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Powering Hong Kong's Sustainable Development

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Powering Hong Kong's Sustainable Development Powering Hong Kong’s Sustainable Development Betty Yuen Managing Director CLP Power 6 December 2006 1 Powering the Development of Hong Kong HK’s Electricity Consumption CLP Power’s Operating Statistics Population Served 5 million + 20-fold increase Customer Number 2.2 million in 40 years Installed Capacity 8,888 MW Sales 30,000 GWh 1890 1930 1950 1970 2005 2 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 3 HK’s Primary Energy Requirements 46% Coal Fuel for Oil / 33% power Naphtha generation Fuel for Nuclear transportation, towngas, industrial and other uses Natural Gas 7% 14% * Source: Hong Kong Energy Statistics 2005 Annual Report Fuel for electricity generation accounts for almost 70% of all energy consumed in Hong Kong 4 CLP Provides Highly Reliable Supply at Competitive Prices • 99.99% reliability, among the Power interruption time world’s best (mins per customer per year*) • Tariffs frozen since 1998 CLP Power 6 • Affordable tariffs – account for 1.9% New York 11.8 of monthly household expenditure Paris 12.8 • Tariffs among the lowest in major London 40 metropolitan cities Sydney 42 Residential Tariff HK cents/kWh (as of January 2006) *Average 2002-2004. Source: UMS Group; EDF; EnergyAustralia 220 200 Regulated market 180 160 Competitive market 140 120 100 80 60 40 20 0 Luxembourg Lumpur Jakarta Taipei Vancouver Shanghai Shenzhen CLP Power Sydney Seoul Singapore Paris Wellington Lisbon London Tokyo Madrid Amsterdam Brussels Rome Berlin New York Kuala Remarks: Comparison based on annual domestic consumption of 3,300 kWh. Tariff and exchange rate at Jan 2006 5 Commercial Dongguan Zhongshan Large Industrial Zhaoqing Higher Reliability at Comparable Tariffs Shenzhen to Mainland Cities Jiangmen Tariff in 2006 (HK cents/kWh) Huizhou 120 Zhuhai 6 100 Guangzhou 80 l Foshan 60 Shanghai 40 Beijing 20 CLP Power 0 Interruption Hours in 2004 (hours/year) 14 12 10 8 6 4 2 0 Source: Beijing Power Supply Co; Shanghai Municipal Electricity Power Co; Guangdong Price Information; China Electricity Counci CLP’s Fuel Diversification – Similar to Developed Countries Japan * North America* CLP (2005) Others 2% Others 2% Oil Hydro Hydro 13% 1% 10% Coal Nuclear Coal Nuclear 28% Nuclear Coal 18% 46% 23% 29% 39% Oil 13% Gas Gas 16% Oil 24% 5% Gas Others 3% Nuclear 2% 31% Hydro Hydro GasNuclear 1% 2% 15% 15% Coal Oil 3% 30% Coal 79% Nuclear Coal A balanced fuel mix is 29% 79% Gas Oil 5% important for supply reliability 18% and tariff management Europe * Mainland China * * Percentages quoted for fuel combination are 2003 figures Source: International Energy Agency 7 Significant Environmental Improvements Emissions Reduction (1990-2005) SO 44% Electrostatic Nuclear Power 2 Precipitator NOx 77% (1982-85) Particulates 70% 200 Note: Local sales grew by 70% in the period Low NOx Burner 150 Natural Gas Use of ultra-low 100 sulphur coal 50 Total Emission (kilotonne) Total Emission 0 Year 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Achieved significant emissions reductions from early 1990s through the use of emissions abatement technology and introduction of cleaner energy sources 8 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 9 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 10 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 CO (carbon dioxide) 2 NOx (nitrogen oxide) Natural gas Coal Oil Natural Gas Coal Oil Natural Gas produces no 100 80 57 100 71 20-37 particulates & SO2 11 The LNG Supply Chain HONG KONG Liquefaction Marine Receiving Natural Gas Transportation Terminal Field Terminal Sendout LNG Natural gas by pump via pipeline LNG Vaporizer Black Point Storage Tank (for regasification) Power Station (for temporary storage) (for power generation) 12 