ENG-1998 — Page 292

LAND, PUBLIC WORKS AND UTILITIES

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The Castle Peak Power Company Limited (CAPCO), which is 60 per cent owned by Exxon Energy Limited and 40 per cent by CLP, supplies electricity to CLP from its Black Point (1 875MW), Castle Peak (4 168MW) and Penny's Bay (300MW) power stations, with the total installed capacity being 6 343MW.

The government has approved CLP's installation of two more 312.5MW generators at Black Point power station, Tuen Mun. They will be commissioned during the period of 2003-2006 subject to review in 1999.

The associated transmission and distribution systems are wholly owned by CLP. Its transmission system operates at 400kV, 132kV and 66kV, and distribution is effected mainly at 33kV, 11kV and 380 volts.

The CLP and HEC transmission systems are interconnected by a cross-harbour link. This provides emergency back-up and achieves cost savings to consumers through economic energy transfers between the two systems and a reduction in the amount of generating capacity that needs to be kept as spinning reserve against the tripping of other units. The interconnection, commissioned in 1981, currently has a capacity of 720MVA.

CLP's system is also interconnected with that of the Guangdong Electric Power Holding Company (formerly named the Guangdong General Power Company) of China and electricity is exported to Guangdong Province. Such sales are made from existing reserve generating capacity and are governed by an agreement with the government, signed in March 1992, under which CLP's consumers receive priority of supply and 80 per cent of the profit from the sales.

In 1985, the Hong Kong Nuclear Investment Company (a wholly-owned subsidiary of the newly formed CLP Holdings Limited) and the Guangdong Nuclear Investment Company (wholly owned by the Chinese Ministry of Nuclear Industry) established the Guangdong Nuclear Power Joint Venture Company, to build and operate a nuclear power station at Daya Bay in Guangdong. This comprises two 985MW pressurised water reactors which went into commercial operation in February and May 1994, respectively. CLP undertook to buy about 70 per cent of the station's power to meet part of the longer-term demand for electricity in its supply area.

Through its affiliated company, the Hong Kong Pumped Storage Development Company Limited, CLP has bought the right to use 50 per cent of the capacity of the Guangzhou Pumped Storage Power Station, at Conghua. The total installed capacity of the current phase is 1 200 MW. Off-peak electricity from the CAPCO system and Guangdong Nuclear Power Station is used to pump water from a lower reservoir to an upper one. The water is allowed to flow downhill during the day to generate electricity to meet Hong Kong's peak demand.

The government entered into Demand Side Management (DSM) Agreements with HEC and CLP in November 1997 and February 1998 respectively for implementation of large-scale DSM programmes to reduce electricity consumption. In accordance with the agreements, each power company has submitted a three-year DSM Resource Plan which provides details of all DSM programmes to be implemented within that period. Actual implementation of the power companies' DSM programmes will begin in the first half of 1999.

The Electricity Ordinance, with its subsidiary regulations, is the main enabling legislation on electricity safety. It sets out the legal framework encompassing all the

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