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The Executive Council today (September 22) approved CLP Power Hong Kong Limited extending the contract for supply of nuclear electricity from Daya Bay Nuclear Power Station for another term of 20 years from May 7, 2014, to May 6, 2034.
CLP Power has currently contracted for 70% of the electricity output of Daya Bay for supply to Hong Kong which accounts for about one-third of its local demand. The term of the supply contract will expire on May 6, 2014.
By a Memorandum of Understanding on Energy Co-operation (MOU) signed between the National Energy Administration of the Central People's Government and the Hong Kong SAR Government on August 28 last year, both governments indicated support for the current supply of nuclear electricity to be extended for a further term of 20 years upon expiry in May 2014. The MOU envisages that the supply quantity will not be less than the current level in principle while pricing will be agreed on commercial principles among the relevant enterprises.
"A reliable, safe and efficient electricity supply that can adequately cater for the demand for electricity is essential for the overall economic development of Hong Kong. CLP Power's extension of the contract for electricity supply from Daya Bay provides an assurance of electricity supply at reasonable and affordable prices for Hong Kong consumers, and also a continued supply of cleaner electricity to Hong Kong, which will help alleviate air pollution and greenhouse gas emission locally. This is in line with our policy intention to use cleaner fuel for electricity generation under the current consultation on the review of the Air Quality Objectives," the Secretary for the Environment, Mr Edward Yau, said.
The projected average unit price of nuclear electricity from Daya Bay in the extended contract period, which will come into effect in May 2014, will be HK60-63 cents/kWh. After adjusting for inflation, this projected price will be in real terms 6% -12% lower than the average unit price in the past three years - 2006-2008.
Mr Yau said the extension of power supply from Daya Bay should benefit both Hong Kong consumers and the environment. If there were no power supply from Daya Bay, CLP Power would have to replace the existing supply by building four additional 360MW gas-fired generating units in Hong Kong, or importing 1,400MW electricity from other sources. The economic case for the extension of nuclear supply from Daya Bay was clear. It was also less polluting.
Ends/Tuesday, September 22, 2009
Issued at HKT 17:03
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