ENG-2019 — Page 288

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The Environment

Climate Change

Long-term Decarbonisation Strategy

Hong Kong is seeking to formulate a long-term decarbonisation strategy in line with the goals of the Paris Agreement. In 2019, the Council for Sustainable Development completed a public engagement exercise. The government will take into account both the views collected during the exercise and the council's recommendations.

Hong Kong participates actively in international cooperation and exchanges on climate action. It is a member city of the C40 Cities Climate Leadership Group and also sits on the group's Steering Committee.

A set of nine carbon audit guidebooks, covering different types of premises, is provided by the EPD to help the public and private sectors carry out carbon audits. Bureaus and departments are conducting carbon audits on major government buildings and will disclose their audit results. For the private sector, the EPD operates a Carbon Footprint Repository to encourage regular carbon auditing. More than 80 listed companies share their carbon management experiences and practices on the repository's website. The government also works with Hong Kong Exchanges and Clearing Limited to promote carbon audits among listed companies.

Energy

Electricity

The Hongkong Electric Company, Limited (HK Electric) supplies electricity to Hong Kong Island and the neighbouring islands of Ap Lei Chau and Lamma. CLP Power Hong Kong Limited (CLP Power) supplies Kowloon and the New Territories, including Lantau and several other outlying islands. The electricity supply to consumers is 50 hertz alternating current, while the voltage is 220 volts single-phase and 380 volts three-phase.

Both power companies are investor-owned. The government monitors them through mutually agreed Scheme of Control Agreements. These require the companies to seek the government's approval for certain aspects of their development plans, including projected basic tariff levels, to ensure the continued supply of reliable, safe and efficient electricity at reasonable prices. The agreements do not give the companies any exclusive rights to supply electricity. They are not franchises, nor do they define a supply area for either company or exclude newcomers to the market. The companies receive a return on their average net fixed assets at the permitted rate of return specified in the agreements.

The current Scheme of Control Agreements, which the government signed with each power company in 2017, reduce the permitted rate of return from 9.99 per cent to 8 per cent and carry a term of about 15 years, up to 2033. Other key terms of the agreements include introducing mechanisms to encourage the companies to further promote energy efficiency and conservation and renewable energy, improving the charging arrangement for fuel costs, improving incentive and penalty schemes on the companies' operational performance, and setting out requirements for the preparatory work necessary to introduce potential new suppliers when the requisite market conditions are present.

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