustainable fuels at market competitive prices that will help address British Airways’ sustainability goals,” said Dr Robert Do, CEO of Solena. “The British Airways offtake agreement represents the largest advanced biofuel commitment ever made by an airline and clearly demonstrates the airline’s leadership and vision in achieving its carbon emission reduction targets.”

Solena Fuels
British Airways – Biofuels

Download PDF : Group Machiel Joint Venture 26 May 2011 press release v FINAL

Solena%20Fuels%20Presentation A


Garbage in – Power out

Download PDF : Garbage in

Plasma Arc Gasification of Municipal Solid Waste

Download PDF : Louis_Circeo-Georgia_Tech_Research_Institute

Download PDF : Solena_Group1

Letter to Legco

Download PDF : CTAlettPanelEAFeb2013

£75m waste-to-energy plant plan for Billingham

Scott Brothers Group's managing director Frank Cooke on the site where the £75m waste-to-energy plant is set to be built

Scott Brothers Group’s managing director Frank Cooke on the site where the £75m waste-to-energy plant is set to be built

A MAJOR waste-to-energy plant is being planned for Teesside.

The £75m Billingham Energy gasifier, on the old Haverton Hill ICI Billingham site, will be the largest UK scheme of its kind if it goes ahead.

The 14 megawatt plant, a joint venture between Haverton Hill-based Scott Brothers Group and Devon company O2N (Old 2 New), will create around 150 construction jobs over two years and up to 40 permanent positions.

AECOM – the company that built the Shard in London – will carry out the design, procurement, construction and operation of the project.

The plant, which will take 160,000 tonnes of household, commercial and industrial waste a year and turn it into clean energy, could be up and running by 2015.

Bosses say financing is at a “well advanced stage” – and 20 similar UK plants could also be in the pipeline over the next 10-15 years.

They claim their project, which comes hot on the heels of Air Products’ announcement of a second energy-from-waste facility at Billingham, will help cement Teesside’s growing status as a major hub for waste-to-energy technology.

Scott Brothers Group managing director Frank Cooke said: “Often with gasification technology in the UK, projects turn out to be long-term and are difficult to get off the ground.

“This is an American design, there are more than 20 similar ones in operation around the world, particularly in Scandinavia and Germany – it’s tried and tested technology.

“There are some in the UK, but none of this size at the moment.

“We are in well advanced discussions on finance. We are also talking to both local and national waste suppliers.

“The majority of the electricity generated could be used by local chemical companies.”

He added: “The old ICI site employed tens of thousands of people in the 50s and 60s; now we are hoping to create employment there once again.

“This project will not only create jobs but renewable electricity using clean technology.

“We are so confident in the technology that O2N is developing, we’ve taken a 25% stake in the company

Read More


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