6 September 2013

Development & Operation Strategy of Renewable Energy – HK Electric’ s Experience

Ir TYIT.Y Ip, SiMSenior Manager, EiEnvironmentlAffital Affairs The Hongkong Electric Co., Ltd. Contents  Company Profile  HK Electric ’s Renewable Energy Initiatives  The “Lamma Winds”  Proposed Offshore  Lamma Solar - Thin Film Photovoltaic System  Sustainable Developpgyment Strategy  Summary Lamma Solar TFPV “Lamma Winds” Extension • 2013 • 2006

Lamma SlSolar Offsh ore Wi nd TFPV System Farm • 2010 • 2017 2 Corporate Profile

Investor-owned utility established in 1889 Powering over 120 years Supplying electricity to 567,000+ customers in Hong Kong with a supreme reliability of HK Electric incorporated in 1889, lit up over 99.999% since 1997 the first electric lamp post in Central and started suppl yin g electricit y in 1890 Strong workforce of 1, 800 employees

1890 - 1922 1919 - 1980 1968 - 1989 1982 - 2006 - 2010 -

Wanchai P/S North Point P/S Apleichau P/S Lamma P/S Lamma Extension Solar PV System 3 Supply Territories (Hong Kong) Interconnection with Mainland China

Interconnection with Mainland China

New Territories

Black Point Power Station

Castle Peak Power Station Kowloon Penny’s Bay Power Station Lantau Island Hong Kong Island Supply Area of Lamma The Hongkong Electric Co Ltd Power Stati on Supply Area of CLP Power Hong Kong Ltd Lamma 4 Island Existing Interconnectors Generation Portfolio (2012) Installed Capacity in 2012: 3,737MW

Coal-fired units: : ● 3 x 250MW – one with Flue Gas ● 1 x 800kW Desulphurisation (FGD) plants ● 5 x 350MW – all with FGD plants and Low NOx Burner Systems Liquefied Natural Gas-fired CCGTs: ● 1 x 345MW Solar Power ● 1 x 335MW (TFPV): ● 1 MW Distillate oil -fired gas turbines & standby units for peak lopping: ● 555MW

Over 90% of units of electricity generated come from environmental friendly generation units. 5 Network Portfolio (2012) Transmission (275/132kV) / Distribution (22/11kV)

Switching Stations: 25

Cable Tunnel: 6

Zone Substations: 27

Distribution Substations: 3,755

Consumers: 567, 000

Units Sold: 11,036 GWh

6 HK Electric’s Renewable Energy Initiatives

7 An Environmentally Conscious VMV To contribute to global efforts in combating climate change

8 Needs of Renewable Energy Development

● Sustainable sources of energy without emissions

● Government’s consultation paper “Hong Kong’s Climate Change Strategy & Action Agenda – 2010” proposed a long term plan for renewable energy development of 3-4% of the total power generation in HK by 2020

● Promoting RE and reducing coal-fired generation in a meaningful scale to improve loca l env ironmen t, m itigat e cli mat e ch ange and advocate sustainable development

9 Lamma Winds

10 Development of The Lamma Winds

Objectives :  Demonstrat ion o f ut iliz ing w in d energy for power generat ion  Education purpose with the use of visitors’ facilities  Wider application of renewable energy – provision of invaluable local experience on design, construction and O&M of wind turbines

● Wind monitoring commenced since 2001

● EIA commenced in early 2004

● Environmental Permit granted in Nov 2004

● Wind turbine installation completed in September 2005

● Commercial operation since February 2006

● First commercial scale station in Hong Kong

11 Lamma Winds Profile

Site Location: Tai Ling,  Over 6,500 MWh of green electricity produced up to the present Site Area: 2,500 m2 Capacity: 800 kW  Higgyp,hest daily production: 17,875kWh on 18-4-2008

Average Wind Speed: 5.5 m/s  The average of “Lamma Winds” for the past Annual Generation: approx. 1,000,000 kWh 7 years (2006 – 2012) is 13% with the highest in 2009 at 15.7% Supplant the use of 350 tons of coal per annum

Reduce emissions of 830 tons of CO2

Exhibition Centre  Educational information on nature and application of Wind and other sources of Renewable Energy  Real-time operational data of the “Lamma Winds”  A tourist attraction in Lamma Island

