CLP is committed to ensuring that all activities and operations within its control result in zero harm for its employees, contractors, customers and the public. This covers construction of new projects, operations and decommissioning.

In May 2020, CLP rolled out a new integrated HSSE Policy. As a result, the Group is currently refreshing its HSSE Management System (HSSEMS).

The Group’s HSSEMS assists in implementing CLP’s commitment to zero harm and the requirements of the new Group HSSE Policy. It is supported by a suite of standards with mandatory requirements, methodologies and other supporting tools. The diagram below shows the relationship and the core components of the HSSEMS.

HSSEMS core components and relationship

The refresh of the HSSEMS aims to:

• Establish a risk-based HSSEMS to meet the objectives set out in the HSSE Policy

• Further improve clarification of mandatory requirements within the CLP HSSEMS Standards

• Enable the Group’s regional organisations to incorporate HSSEMS Standards into their business programme, and

• Promote and encourage conformity to internationally accepted standards for occupational health and safety (ISO 45001) and environmental management (ISO 14001).

More details on how CLP manages Safety and Environment can be found in the relevant section of this report.

As the transition to the refreshed system is ongoing, certain parts of the refreshed HSSEMS are being developed under four sections:

• Leadership and commitment

• Planning and support

• Operational enablers

• Monitoring, learning and improving.

Goals and targets

To support safe operations, the Health, Safety and Environment Improvement Strategy (HSE Improvement Strategy) has clear objectives, programmes, timelines, and quantifiable key performance indicators (KPIs), as well as sufficient resources including HSSE professionals and an appropriate budget.

Operational responsibilities

The Group HSSE Committee, chaired by the CEO, has the highest executive responsibility on HSSE-related issues. The Group Operations Leadership Team and the Global HSE Team conduct monthly meetings to coordinate, monitor and share knowledge and experience in HSSE practices across the Group. Special focus is given to achieving an overall higher level of safety performance.

In addition, various HSSE committees have been established to engage employees at the operational level. These committees also involve project partners and contractors. HSSE professionals facilitate the overall engagement effort and advise on HSSE matters, while the responsibility for implementing high levels of HSSE standards rests with line management.

Continuous improvement

An annual improvement programme is developed, approved and communicated to staff and contractors in each business unit. The programme follows the five pillars of the Group's HSE Improvement Strategy. Recommendations are implemented on agreed timescales and programme processes are monitored regularly.

Hierarchy of operational responsibilities

Strategies and procedures

CLP’s AMS Standard was developed in 2016 to standardise key practices in managing assets across the Group and ensure best practice. It accords with the ISO 55000 series of standards for asset management systems, as well as the ISO 31000 standards for risk management.

The AMS Standard is integrated into CLP’s Health, Safety, Security and Environment (HSSE) Management System and the Project Management Governance System (PMGS) Standards to manage the complete lifecycle of an asset.

The AMS contains five key stages and 10 asset management elements, as illustrated in the diagram below.

Overview of the CLP asset management system

Monitoring and follow-up

CLP has developed and implemented an in-house non-financial data reporting and assurance standard. The customised Group Operations Information System (GOIS) is used to compile operational data. Its built-in data approval sequence and automated presentation and reporting functions strengthen data governance.

Relevant staff at the asset, regional and Group levels are expected to take responsibility for upholding the standard.

Continuous improvement

CLP constantly identifies opportunities to improve the operational efficiency of Group assets to help meet the increasingly stringent regulations on emissions and fuel efficiency in certain jurisdictions. There are also increasing improvement opportunities arising from innovation and optimisation, particularly from data analytics.

Initial efforts at the project planning stage are critical in determining the operational efficiency or capacity factor range of an asset through its entire lifespan. Projects involving a major asset overhaul require stringent technical and financial scrutiny before commencement.

Generation assets

Coal consumption was lowered in 2020 by 16.9%, compared to 2019. This was primarily due to a reduction in coal consumption at Castle Peak Power Station in Hong Kong, and higher utilisation of gas, a cleaner fuel, at Black Point Power Station. Gas consumption in 2020 was 25.7% higher mainly due to its increased utilisation at Black Point Power Station.

CLP reports the annual operating performance of its generation assets which fall within the reporting scope. The performance metrics include the availability factor, generation sent-out, thermal efficiency and energy intensity.

CLP has been encouraging its asset managers to drive business innovation and explore operational potentials. One example is the recent innovation at Sihong Solar Power Station. Since February 2019, Jiangsu Sihong Solar Power Station, through its use of technology, configured its solar panels to achieve an 8% increase in performance ratio, resulting in an energy sales increase of 100MWh per year. This innovation was awarded a National Utility Model Patent by the National Intellectual Property Administration in August 2020.

