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How can the next Chief
Executive build on
Government’s Climate
Action Plan 2030+ and
encourage renewable
energy uptake?
Gavin Edwards
Director, Conservation
WWF-Hong Kong
24 February 2017
IPCC and Paris COP Require Reductions for 2°C
Source: own figure, based on marker scenario RCP 2.6 of the IPCC, from RCP scenario database http://tntcat.iiasa.ac.at:8787/RcpDb/dsd?Action=htmlpage&page=download More detail on ranges from the IPCC data base see Climate Action Tracker update: http://climateactiontracker.org/assets/publications/briefing_papers/CAT_Bonn_policy_update__final.pdf
10/06/2014 Dr. Niklas Höhne, [email protected]
0
10
20
30
40
50
2000 2005 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100
Glo
bal
GH
G e
mis
sio
ns
in G
tCO
2e
CO2 from fossil fuels
and industry
CO2 from forestry
Non-CO2
Hong Kong's greenhouse gas emissions from electricity have continued to rise in the past decade
Energy use in another major Asian city, Tokyo is falling through decisive policies
97 81 70 63 61
245 274 260 233 237
202 217 221212 212
257 219172
169 161
0
500
1000
2000 2005 2010 2011 2012
Annualenergyuse(PJ)
Industrialsectors Commercialsectors Residentialsectors Transportsectors
Climate and energy external landscape (selection) 30Jan17.pptx 5
Yet large number of countries that generate >20% or even >50% of power from renewables
1. 2014 / Note: Including hydro in renewables Source: Bloomberg New Energy Finance; IEA 2014 / 2015
Spain
35%
UK
25%
Germany
30%
Japan
16%
Australia
14%
India
15%1 South
Africa
1%1
Brazil
73%1
US
13%
Canada
66%
China
23%1
Renewables production over total power production (%)
No data
<10%
11-20%
21-50%
>50%
China: Proportion of installed power capacity from Renewables 2006 to 2013
Source of primary data: data up to 2011 available from the US EIA, data for 2012 and 2013 available from the China Electricity Council
WWF 2050 energy vision for Hong Kong
Nuclear
Gas
Coal
Aggressive
End-use
Energy
Saving
29.8
(billion kWh)
50%
1-2% annual
electricity
consumption
~ 15%
92% CO2
1990 level
43 (billion
kWh)
61.5
(billion kWh)
2050 2015 2020 2030 2035 2040 2025
Renewables
(HK)
5% domestic renewables by 2030,
no Mainland renewables yet
Renewables
(China)
~85%
BAU 16%↑
CO2 than 1990
Green Groups call for Fitter Electricity Market
1. Open up grid for distributed
generation
2. Improve the incentive / penalty
scheme for energy efficiency
Climate Ready is an Important Step Forward to Hong Kong meeting the Paris Commitments
• Government expects its carbon intensity
target to reduce absolute emissions 26
to 36 per cent by 2030.
• Government has suggested that 3 to 4
per cent RE by 2030 is feasible.
• Mention of feed-in tariff policy and
renewable energy certificates in the
post-2018 SCA
• Large scale RE projects at Government
premises
• Review of climate ready plan scheduled
for 2019 and revised plan in 2020
• But, are policies to increase energy
efficiency enough to attain GHG target?
HK Government’s suggested shares of different RE technologies that might be achieved by 2030
Two 100
MW off-
shore wind
farms =
1.5%
Energy from
waste =
1.5%
3.6 km2 of solar PV across
territory = 1%
Policy instruments to encourage uptake of RE
• Feed-in Tariff – Payments to RE generators by utility for any RE
power that is generated. Price reflects scale & technology
• Feed-in Tariff – Tendered prices for Utility scale RE. Price
determined in competitive auction between generators
• Net Metering – Feed-in tariff where small generator receives same
price for its RE surplus, as its retail electricity price
• Renewable Portfolio Obligation / Standard – obligation on utility
to source an annually increasing share from RE
• Renewable Energy Certificates – customers / utilities purchase
certified renewable RE power from local / international markets
• Capital subsidies – to developers where capital scarce, or
investment risky. Used for early stage technologies
Which instrument to use in Hong Kong?
Used for Technology Scale Suitability in
HK
Feed-in Tariff
Administered
Price
Price set by
government,
adjusted overtime
PV, waste /
biomass and wind
All scales. Common
for small scale
Highly suited to
distributed
generators
Feed-in Tariff
Tender price
When installation
industry is mature
Off-shore wind,
large-scale solar
Large scale
>50 MW
Will enough
competing
generators
participate in
auction?
Renewable
Portfolio
Standard
Instead of FIT for
utility scale RE
Wind, large solar
plants
Large scale Need another
mechanism for
small PV
Renewable
Energy
Certificate
If market or trade in
renewables
PV, wind, biomass Needs verification
to ensure
additionality
Only suitable after
local potential
exhausted
Capital
Subsidies
For early stage
technologies, where
finance hard to
raise
Tidal, Wave All scale Suited to early
stage & novel. Can
HK innovate?
Policies to raise finance for RE
As well as the policies described above to incentivise RE there are
policies to RE developers raise or structure capital: -
• Solar leasing – instead of paying for the purchase and maintenance
of RE technology site owners pay a regular fee to lease the RE
equipment and receives payment for any RE generated.
• Roof leasing – here the installer pays the site owner (or provides
the power free) for providing space for installing RE
• Green bonds – utility scale RE projects raise finance by the project
promoter issuing bonds, often bought by “green” investors
Key features of Feed-in tariff
• An agreed long-term tariff – this is guaranteed price paid to RE
generator per kWh of power generated. Price differs by RE’s size and
technology and reflects the annualised cost of generation when the
generator is first connected. Price set for new generators revised
periodically to ensure reasonable payback time (8-10 years)
• Guaranteed access to the grid – the utility is required to efficiently
and quickly connect RE generators that comply with their safety and
secure metering standards, and have to purchase all offered. Building
and Planning regulations need to be streamlined.