12 Performance Data from 2006 to 2012 2006 2007 2008 2009 2010 2011 2012

Electricity Generated, 840 865 807 1099 977 867 1,053 MWh

Capacity Factor, % 11.98 12.34 11.49 15.69 13.94 12.4 15

Availability, % 93.0 98.3 94.8 95.3 97.8 97.61 96.08

MSd/Mean Speed, m/s 434.3 424.2 424.2 464.6 444.4 414.1 454.5

Capacity Factor vs Annual Mean Availability of Lamma 800kW Wind Speed Wind Turbine , % 18 99 16 98 14 97 12 96 10 95 8 94 6 93 4 92 2 91 0 90 4 4.1 4.2 4.3 4.4 4.5 4.6 4.7 2006 2007 2008 2009 2010 2011 2012 13 Maintenance Experience ● Maintenance is normally arranged on weekdays as there would be fewer visitors. ● Maintenance would not be carried out at night for safety reasons ● No work is allowed on the drive side when wind speed exceeds 12 m/s. ● Scheduled and unscheduled maintenance

Annual Intermediate Unscheduled Maintenance Maintenance

Power Maximum Abnormal Noise Insulation Low Alarm from Yaw Brake- Alarm disc Scheduled Annual Main Maintenance Maintenance

Five Years Maintenance

14 O&M Strategy to Im prove Reliability

Apart from the routine and scheduled  Using non-destructive techniques maintenance recommended by the including vibration monitoring and analysis of gearbox oil wind turbine manufacturer, the  Identify the repairs needed before following maintenance strategy incipient failures develop established for fossil-fuel power Predictive  Allows early prediction of equipment‘s Maintenance component failure station was incorporated  Saving the cost of unnecessary routine maateaceintenance  A history buffer is  Plant owners are available to allow a responsible for the review of events leading Plant performance and up to a fault. Improved Ownership expenditure of  Suggestions and Maintainability respective assets . comments were ShScheme  Setting performance incorporated as part of pledges the continuous  Plant closely monitored improvement process. and maintained

 Lists out likely failure modes alongside with the spares  Monthly routine inspection inventory, manpower, tools and Routine and and post-typhoon inspection equipment for carrying out the  IldIncludes vi sual lhkfth check of the repairs. Logistic Plan Post-Typhoon Inspection brake system, oil level,  Breakdowns are dealt with coolant pressure, yaw efficiently and downtime of the position etc. 15 wind turbine can be minimized Proposed Offshore Wind Farm

16 Offshore Wind Farm Development

● Siting study carried out since 2006

● NitblldfdlNo suitable land for developmen t of an onshore wind farm

● Development of an offshore wind farm is the only option

Areas with AdequateHong Kong Wind Map Resource for Development of Wind Farm

South West Lamma is the final chosen site for development of an offshore wind farm among 8 potential sites 17 Advantages of the South West Lamma Site

● Least potential environmental impact ● Technical merits:  Close proximity to for logistics supports  Shorter transmission cable  Shallower water  Lower total costs

Environmental Impact Assessment (EIA) Scope 1. Water Quality 2. Waste Management 3. Terrestrial Ecology 4. Marine Ecology 5. Fisheries 6. Landscape & Visual Impact 7. Cultural Heritage 18 General Design Information

Location 3.5 km Southwest of Lamma Island Capacity Up to 100 MW No. of Wind Turbine 25 – 35 nos. Wind Turbine Capacity 3 – 4 MW Class Land-take Area 600 Ha Hub Height ~ 82m Water Depth 18 – 23 m

IEC Class 1 wind turbine model will be adopted to withstand typhoon condition with maximum 3-second gust of 70m/s

Capacity (MW) Rotor Dia(m) Cut-in / Cut-out / Rated Wind Speed (m/s)

3 90 -112 3~4 / 25 / 15 3.6 107 -120 3~5 / 25 / 12~14 4.1 113 3.5 / 25 / 14 Typical wind turbine characteristics 19 Systematic Feasibility Studies