Transmission network

To meet Hong Kong’s electricity demand growth, CLP reviews future transmission network developments annually in accordance with: the latest system maximum demand forecast; area load growth; infrastructure development; and generation development.

Maintenance and improvement programmes have been developed annually for major assets, based on the analysis of current conditions and performance of the assets, levels of investment and risk.

To ensure safe and reliable power supply, CLP safeguards the power systems with sophisticated equipment and best practices in operations.

CLP continues to improve the reliability of its power supply network. In addition to vegetation management and third-party damage prevention programmes, various other measures have been taken to further enhance network reliability and minimise customer supply interruption.

Examples include:

• Installing online condition monitoring systems for switchgear and transformers to allow real-time monitoring and detection of incipient fault conditions

• Continuing the reinforcement of transmission towers for 400kV overhead lines against super typhoons and the refurbishment of switchgear

• Enhancing automatic detection and isolation of the faulty sections of overhead line circuits and expediting the deployment of smart meters in villages, and

• Conducting regular reviews and targeted studies on network performance and climate risks to drive continual improvement.

For CLP India’s transmission assets acquired in 2019, predictive and corrective maintenance is the key philosophy adopted. This includes pre-emptive check-ups and assessments on operational clearances, ensuring assets are well structured and maintained with proper setup, hardware and security. Frequent patrolling was carried out for conducting assessments on landscape and assets. The results would be used to identify defects and plan for shutdowns if needed.

CLP India has begun using a mobile application for real-time tracking of site patrol to shorten the response time rectifications, if required. Thermo vision cameras aid the team in reaching the site with defects through heat mapping. The use of drones for site patrolling is under planning, while a ground team will be retained at strategic locations to allow them to attend to damages when required.

With the operations and maintenance strategy in place, CLP India was able to achieve 100% availability since its acquisition in November 2019.

Goals and targets

Targets for each asset are set annually and included in the business plan. Performance is reported on a weekly basis to senior management. Any significant performance variance is analysed and corrective action is taken where appropriate.

For generation assets, CLP monitors the availability factor in terms of the amount of time that an asset is able to produce full load equivalent electricity over a certain period, divided by the amount of time in that period. Typical values range from 70% to 90%, and CLP aims to maintain an availability range of 90% and above for newer assets.

Strategies and procedures

While CLP has generation businesses across the Asia-Pacific region, Hong Kong is the only location where the business is vertically integrated, that is, it provides generation, transmission and distribution of power and retail. CLP Power Hong Kong is regulated by the Hong Kong Government under a Scheme of Control Agreement (SoC) framework that requires the Company to forecast electricity demand and plan for investment to provide a safe and reliable electricity supply to customers. In Hong Kong, CLP uses various measures to maintain high supply availability and reliability. These measures include:

• Maintaining sufficient generating capacity to meet forecast demand as well as planned and unforeseen outages

• Implementing demand-side management measures to reduce demand growth and to improve utilisation of existing assets

• Upgrading generation and network facilities to meet new electricity demand

• Adopting advanced technology such as smart grid

• Improving the quality of the power supply to minimise voltage dips, and

• Enhancing power systems to minimise the impact of adverse weather.

CLP promotes organisational learning and the building of technological capacities across the Group. Insights learned from regional experiences are shared amongst functions to plan for a consistent management framework. This practice facilitates better portfolio management and reduces risks to the Group’s operations as a whole.

On a three-year rolling basis, from 2018 and 2020, a CLP Power Hong Kong customer experienced 9.77 minutes of unplanned power interruptions per year. The major interruption was due to the impact of Super Typhoon Mangkhut in September 2018. Excluding that interruption, the performance would have achieved a three-year rolling average of about 0.92 minutes. This achievement shows the value of a stable and supportive regulatory framework that encourages careful investment planning, as well as the professional expertise of CLP employees in power operations.

CLP’s transmission and distribution network in Hong Kong serves about 80% of the population of the city and close to 100% of the population in the Company’s service area. At the end of 2020, CLP Power had approximately 1,143km of overhead and approximately 15,103 km of underground circuits at medium or higher voltage. In addition, there were 235 primary and 15,028 secondary substations in Hong Kong. In 2020, the average network loss for the past five years was 3.69%, slightly lower than the five-year average of 3.83% reported in 2019.

A set of universally recognised supply reliability performance indicators is used from the Institute of Electrical and Electronics Engineers standard (IEEE 1366-2012) to monitor system performance. These indicators are reported annually to the Hong Kong Government.

In 2020, CLP continued to enhance the reliability and security of the supply system. It invested around HK$8.9 billion to meet both current and future energy demand.

