Hong Kong on ‘yellow alert’, Kadoorie says, as Middle East war fuels energy crisis

CLP Group chairman Michael Kadoorie (left) and non-executive director Philip Kadoorie.

Photo: Karma Lo The conflict in the Middle East has triggered a global energy crisis that serves as a “yellow warning” for Hong Kong, which so far has escaped the severe impact seen elsewhere, tycoon Michael Kadoorie has said. “At this point, I think we’re very lucky.

Now we touched on the story of fuel.

It may impact us.

It does already send a warning light,” the CLP Group chairman said. “So you have your traffic lights red, yellow and green.

Well, we’re yellow.

We’re not at red, but we have to think ahead as to how we’re going to generate light.” Kadoorie said the electricity provider maintained access to multiple fuel sources, including natural gas and nuclear energy from mainland China, while coal and oil were other options.

He acknowledged the unpredictability of the Middle East situation but assured customers that their daily power supply was secure for the foreseeable future. “Who knows what the Middle East is going to do?

Nobody knows.

But we’re not reliant on [the] Middle East.

We have other sources.

So don’t worry, you can turn your lights on tomorrow,” he said.

CLP, which marks its 125th anniversary this year, had built a buffer into its scheme of control agreement with the government to help mitigate the initial impact of rising global fuel prices, his son, non-executive director Philip Kadoorie, said. “We also have a buffer built into … our agreement in the scheme of control that enables us, as prices rise, and we don’t know what that will look like, how long this will last, but to be able to reduce the initial impacts and make sure that we can rely on our reserves,” he said.

The scheme of control agreement is an accord between the government and the city’s two electricity suppliers – CLP Power and HK Electric – which sets an annual permitted return of 8 per cent based on the total value of their average net fixed assets for that year.

Under the agreement, CLP Power maintains two balancing funds – the tariff stabilisation fund and the fuel clause recovery account – designed to help stabilise tariff levels by cushioning the effects of basic tariff adjustments and fuel cost movements.

The company announced last week that it would raise its fuel cost adjustment from April 1 – the first hike since January last year.

The ongoing war in the Middle East represented a tragedy that had created losers on all sides, Michael Kadoorie, whose family has hi

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