Glossary

Accelerator programme

A programme that offers support, including financing and mentorship, to facilitate the development of start-up companies.

Air emissions

The emission of air pollutants such as sulphur dioxide (SO₂), nitrogen oxides (NO_x) and particulate matter (PMs).

Availability

The fraction of a given operating period in which a generating unit is available without outages and capacity reductions. Also known as Equivalent Availability Factor.

Capacity purchase

Additional third-party owned power generation capacity contracted by CLP under long-term agreements to meet customer demand. Some of these agreements may confer CLP rights to use the generation assets and exercise dispatch control as if they belonged to the Group.

Capital investments

Includes additions to fixed assets, right-of-use assets and intangible assets, investments in and advances to joint ventures and associates and acquisition of businesses. 

Carbon credit

A carbon credit is a tradeable instrument which represents either: (a) a permit which gives the holder the right to emit one tonne of carbon dioxide or equivalent greenhouse gas (tCO₂e) into the atmosphere; or (b) a certificate from a project that represents the removal or avoidance of one tCO₂e from the atmosphere.

CLP Carbon Credits (https://www.clpcarboncredits.com) are generated from renewable energy sources and can be used to offset carbon emissions generated by governments, organisations or individuals.

Carbon neutral

The condition in which greenhouse gas emissions associated with an activity or entity’s carbon footprint are reduced as much as possible and any remaining hard-to-abate emissions are counterbalanced by offsetting through measures such as the use of carbon credits, carbon sinks or storage.

Circular Economy

Circular Economy is defined in general as a framework that can address the global challenges of climate change, biodiversity loss, waste and pollution, which is achieved through three principles – eliminating waste and pollution, circulating products and materials at their highest value and regenerating nature. Embracing the Circular Economy, an utility company can contribute to the transition to a more sustainable and resilient energy and resource management system by adopting cleaner technologies, promoting resource efficiency and investing in nature conservation. 

Climate Action Finance Framework (CAFF)

Launched in 2017, CAFF supports the transition to a low-carbon economy by attracting socially responsible, sustainable financing to fund CLP’s investments to reduce carbon emissions and increase efficiency of energy usage. The CAFF formalises and governs project evaluation, usage and management of proceeds, as well as reporting for Climate Action Finance Transactions, including bonds, loans and other forms of finance.

Climate Vision 2050

CLP’s Climate Vision 2050 sets out the blueprint of the Group’s transition to net-zero greenhouse gas emissions leading up to mid-century. Launched in 2007 with a focus on the ambition to mitigate CLP’s climate impact, Climate Vision 2050 has been instrumental in informing CLP’s business strategy and guiding its investment decisionmaking.

Combined-cycle gas turbine (CCGT)

A power generation technology that uses dual turbine design, comprising a gas turbine and steam turbine. During the process, the heat from the gas turbine is captured and transported to heat up water in a boiler. Steam is then produced to drive the steam turbine for power generation. The combined-cycle design enables significantly higher efficiency by allowing for greater output without the use of additional fuel.

Decarbonisation

Used to describe the action of lowering GHG emissions. For the power sector, this primarily refers to the reduction of GHG emissions from electricity generation and providing energy efficiency services and solutions to customers which reduce carbon footprint.

Decentralised generation / distributed generation

Refers to electrical generation and storage performed by a variety of technologies of a smaller scale located close to the load they serve. In contrast, centralised generation is the large-scale generation of electricity serving multi-loads connected to the transmission network.

Demand response

Demand response programmes encourage participating customers to commit to short-term reductions in electricity demand, helping energy suppliers to keep the grid running optimally during high load periods.

Development Plan

CLP Power’s Development Plan, which is part of the Scheme of Control (SoC) Agreement, covers capital projects for the provision and future expansion of electricity supply systems under CLP’s operation. It is implemented over a given five-year period, and is subject to the review and approval by the Executive Council of Hong Kong.

Digitalisation

The application of new information technologies including artificial intelligence and data analytics to help electric utilities develop new customer-centric services and improve operations.

