TNAG-0638-FCO40-786-Supplies-of-electricity-for-Hong-Kong-1977 — Page 111

CONFIDENTIAL # 2

XCS(77)2

(G) to comment briefly on the possibility of enfranchising

both CLP and the Hongkong Electric Company Limited.

(A) Recent Developments

5

In October 1975, the Chairman of CLP informally gave the Financial Secretary an indication of the factors he considered would have a bearing on the renegotiation of a Scheme of Control. In February 197€ he submitted in writing some ideas on the possible forms of a new Scheme. It was agreed in March 1970 that, because of the large capital commitment that CLP would have to enter into in 1977, informal dis- cussions should start as soon as possible.

Ε

€

The ensuing discussions covered a full study of the likely expansion of CLP for the next 10 years or so and involved collating information on demand for electricity, analysing price movements, adopting agreed assumptions about likely future price changes, estą- blishing CLP's future requirements for plant and examining possible ways of financing expansion.

(B) Expansion of generating Capacity

7

Demand

Despite the numerous factors involved in estimating future demand for electricity (e.g. population growth, gross domestic product, industrial growth and changes, housing developments), Government and CLP, working independently and using the different methods set out in Annex D, have arrived at forecasts close enough to confirm the use of CLF's medium forecast for purposes of assessing future plant require-! ments and revenue estimates. For the purpose of this forecast (pre- sented below), units generated (expressed in millions of kilowatt hours) represent the amount of electricity which is needed to meet demand for a whole year, and maximum demand (expressed in megawatts) represents the maximum requirement at any one time during a year:

CLP's medium forecast Units generated

Financial

Million

%

Maximum demand

MW

%

year

units

Growth

Growth

1977

6419

8.8

1328

7.8

1978

6936

8.1

1428

7.5

1979

7493

8.0

1535

7.5

1980

8092

8.0

1653

7.7

1981

8725

7.9

1783

7.9

1982

9424

7.9

1924

7.9

1983

10156

7.8

2074

7.9

1984

10894

7.3

2225

7.8

1985

11638

€.8

2377

7.3

1980

12404

3.6

2533

6.8

1987

13190

6.3

2693

3.€

C.S. 166

CONFIDENTIAL ##