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1
Powering Hong Kong’s Sustainable Development
Betty YuenManaging DirectorCLP Power
6 December 2006
2
Powering the Development of Hong Kong
CLP Power’s Operating Statistics
Population Served 5 million +
Customer Number 2.2 million
Installed Capacity 8,888 MW
Sales 30,000 GWh
1890 20051930 1950 1970
HK’s Electricity Consumption
20-fold increase in 40 years
3
Some Facts about Hong Kong’s Energy Requirements
• HK’s total energy requirement is about the same as that of New Zealand, 2/3 of Singapore and 1/6 of Taiwan
• HK is 100% dependent on imported energy
• HK is an international finance centre with 50% of the population living or working above 15th floor
4
46%
33%
7%14%
Oil / Naphtha
Natural Gas
Coal
* Source: Hong Kong Energy Statistics 2005 Annual Report
HK’s Primary Energy Requirements
Fuel for electricity generation accounts for almost 70% of all energy consumed in Hong Kong
Nuclear
Fuel for power
generation Fuel for transportation,
towngas, industrial and other uses
5
• 99.99% reliability, among the world’s best
• Tariffs frozen since 1998• Affordable tariffs – account for 1.9%
of monthly household expenditure• Tariffs among the lowest in major
metropolitan cities
020406080
100120140160180200220
Kuala
Lumpur
Jakarta
Taipei
Vancouver
Shanghai
Shenzhen
CLP Pow
er
Sydney
Seoul
Singapore
Paris
Wellington
Lisbon
London
Tokyo
Madrid
Am
sterdam
Brussels
Rom
e
Berlin
Luxembourg
New
York
Regulated market
Competitive market
Remarks: Comparison based on annual domestic consumption of 3,300 kWh. Tariff and exchange rate at Jan 2006
Residential Tariff HK cents/kWh (as of January 2006)
Power interruption time (mins per customer per year*)
CLP Power 6
New York 11.8
Paris 12.8
London 40
Sydney 42*Average 2002-2004. Source: UMS Group; EDF; EnergyAustralia
CLP Provides Highly Reliable Supply at Competitive Prices
6
0
2
4
6
8
10
12
14Interruption Hours in 2004 (hours/year)
0
20
40
60
80
100
120
CLP Power
BeijingShanghai
FoshanGuangzhou
ZhuhaiHuizhou
Jiangmen
Shenzhen
Zhaoqing
Zhongshan
Dongguan
Large Industrial Commercial
Tariff in 2006 (HK cents/kWh)
Source: Beijing Power Supply Co; Shanghai Municipal Electricity Power Co; Guangdong Price Information; China Electricity Council
Higher Reliability at Comparable Tariffs to Mainland Cities
7
Coal39%
Gas
Nuclear
Oil
31%
29%
1%
CLP (2005)
* Percentages quoted for fuel combination are 2003 figures Source: International Energy Agency
Coal30%
Others 3%
Hydro15%
Nuclear 29%
Gas 18%
Oil 5%
Europe *
Coal28%
Hydro10%
Nuclear 23%
Gas 24%
Oil 13%
Others 2%
*North America
Coal46%
Others 2%
Hydro13%
Nuclear 18%
Gas 16% Oil
5%
CLP’s Fuel Diversification – Similar toDeveloped Countries
Coal79%
Nuclear 2%Hydro15%Gas 1%
Oil 3%
Nuclear 2%
Coal79%
*Mainland China
*Japan
A balanced fuel mix is important for supply reliability
and tariff management
8
Significant Environmental Improvements
0
50
100
150
200
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005Year
Tota
l Em
issi
on (k
iloto
nne)
Nuclear Power
Natural Gas
Low NOx Burner
Achieved significant emissions reductions from early 1990s through the use of emissions abatement technology and
introduction of cleaner energy sources
NOx
SO2
Particulates
Emissions Reduction(1990-2005)
44%77%70%
Note: Local sales grew by 70% in the period
Electrostatic Precipitator(1982-85)
Use of ultra-low sulphur coal
9
CLP is Committed to Meeting 2010 Target
• Import Liquefied Natural Gas (LNG)
• Install Emissions Control Equipment for Coal Units
• Increase use of Ultra Low Sulphur Coal
• Promote energy efficiency
• Feasibility studies of Onshore and Offshore Wind Projects
• Other possible options to be explored
10
Natural Gas is Crucial to Supply Reliability and Clean Air• CLP’s Black Point Power Station (2,500 MW) is one of largest gas-
fired power station in the world, using natural gas for more than 10 years
• The existing gas supply to Black Point, the Yacheng gas field, is expected to deplete early next decade
• A secure and reliable gas supply is needed to refuel Black Point
11
Benefits of Using LNG
• LNG transportation and usage has an outstanding safety record extending over 40 years
• LNG is the cleanest fossil fuel available for power generation
Coal 100
Oil 80
Natural Gas 57
Coal 100
Oil 71
Natural Gas20-37
CO2 (carbon dioxide) NOx (nitrogen oxide)
Natural gas produces no
particulates & SO2
12
The LNG Supply Chain
Natural Gas Field
Receiving Terminal
Liquefaction Terminal
Marine Transportation
HONG KONG
LNG Storage Tank
(for temporary storage)
Black Point Power Station
(for power generation)
Vaporizer (for regasification)
Natural gas via pipeline
Sendout LNG by pump
13
Why Hong Kong Needs a LNG Terminal?
