In this undated file photo, a citizen walks past the CLP Group's logo in Hong Kong. (PARKER ZHENG / CHINA DAILY)
CLP Group announced on Thursday that it is committed to its goal of achieving net-zero greenhouse gas emissions across its business value chain by 2050.
CLP also said that the utility conglomerate will look into green-bond issuances and other green financing opportunities in Hong Kong to provide the group with the business resources and available capital necessary to concentrate its investments in the Guangdong-Hong Kong-Macao Greater Bay Area. CLP did not specify how much capital it needs to meet this goal in the next three decades.
In addition, CLP is accelerating plans to phase out coal-fired generation assets by 2040.
Richard Lancaster, the CEO of CLP Group’s holding company, CLP Holdings, said it is important for Hong Kong to maintain a diversified energy mix as the city needs energy security and stable energy prices while the city’s economy relies on imports
Richard Lancaster, the CEO of CLP Group’s holding company, CLP Holdings, said CLP has a number of minority investments of some coal plants on the Chinese mainland and in India and Taiwan. “We are working with partners, and in some cases, these plants are reaching their natural life over the next few years. We already have plans in some cases to transfer some of them to the majority partners, or close down when they reach their end of life,” he said.
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In Hong Kong, the utility group had announced plans to progressively close the coal-fired generation units at Castle Peak A Power Station in the middle of the decade. The Castle Peak B Power Station may be closed in the mid-2030s.
Lancaster said that although Hong Kong does not have many industries and has an electricity-powered mass public transportation system, he sees new areas of businesses for CLP Group arising from population growth, digitalization and decarbonization.
Regarding population growth, Lancaster said population growth broadly translates into 1 to 2 percent growth in electricity demand annually.
Further, new technologies, such as the transformation from natural gas to green hydrogen or renewable energy forms such as offshore wind and nuclear power, are also driving the energy transition process, which creates new business potential for CLP Group, he said.
The decarbonization drive will also create new business. “We see a new business model is developing as there is strong demand for energy management. Many customers see energy as their biggest source of carbon emissions so they want to manage their carbon footprint better. Some large international organizations operating globally want to buy renewable energy directly from producers in large markets such as China and India,” Lancaster said.
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The CEO also said it is important for Hong Kong to maintain a diversified energy mix as the city needs energy security and stable energy prices while the city’s economy relies on imports.
Money has to be provided somewhere to finance all these new investments. CLP Group recognizes that there are more investment opportunities than business resources to capture the opportunities arising from the decarbonization initiative.
The utility group is selling some of its energy portfolios and reinvesting the cash proceeds in decarbonization-related energy projects.
In India, CLP Group partnered with Canadian-based institutional investor CDPQ, whereas CDPQ acquired a 40 percent stake in CLP India in 2018. The utility conglomerate is also looking for other partners to purchase a stake in its Australian energy business. These financial transactions help CLP Group have more available capital to concentrate investments in the Greater Bay Area.
“We can manage our decarbonization business in Hong Kong and on the Chinese mainland within our resources but we also need to increase our borrowings and will look for green bond issuances and other types of green financings,” Lancaster said, adding that the group will ensure that there will be sufficient capital as the group will not stretch its finances while taking on debt.
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