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The Environment
Energy
Electricity
The Hongkong Electric Company Limited (HK Electric) supplies electricity to Hong Kong Island and the neighbouring islands of Ap Lei Chau and Lamma, while CLP Power Hong Kong Limited (CLP Power) supplies Kowloon and the New Territories, including Lantau and several other outlying islands. The electricity supply to consumers is 50 hertz alternating current, while the voltage is 220 volts single-phase and 380 volts three-phase.
Both power companies are investor-owned. The government monitors them through mutually agreed Scheme of Control Agreements. These require the companies to seek the government's approval for certain aspects of their development plans, including projected basic tariff levels, to ensure the continued supply of reliable, safe and efficient electricity at reasonable prices. The agreements do not give the companies any exclusive rights to supply electricity. They are not franchises, nor do they define a supply area for either company or exclude newcomers to the market. The permitted rate of return of the power companies on their average net fixed assets under the agreements is 9.99 per cent.
The current agreements are for 10-year terms ending in 2018, with an option exercisable by the government to extend for five more years, until 2023. The government is discussing with the companies new agreements with improved terms to take effect after the current ones expire, taking into account the outcome of the 2015 public consultation on the future development of the electricity market.
HK Electric has a total installed capacity of 3,757 megawatts at its Lamma Power Station. CLP Power receives its electricity supply from the Castle Peak Power Company Limited's power stations at Black Point (2,525MW), Castle Peak (4,108MW) and Penny's Bay (300MW).
CLP Power and HK Electric own their respective transmission and distribution systems. The two transmission systems are interconnected by a cross-harbour link, which provides emergency backup and some sharing of generating capacity reserve between the two systems. The link has a total capacity of 720 megavoltamperes.
CLP Power's transmission system is also connected to the Guangdong electricity network to facilitate its electricity exports and imports to and from the province. CLP Power imports about 70 per cent of the power generated by the Daya Bay station, which has two 984MW pressurised water reactors. The company also sells electricity to Guangdong from its existing reserve generating capacity. Its sales are governed by an agreement with the HKSAR Government, under which CLP Power's consumers get priority of supply and 80 per cent of the profit from the sales.
The Central People's Government, in a memorandum of understanding signed between the HKSAR Government and the National Energy Administration in 2008, supported China Guangdong Nuclear Power Holding Company Limited in renewing its supply agreement with Hong Kong for 20 more years. In 2009, the HKSAR Government gave approval for CLP Power to extend its contract for the supply of nuclear electricity from the Daya Bay station for another 20 years from 7 May 2014. The quantity of electricity supply will be no less than the current level.
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