C.S. 166

CONFIDENTIAL #2

機密

XCC(77)58

(d)

Copy No....

Page 2 of

Station and Kwai Chung, frequent failures of the circuits are being experienced and the situation would become more serious if Tsing Yi Power Station were extended.

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It is considered essential that any additional units should be capable of being fired by coal (see paragraph 4 below), the storage of which would not be possible at the existing site.

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For these reasons, the Company proposes to conclude a contract for a new power station before the end of this year, but is unable to do so without a site. Selection of a site has therefore become a matter of extreme urgency. This paper seeks guidance from Honourable Members on two points:

of followe

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(a) What site should be allocated to the Company?

(b)

If, as recommended, the site should be on North- East Lantau, what assurances should be given to the Company about the eventual provision of road access to Lantau.

Coal Firing

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Brit

'As the use of coal sets a major limitation on the choice of sites, the reasons for its choice were carefully examined by Government. The Company has pointed out that, although the landed prices of oil and coal are similar at present, supplies of oil are likely to diminish and coal will be significantly cheaper than oil before the end of the century. However this may be, uncertainties as to both the availability and price of either fuel, make it imprudent to be locked into either; for this reason, most new power stations, except those in oil producing countries, are being planned to use coal or dual fired boilers; in the United States conversion from oil to coal is being considered. Although the capital cost of coal or dual fired boilers is considerably greater than that of oil fired boilers, it would be very short-sighted to install more capacity dependent wholly on oil.

Site Requirements for a New Power Station

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(a)

The Company's latest estimates are as given below:

Dimensions

CONFIDENTIAL

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