Distributed energy

Distributed energy includes power generated from sources such as solar panels and wind turbines located close to the users, as well as controllable loads or storage such as electric vehicles and batteries.

Double materiality

Under the concept of double materiality, companies assess matters affecting business sustainability from two perspectives: firstly financially material topics that may reasonably be expected to affect the business’s cash flows, access to finance or cost of capital; secondly impact material topics with potential effects on people, the environment and the economy. The concept was formally proposed by the European Commission in 2019.

Electricity sent out

Gross electricity generated by a power plant less self-generated auxiliary power consumption, measured at the connecting point between the generating unit and transmission line.

Energy-as-a-Service

Evolution in the business strategy of energy companies to provide a more diverse range of value-adding energy services such as energy management and distributed energy resources, enabling customers to benefit from sustainable energy solutions through a schedule of regular payments, minimising upfront costs.

Energy attribute certificates (EACs)

EACs are a category of contractual instrument that conveys certain information (or attributes) about the energy generated, including the resources used to create it, the emissions associated with its production, the location of the facility that generated the unit of energy and when the unit of energy was produced. EACs are usually issued for renewable energy. Currently, CLP offers two types of EACs, namely Green Electricity Certificates (GECs) and Renewable Energy Certificates (RECs). See definitions of both in this Glossary.

Energy purchase

Electricity purchased by CLP to meet customer demand under long-term agreements from power plants not owned by CLP and without existing capacity purchase agreements with the Group.

Energy security

The uninterrupted availability of energy sources.

Energy transition

The transition of the global energy sector from fossil-fuel based energy systems to low- or zero-carbon sources.

Equity basis

An approach set out by the GHG Protocol Corporate Standard for an organisation to consolidate GHG emissions for the purpose of accounting and reporting GHG emissions. On this basis, the organisation accounts for GHG emissions from operations according to its equity share in the operations.

Feed-in Tariff (FiT)

Payable by CLP under the SoC Agreement to purchase electricity produced by any of its customers with an embedded renewable energy system qualified to participate under the terms of the FiT Scheme.

Flue gas desulphurisation (FGD) facility

Equipment used to remove sulphur oxides from the combustion gases of a boiler plant before discharge to the atmosphere.

Generation capacity

The maximum amount of power that a generator is rated to produce. Also known as installed capacity or nameplate capacity.

Green Electricity Certificates (GECs)

Issued by China’s National Energy Administration, GECs provide proof  of the environmental attributes of renewable energy and enable holders to claim the associated benefits.

Greenhouse gas (GHG) emissions

The emission of gases that contribute to the greenhouse effect, causing a changing climate. CLP’s GHG emissions inventory covers the six GHGs specified in the Kyoto Protocol. Nitrogen trifluoride (NF₃), the seventh mandatory gas added under the second Kyoto Protocol, was deemed immaterial to CLP’s operations after evaluation.

The GHG Protocol Corporate Standard classifies an organisation’s GHG emissions into three ‘Scopes’. Scope 1 emissions are direct emissions from owned or controlled sources. Scope 2 emissions are indirect emissions from the generation of purchased energy. Scope 3 are indirect emissions (not included in Scope 2) that occur in the value chain of the organisation.

Just transition

For energy companies, the transition to a net-zero economy directly impacts individuals, workers and communities. A just transition seeks to mitigate negative impacts on people while effectively harnessing opportunities to deliver equitable and inclusive outcomes.

Megatrends

Large, transformative global forces that define the future by having a far-reaching impact on business, economies, industries, societies and individuals. A megatrend is distinguished from other trends in that it cannot be stopped or significantly altered, even by powerful actors such as governments.

Megatrend analysis is an important tool for companies aiming to drive sustainable growth as competition increases and new disruptive ideas and concepts affect entire industries.

Microgrids

Localised networks with generation, energy storage and load entities, that can operate in tandem with an existing grid or independently. They can potentially be deployed to meet the energy needs of remote areas cost-effectively, foregoing the expense of transmission grids.

