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CEO’S REPORT
PROGRESS TOWARDS A GREENER
ENERGY FUTURE
In 2016, HK Electric maintained its excellent track record
in customer service, supply reliability and environmental
performance. At the same time, it made systematic
investments to move towards greener fuels to further reduce
emissions in the future.
During the year, we met our promise to provide affordable
power to our customers by reducing tariffs in response to
soft fuel prices, after freezing them for the two preceding
years. We fulfilled our obligations to the holders of our
Share Stapled Units by achieving steady returns and stable
distribution.
OPERATION REVIEW
In 2016, our customer base increased slightly from
572,000 in 2015 to 575,000, driven by the residential and
commercial sectors though electricity sales decreased by
0.8% from 10,879 million kWh in 2015 to 10,792 million
kWh. As a result of a decline in international fuel prices,
combined with operating efficiencies, we were able to
reduce net tariffs for all customers by an average of 1.1% or
1.5 cents per unit of electricity in 2016.
The reduction in electricity consumption in Hong Kong
in 2016 was partly due to milder weather compared to
the record-breaking temperatures during the summer of
2015, as well as the result of various energy efficiency and
conservation efforts undertaken across the community.
Oil prices reverted the falling trend in the preceding years
and started to rebound in 2016. Coal prices on the other
hand underwent significant adjustments. We are planning
ahead to minimise the impact any potential long-term
increase in the price of natural gas will have on tariffs, at a
time when our dependence on this fuel will also increase.
We actively engaged with the Government on discussions
through the year to determine the future development of
the electricity sector in Hong Kong after the expiry of the
current regulatory period. Respondents to a 2015 public
consultation exercise shared our view that the current
Scheme of Control arrangement had generally worked well
to achieve the energy policy objectives, enabling reliable
power supply at an affordable price. Respondents agreed
that going forward, the current contractual agreement
As we increase gas-firing
capacity we also move
forward with plans to
strengthen the security of
our gas supply and secure
more competitive prices.
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HK ELECTRIC INVESTMENTS