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 Towngas or 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 13 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 Achievable SO2 NOx CO2 20,000 tonnes 10,000 tonnes 3 million tonnes (43%) (35%) (17%) 14 Significant Progress since 2003 to Bring LNG to Hong Kong Intensive activities over the last 3½ years : Stakeholders Engagement Engineering & design EIA study Gas supply Overseas experience Site selection Legend Black Point Power Station Hong Kong SAR Boundary LNG ship Isometric Circles Potential Site Sites 1 - Black Point 2 - Lung Kwu Tan 29 3 - Castle Peak North 4 - West Brothers 5 - Yam Tsai 6 - Brothers Point 7 - Sham Wat Wan New Territories 8- North Tai O 9- Yi O 10- Peaked Hill Island 1 m k 11- Fan Lau West 0 1 m k 12- Fan Lau East 0 13- North Sokos 2 2 m k 14- South Sokos 0 15- Shek Kwu Chau 3 3 16- Sunshine Island m k 17- Man Kok Peninsula 0 18- Tsing Yi 4 19- Beaufort Island 6 m k 20- Po Toi Island 4 0 21- Fury Rocks 5 Kowloon 28 5 22- Waglan Island 27 23- Stanley Peninsula 18 24- Cape Collinson 25- Tung Lung Chau 26- Area 137 27- Wang Chau 7 28- Town Island 29 - Tap Mun 8 16 Hong Kong 26 17 Island 24 25 9 10 ² Kilometres 15 23 024681 11 21 12 13 19 22 14 20 Hong Kong SAR Boundary Comprehensive project to bring LNG to Hong Kong as early as possible 15 South Soko and Black Point Sites Studied Black Point South Soko Island An overall evaluation of the EIA study together with other considerations show that the South Soko option provides the most benefits to Hong Kong 16 The Proposed Enhancement Plan 17 Further Emissions Reductions Initiatives KT 150 SO2 • Ongoing improvement plans/projects include: 75 Reduced − Ultra Low Sulphur Coal by 44% − Emissions Control Retrofit 0 1990 2005 Projects Completion − Liquefied Natural Gas KT 150 NOx • Completion of these plans/projects Reduced 75 by 77% critical to meet 2010 emissions reduction targets 0 1990 2005 Projects Completion • Other initiatives: KT 10 RSP − Feasibility studies of onshore and offshore wind projects 5 Reduced by 70% − Other options to be explored 0 1990 2005 Projects Completion 18 Emissions Comparable to Developed Economies kg/MWh 5 SO2 Emission CLP’sCLP’s 2005 2005 emissionsemissions perper unitunit soldsold 4 inin HongHong KongKong comparecompare favourablyfavourably 3 withwith majormajor utilitiesutilities inin developeddeveloped 2 countriescountries 1 FurtherFurther significantsignificant reductionsreductions uponupon completioncompletion ofof majormajor projectsprojects 0 Southern Delta HEC (HK) Pacific Corp Scottish CLP (HK) KEPCO EDF SA CLP TEPCO Company Electricity (USA) Power (UK) (Korea) (France) (projects (Japan) (USA) (Australia) completion) Source: Company websites; 2003, 2004 and 2005 data kg/MWh kg/MWh 3 0.3 NOx Emission Particulates Emission 2 0.2 1 0.1 0 0 Delta Pacific Corp HEC (HK) Southern Scottish CLP (HK) KEPCO EDF SA CLP TEPCO Eskom Progress Scottish HEC (HK) Delta Pacific Corp CLP (HK) CLP KEPCO Electricity (USA) Company Power (UK) (Korea) (France) (projects (Japan) (South Energy Power (UK) Electricity (USA) (projects (Korea) (Australia) (USA) completion) Africa) (USA) (Australia) completion) 19 Renewable Energy (RE) Development To date, RE accounts for about 1.8% of CLP Group’s generating capacity: HK – offshore feasibility Operation Guangdong, Shandong, Australia, Australia, Huaiji Changdao Bluff Point* Cathedral Rocks* Photo by Elsam 82MW Hydro 27MW Wind 65MW Wind 66MW Wind Shandong, Jilin, Guangdong, Shandong, Construction HK – Wind Turbine Pilot Weihai Shuangliao* Nanao Rongcheng* 19.5MW Wind (2006/7) 49MW Wind (2006/7) 45MW Wind (2007) 49MW Wind (2007) Demonstration (2008) * Thru’ Roaring 40’s CLP Group has set a target to have 5% of total generating capacity from renewable energy sources by 2010 20 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 21.
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