BMI View: Hong Kong remains heavily dependent on thermal energy, with coal accounting for approximately 66.1 % of the city-state's energy production as of 201 5 . Although the government is actively researching renewable energy solutions to curb this dependency, it is most likely Hong Kong will become increasingly reliant on mainland China and imported natural gas over the medium term.
BMI forecasts Hong Kong's real GDP growth will average 2.3% a year between 2016-2025, with an increase of 1.2% forecasted for 2016. BMI is forecasting an average annual increase in total electricity consumption of 0.4% to 44.87TWh between 2016-2020. Thermal generation, comprising coal, gas and oil, is expected to grow by an average of 0.6% per annum over the same period, and average 0.8% between 2020-2025. Thermal power generation will continue to account for all of domestic production, with imports from nuclear and pumped storage capacity in China .
Apart from domestic thermal energy production, Hong Kong is making limited progress in the field of renewable energy, with China Light & Power (CLP) and Hong Kong Electric Co . (HEC) drawing up plans for offshore wind farms. In addition, Hong Kong imports electricity generated by the Daya Bay Nuclear Power Station (DBNPS) in mainland China - Hong Kong has no plans to build its own nuclear facilities - and CLP has struck a deal with Chinese firms over long-term plans to import natural gas.
Hong Kong is in 15th position in BMI's Asia Power Risk/Reward Ratings (RRRs), owing to its modest market size and below average growth prospects. It scores above average for industry and country risks, with its total score dragged down by the rewards side of the matrix.
Key Trends And Developments
Hong Kong's energy dependence on China is growing, with the Hong Kong government agreeing to a deal by CLP Power Hong Kong to purchase natural gas from state-owned PetroChina's second east-west pipeline over the next two decades. CLP has repeatedly suggested the government shift towards domestic, gas-fired electricity production rather than to directly import electricity from the mainland as part of an ongoing consultation regarding Hong Kong's future power generation mix.
Hong Kong is attempting to take its coal-fired power generating units offline by 2017, in an effort to reduce air pollution that is largely caused by the thermal electricity generation and is exacerbated by Hong Kong's proximity to Chinese province Guangdong.
In order to replace the electricity generated by the coal plants, the two main options are an increase in gas-fired plants to 60% of output, with the remainder covered by direct imports from China, or a larger increase in direct imports from China and an increase in gas-fired production to 40% of output.
Hongkong Electric, CLP, and the Hong Kong General Chamber of Commerce have opposed plans to deregulate Hong Kong's power sector in consultations with the government on the grounds that it will lead to high levels of uncertainty. The deregulation process, which was previously expected to begin in earnest in 2018, may be shelved indefinitely.
The Hong Kong Power Report features BMI Research's market assessment and independent forecasts covering electricity generation (coal, gas, oil, nuclear, hydro and non-hydro renewables), electricity consumption, trade, transmission and distribution losses and electricity generating capacity.
The Hong Kong Power Report also analyses the impact of regulatory changes, recent developments and the background macroeconomic outlook and features competitive landscapes comparing national and multinational operators by sales, market share, investments, projects, partners and expansion strategies.
- Use BMI's independent industry forecasts for Hong Kong to test other views - a key input for successful budgeting and strategic planning in the power market.
- Target business opportunities and risks Hong Kong's power sector through our reviews of latest power industry trends, regulatory changes, and major deals, projects and investments in Hong Kong.
- Assess the activities, strategy and market position of your competitors, partners and clients via our Competitive Landscape analysis.
BMI Industry View
Summary of BMI’s key industry forecasts, views and trend analysis, covering power markets, regulatory changes, major investments, projects and company developments.
Industry SWOT Analysis
Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the power sector and within the broader political, economic and business environment.
BMI’s Power Forecast Scenario
Forecasts to end-2024 for all key indicators, supported by explicit assumptions, plus analysis of key downside risks to the main forecasts:
- Generation: Electricity generation total, thermal, coal, natural gas, oil, nuclear, hydropower, hydro-electric pumped storage and non-hydropower renewables.
- Transmission and Distribution Losses: Electric power transmission and distribution losses.
- Trade: Total imports and exports.
- Electricity Consumption: Net consumption.
- Electricity Capacity: Capacity net, conventional thermal, nuclear, hydropower and non-hydroelectric renewables.
BMI’s Power Risk Reward Index
BMI’s Risk Reward Indices provide investors (power companies, service companies and equity investors) looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide indices of highest to lowest appeal to investors,
Structure, size and value of the industry sector; overview of the industry landscape and key players; an assessment of the business operating environment, sustainable energy policies, pricing and the latest regulatory developments.
Key Projects Database
Details and analysis of all current and planned developments (new ventures, capacity expansion and other investments) across the sector broken down by location, sector type, capacity, value, companies and operational status.
Illustration of the power industry that exploits our data-rich, in-depth analysis of the leading players in the sector and examination of operational results, strategic goals, market position and the potential for investment.
Power Outlook long-Term Forecasts
Regional long-term power forecasts covering electricity generation, consumption and capacity for thermal, hydroelectric and nuclear power. These are supported by a country specific overview, alongside an analysis of key downside risks to the main forecasts.
Providing BMI’s near-term economic outlook for the region as a whole, as well as taking a close look at countries of particular interest and the latest trends and developments.
The Power Market Reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports, including Energy Information Administration (EIA), World Bank (WB) and United Nations (UN).