HK Electric Investments & HK Electric Investments Ltd. · HKEX:2638
HK Electric Investments & HK Electric Investments — HK Electric Investments — Investor Presentation (July 2018)
13 slides from HK Electric Investments & HK Electric Investments's investor presentation, Jul 4, 2018
Slide 1: Entering a New Era of Gas Generation for a Low-Carbon Future
4 July 2018 2019-2023 Development Plan Entering a New Era of Gas Generation for a Low-Carbon Future
Slide 2: Development Plan Background
Development Plan Background ● “Hong Kong’s Climate Action Plan 2030+” – Improving fuel mix as a key strategy for Hong Kong to combat climate change ● Densely populated vertical city – Reliable power supply and excellent customer service is critical to Hong Kong’s development – HK Electric’s supply r
Slide 3: Development Plan Objectives
Development Plan Objectives ● 2019-2023 Development Plan requires $26.6B capital expenditure – Support Government’s environmental and climate change policies – Build infrastructure for transition from coal to gas generation – Help transform Hong Kong into a smart city and enhance power networks – Ma
Slide 4: Development Plan Overview
Development Plan Overview 2019 to 2023 Capital Expenditure - $26.6 B Transmission & Distribution Systems Customer and 34%% 34 Corporate Services $9.1BB $9.1 Development New Generating Units & Other Generation 61% 61% Facilities $16.2BB $16.2 4
Slide 5: Towards Low-Carbon Power Generation
Towards Low-Carbon Power Generation Generation Mix 2017 2020 2022 2023 Oil Coal Gas Gas 34% 50% 55% ~70% Fuel Mix Coal 66% 50% 45% ~30% 100% 50% 0% 1980 1985 1990 1995 2000 2005 2010 2015 2020 Oil Coal Generation Gas Generation Generation 5
Slide 6: Securing 2nd Gas Supply
Securing 2nd Gas Supply ● Gas generation to increase to 50% in 2020 to meet Government’s fuel mix target ● Gas generation increases further to 55% in 2022 and 70% in 2023 with Proposed Offshore LNG new generating units Terminal in Hong Kong Waters ● Lamma Power Station now wholly relies on a single
Slide 7: More Resilient Power Grid
More Resilient Power Grid ● Construct and reinforce T&D Facilities – New zone substation in Eastern District – Replacement zone substation in Sheung Wan – New distribution substations and network expansion for new building developments ● Improve and enhance grid intelligence and Congested undergroun
Slide 8: Factors Affecting Future Tariffs
Factors Affecting Future Tariffs ● 2019-2033 Scheme of Control Agreement (SCA) new requirements – Lower Permitted Rate of Return (8%) will reduce Basic Tariff – Frequent adjustments of Fuel Clause Charge timely reflect actual fuel cost fluctuations – Wider promotion of energy efficiency & conservati
Slide 9: Year 2018 and 2019 Tariff Comparison
Year 2018 and 2019 Tariff Comparison 2018 2019 (¢/unit) 140 132.5¢ Net Tariff Payable 124.7¢ 20.0¢ -11.8¢ Net Tariff (2018 Special (Reduction due Payable Rebates on to lowered RoR) +4.0¢ 4.6¢ (Special Rebates)* 120 Rent & Rates (Other Factors and Fuel) Affecting Net Tariff) 120.1¢ 112.5¢ (2019 (2018
Slide 10: 2019 Tariff
2019 Tariff Year 2018 2019 Adjustment Components (¢/unit) Basic Tariff 109.1 101.3 - 7.8 [ -7.1%] Fuel Clause Charge 23.4 23.4 --- Net Tariff Payable 132.5 124.7 -7.8 [- 5.9%] Special Rent & Rates Rebate - 4.0 - 2.3 + 1.7 Special Fuel Rebate - 16.0 - 2.3 + 13.7 Net Tariff Payable with Special Rebate
Slide 11: Basic Tariff Projection
Basic Tariff Projection Year 2018 2019 2020 2021 2022 2023 Components (¢/unit) Basic Tariff 109.1 101.3 105.3 110.2 114.8 115.7 Change since 2018 - -7.1% -3.5% +1.0% +5.2% +6.0% Special Rent and Rates -4.0 -2.3 -0.3 - - - Rebate Net Basic Tariff 105.1 99.0 105.0 110.2 114.8 115.7 Change since 2018 -
Slide 12: Conclusion
Conclusion ● HK Electric will make best endeavour to complete all planned projects ● Commissioning new gas generating units will further improve air quality and help combat climate change ● Installing smart meters and improving grid intelligence will help transform Hong Kong into a smart city ● 2019
Slide 13: Thank You
Thank You
HK Electric Investments — Investor Presentation (July 2018) on 6ix