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Monday 3 November 2008
Hongkong Electric invests in mainland wind farm projects
Hongkong Electric Holdings, the power supplier controlled by Li Ka-shing, has made its first investments on the mainland to capitalise on the country’s rising demand for renewable energy.
Hongkong Electric invests in mainland wind farm projects
Denise Tsang 3 November 2008
Hongkong Electric Holdings, the power supplier controlled by Li Ka-shing, has made its first investments on the mainland to capitalise on the country’s rising demand for renewable energy.
The company bought minority stakes in a 48-megawatt wind farm in Dali, Yunnan, and a 49.5 MW project in Leting, Hebei, a company spokesman said.
Analysts, who estimated the total cost of the two projects at 780 million yuan (HK$883 million) or 8 million yuan per MW, said Hongkong Electric was the latest utility after CLP Holdings and Hong Kong & China Gas to take a bite of the nascent but massive renewable market.
Hongkong Electric appeared to have loosened its strict strategy of investing in highly regulated energy markets, such as Australia and Britain, in the face of a looming government-ordered cut in the rate of return from supplying electricity on its Hong Kong home turf, they said.
“China has never been on its development radar screen until recently,” an analyst with a European brokerage said.
“Given the company’s minority shareholdings in the wind projects, it is testing the market.”
Hongkong Electric said it would continue to look for attractive investments globally.
The Yunnan project calls for erecting 64 wind turbines of 750 kilowatts each, with construction nearly completed and commercial operation due early next year.
The Hebei project involves 33 wind turbines of 1.5 MW each. It is to be commissioned next year.
Hongkong Electric said the projects were awarded with government incentives, which included priority in the purchase of power generated from the windmills, tax exemptions on construction work and value-added tax rebates on machinery.
It added that the projects were qualified for accreditation of carbon credits under the Kyoto Protocol, a global environmental treaty for cutting emissions of greenhouse gas.
JP Morgan analyst Edmond Lee said China and India had the biggest potential in developing wind power in the Asia-Pacific.
“In terms of wind resources and governmental support, the two countries offer a lot of opportunities,” Mr Lee said. “However, because of their short history of wind power development, investment risks are higher, too.”
On the mainland, coastal or highland regions may be rich in wind resources, but wind data and locations were among a basket of decisive factors affecting the return of a project, he said.
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Hongkong Electric invests in mainland wind farm projects
Denise Tsang
3 November 2008
Hongkong Electric Holdings, the power supplier controlled by Li Ka-shing, has made its first investments on the mainland to capitalise on the country’s rising demand for renewable energy.
The company bought minority stakes in a 48-megawatt wind farm in Dali, Yunnan, and a 49.5 MW project in Leting, Hebei, a company spokesman said.
Analysts, who estimated the total cost of the two projects at 780 million yuan (HK$883 million) or 8 million yuan per MW, said Hongkong Electric was the latest utility after CLP Holdings and Hong Kong & China Gas to take a bite of the nascent but massive renewable market.
Hongkong Electric appeared to have loosened its strict strategy of investing in highly regulated energy markets, such as Australia and Britain, in the face of a looming government-ordered cut in the rate of return from supplying electricity on its Hong Kong home turf, they said.
“China has never been on its development radar screen until recently,” an analyst with a European brokerage said.
“Given the company’s minority shareholdings in the wind projects, it is testing the market.”
Hongkong Electric said it would continue to look for attractive investments globally.
The Yunnan project calls for erecting 64 wind turbines of 750 kilowatts each, with construction nearly completed and commercial operation due early next year.
The Hebei project involves 33 wind turbines of 1.5 MW each. It is to be commissioned next year.
Hongkong Electric said the projects were awarded with government incentives, which included priority in the purchase of power generated from the windmills, tax exemptions on construction work and value-added tax rebates on machinery.
It added that the projects were qualified for accreditation of carbon credits under the Kyoto Protocol, a global environmental treaty for cutting emissions of greenhouse gas.
JP Morgan analyst Edmond Lee said China and India had the biggest potential in developing wind power in the Asia-Pacific.
“In terms of wind resources and governmental support, the two countries offer a lot of opportunities,” Mr Lee said. “However, because of their short history of wind power development, investment risks are higher, too.”
On the mainland, coastal or highland regions may be rich in wind resources, but wind data and locations were among a basket of decisive factors affecting the return of a project, he said.
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