CLP gets go-ahead to build a new gas-fired unit in Hong Kong
The 550MW unit will be built in 2-3 years.
CLP receiving government approval today to build a new gas-fired unit in HK is positive while its HK tariff freeze in HK in 2017 is in line, according to Citi, with the offer of one-off HK$0.023/kWh rebate in 1Q17 from tariff stabilization fund with no profit impact.
"CLP’s fuel mix in HK from NG would be lifted from 25% in 2015 to 50% in 2020E; by adding the newly approved 550MW gas-fired unit to be built in 2-3 years at HK$5.5bn at its Black Point power plant, of which HK$3.6bn will be incurred in the current Scheme of Control period until 30 Sep 2018. This will add to its tariff by HK$0.02/kWh (1.8%) in 2017E and HK$0.04/kWh (3.5%) in 2018E," adds Citi.