Supply reliability performance indicators and results for CLP Power Hong Kong

Strategies and procedures

CLP’s approach to security can be best understood using the diagram below.

CLP's approach to security

There are five separate but co-dependent lines of activity, all of which are protected (to a lesser or greater extent) by cyber and physical security measures. These lines of activity are:

• Information: Data is stored in both hard and electronic formats. The confidentiality, integrity and availability of this data needs to be protected

• Operational Technology (OT): Hardware and software that detects, monitors or controls physical devices (such as a turbine) at CLP assets, need to be protected

• Information Technology (IT): The IT used to store, retrieve, transmit, and manipulate data or information needs to be protected

• Personnel: Staff employed by CLP, both at the workplace and travelling for business, must be safe, and

• Brand: CLP’s image, identity and associated reputation needs to be protected.

CLP security measures are robust and scalable. Taken together, they provide comprehensive, layered and flexible protection.

With reference to ISO/IEC27002:2013 Information Technology Security Techniques - Code of practice for information security controls, a set of Group-level policies have been developed. Regional standards and procedures have been developed from these policies, and tailored to suit the context and local regulation of the business unit.

Operational responsibilities

CLP Group Security was established in the first quarter of 2020, aiming to deliver a holistic security service to the Company by offering an in-house capability across the full range of security skillsets. Drawing on internal security professionals and recruiting from wider industry, the Group Security function is separate from both the IT and the Health & Safety departments. It is led by the Senior Director – Group Security, who is a highly experienced cyber security leader, and this role reports directly to the Group Chief Operating Officer.

The Group Security team’s responsibilities are discussed in the Reinforcing cyber resilience and data protection section of this Report.

Training and awareness

CLP security staff have a key role in preventing harm to staff and the wider public. Standards of conduct are informed by the newly revised CLP Value Framework and Security Management System, which requires each CLP region and site to develop an appropriate security system to effectively address the threats faced.

All in-house security staff are required to comply with CLP’s Code of Conduct at all times, and receive Code of Conduct training on an annual basis. In addition to training on national regulations and site-specific requirements, third-party vendor security staff receive induction training on CLP’s policies on: ensuring a harassment-free workplace; minimum wage guidelines; and measures preventing discrimination in the workplace. This induction training must be completed before personnel are granted access to their assigned workplace sites.

CLP’s Crisis Management & Emergency Response Structure is outlined in the diagram below. The Group Crisis Management Plan provides a platform for the effective handling of a crisis at the Group level. The plan:

• Outlines crisis management organisation, roles, responsibilities, procedures and processes

• Specifies the tools needed to ensure the collective response is well planned, well executed, and fully integrated across the organisation

• Describes the relationship and interface between the handling of regional- and Group-level crises, and

• Details the processes that govern internal and external communications during emergencies and crises; ensuring the people responsible for managing a crisis have the necessary information to carry out their responsibilities and that key stakeholders are informed.

The Group-level plan is supported at regional level by Regional Crisis Management Plans which mirror the Group document but are tailored for each region. In addition, detailed emergency response plans have been developed for each asset. These plans are designed to be used by first responders and asset managers.

CLP Crisis Management & Emergency Response Structure

Training and awareness

As specified in both Group and regional publications, emergency response drills are conducted at least annually at all Group sites, with smaller scale drills taking place more often. Group and Regional Crisis Management Plans are reviewed at least every three years. Regional crisis management exercises are conducted annually as part of the internal peer review process.

Travel security

Protocols and procedures are in place to adequately prepare staff before travel, support them when they are on the road, and respond quickly in the event of a travel emergency anywhere in the world. For emerging risks, information packs are updated regularly to help employees prepare for business trips.

In 2020, CLP upgraded its:

• Everbridge Mass Notification system, a comprehensive notification system enabling users to send notifications to individuals or groups using lists, locations and visual intelligence

• Secure chat Emergency Communications & Response (ECR) system, allowing secure two-way messaging

• Crisis Communications Billboard (CCB), and

• Audio and video systems installed in the key conference rooms in selected Company offices.

At the Group level, communications and administrative drills have been conducted quarterly to ensure that the equipment and procedures are functional and fully understood by the operators.

Over the course of 2020, business travel all but stopped in response to the COVID-19 pandemic. Instead, more effort was spent keeping staff across the Group informed on the travel situation and border closures across CLP's portfolio countries and other key destinations, as well as providing bespoke advice to those who needed it.

The protest situation in Hong Kong has all but died down, constituting a much lower threat profile to the business than it did 12 months ago. CLP will continue to monitor potential areas of concern.