XN000022-1976-10-30 — Page 2

SATURDAY, OCTOBER 30, 1976

STUDY ON NUCLEAR POWER IN H.K.

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BY AGREEMENT WITH THE GOVERNMENT, THE CHINA LIGHT AND POWER CO LTD, PENINSULAR ELECTRIC POWER CO LTD, AND THE HONG KONG ELECTRIC CO LTD, THE INTERNATIONAL ATOMIC ENERGY AGENCY (IAEA) IN 1975 UNDERTOOK A STUDY OF THE TECHNICAL AND ECONOMIC FEASIBILITY OF INTRODUCING NUCLEAR POWER GENERATION TO HONG KONG.

A STEERING GROUP, WITH REPRESENTATIVES OF THE GOVERNMENT AND THE POWER COMPANIES, WAS ESTABLISHED TO CO-ORDINATE INFORMATION AND TO CONSIDER THE RESULTS OF THE STUDY. THE AGENCY'S REPORT, +NUCLEAR POWER PLANNING STUDY FOR HONG KONG, WAS PRESENTED TO THE STEERING GROUP EARLIER THIS YEAR, AND WILL BE PUBLISHED.

THE STEERING GROUP HAVE REPORTED THEIR APPRECIATION OF THE VERY EXTENSIVE AND USEFUL ANALYSIS UNDERTAKEN BY IAEA, AND AFTER A THOROUGH EXAMINATION OF THE REPORT REACHED THE FOLLOWING CONCLUSIONS:

(A)

IT WOULD BE TECHNICALLY FEASIBLE TO INTRODUCE NUCLEAR POWER IN HONG KONG, AND ADEQUATE SAFETY STANDARDS COULD BE ENSURED.

(B) UNDER THE ASSUMPTIONS USED BY THE IAEA, NUCLEAR

GENERATION SHOWED A SMALL ECONOMIC ADVANTAGE OVER CONVENTIONAL GENERATION. HOWEVER, GIVEN THE UNCERTAINTIES AS TO THE TREND OF RELATIVE FUEL PRICES OVER THE NEXT TWENTY YEARS OR SO, AND THE FURTHER UNCERTAINTIES AS TO THE FINAL CAPITAL COST OF BUILDING THE FIRST NUCLEAR POWER PLANT IN HONG KONG, THE APPARENT ADVANTAGE OF NUCLEAR POWER WAS TOO SMALL, TOO UNCERTAIN, AND SPREAD OVER TOO LONG A TIME SPAN.

(C) THE CAPITAL COST OF NUCLEAR PLANT, AT US$800 PER

KW (1975 PRICES) IS SOME THREE OR FOUR TIMES THE COST FOR CONVENTIONAL PLANT. EVEN IF THE PROGRAMME WERE CONFINED TO TWO NUCLEAR PLANTS AT 600 MW EACH, THE CAPITAL COST WOULD BE APPROXIMATELY HK$5 BILLION, AS OPPOSED TO A SUM WELL UNDER HK$2 BILLION FOR CONVENTIONAL PLANT OF THE SAME CAPACITY. IT WOULD THEREFORE POSE THE QUESTION OF RAISING A CONSIDERABLE AMOUNT OF ADDITIONAL FINANCE, WHICH IN VIEW OF THE FACTORS ALREADY MENTIONED, AND AGAINST THE COMPETING CLAIMS OF POSSIBLY MORE IMPORTANT PROJECTS, WOULD BE NEITHER EASY NOR JUSTIFIABLE.

THE STEERING GROUP AGREED THAT, UNLESS THERE WERE SIGNIFICANT FUTURE CHANGES IN ANY OF THE ECONOMIC OR FINANCIAL CIRCUMSTANCES PERTAINING TO A NUCLEAR PROJECT, IT SHOULD NOT BE PURSUED ANY FURTHER.

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