**********************************************************
Following is a question by the Hon Fred Li and a written reply by the Secretary for the Environment, Mr Edward Yau, in the Legislative Council today (January 13):
Question:
It has been reported that in order to improve air quality in Hong Kong, the Government plans to require the CLP Power Hong Kong Limited and The Hongkong Electric Company Limited to gradually increase the proportion of electricity generated using natural gas from the present around 30% to 50% by 2015. The two power companies also plan to build wind power plants to generate electricity by wind. As natural gas prices are much higher than coal prices and the two power companies also need to build additional gas-fired generation facilities, the Government has estimated earlier that the increase in the use of natural gas for electricity generation will increase the electricity tariff by at least 20%. In this connection, will the Government inform this Council of:
(a) the respective amounts of investment made by the two power companies in building natural gas and wind power generation facilities, as well as the costs for operating such facilities; and
(b) the impact on the electricity tariff of using wind power to generate electricity by the two power companies?
Reply:
President,
(a) & (b) According to the information provided by the Government's independent energy consultant, the capital cost of a new combined cycle gas turbine can be as high as US$1,000 to 1,200 per kilowatt. If a combined cycle gas turbine of 350 megawatts is taken as an example, its capital expenditure is about HK$3 billion. However, this amount has yet to take into account additional capital investments on land formation works, gas supply facilities, emission reduction installations, transmission and distribution facilities etc., which might be required. The actual amount of investments will also be affected by other factors including, inter alia, the capacity and technical design of the generating unit, the timing for the construction, as well as the then prevailing prices of construction materials and labour costs, etc. As for the operating costs, it is mainly determined by the then prevailing price of natural gas.
Currently, the two power companies are conducting feasibility studies on their proposed construction of off-shore wind farms in Hong Kong, which include technical studies, environmental impact assessment and consultation with stakeholders. The actual amounts of investments and operating costs will depend on the scale of the wind farms and other factors. These projects are still at a very preliminary stage and the specific arrangements are yet to be finalised.
Pursuant to the Scheme of Control Agreements, the two power companies are required to seek the Government's approval of their investments in wind farms. So far the Environment Bureau has not received their applications. In considering the applications, the Government will critically examine the related projects from various perspectives, including the policy on renewable energy, impact on tariff, economic benefits and technical factors, so as to make a decision to balance the interests of the society as a whole.
Ends/Wednesday, January 13, 2010
Issued at HKT 15:01
NNNN
