Changes in energy intensiveness of Hong Kong economy, 1995-2007

The growth of Primary Energy Requirements (PER) slackened appreciably since the late 1990s in Hong Kong while Final Energy Requirements (FER) actually declined. Yet GDP continued to grow at a respectable average annual growth rate during the period, leading to a drastic drop in the energy intensiveness of the economy. The article analyzed the factors that contributed to the emergence of the above phenomena and discussed its consequences. The factors that led to the drop in energy intensiveness with respect to FER includes the rising electrification of the fuel mix, improvements in energy end-use efficiency (partly induced by government policy), and changes in the structure of the Hong Kong economy. With respect to the decline in PER energy intensiveness, the following aspects are pertinent: the share of electricity consumption accounted for by nuclear imports, the efficiency of electricity generation in Hong Kong (partly determined by the type of fuels used) and losses due to transmission and distribution as well as station consumption (system losses). The decline in energy intensiveness is good to Hong Kong, both in terms of the economy and the environment. Its ramifications will be briefly discussed.