Higher priced electricity prompts market liberalisation: energy office chief

Thursday, October 9, 2008
Issue 491, Page 6
Word count: 501
Published in: Macau Daily Times

By Poyi (Natalie) Leung

Households in Macau have been paying up to 20 percent higher electricity rates than in major neighbouring regions, which the energy development cabinet said yesterday was the “main reason” for its proposal to liberalise the market.

A public consultation meeting was held yesterday by the Office for the Development of the Energy Sector (GDSE) to collect social organisations and individuals’ opinions about the reform proposal which is to partially liberalise Macau’s electricity supply market after the current franchise of CEM is due to expire in December 2010.

According to the proposal, more operators should be introduced to the “upper section of power supply” which involves transmitting power from the mainland and generating power in Macau.

By injecting competition to this section, new power generation and transmission facilities will be built, said chief of the GDSE, Arnaldo Santos yesterday.

However, the lower section of power supply involving distribution and retail will remain to be operated in monopolisation which “fits the local market scale and can ensure reliability and stability of electricity services,” the proposal continued.

Mr Santos said not only could market liberalisation “increase productivity, economic efficiency, diversity of supply and reinforce network stability”, but could also lead to “a decrease of electricity rates by 10 to 30 percent”.

Research conducted by the Office showed that in 2007, per kilo watt hour (kWh) domestic consumption in Macau cost 121.47 patacas, while that in Singapore was 107.06 patacas.

In Hong Kong where power is supplied by two operators, Hongkong Electric and the CLP Group, priced domestic consumption were respectively 100.76 patacas and 89.5 patacas per kWh last year.

As for Zhuhai and Guangzhou, the rates were at 63 patacas and 61 patacas.

“There are gaps between electricity rates in Macau and neighbouring regions,” Mr Santos said, adding “bringing down the fares is always the biggest motive for every nation to liberalise the market.”

On the other hand, the Ecological Association of Macau attended the consultation meeting yesterday where they proposed to the GDSE that heavy oil and diesel generated power should be forbidden after 2010 and changed to serve as a back-up purpose.

Also, the environmental group said the government should issue standards to guide commercial and industrial sectors to reduce energy consumption year on year until it reached “zero”.

Official data collected indicated that power generated in Macau was by 73 percent heavy oil and diesel fuel and 27 percent natural gas.

Mr Santos said, however, the government emphasised “diversification”, adding that by only using one single way of natural gas to generate power for the entire population would “fail to secure stability and safety of an energy supply to Macau in case of emergency situations”.

The public consultation period of the reform proposal will end on November 21. Opinions can be mailed, faxed or emailed to the Office.

The GDSE has scheduled another open consultation meeting on October 18 mainly for youth associations from 3pm to 5pm at the auditorium of the Science and Technology Development Fund in the Dynasty Plaza.

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