• A mechanism to allocate for the cost of the tariff amongst
customers – A mechanism needs to be agreed to finance the FiT:
customers, perhaps utilities and Government pay. Some customers
might be exempt
Government should develop a supportive policy environment, centered around a feed-in tariff
Hong Kong has better solar resources than countries that have deployed solar PV at scale
1350
kWh/m2
900-
1200kWh/
m2
Analysis funded by Central Policy Unit suggests considerable scope for PV in Hong Kong
• Solar PV potential estimated
using LiDAR and satellite imaging
to identify suitable non-shaded
rooftops and include losses from
cloud cover
• Total rooftop & open space
sufficient for 5.54 TWh, 12.6% of
HK demand
Source: # Wong, M S (2015) A Remote Sensing
Study of Solar Energy Supply in Cloud-prone
Areas of Hong Kong. Hong Kong Polytechnic
University: Hong Kong.
Solar PV Feed-in Tariffs in UK and Germany fell as installer experience and technology improved
0.00
1.00
2.00
3.00
4.00
5.00
6.00
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
FeedintariffHK$/kW
h
UKProductionSolarPV<10kWnewbuilding UKProductionSolarPV>250kW,connected
Germanyrooftop Germanylargeroof/groundmounted
Despite the cuts in feed-in tariffs PV capacity continued to grow
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45
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Installedcapacity(GW)
FeedintariffHK$/kW
h
UKPVinstalledcapacity,GW GermanyPVcapacity,GW
UKProductionSolarPV<10kWnewbuilding UKProductionSolarPV>250kW,connected
Germanyrooftop Germanylargeroof/groundmounted
Where might the money to pay the FiT come from?
• Consumers: Feed-in tariff funded through electricity customers bills.
Exemptions might be given for low income customers, or
Government might pay their share
• Utilities: the electricity companies could directly or indirectly pay for
the feed-in tariff by reducing the amount of profit made
• Government: could contribute to the fund, or pay a grant to some
customers to reduce the up front costs of installation. This might be
particularly important at the initial stage of the scheme
What if Hong Kong solar uptake through FIT follows the UK and Germany path?
0.0%
1.5%
3.0%
4.5%
6.0%
0.00
1.00
2.00
3.00
4.00
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Co
st
of
fee
d-i
n t
ari
ff a
s a
pro
po
rtio
n o
f e
lec
tric
ity t
ari
ff
Fee
d-i
n t
ari
ff r
ate
($
/kW
h)
Increase in bill (6.3% capacity & $4/kWh)Feed-in tariff ($4 scenario new capacity)Feed-in tariff ($4 scenario average all capacity)
average over period of 3.8%
Dash to gas – is not a free lunch
22
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1987 1992 1997 2002 2007 2012
LN
G p
rice H
K$/k
Wh
Price Japanese LNG
Is RE possible in cities?
• “Sunny” London has 20,000 PV installations with 85MW capacity,
New York City has 7,300 installations with 88MW capacity
• Hong Kong has 24 km2 of reservoirs – if half covered they would
provide more than 1GW of capacity and meet 3.3% of demand!
• Wind power in Chinese cities – Installed capacity 2013 Hong Kong
0.8 MW, Beijing 156 MW, Chongqing 124 MW, Tianjin 305 MW,
Shanghai 370 MW
• Hong Kong can only obtain 1.5% from biological wastes: In UK 10%
of electricity demand met from biological products: 1.5% landfill gas,
1% energy from waste combustion, 6% from plant biomass, 1.5%
anaerobic digestion / sewage sludge / manure
Solarize Tai O: Innovative uses of PV and electricity storage to supply in rural areas
Renewables: Poor people cross-subsidise the rich?
• Solar PV in reduces reliance on expensive peak day time electricity. Can
reduce the need to build little used gas generation capacity
• Price of solar is fast falling
• Poorest customers can be protected by designing lower tariffs for subdivided
flats and strengthening the existing tiered tariffs
The Four T’s for Renewable Energy
Targets & Timeline
• Government to commit to a goal of 5% domestic renewables by 2030
Together
• Waste treatments facilities, homeowners (especially in rural areas), new
developments and other stakeholders can play an important role is hosting distributed
energy generation
• Feed-in tariff has proved itself as an effective instrument
– administratively set tariffs for solar PV, wind, waste
– payment into the FIT fund should be carefully calibrated to protect vulnerable
customers perhaps with Government paying vulnerable people’s share
Transparency
• Utilities need to develop an efficient procedure for connecting up distributed
generators that ensures grid security and safety, without imposing undue costs on RE
generators
References
• WWF-HK (2015) “Hong Kong Energy Vision 2050”
• WWF International (2011) “100% Renewable Energy By 2050”
• Marke, A & Vaze, P: “Sources of Funding for Renewable Energy” – WWF-HK
(FORTHCOMING)
• Final Energy Consumption and Greenhouse Gas Emissions in Tokyo (2015)
http://www.kankyo.metro.tokyo.jp/attachement/2012GHGsummary_English.pdf
• Wong, M S (2015) A Remote Sensing Study of Solar Energy Supply in Cloud-prone
Areas of Hong Kong. Hong Kong Polytechnic University: Hong Kong
• New York City PV - https://pv-magazine-usa.com/2017/02/22/new-york-solar-grows-
795-in-five-years/
• Chinese cities’ wind - National Renewable Energy Centre, Table 1-5 China Wind
Power Review and Outlook http://www.gwec.net/wp-content/uploads/2012/06/2014风电报告2英文-20150317.pdf
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