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OPERATION REVIEW
should be maintained with rate of return at the current
level of 9.99% to provide the necessary incentive for power
companies to make investments. The community did not see
a need to introduce competition for the sake of bringing in
choices.
REALIGNING THE FUEL MIX TO YIELD
LONG-TERM EMISSIONS BENEFITS
In 2016, HK Electric progressed with several key initiatives
in support of the Government’s fuel mix target, which
mandated that the proportion of natural gas in the fuel mix
should increase to about 50% in 2020.
The first of these was the installation of the new L10 gas-
fired combined cycle generating unit, which has entered the
construction stage. Combined cycle generation technology
is one of the cleanest, most popular and efficient ways
available in the world today to generate electricity with fossil
fuels. The new L10 unit, with a high efficiency, can generate
more power and reduce fuel costs when compared with the
older gas-fired unit at Lamma Power Station (LPS).
In September 2016, the Government approved the
construction of L11, another new gas-fired combined cycle
generating unit with an installed capacity of 380 MW to
replace an ageing gas-fired unit. The two new units are
scheduled for completion in 2020 and 2022 respectively
and will jointly improve HK Electric’s gas-firing generation
capacity to about 55% of total output by 2022.
The city’s carbon intensity will continue to be tightened
as Hong Kong joins the worldwide move against climate
change following China’s signing of the Paris Agreement
made at the UN Climate Change Conference (COP 21). In
this context we will continue to accelerate our adoption of
natural gas-firing capacity and reduce our use of coal, as we
plan ahead for the long-term development of LPS.
UPGRADING THE RELIABILITY AND
AFFORDABILITY OF NATURAL GAS SUPPLY
As we increase gas-firing capacity we also moved forward
with plans to strengthen the security of our gas supply and
secure more competitive prices. Importing gas via oceanic
routes is a practical and attractive option.
Plans are in place for Lamma Power Station to increase its gas-firing capacity progressively.
HK Electric's fuel mix in 2016 and 2020
(based on GWh sent out)
Coal
Gas
50%
66%
34%
50%
2020
2016
2016 ANNUAL REPORT
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