• South China gas reserves either committed to others or insufficient to meet CLP’s large volume requirements
• CLP’s requirements of 2.6 MTA are 8 times the size of Towngasor Hongkong Electric
• Could take up almost all the volume currently available for the Shenzhen Dapeng LNG Terminal which serves more than 10 users
• Timing for new terminals in Guangdong is uncertain
• Only a Hong Kong LNG terminal can meet CLP’s large volume in the time-frame required
14
A Local LNG Receiving Terminal is the Best Option for Hong Kong
• Time certainty : Faster project development under one jurisdiction. Upon timely GOHK approval, project development can start in 2007 for completion in 2011
• Supply security :• CLP could directly deal with LNG suppliers without a middleman• Hong Kong’s gas needs would be served as priority
• Air Quality Improvement : Availability of LNG enables CLP’s flexibility to increase the use of natural gas up to half of its electricity demand, which will result in further reduction of emissions by 17% to 40%
Annual Reduction in Emissions AchievableSO2 NOx CO2
20,000 tonnes
(43%)
10,000 tonnes
(35%)
3 million tonnes
(17%)
15
Significant Progress since 2003 to Bring LNG to Hong KongIntensive activities over the last 3½ years :
Comprehensive project to bring LNG to Hong Kong as early as possible
Gas supply
Site selectionLNG ship
EIA study
Overseas experience
Stakeholders Engagement
Engineering & design
Hong Kong SAR Boundary
Hong KongIsland
Kowloon
New Territories
1
2
654
7
8
9
10
1112 13
14
15
16
17
18
19
20
2221
23
24 25
26
2728
29
3
0 2 4 6 81Kilometres
²
10 k
m
20 k
m
30 k
m
40 k
m
50 k
m
Legend
Potential Site
Black Point Power Station
Sites
1 - Black Point 2 - Lung Kwu Tan3 - Castle Peak North4 - West Brothers5 - Yam Tsai6 - Brothers Point7 - Sham Wat Wan8- North Tai O9- Yi O10- Peaked Hill Island11- Fan Lau West12- Fan Lau East13- North Sokos14- South Sokos15- Shek Kwu Chau16- Sunshine Island17- Man Kok Peninsula18- Tsing Yi19- Beaufort Island20- Po Toi Island21- Fury Rocks22- Waglan Island23- Stanley Peninsula24- Cape Collinson25- Tung Lung Chau26- Area 13727- Wang Chau28- Town Island29 - Tap Mun
Hong Kong SAR BoundaryIsometric Circles
16
South Soko and Black Point Sites Studied
An overall evaluation of the EIA study together with other considerations show that the South Soko option provides the most benefits to Hong Kong
Black PointBlack Point
South Soko IslandSouth Soko Island
17
The Proposed Enhancement Plan
18
Further Emissions Reductions Initiatives KT SO2
0
75
150
1990 2005 Projects Completion
Reduced by 44%
KT RSP
0
5
10
1990 2005 Projects Completion
Reduced by 70%
KT NOx
0
75
150
1990 2005 Projects Completion
Reduced by 77%
• Ongoing improvement plans/projects include:−Ultra Low Sulphur Coal
− Emissions Control Retrofit
− Liquefied Natural Gas
• Completion of these plans/projects critical to meet 2010 emissions reduction targets
• Other initiatives:− Feasibility studies of onshore and
offshore wind projects
−Other options to be explored
19
Emissions Comparable to Developed Economies
0
1
2
3
DeltaElectricity(Australia)
Pacific Corp(USA)
HEC (HK) SouthernCompany
(USA)
ScottishPower (UK)
CLP (HK) KEPCO(Korea)
EDF SA(France)
CLP(projects
completion)
TEPCO(Japan)
NOx Emission
kg/MWh
0
0.1
0.2
0.3
Eskom(SouthAfrica)
ProgressEnergy(USA)
ScottishPower (UK)
HEC (HK) DeltaElectricity(Australia)
Pacific Corp(USA)
CLP (HK) CLP(projects
completion)
KEPCO(Korea)
Particulates Emission
kg/MWh
CLP’s 2005 emissions per unit sold in Hong Kong compare favourablywith major utilities in developed countries
Further significant reductions upon completion of major projects
CLP’s 2005 emissions per unit sold in Hong Kong compare favourablywith major utilities in developed countries
Further significant reductions upon completion of major projects
Source: Company websites; 2003, 2004 and 2005 data
0
1
2
3
4
5
SouthernCompany
(USA)
DeltaElectricity(Australia)
HEC (HK) Pacific Corp(USA)
ScottishPower (UK)
CLP (HK) KEPCO(Korea)
EDF SA(France)
CLP(projects
completion)
TEPCO(Japan)
SO2 Emission
kg/MWh
20
Renewable Energy (RE) Development To date, RE accounts for about 1.8% of CLP Group’s generating capacity:
CLP Group has set a target to have 5% of total generating capacity from renewable energy sources by 2010
HK – Wind Turbine Pilot Demonstration (2008)
HK – offshore feasibility
Photo by Elsam
Guangdong,Huaiji82MW Hydro
Australia,Bluff Point*65MW Wind
Australia,Cathedral Rocks*66MW Wind
Shandong,Changdao27MW Wind
Ope
ratio
n
Shandong,Weihai19.5MW Wind (2006/7)
Guangdong,Nanao45MW Wind (2007)
Jilin,Shuangliao* 49MW Wind (2006/7)
Shandong,Rongcheng*49MW Wind (2007)
Con
stru
ctio
n
* Thru’ Roaring 40’s
21
The Way Forward
• CLP relies on a fair and balanced regulatory framework to maintain its excellent performance – provide customers with reliable, efficient and environmentally friendly supply at affordable prices
• CLP has demonstrated unwavering commitment to manage the environmental impact of our operations, and we have taken other initiatives to further improve our performance facilitating the sustainable development of the community