Like it or not, Hong Kong sits in a nuclear caldera that is expanding its capacity every year. It is probably too late to try to exercise any influence on our nuked-up neighbours.
(Article published on July 20, 2015 for subscribers only. Republished in June 2021 due to reports that the nuclear plant in Taishan (Guangdong Province) is experiencing a leak. Although sources hesitate from calling it a crisis at this moment, we believe it is nonetheless apt for our readers to be informed on the nuclear facilities around the Hong Kong region
The original text has not been edited for republishing).
Even if Hong Kong never opens a nuclear power plant, the nuclear age has arrived. By 2020, there will be 20 nuclear power plants operating in Guangdong, with another 19 to come. And Hong Kong missed its chance to be on the inside of their operations.
The Fukushima Daiichi nuclear crisis in 2011 has seen the Hong Kong Government back off from its plan to increase the share of nuclear energy in our total fuel mix to 50%. The energy consultation which just ended in May did not touch on the issue of increasing the use of nuclear energy, currently supplying 25% of Hong Kong’s power.
A public distracted by constitutional reform theatrics may have missed the fact that Hong Kong will be surrounded by as many as 40 nuclear reactors in the near future. According to the World Nuclear Association, there are currently eight reactors operating in Guangdong. Approximately 12 more will be running by 2020, given the constructions are completed on time. Another 19 are in the works.
Demand for electricity, and clean air targets set in the national policy, have made nuclear energy an attractive option for China. Energy experts suggest it would be a mistake not to consider importing nuclear power from Guangdong and warned, that without getting involved in nuclear development in the region, Hong Kong’s has no influence on the safety of plants close to our city.
Importing nuclear power from China
Nuclear energy can be relatively cheap as a clean energy source. According to CLP, the latest cost of nuclear power from Daya Bay reactors is $0.49 per kWh, compared to $0.94 for gas, $0.23 for coal, and $1.72 for oil plus others. Given renewable energy such as wind power can cost up to $1 and even over $2 per kWh, nuclear power seems to be a good deal.
The Hong Kong Nuclear Society (HKNS) suggests that things could get even better. Analysis by HKNS shows that nine years from now, the on- grid price of third generation nuclear electricity will drop below $0.6 per kWh. Adding an inter-provincial electricity transmission cost of $0.25 per kWh, the total cost of importing nuclear power from China under the dedicated transmission model is estimated to be $0.85 per kWh in 2024 (with inflation taken into account). This cost is far lower than in many cities worldwide, such as London and New York (see graph).
Since last year, the HKNS has been urging authorities to import more nuclear power from China through a dedicated transmission model.
“This option will provide Hong Kong with an electricity supply that is more reliable, cost competitive and environmentally friendly with greater control,” the group says.
This model is currently used by the Daya Bay nuclear plant, which has a direct cable that connects the nuclear plant to the Hong Kong public grid. If an outage takes place in the Guangdong power grid, this model would ensure that Hong Kong will not be affected. Nuclear power supply to Hong Kong through the dedicated cables will remain undisturbed.
“If it is not through a dedicated transmission model, importing nuclear energy from China is meaningless,” says Dr Vincent Ho, Vice Chairman of HKNS.
Once the electricity enters the Guangdong power grid, it does not matter whether it is generated from nuclear plants, solar panels, wind turbines, or coal. Only through a direct cable to Hong Kong can the city get the power from desirable sources and enjoy the advantages of high reliability, Dr Ho explains.
For the sake of transparency
Even with all the upsides of nuclear energy, the dire consequences of several nuclear accidents in history are not something that can be easily forgotten. Transparency is one of the few means of reassuring the public. Opaqueness has led to disaster elsewhere.
Dr Ho has concerns about the lack of transparency in the operation of nuclear plants in Guangdong. “I am not saying that they are not safe, but we have no clue what they are doing,” he says.
Without any stake or participation in those nuclear plants in Guangdong, Hong Kong has no rights to inspect or manage the reactors, many of which are only 100 to 200 km away from Hong Kong (see map).
“It is only by boosting Hong Kong’s investment in building or managing the nuclear plants in Guangdong, can we ensure the nuclear reactors are operating safely – like the Daya Bay nuclear plant, which is co-managed by CLP…. If not, what [right] do we have to ask them to let us carry out inspections?” asks Dr Ho.
However, the chance to engage heavily in the Guangdong nuclear development may have passed and the dedicated transmission proposal may be the only option left to buy us a ticket to the nuclear party in the province.
CLP has been investigating the possibility of working more closely with China General Nuclear Power Corporation (CGNPC) on both old and new projects based on their successful cooperation with Daya Bay. Should future investment in other projects be established, CLP might be able to co-manage the plants or increase the transparency of the operations.
Mr SH Chan, Managing Director – China of CLP Holdings, is a fan of this cooperation and points to its results. He explains CLP is “pleased to see that CGNPC has developed into a leading nuclear power enterprise today with world-class technical and management expertise as well as the capability to raise its own capital.”
That successful growth in CGNPC could mean that other state-run companies feel they can go it alone. “Hong Kong does not have any expertise to offer to China on nuclear energy,” says Dr Ho, “except for the Hong Kong- style operation management but that is not as singular as it used to be.” China is exporting its own technical expertise internationally – not just importing it. In February this year, China conﬁrmed that it will help Pakistan to build at least six more nuclear power plants on top of those agreed upon some years ago.
Mr Chan explains there is still a benefit to partnership. “CGNPC does value CLP’s expertise in corporate governance and developing business overseas. For example, over the years CLP has worked to enhance the transparency of Daya Bay’s operation and communication with the Hong Kong public. The institution of a 2-day notification mechanism in 2011 on Licensing Operational Events at our facility of level 1 or zero on the International Nuclear and Radiological Event Scale illustrated our contribution in this area.”
For local operations, it is not as clear if companies like CGNPC are as concerned about transparency. Hong Kong companies still bring international experience and a much deeper experience of corporate good governance to the table. Formal connections, through shareholdings, are still welcome. Mr Chan points out that “CLP participated as a cornerstone investor in CGNPC’s IPO, which demonstrates the value that they see in our partnership.”
While pre-existing relations between the two companies may be excellent, there are rafts of new projects that have little to no Hong Kong input and the ‘barren rock’ has little to no influence on the national state energy policy or the nuclear building programme.
“[Hong Kong] Energy companies have no say on whether to import more nuclear energy, this has to be done on the policy side by the Government,” Ho explains. He claims the Government and Hong Kong society are to be blamed for missing the opportunities to get involved in the nuclear development in Guangdong.
Dr Ho thinks the only way to cement a partnership with CGNPC is through government interaction or political manoeuvring. However, with tension between Hong Kong and the mainland running high and localism on the rise, Hong Kong has little leverage to negotiate its way into Guangdong’s nuclear industry.
The only relief Hong Kong people can have is that most of the reactors proposed or under construction are third generation technology, suggesting they will, theoretically, be safer to operate. But as Alexander Pope said, “To err is human”. We can only hope that China has learned from the calamities of others to ensure one doesn’t happen here.