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CEO'S REPORT

10

| HK ELECTRIC INVESTMENTS

Natural gas was primarily sourced from Australia and Qatar.

Our supply of low-sulphur coal with lower ash content from

Indonesia, Russia and Australia played a role in improving our

environmental performance during the year. During selection

and throughout our engagement we aim to ensure that

our suppliers uphold our own standards for sustainability

including ethics, human and labour rights, health and safety,

and environmental protection.

A range of emissions reduction measures is in place at LPS

including flue gas desulphurisation plants and low-nitrogen-

oxide burner systems. In 2015 we outperformed the

emissions targets set by the government.

During the year, we worked with the government to

determine emissions allowances from 2020 onwards. From

2020, our target emissions levels will further decrease by

26% for SO

2

, 29% for NO

x

and 28% for RSP respectively.

Apart from increasing production of gas-fired and renewable

energy, we will continue to invest in emissions reduction

technology and manage our fuel supply to meet the

challenge.

GENERATING GREEN ENERGY FOR BLUE

SKIES

Renewable energy forms an important part of our

sustainability strategy. We utilise both solar and wind

energy for power generation on Lamma Island. In 2015 the

renewable energy we generated offset 1,530 tonnes of

carbon dioxide emissions.

LOW-EMISSION ENERGY PRODUCTION FOR

THE NEW GENERATION

We constantly review the environmental impact of our

generation activities. In 2015, natural gas and low-sulphur

coal remained our primary fuels with the proportion of gas-

fired power standing at about 34%.

SO

2

, NO

x

and RSP emission performance

Tonnes

0

2,000

4,000

6,000

8,000

10,000

SO

2

NO

x

RSP

2011 2012 2013 2014 2015

Hong Kong has adopted a carbon intensity reduction

target of 50%-60% by 2020 compared with 2005.

To support this target we aim to provide 50% of our

electricity supply to the customers using natural gas by

this date.

Our upcoming L10 gas-fired combined cycle generating

unit will be central to meeting these natural gas-based

energy targets. Combined cycle generation technology

is one of the cleanest and most efficient ways in the

world to generate electricity from fossil fuels. The high

efficiency of the new L10 unit means that using the same

amount of fuel, more power can be generated at a lower

cost.

Equipped with a Selective Catalytic Reduction system

and state-of-the-art Dry Low NO

X

combustion system,

the new L10 turbine will further minimise NO

X

emissions

beyond the levels of the existing units.

NEW L10 UNIT TO ADDRESS TIGHTENED ENVIRONMENTAL GOALS