Power and the glory

China Daily (Canada) - - FRONT PAGE -

Tran­quil and serene Kowloon Bay glows in the sun­light as it stretches away to meet the sky. Tak­ing in the view from the CLP build­ing at Hung Hom, Kowloon, is Richard Lan­caster who, with his char­ac­ter­is­tic smile, re­calls the com­pany’s more than a cen­tury old history in Hong Kong.

From a hum­ble be­gin­ning pro­vid­ing street light­ing in Kowloon, CLP Hold­ings has grown into the larger of Hong Kong’s two power util­i­ties, sup­ply­ing to 80 per­cent of the lo­cal pop­u­la­tion. “Pre­vi­ously, the power in­dus­try was one that not many peo­ple would talk about. It was some­thing we took for granted by just turn­ing on a switch and ex­pect­ing the elec­tric­ity to be there,” said Lan­caster, chief ex­ec­u­tive of­fi­cer at CLP Hold­ings.

The power in­dus­try has lately gone through a lot of dra­matic trans­for­ma­tions amid a spate of sig­nif­i­cant en­vi­ron­men­tal pro­tec­tion is­sues, with changes in both energy pro­duc­tion and con­sump­tion modes, he noted.

Echo­ing the SAR gov­ern­ment’s cleaner-energy goals, the role of CLP in the power in­dus­try has changed enor­mously, from just pro­duc­ing power at the cheap­est price to at­tach­ing great im­por­tance to re­li­a­bil­ity, more so than ever be­fore, while equally man­ag­ing the en­vi­ron­men­tal im­pact, Lan­caster said.

Bet­ting big on the Chi­nese main­land and In­dia, the Hong Kong-head­quar­tered power firm is switch­ing its long-time growth fo­cus away from Aus­tralia, which it spent 15 years build­ing an as­set port­fo­lio and grew to be­come the coun­try’s third-largest power util­ity.

Hav­ing set up shop in Hong Kong more than a cen­tury ago in 1901, CLP has grown be­yond its borders to Chi­nese main­land, In­dia and Aus­tralia over the past 20 years.

The core busi­ness of the city’s largest power firm is still Hong Kong, where it was founded and is head­quar­tered, said Lan­caster.

When CLP Power turned on its first gen­er­a­tor in Hong Kong over a cen­tury ago, at a time when elec­tric­ity was still a nov­elty world­wide, the ter­ri­tory’s to­tal power de­mand was just one tenth of a megawatt (MW).

Hav­ing en­joyed the highs and weath­ered the lows of the city’s for­tunes, CLP has grown into a be­he­moth com­pris­ing more than 70 as­sets with over 22,000 MW of ca­pac­ity and serv­ing more than 5.8 mil­lion peo­ple in Kowloon and the New Ter­ri­to­ries.

But the best growth op­por­tu­ni­ties emerge from the Chi­nese main­land and In­dia, eco­nomic pow­er­houses with an in­sa­tiable ap­petite for in­vest­ment in the power in­dus­try and which also strug­gle to deal with lo­cal­ized air pol­lu­tion and cli­mate change.

This is where CLP comes in, by fo­cus­ing on pro­vid­ing re­new­able energy and high-ef­fi­ciency coal-fired­power, ob­served Lan­caster.

In Aus­tralia, where CLP has faced mul­ti­ple set­backs, it will fo­cus on get­ting value from pre­vi­ous in­vest­ment rather than plow­ing more money into the mar­ket.

The blue-chip com­pany en­tered the main­land mar­ket as early as 1979, sup­ply­ing elec­tric­ity for Guang­dong province to de­velop the lo­cal econ­omy.

As at the end of last year, it boasts more than 40 projects in 15 cities and prov­inces with a to­tal ca­pac­ity of about 7,629 MW.

CLP’s “bold move” came in 1994, when it in­vested in the Guang­dong Nu­clear Power Sta­tion (GNPS) in Daya Bay, the first com­mer­cial nu­clear power sta­tion on the main­land, nearly a decade af­ter the com­pany be­gan to in­vest in the power sec­tor there. Al­most 70 per­cent of elec­tric­ity gen­er­ated by GNPS, in which CLP owns a 25 per­cent stake through a sub­sidiary, was im­ported by CLP to Hong Kong, feed­ing more than a fifth of the lo­cal power con­sump­tion.

That im­port ceil­ing was lifted to 80 per­cent for late 2014 to 2018.

How­ever, not ev­ery­one in Hong Kong is keen on re­ly­ing on the main­land for energy sup­ply, es­pe­cially nu­clear energy.

A plan to im­port 30 per­cent of the city’s power from the main­land grid to meet en­vi­ron­men­tal pro­tec­tion goals fired a year­long de­bate and has been shelved for the mo­ment, with a ma­jor­ity of peo­ple cit­ing energy re­li­a­bil­ity as the chief con­cern.

It has been sug­gested that half the city’s elec­tric­ity sup­ply should come from lo­cal nat­u­ral gas plants. June 30 saw the close of the sec­ond three­month con­sul­ta­tion on how the SAR should be pow­ered, and the fu­ture de­vel­op­ment and reg­u­la­tory frame­work of the elec­tric­ity mar­ket.

Lan­caster be­lieves the city’s energy fu­ture re­ally lies in strik­ing a bal­ance be­tween energy re­li­a­bil­ity, en­vi­ron­men­tal per­for­mance and costs, and there are no ab­so­lute so­lu­tions. Lo­cal gas gen­er­a­tion may meet the city’s im­me­di­ate elec­tric­ity needs, whereas in the long run, the in­creas­ingly re­li­able sup­ply of low car­bon energy


The power in­dus­try is a re­ward­ing place to be in as it pro­duces some­thing that is so es­sen­tial and fun­da­men­tal to daily life, says CLP Hold­ings Chief Ex­ec­u­tive Of­fi­cer Richard Lan­caster, who has been with the com­pany for more than two decades.

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