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Critics Question Cost-effectiveness Of Proposed Offshore Wind Farm

Cheung Chi-fai, SCMP – Jun 19, 2009

The construction of an offshore wind farm near Sai Kung will add about 2 per cent to electricity bills while supplying only about 1 per cent of the city’s needs, CLP Power (SEHK: 0002) says.

The disclosure prompted critics to question the cost-effectiveness of the estimated HK$6.7 billion project, and whether it would generate even the predicted amount.

The 2 per cent figure was based on the estimated construction costs of between HK$80 million and HK$100 million for each wind turbine, including the foundations and undersea cables, CLP said yesterday.

The plans call for the installation of 67 wind turbines, each with a 3MW generation capacity, at a site 10km from Clear Water Bay.

A spokeswoman for the utility said offshore wind farms tended to be three to five times more expensive than power plants using conventional fuel. She said the preliminary cost estimates were in line with overseas wind farms of a similar scale.

The final costing would hinge on further detailed wind studies at the site. “As detailed site data have yet to be gathered … only rough estimates can be made at this stage,” she said.

It was the first time CLP had offered an estimate of the impact on tariffs since an environmental assessment for the project was made public early this month.

It said that if 50MW turbines were installed first, the tariff increase would average 0.8 per cent.

When all 67 turbines were in operation, with a total capacity of 200MW, the rise would be 2 per cent.

The power utility had said the wind farm could generate about 40 million kWh of electricity a year, enough for 80,000 households a year at an annual carbon reduction of 300,000 tonnes.

The generation figure was based on an assumption that the wind would be strong enough to drive the turbines at full force 25 per cent of the time.

But this assumption was challenged as too optimistic.

“Major coastal wind farms in Guangdong, where the wind resource is richer than in Hong Kong, do not yield such a high rate,” said Jasper Ip Chi-man of Green Future, which promotes renewable energy.

A wrong forecast might affect the pay-back period of the wind farm and affect power tariffs, he said.

Lo Wing-lok of the Country and Marine Parks Board asked if the money could be better used installing equipment to cut emissions from coal-fired power stations.

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