● Foundation conceptual design

● Grid Stability Impact

● Civil aviation and marine navigation safety

● Studies on artificial reef and fisheries management

20 Wind Resources Assessment

Desktop Studies

● Computer modelling technology based on historical wind data archive ● Average wind speed at the wind farm site ranges between Weibull Curve Wind Rose 6.61m/s to 7.13m/s On Site Wind Measurement ● LIDAR technology adopted which captures wind data by measuring the Doppler shift of the laser beam scattered by microscopic airborne particulates ● Full hub height mast (80m) is not required leading to a substantial reduction in foundation cost

● 4 x 4m platform supported on piles 80m ● Powered by RE facilities ● Equipped with 10m reference met mast 22.5m ● Safety facilities for aviation & marine traffic 12.5m ● Validated by independent certifying body ● Monitoring campaign commenced since 1 March 2012 21 LIDAR System Met Mast Foundation Design ● Different types of foundations have been considered ● Monopile and gravity based foundations are mostly adopted in existing offshore wind farm installations

80m

Monopile Gravity Base Tripod Suction Caisson22 Study on Grid Stability Impact Wind power characteristics: ● Erratic nature of wind power ● Dynamic behavior of wind turbines Mismatch of wind power output with system ● Uncertainty on output prediction demand: ● Increase in system variability ● High wind power output at light load period ● Wind power ramp up/down against system demand

Recommendation  Ramping rate limitation  Limiting the total output of wind farm  facilities

Wind Power Decrease during Demand Increase in Summer Wind Power Increase during Demand Decrease in Winter 23 Solar Power System

24 Lamma Solar Power Syypstem Development

● As a pilot project for the Shenzhen Hong Kong Innovative Circle, DuPont established a plant in Shenzhen for manufacture of Thin Film Photovoltaic (TFPV) panels in 2008. ● Stage 1 with capacity of 550kW was commissioned in July 2010. ● In view of remarkable performance in its 1st year of operation, HK Electric decided to expand the system capacity to 1MW in 2011. ● Stage 2 to be constructed in 2 phases with capacity of 450kW was completed in March 2013. 25 Feasibilityyy study and site selection Key factors identified

● Large flat area for solar PV installation on ground or rooftop ● Total weight of solar panels and supports against allowable roof loading ● Orientation of solar panels – facing south and tilted at 22° ● Full utilization of sunlight with no shading ● Visual impact ● Ease of grid connection ● Accessibility for operation & maintenance

Lamma Power Station is selected 26 Thin Film Benefits ● Use less energy for production The more silicon is used for production of PV panels, the more energy is required. Thin film PV technology uses less silicon. Thickness is only about 1/200 of that for crystalline PV module.

● More suitable in tropical environment Thin film PV maintains better power output level at high temperature than crystalline PV. PV Type Temp. coefficient for Pm a-Si thin film PV -0.25% per oC increase Tandem Junction thin film PV -0.34% per oC increase c-Si PV -0.40% per oC increase ● Better weak liggpht performance a-Si thin film PV modules are able to effectively produce power at low irradiance conditions.

● Lower cost than c-Si The cost of crystalline PV modules is in some degree higher than thin film PV modules. 27 Electricity Production Evaluation PV System Simulation software “PVsyst” was used for electricity production estimation. The following parameters were inputted to the software:- ● Surface meteorology and Solar Energy data from HKO (Hong Kong Observatory) and NASA (The National Aeronautics and Space Administration) of the United State ● Detailed layout of TFPV modules and all existing services in the vicinity ● Technical particulars of preliminary selected equipment , such as TFPV modules, PV Inverters, etc. ● Cable size and cable length

Animation of System Layout Shading Analysis Loss Tree 28 Site Locations

Amenity Building Lamma Extension

Main Station Buildings (550kW)

Slope Area LMX Maintenance Building

Main Station Buildings

New Control Building Lamma East Store Building 29 System Information

Stage 1 Stage 2

Total Installed Capacity 550 kW 450 kW

Phase 1 – 30/6/2012 Commission Date 1/7/2010 Phase 2 – 31/3/2013 Amorphous / Amorphous Type of PV MModuleodule microcrystalline silicon silicon thin film tandem junction thin film Max. Power of Each 100W 142W 145W TFPV module Dimension of Each 1,409 x 1,110 x 35 mm TFPV module

Quantity of TFPV 2,666 496 5,500 modules 3, 162 Anticipated annual 620,000 kWh 500,000 kWh electricity production Capacity Factor 12.9 % 12.6% Design Life 25 years 30 Operation & Maintenance

● Fully Automatic Operation . With solar irradiance of 100 W/m² and the output voltage of PV string is sufficient to switch on PV Inverters, the system connects to the grid automatically.

