|Electricity company CEM calls for more production rather than sector liberalisation|
Macau, China, 20 Nov - Macau electricity company Companhia de Electricidade de Macau (CEM) Thursday called for more electricity production in Macau and diversifying local energy sources, in response to a sector reform proposal by the government, which plans to partially liberalise the sector.
CEM, which has an exclusive production and distribution monopoly until 2010, said that Macau's electricity supply, 70% of which is currently dependent on mainland China, should be focused on local production together with natural gas.
Franklin Willemyns, chief executive officer of CEM, said that the future of Macau's energy should not be depending on electricity from abroad, but rather should be increasing local capacity and diversifying sources.
The Macau government launched a public consultation with a view to partially liberalise electricity supply in Macau, which is expected to reduce fixed net income for the distributor.
CEM submitted a document to the Macau Office for the Development of the Energy Sector (GDSE), where it outlined its vision about the future of Macau's energy infrastructure, and stressed that the government needs to make decisions "with extreme care".
"Any significant change to the current electricity market may have a profound long-term impact on Macau's economy," said Willemyns.
CEM's chief executive said that "there is no room for errors" and that any reform made to Macau's electricity supply should take "the size of the market" and "regulation costs" into account, if the separation of the various production and distribution businesses moves forward.
"A substantial change to Macau's electricity market should not be based on ideological issues or on measures that have not been tested", said Willemyns, commenting on the government's plans.
CEM's chief executive also said that "it is not certain" that the cost of energy to the end costumer will come down if the supply of energy is concentrated on a mainland Chinese source and on small local producers, as proposed by GDSE.
Willemyns said that Macau should focus on renewable energies, noting that wind energy studies show that it has between 1 to 1.5 MW of capacity on land and 20 MW at sea. He said that it should continue to import electricity from mainland China, establishing a long-term contract with Guangdong Power Grid, allowing this Chinese company to study its needs to be able to supply electricity to Macau.
Willemyns also explained that Macau's production capacity can be increased with highly efficient and "clean" gas-fired power plants, which will "provide Macau with more negotiating power with China in terms of importing energy". He added that "reclaiming land will not be necessary because there are already infrastructures on the island of Coloane to install power plants".
CEM's chief executive also said that gas-fired power plants will produce energy at competitive prices compared to importing energy from mainland China.
The new power plants will reduce carbon dioxide emissions by 40 percent, he said, referring to Macau's contribution to protecting the environment as part of the Kyoto protocol.
In 2007 CEM posted a profit of 433.1 million patacas (US$54.13 million), an increase of 9.2 percent on the 396.6 million patacas posted in 2006.
CEM also invested around 900 million patacas in the year, which is double its net profit.
Over 80 percent of the capital of CEM belongs to two groups with interests in China, Portugal, France and Hong Kong.
A Chinese-French group mainly made up of Suez and NWS Holdings Limited own 42 percent of the capital and a Chinese-Portuguese group, in which Portugal's EDP has a majority stake, also has 42 percent.
The Government of the special administrative region of Macau (SARM) has 8 percent of the company's capital, China Power International Holding Ltd has 6 percent and the remaining 2 percent are in the hands of 800 local shareholders.
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