Specialist disapproves of Macau's energy market liberalisation

Specialist disapproves of Macau's energy market liberalisation

A specialist from a US electricity consulting firm said Macau does not possess conditions to liberalise its energy market, according to the Oriental Daily News in Hong Kong.

Senior partner of Energy and Environmental Economics, Inc. Woo Chi-keung said yesterday that competitors might not be introduced into Macau as the cost of investment in an electricity industry was "massive".

Hence, Woo said monopoly could be created after the electricity market is opened in 2010.

At the same time, the expert also pointed out that it is necessary for CEM to increase its own power generation capacity in order to ensure its status in the Macau market.

The private utility company announced last week that an investment of 718 million patacas had been put into building and expanding a number of substations throughout the territory in 2008.

As well, its net profit was reported at 434 million patacas for last year.

When compared with international enterprises CLP Group and Hongkong Electric Holdings which are both headquartered in Hong Kong, CEM only accounted for three to four percent of the overall energy supply in Macau, whilst imported electricity from the mainland weighed as much as 66 percent last year.

However, Woo expressed a "strong reservation" for completely relying on imported electricity, adding that stability of the current energy supply in the mainland still needs to be improved, the Chinese daily reported.

He also forecast that the electricity markets of China, Hong Kong and Macau must be "integrated" in the future, but at the same time emphasised the importance for the two SARs to enhance and develop their own power supply capacity so that the service stability could be guaranteed.

At the night of March 16 about 20,000 people were in the dark for nearly one and a half hours due to a major blackout in Macau's north spreading to Ilha Verde, Fai Chi Kei, the Border Gate and Areia Preta.

CEM announced on the next day that the power interruption was caused by simultaneous short circuits of two transformers at the Macau North Substation.

Chief Executive Officer Franklin Willemyns said it was the first time for two transformations to have experienced a short circuit at the same time for the past 25 years.

He also said that in order to meet the growing demand in the northern district, CEM is planning to build a new substation and inject more investment into improving grid operations and power supply system.

Monday, 06 April 2009
Macau Daily Times