3 / 148
PREPARING FOR A GREEN ENERGY FUTURE
It gives me great pleasure to present the financial and
operating results for HKEI in 2016.
This year we continued to achieve a balance between
shareholder and customer value, with stable distribution to
holders of our Share Stapled Units (SSU), while reducing our
tariffs across the board. Following the 2016 tariff reduction
we have announced further cuts for 2017, delivering savings
of over 17% on average for all customers, thanks to lower-
than-expected fuel costs. These cuts follow a two-year tariff
freeze and have enabled us to go over and above our 2013
pledge to keep tariffs unchanged for five years till end 2018.
Over the years, it is clear that the world’s energy needs
have evolved: the need is now for reliable and accessible
energy that is also environmentally friendly. One of our key
strategies to achieve this in the immediate term is through a
significant increase in the use of natural gas for generation.
In 2015, we had begun the work of increasing gas-firing
generation capacity with the construction of a new gas-
fired generating unit, L10 at Lamma Power Station (LPS).
In September 2016, we secured Government approval for
another such unit, L11, and have already commenced with
preparation works for its construction.
In the longer term, more efforts would be required to
support the Government’s Climate Action Plan 2030+ which
sets out an aggressive target to reduce Hong Kong’s carbon
intensity by 65-70% in 2030 compared to the 2005 level.
We envisage an investment pipeline which includes the
further replacement of coal-fired generating units by gas-
fired units and other supporting infrastructure.
FINANCIAL RESULTS AND DISTRIBUTIONS
For the year ended 31 December 2016, HKEI’s EBITDA was
HK$8,034 million (2015: HK$8,035 million) and audited
profits attributable to SSU holders was HK$3,599 million
(2015: HK$3,591 million).
In the longer term, we
envisage an investment
pipeline which includes the
further replacement of
coal-fired generating units
by gas-fired units and other
supporting infrastructure.
CHAIRMAN’S STATEMENT
2016 ANNUAL REPORT
3