For a company like CLP, which has such a long history of providing stable and reliable electricity at affordable prices, as well as ensuring stable returns for its shareholders, embracing the ambiguity and pace of innovation in the digital era is undeniably different. However, one thing is very clear, standing still is not an option for a company like ours. There is much talk about innovation requiring more risk-taking than traditional business activities. We argue that it’s about taking “more better risk”. Great innovation thrives on ambiguity and pace while also bringing determined attention to detail and excellence in delivery.
With this context in mind, I am therefore excited by the progress we have made in 2017. At a practical level, we have developed an approach for systematically tracking and assessing the possible opportunities and relevant risks for potential new revenue streams. With this approach in place, our Senior Management team have taken it upon themselves to champion innovation across the company, inspiring performance improvement at the operational level through data science application right up to exploration of new innovative business models, partnerships, collaborations across the different business units.
During the year, we made commitments to join Venture Capital Funds in different parts of the world, that have each committed to investing US$75 to 100 million in new tech and early stage digital energy companies. We also partnered with other companies and organisations for new innovative projects. Examples included working with the Hong Kong Science and Technology Park (HKSTP) for Sustainable Energy Solutions, and the Smart City Consortium in Hong Kong as well as Siemens for smart grid and smarter city solutions. We also struck an MoU with the Israel Electric Corporation to collaborate on the extremely important topic of cyber security.
Taking into consideration our history and strengths, together with the global trends of technological advancements, climate change and social and demographic changes, we have landed on seven focus areas. These are: next generation renewables; distributed energy; energy management systems; energy storage; microgrids; electric vehicle infrastructure; and insights from data science tools.
To bring this to life, we are pursuing new capabilities through the three big ideas of: a smart energy platform, that integrates energy applications into one ecosystem, allowing participants to collaborate on delivering new solutions; big data, which provides deeper insights about business performance, driving improvements through more informed decision-making; and the smart city, which contributes to the convenience of residents and retailers in terms of smart homes and systems. Our vision is to become a preferred partner for delivering smarter city infrastructure and services in each of the markets and regions where we operate.
I believe CLP is moving faster and that we must always strive to move even more briskly. In fact, although I only joined in mid-2016, I expect 2018 to be the year for the delivery of scalable models for new potential revenue streams. I am very encouraged to see that SDG 9 – Industry, Innovation and Infrastructure is one of CLP’s four core SDGs, with innovation stated as the focus. The fact that we intend to develop 2030 targets for this new area hopefully by 2019, is a sign of the importance of innovation to CLP’s future business and the expectation for the speed to continue unabated.
There is no doubt in my mind that we have begun to run at the front of the pack. Now we’re focusing on where it is appropriate for CLP to provide both thought and execution leadership. I am confident CLP is capable of moving nimbly enough to capitalise on the potential opportunities most appropriate to sustaining its successful business. We have the commitment of our Senior Management team and Board to move ahead in this area and so it is a certainty that the positive momentum will continue.