Question:
The Government plans to build a desalination plant in Tseung Kwan O and the anticipated unit cost is $12/cubic metre (m3), which is three times of that of Singapore. On this, the Government has explained that direct comparison of such costs should not be made as different countries have used different calculation methods for energy charges. In this connection, will the Government inform this Council:
(a) of the formula with which the authorities have projected the cost for seawater desalination (desalination cost) in Hong Kong; of the respective percentages of various expenditure items (e.g. construction, management, repair and maintenance, equipment replacement, chemicals, electricity, osmosis membranes and operation, etc.) in the total costs;
(b) given that the desalination cost estimated during the one-year trial operation of the pilot desalination plant in Tuen Mun by the Water Supplies Department in 2005 was $7.8 to $8.4/m3, of the reasons why such cost will rise to $12/m3;
(c) of the specific differences between the calculation method adopted by Hong Kong for energy charges and those adopted by countries applying desalination technology, e.g. the United States, Australia and Singapore, etc.; of any other factors that have resulted in the desalination cost in Hong Kong being substantially higher than those in other countries;
(d) whether, according to the Government's assessment, the desalination cost can eventually drop, with the continuous improvement in desalination technology, to a level below the cost for Dongjiang water supply; if the assessment outcome is in the affirmative, of the specific plan and timeframe for achieving that situation; if the assessment outcome is in the negative, the reasons for that; and
(e) given the Government's anticipation that the annual water production of the desalination plant is expandable to 90 million m3, which amounts to approximately 9 per cent of the total fresh water supply in Hong Kong, whether the Government will consider afresh further expanding the scale of the desalination plant so as to reduce the reliance of Hong Kong on other water sources; if it will, of the specific plan and timeframe; if not, the reasons for that?
Reply:
President,
In 2005, the Water Supplies Department (WSD) commenced a pilot study on reverse osmosis technology for seawater desalination at Tuen Mun and Ap Lei Chau to test performance of the technology under different seawater regimes. The study was completed in early 2007. The test results confirmed feasibility of the technology in Hong Kong and that the potable water produced through reverse osmosis technology could comply with the drinking water standards set up by the World Health Organization.
Seawater desalination using reverse osmosis technology is now an energy intensive process. It entails a higher production cost as compared with other water sources. However, with continuous improvements to the energy recovery process, there is room for bringing down the production cost. The ongoing Planning and Investigation Study of Desalination Plant at Tseung Kwan O (the TKO Study) will consider practicable arrangements to reduce production cost.
My reply to the five parts of the question is as follows:
(a) The current estimated cost for producing potable water through seawater desalination is about $12 per cubic metre (m3). The estimate is derived on the basis of the technology level reviewed and with reference to research findings of the pilot study on reverse osmosis technology completed in 2007. The respective percentages of various expenditure items in the production cost are as follows:
Respective
Items Percentages
----- -----------
Operations 38%
(including chemicals
and electricity) and
maintenance (including
replacements for
equipment and membranes)
Water distribution and 20%
customer services
Capital cost for the 42%
construction of a
seawater desalination
plant and associated
water transfer pipelines
The consultant for the TKO Study will consider the latest practicable technology and re-assess the unit cost of seawater desalination in the light of the design of the desalination plant.
(b) According to the above-mentioned pilot study conducted between 2005 and 2007, the cost of producing potable water through desalination was estimated to be between $7.9 and $8.5 per m3 at 2006 price level. The current estimated cost of seawater desalination of $12 per m3 is derived by adjusting the average of the above prices in 2006 (i.e. $8.2) upward by 18 per cent (Note: This is based on the changes to the Consumer Price Index (A) in 2006-2012) to account for the inflation from 2006 to 2012, and add the distribution and customer services cost, which have not been calculated in the 2006 cost estimate.
(c) According to the International Desalination Association's annual yearbook for 2007-08 and 2008-09, the unit cost for producing potable water by seawater desalination using reverse osmosis technology varied by country and region, ranging from $9.4 to $22.0 per m3. The variations in seawater desalination costs in different parts of the world may be attributed to a number of factors such as construction cost, energy price, scale of ancillary facilities (including the facilities for seawater intake and outfall structures, fresh water service reservoirs and the length of the water transfer pipelines, etc), capital cost and calculation methods, which can vary greatly. Therefore, the unit cost for desalination as estimated by the WSD is not particularly high.
(d) With a growing number of countries and regions using seawater desalination to produce potable water, and the continuous improvements in related technology, we expect that there should be room for downward adjustment in the energy consumption in the desalination process. However, with the upward trend of local electricity tariff, it is considered at the present stage that the desalination cost cannot drop to the price level of Dongjiang water in the near future.
(e) Subject to the findings of the TKO Study and the water demand, the Government will formulate a development strategy for the project and timeframe for the construction of a desalination plant. The site earmarked in Tseung Kwan O can accommodate a desalination plant with an output capacity of around 90 million m3 per year. We expect that when the expanded output capacity of the desalination plant reaches 90 million m3 per year, together with the rainwater collected locally and an annual supply of 820 million m3 of Dongjiang water, it will be sufficient to meet the potable water demand of Hong Kong in 2030, after accounting for the projected water saving brought about by the achievements under various water demand and supply management initiatives. That said, we will continue to review the need to develop alternative water resources (including seawater desalination and reclaimed water) in planning new development areas, and to developing another desalination plant as necessary when the technology is proven to be cost-effective.
Ends/Wednesday, May 22, 2013
Issued at HKT 15:43
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