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Following is a question by the Hon Audrey Eu and a written reply by the Secretary for the Environment, Mr Edward Yau, in the Legislative Council today (July 9):
Question:
Regarding the proposal to construct a liquefied natural gas receiving terminal in Hong Kong, the Government indicated last year that it had commissioned a professional energy consultant to assist in its studies by evaluating natural gas supply arrangements from different perspectives, which include analysing the distribution of natural gas resources in the region, supply conditions of the Yacheng gas field, future electricity demand and environmental protection requirements in Hong Kong, etc. In this connection, will the Government inform this Council:
(a) of the progress and preliminary results of the above studies;
(b) whether it will publish the reports of the studies; if it will, when they will be published; if not, the reasons for that; and
(c) whether it will develop plans to increase the proportion of natural gas in the fuel mix for electricity generation, in order to reduce the emission of greenhouse gases; if it will, of the details; if not, the reasons for that?
Reply:
Madam President,
Since 1996, CLP has been importing natural gas for power generation from the Yacheng 13-1 gas field near Hainan via a 778km submarine pipeline. After conducting re-determination of the Economically Recoverable Reserves of the gas fields with the gas supplier, CLP anticipates that the existing Yacheng 13-1 natural gas field will be depleted by early 2010s. At present, about 30% of CLP's installed capacity is gas-fired. CLP reckons that a replacement gas supply must be in place by end 2013 to ensure supply reliability and achievement of emission caps imposed by the Environmental Protection Department under the Air Pollution Control Ordinance.
With the assistance of a professional energy consultant, the Government is reviewing CLP's proposal. To ensure that the public can continue to enjoy reliable and safe electricity supply at reasonable prices, the Government is examining all relevant factors including the distribution and development of natural gas in the region, the feasibility of supplying gas to Hong Kong from other natural gas/LNG projects in the region, the supply situation of the Yacheng gas field, the forecast of future electricity demand, environmental requirements, estimated expenditure and tariff impacts.
The due diligence process on CLP's proposed LNG terminal is still ongoing. No decision has been made by the Government regarding the proposal of CLP to build an LNG terminal project in Hong Kong. Although the Government is unable to report the results of the due diligence at this stage, we briefed the Environmental Affairs Panel of the Legislative Council on June 30, 2008 on the latest status of the proposed LNG terminal. Given the concern of the Hong Kong community on the need and justification of the terminal, it is crucial that all aspects of the project are properly examined to ensure that building an LNG terminal in Hong Kong is in the best interest of Hong Kong.
At present, electricity generation is the major source of greenhouse gases (GHG) emission in Hong Kong, representing over 60% of the total GHG emission. Over half of the electricity is generated from coal burning. Compared with coal burning, electricity generated by natural gas emits about 50% less carbon dioxide. Energy saving and change in fuel mix can reduce GHG emission. However, changing the fuel mix for power generation by drastically increasing the use of natural gas in order to reduce coal burning involves important and complicated issues such as energy policy, energy security, and stability in power supply. The public is also very concerned about the impact on the tariff as a result of the change in fuel mix. More in-depth analysis and discussions of these related issues are therefore necessary before we can come up with an option which takes account of environmental requirements, people's livelihood and a sustained economic development.
Ends/Wednesday, July 9, 2008
Issued at HKT 14:01
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