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Renewable Electricity Feed-In Tariff
19 April 2018


The Hong Kong Government has announced that electrical power generated by renewable energy systems (PV) can earn attractive payments setting the new feed-in-tariff.

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What is a Feed-in Tariff?

The Feed-In tariff is the rate or money, per kwh of electricity, paid by the electricity utility to the renewable energy equipment owner, for electricity generated used RE, for example solar photovoltaic or wind turbines, and sold back to the utility electricity grid.

The rates the utilities companies will pay is only fixed until 2033 RTHK reports, and bizarrely is subject to annual review. A sliding scale has been adopted, related to the RE system capacity (most probably gross capacity):

  1. HK$5/kwh for less than 10kW
  2. HK$4/kwh for 10 - 200kW
  3. HK$3/kwh for 201 kW - 1mW


The above rates quoted were abstracted from the RTHK report.

Although the feed in tariff seems quite attractive, compared to present utility charges (HK$ 1.1 - 1.3 kwh at 2018 prices) the terms are not, investment decisions are based on the risk, therefore offering a term fixed rate that can be adjusted annually will not help.

This announcement is a certainly a milestone, but unlikely to trigger increasing Renewable energy systems as witnessed in Germany, because this deal carries risk, the term is too short, and critically after the investment is made, subject to review when your rate maybe cut.

The report does not mention regulating the fees the utility companies charge for grid connection.

Source: RTHK Report 2018-04-17 HKT 17:50

Update:

We have been asked what is the problem with "....subject to annual review".

We query "annual review" because it create uncertainly, investments are made on the basis of an expected Return On Investment (ROI).

If Government or utility can change the deal ebergy year, its impossible to assess the viability of an investment.

For example, if Government or utility changes the 10 kw system feed-in-tariff to 0.01 cent/kwh, the time to recover the cost of the initial investment changes, it causes uncertainity.

About the Author

John Herbert is a veteran engineer with more than 30 years engineering experience, educated in the United Kingdom he has worked across Asia for more than two decades engaged by international and local companies. He is a Hong Kong Registered Energy Assessor (REA) and BEAM Professional.



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date:20-08-19
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