Expected power price increase may be cut in half, says group
Next year's rise could be kept as low as 4.3pc, says one group, thanks to falling oil costs
The city's largest power supplier might be able to reduce its price increase for next year to as low as 4.3 per cent - far lower than the projected 11.8 per cent it predicted in its development plan, according to a forecast from an energy observer.
The observer, World Green Organisation, attributed its optimistic forecast for CLP Power's price hike to a continuing plunge in international oil prices and the decrease in both natural gas and coal prices.
CLP Power, which supplies more than two million users in Kowloon, Lantau and the New Territories, had warned of sharp rises as it strove to meet new emission caps imposed by the government amid a depletion of cheap natural gas from its reserve.
The utility has also begun to take natural gas from the mainland pipeline originating in Central Asia, but the gas price was said to be three times higher than that from the firm's reserve.
A year after the warning of a sustained price rise, the international fuel market has undergone fluctuations that have seemed to favour power consumers.
A drop in oil prices continuing into the second half of the year has had a domino effect on fuel prices. For instance, coal prices have dropped by 20 per cent this year, after a similar decrease last year.
The firm will also take up to 1.7 billion more kilowatt-hours of electricity from the Daya Bay Nuclear Power Plant in 2015, as per an agreement with the mainland.
William Yu Yuen-ping, chief executive of World Green Organisation, said the group was hopeful that even the price of gas from the pipeline might decline.
He estimated that the final price increase for next year - to be announced on December 16 - would be less than 5 per cent. The coal price reduction alone would account for about a 1.5 per cent decrease.
But Yu said he wouldn't be surprised at an even lower price increase from the utility, as he believed it was in the interest of CLP Power to appease the public as much as possible in the next two years.
"It is understandable that the power firm will not irritate the public with a heavy tariff rise before their negotiation with the government on the review of the regulatory regime by 2018," Yu said.
Earlier this year, the firm already said it didn't require the projected price rise because of a drop in international fuel prices, and its continuing use of less expensive natural gas from its Yacheng reserve off Hainan .
According to its five-year development plan submitted last year, however, the firm will still need to raise prices by 3.9 to 7.9 per cent each year until 2018.
HK Electric, a subsidiary of the Power Assets controlled by Li Ka-shing's Cheung Kong group, has pledged not to raise its prices before 2018. The firm had expected stable fuel prices.
