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The Environment

The current agreements are for 10-year terms ending in 2018. In April 2017, the government entered into post-2018 Scheme of Control Agreements with each power company. Key terms of the new agreements include reducing the permitted rate of return from 9.99 per cent to 8 per cent with a term of about 15 years, introducing mechanisms to encourage the power companies to do more to promote energy efficiency and conservation and renewable energy, improving the charging arrangement for fuel costs, improving incentive and penalty schemes. on the companies' operational performance, and setting out requirements for the necessary preparatory work to pave the way for introducing potential new suppliers when the requisite market conditions are present.

HK Electric has a total installed capacity of 3,507 megawatts at its Lamma Power Station. CLP Power receives its electricity supply from the Castle Peak Power Company Limited's power stations at Black Point (2,525MW), Castle Peak (4,108MW) and Penny's Bay (300MW).

HK Electric and CLP Power own their respective transmission and distribution systems. The two transmission systems are interconnected by a cross-harbour link, which provides emergency backup and some sharing of generating capacity reserve between the two systems. The link. has a total capacity of 720 megavoltamperes.

CLP Power's transmission system is also connected to the Guangdong electricity network to facilitate its electricity exports and imports to and from the province. CLP Power imports about 70 per cent of the power generated by the Daya Bay station, which has two 984MW pressurised water reactors. The company also sells electricity to Guangdong from its existing reserve generating capacity. Its sales are governed by an agreement with the HKSAR Government, under which CLP Power's consumers get priority of supply and 80 per cent of the profit from the sales.

The Central People's Government, in a memorandum of understanding signed between the HKSAR Government and the National Energy Administration in 2008, supports China Guangdong Nuclear Power Holding Company Limited in renewing its supply agreement with Hong Kong for 20 more years. In 2009, the HKSAR Government gave approval for CLP Power to extend its contract for the supply of nuclear electricity from the Daya Bay station for another 20 years from 7 May 2014. The quantity of electricity supply will be no less than the current level.

On a temporary basis from 2014 to 2018, CLP Power is importing some additional 10 per cent of electricity generated by the Daya Bay station. The company is also drawing natural gas from the Mainland's Second West-East Natural Gas Pipeline through the Hong Kong Branch Line facilities.

CLP Power has the right to use up to half of the 1,200MW capacity of the Guangzhou Pumped Storage Power Station phase 1 at Conghua. It stores off-peak-period electricity from Castle Peak Power's stations and the Daya Bay station in the Conghua plant, which generates hydroelectricity to meet Hong Kong's demand during peak periods.

Regulations under the Electricity Ordinance govern the registration of electrical contractors and workers and competent persons, safety of electrical wiring, supply of safe household electrical products and protection of electricity supply lines from third-party damage.

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