National Electricity Market (NEM)

Australia’s NEM is a wholesale spot market connecting six regional market jurisdictions – Queensland, New South Wales, the Australian Capital Territory, Victoria, South Australia and Tasmania.

Nature

Nature is the natural world, with an emphasis on the diversity of living organisms (including people) and their interactions among themselves and with their environment. In the context of corporations, these interactions includes ecosystems providing different ecosystems services and corporation’s operational impacts and financial implications that arise from nature loss. 

Net-zero

The situation in which greenhouse gas (GHG) emissions 2 are reduced, and the residual emissions are balanced by the removal of an equivalent amount of GHG from the atmosphere which is durably stored.

Non-carbon energy / non-carbon emitting energy

Energy from power sources that adds no extra carbon to the atmosphere, such as wind, solar, hydro and nuclear energy. It does not include waste-from-energy and other forms of biomass.

Operational control basis

An approach set out by the GHG Protocol Corporate Standard for an organisation to consolidate GHG emissions for the purpose of accounting and reporting GHG emissions. On this basis, the organisation accounts for 100 percent of the GHG emissions from operations over which it has operational control, but does not account for GHG emissions from operations in which it owns an interest but has no control.

Offtake

A long-term agreement to purchase electricity from another generator (see capacity purchase).

Particulate matter (PM)

Microscopic solids or liquid droplets in the air.

Peaking plant

A power generating station that is normally used to produce extra electricity during peak load times.

Phase out coal-fired generation capacity

In CLP’s context, phasing out coal-fired generation capacity refers to: (a) the retirement and closure of a coal-fired power asset; (b) the move away from a build-own-operate-transfer coal-fired project before the end of the contract term or according to the terms of the project; or (c) the divestment from a coal-fired asset.

Photovoltaic (PV) panels

PV panels convert solar energy into DC electricity.

Power Purchase Agreement (PPA)

A long-term electricity supply agreement specifying deliverables such as the capacity allocation, the quantity of electricity to be supplied and financial terms.

Renewable energy

Energy that is generated from renewable resources, which are naturally replenished on a human timescale, including sunlight, geothermal heat, wind, tides, water, waste-to-energy, and various forms of biomass.

Renewable Energy Certificates (RECs)

In Hong Kong, RECs represent all the environmental attributes associated with electricity produced by local renewable sources in Hong Kong including solar, wind and landfill gas, purchased or generated by CLP Power Hong Kong Limited (CLP Power).

Scheme of Control (SoC) Agreement

The SoC Agreement sets out the electricity regulatory framework, procedures and policies for the 1 October 2018 – 31 December 2033 period. It governs and applies to the financial affairs of CLP Power and CAPCO, the manner in which CLP Power and CAPCO are responsible for providing, operating and maintaining sufficient electricity-related facilities and supplying electricity to meet demand in Hong Kong over the term of the Agreement.

Science-based target (SBT)

A target for greenhouse gas reductions that is in line with the goals of the Paris Agreement to limit global temperature increase to well below 2°C above pre-industrial levels and pursue efforts to limit warming to 1.5°C. SBTs are managed by the Science Based Targets initiative (SBTi).

Sustainable Development Goals (SDGs)

The 17 SDGs, adopted by all United Nations Member States in 2015, are the blueprint to achieve a better and more sustainable future for all. Find out more on https://sdgs.un.org/.

Utilisation

Gross generation by a power plant unit in a given period as a fraction of the gross maximum generation. Also known as Gross Capacity Factor.

Virtual Power Plant (VPP)

VPPs are networks of distributed energy systems such as rooftop solar and battery storage systems that are pooled together to provide additional capacity to the electricity grid.

Waste-to-energy

A form of renewable energy generation using waste such as landfill gas. Greenhouse gases are emitted during the process.

Zero-carbon electricity

When the GHG emissions associated with the electricity consumption of a system/project are either non-existent (i.e. refer to the definition of non-carbon energy below) or cancelled out or balanced by virtual renewable power purchase agreements (VPPA) or energy attribute certificates