Zero-carbon power tests Hong Kong's grid

Certification and grid investment could create business opportunities.

Hong Kong's plan to expand zero-carbon power could boost its appeal to multinational companies, artificial intelligence (AI) firms, and data centre operators, but reliable, affordable energy and market reforms would determine whether businesses benefit, analysts said.

"More companies are now required to disclose emissions linked to the electricity they use, making access to cleaner power increasingly important," Lawrence Iu, executive director at Civic Exchange, told Hong Kong Business via Zoom.

Secretary for Environment and Ecology Tse Chin-wan told the Legislative Council in July that the government aims to raise zero-carbon electricity from about 25% of the fuel mix to as much as 70% by 2035, mainly by importing more clean energy from Mainland China.

Iu said cleaner electricity would help businesses reduce emissions from their operations and support their carbon reduction goals.

Christine Loh, chief development strategist at the Institute for the Environment at the Hong Kong University of Science and Technology, said many multinational companies already have decarbonisation commitments.

"With zero-carbon electricity, this helps them to decarbonise," she said.

She added that the government and power companies could introduce a certification system letting businesses buy verified zero-carbon electricity, similar to programmes already available in China.

Iu said industries with high electricity demand—including AI, data centres, life sciences, advanced manufacturing, and financial services—could benefit as the Northern Metropolis develops.

"Hong Kong could become a very clean and low-carbon data centre cluster in Asia," he said.

Yuan Xu, an associate professor at the Chinese University of Hong Kong, said electricity policy would be important for data centres because power is one of their highest operating costs. But cleaner electricity alone would not determine where companies invest.

"You cannot separate carbon emissions from affordability, reliability, and energy security," Xu said.

Hong Kong has cut emissions by replacing coal-fired generation with natural gas, he pointed out. The next phase will require greater imports of nuclear and renewable electricity from the mainland.

Iu said the transition is likely to drive investment in electricity infrastructure over the next five to 10 years. He also expects businesses to install more rooftop solar systems under Hong Kong's feed-in tariff programme.

Loh said improving energy efficiency should be a priority even as cleaner electricity becomes more widely available.

Retrofitting older buildings would cut energy use, boost competitiveness, attract investment in technologies, and create opportunities in areas such as green finance and performance-based contracting, she said.

Xu said Hong Kong's electricity market must also evolve to support carbon neutrality without sacrificing affordability or reliability.

"The key issue is how to reform the electricity market to make sure it is fit for a future electricity system that includes carbon neutrality," he added.