● Maintenance . Infrared images of the PV panel and the electrical panel are taken to ensure no hot spot is identified. . GlliiddGeneral cleaning required under normal circumstances. . Power output not affected even with m inor crac ks on sur face o f PV modules. IR Image - PV Panel IR Image - Electrical Panel 31 Electricity Production

32 Electricity Production

550kW 450kW

Capacity Capacity Solar Production Production Factor Factor Irradiance*

st 5,414.32 MJ/m² 1 year 735, 576 kWh 15. 27% -- (7/2010 ~ 6/2011) (+11.9%)

nd 4,995.11 MJ/m² 2 year 640,629 kWh 13.26% - - (7/2011 ~ 6/2012) ((%)+3.2%)

rd 4,782.24 MJ/m² 3 year 625,953 kWh 12.99% 444,459 kWh 12.68% (7/2012 ~ 6/2013) (-1.2%)

Sub-total 2,002,158 kWh 13.84% 444,459 kWh 12.68%

Total 2,446,617 kWh (13.8%)

* Design solar irradiance is 4,839 MJ/m². 33 Sustainable Development Strategy

34 Support Sustainability – Total Caring Culture

35 Respect & Protect the Environment

Public Inspection + Advisory Public Inspection Council on Environment 47 Months

EIA Project EIA Study EIA Report Environmental Profile Report Brief Approved Permit

3/7/06 14/8/06 30/11/09 14/5/10 8/6/10 Offshore Windfarm EIA Process under the EIA Ordinance

EM&A Work & Measures ● Environmental Team , including IEC and Marine Mammal Observer ● Ramp-up piling procedure ● Adoption of bubble jacket during piling work ● Setti ng up 500 m exc lusi on zone f or fi nl ess porpoi se & sea turtle during piling work ● Voluntary noise and water monitoring 36 Benefiting the Community

Offshore Windfarm Lamma Winds & Lamma Solar Power System ● Annual electricity generation of around 175 GWh ● generated more than 9.2 million units of green ● Meet Consumption for 50,000 families electricity

● NfNo fue l requ idired ● Avoided about 7, 600 tonnes of CO2 emissions ● Offsetting use of around 62,000 tonnes of ● Equivalent to planting 330,000 trees coal per annum ● Reduce emission of 150,000 tonnes of

CO2

37 Renewable Electricity Generation

Electricityy() Generated (kWh) 2,500,000

Thin Film PV 2,000,000 Lamma Winds

1,500,000

1, 000, 000

500,000

0 2006 2007 2008 2009 2010 2011 2012

38 Embracing the People Stakeholder Liaison Group (SLG) for Offshore Windfarm ● The purpose of setting up this SLG is to establish communications between the project developer and relevant stakeholders, particularly on the environmental aspects of the project

● The objective of this SLG is to provide an advisory forum for stakeholders including those related to fishery sector, environmental groups, academia and the local communities to advise on the design, construction and operation of the proposed Offshore Wind Farm at Southwest Lamma

39 ● Structure ● Membership

 Members will be selected from different functional groups aiming to tap knowledge from the experti se and ba lance o f the interest of various stakeholders towards successful development of the project

 Serving on membership of the SLG is purely on a voluntary basis

40 Fishery Review & Consultation Committee

● Comprising representatives of fishery sectors and the AFCD, plus those from other government departments as and when necessary

● To establish communications between HK Electric and relevant stakeholders on potential fishing arrangements within the wind farm area and to explore feasibility on measures in enhancement of fishery resources.

41 Summary By implementing the RE initiatives, HK Electric demonstrates:- ● Support Sustainable Development – Assessing the environmental impact for designated projects – Implement comprehensive Environmental Monitoring and Audit Programmes

● Capacity Building in RE development – Design and construction experience – Operation & maintenance experience

● Stakeholder Engagements – Public icon for RE education – Lamma Winds – Public accessible websites for wind and solar systems operation – Stakeholder liaison Group and Fishery Review & Consultation Committee • Communications between HK Electric and relevant stakeholders on infrastructure development 42 Thank You

Eilti@hkltiEmail : [email protected]