Hong Kong's electricity is cheap and reliable, don't fix what isn't broken

Hong Kong's electricity is cheap and reliable, don't fix what isn't broken

The government has launched a public consultation on how to develop the electricity market. This is a follow-up public consultation on the future fuel mix for electricity generation in last June. The last consultation collected over 86,000 submissions, the majority of which supported local generation by natural gas. This is good news for OpEd readers who want to become engineers in the future, because it means more gas-fired power generation units will be built locally. These projects will needs lots of engineers to design, manage and commission the new facilities. This means a lot of great opportunities for young engineers to develop their technical skills. Unlike a lot of industries, engineering has a certain future, so it’s definitely a career path worth considering.

One of the key objectives of the current consultation is whether or not to introduce competition. This is a tricky area. Local economists and politicians often advocate competition in the electricity market, claiming that the competitive market brings prices down. But the reality in many developed countries and cities with open markets is that while electricity is more expensive than Hong Kong, the reliability of their power supply is worse than Hong Kong’s. People there are paying more for worse, compared to us. Competition for lower cost and better service does not appear universal, as far as electricity market is concerned.

Hong Kong’s prices are lower than many comparable cities. Macau is higher than Hong Kong by about 30 per cent, while Singapore is about 60 per cent higher. The average electricity bill is just two per cent of a family’s expenditure. If this is still too expensive, the question would be: what is reasonable? The price of electricity cannot remain indefinitely low; at least, not without compromising reliability. In Hong Kong, as a business and financial hub, an unreliable power supply isn’t really an option. We currently enjoy a system that provides good value for money and a reliable electricity supply. Any change in the market would not necessarily make things better.

This article appeared in the Young Post print edition as
Change isn't always better

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