Hong Kong’s CLP Holdings Ltd. is looking offshore to help meet a growing need for renewable energy, as limited land supply in the city poses a challenge to building clean-power capacity.
CLP, one of the two main electricity generators in the city, said it is revisiting offshore wind technology, and may submit proposals for an offshore wind farm to the local government for their next five-year development plan starting 2023.
Hong Kong, a city with sky-high land prices, has already set a goal to achieve net-zero emissions by 2050. To do so it will have to eliminate fossil fuels, which currently accounts for 75% of its power generation, with nuclear and renewables mostly imported from China making up the rest.
“When you look at land being quite a valuable and a scarce resource. That leads you to think, well, what about the water?” chief executive officer Richard Lancaster said in a media briefing last week. “It is much more economic now to build offshore wind than it was 10 years ago.”
CLP had proposed in 2010 to build an offshore wind farm in southeastern Hong Kong waters, but the costs were too high at the time, Lancaster said. The average offshore wind project cost about $134 per megawatt-hour that year, according to BloombergNEF data. That’s fallen to about $89 this year.
It’s also easier to develop such a project near Hong Kong now, as an offshore building boom in South Korea, Taiwan and China mean there are more ships in the region that specialize in erecting the towering turbines.
Solar power will be a relatively smaller part of the energy mix in Hong Kong, while nuclear, hydrogen and battery storage will all play a role, Lancaster said. CLP hasn’t ruled out making investments in China, and has been exploring renewable energy projects in Vietnam, he said.