TNAG-1059-FCO40-1309-Guangdong-nuclear-power-station-project-1981 — Page 107

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For discussion

on 14th July 1981

XCS(81)5 Copy No

MEMORANDUM FOR EXECUTIVE COUNCIL

THE PROPOSED CONSTRUCTION OF A NUCLEAR

22. of 27

POWERED GENERATING STATION IN GUANGDONGHKK. 166|1

THE PURCHASE OF ELECTRICITY FROM 29 JUL 1981

CHINA - ECONOMIC ASPECTS

Introduction

On 20th May 1980, Members considered memorandum XCC(80)62 (Annexed) which gave the background to a proposed joint venture between China Light and Power Co Ltd (CLP) and the Guangdong Power Co (GPC) to build a nuclear power station in China, with China selling about half the electricity to Hong Kong as a means of recovering the foreign exchange cost of the project (paragraphs 1 to 7 of the Annex). The memorandum went on to suggest that the balance of the arguments between the political advantage of a joint venture with China and the disadvantage of Hong Kong taking power from sources beyong its control, were in favour of the former (paragraphs 8 to 12 of the Annex). But if the power companies were to purchase power from China, consumers in Hong Kong should not pay more for it than if the electricity were generated in Hong Kong or more than consumers in China (paragraph 14 of the Annex). Also, the amount purchased should be dictated by the reserve capacity in Hong Kong available in the event of a failure of supplies from China (paragraphs 15 to 19 of the Annex) and the Hongkong Electric (HEC) should be given a chance to participate (paragraph 20 of the Annex). Members advised and the Governor ordered :-

(a)

(b)

that, as a matter of policy, power companies in Hong Kong should be supported in their efforts to purchase electricity from power stations situated in China, but that this should be conditional on the maintenance of reserve capacity in Hong Kong at a level considered adequate by expert advisers in the light of the type of plant put into operation;

that the Hong Kong Government should, at this stage at least, discourage any suggestions that it might participate directly in the possible joint venture outlined in the memorandum and involving CLP, GPC and possibly other parties.

The Council noted that suitable arrangements had been made whereby the Hong Kong Government would be kept advised on a continuing basis of further developments concerning the proposed project. When the advice of the experts made available for the purpose had been received on the safety and environmental issues, a further report would be made to the Council.

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