Reply:
(b)
(c)
Mr President,
- 77
whether in the event of an unexpected shortfall of electricity produced at Daya Bay, the Guangdong Nuclear Power Joint Venture Company (GNPJVC) is allowed to set the price of these unprotected units of electricity at a rate which will allow the GNPJVC to recoup a minimum annual rate of return regardless of the price of these units as compared to the cost of electricity generated by coal-fire; and
how the public can be assured that all electricity purchased from GNPS is at a price below or comparable to the cost of producing electricity from spare capacity in Hong Kong?
Under the terms of the joint venture contract, the Hong Kong Nuclear Investment Company Limited (HKNIC) is committed to purchasing 70% of the total output of the Guangdong Nuclear Power Station (GNPS) at Daya Bay. The nuclear electricity purchased by HKNIC is resold, without any mark-up, to its holding company, the China Light and Power Company Ltd. (CLP) for distribution to CLP customers. 30% of the total output is ear-marked for China.
64% of the electricity purchased by HKNIC (the "resale" quantity) is subject to a unit price not exceeding the notional cost of a unit of electricity generated by a coal fired station construction in Hong Kong and commissioned in 1991 (the coal-fired electricity price formula). There is no price cap for the remaining 36% (the "offtake" quantity) and this is charged at the actual unit price.
With this background, the answers to the specific questions are as follows:-
(a)
irrespective of the buyer, the actual unit price of nuclear electricity purchased from the GNPS is determined by dividing the total cost of generation plus permitted profit by the number of units sold.
Generation cost is defined in the joint venture contract. It includes all expenses relating to the production and operation of the nuclear power station.
Profit is also defined in the joint venture contract. It is expressed as a percentage return on average investors' funds and is performance related.