Manufactured Capital

Our operations are the heart of our business. We must pursue excellence in procuring and operating our manufactured assets such as equipment, buildings and infrastructure to deliver the energy needed to fuel the growth of our communities.
Interview with Derek Parkin, Chief Operating Officer of CLP Group

“For us to be able to optimise the performance of both ageing traditional assets as well as new renewable energy assets, the use of big data will be key.”

What were the highlights for you in 2017?

While there are many positive achievements I would like to highlight for 2017, I want to start with the topic of safety, which has always been a top priority for CLP. It is not acceptable that any lives are lost through the delivery of our products or services and yet in 2017, two fatal incidents involving four contractor workers occurred in Hong Kong.

After extensive analysis of our safety performance over the last decade and the relevant trends around the world, we have begun to direct our focus on reducing exposure to serious injuries or fatalities (SIF). Although overall injury rates are declining, it is the serious injuries and fatalities that are not and which we must focus our attention on. We have identified interventions that can increase the effectiveness of the existing safety management system and have based our plan for improvements on these findings. We also created a new Senior Director role for Health, Safety and Environment at the Group level for which a very experienced professional has been hired. Given the important role that our contractors and suppliers play in our business, CLP will continue to work hard to ensure their safety while they are working on CLP’s projects and premises.

What new capabilities will help CLP operate even more efficiently and effectively?

While we have traditional assets that are ageing, we also have new renewable energy assets for which there is a relatively short history of knowledge. For us to be able to optimise the performance of both ageing traditional assets as well as new renewable energy assets, the use of big data will be key. In addition to helping improve our efficiency, such a capability will empower us to predict equipment or process failure accurately and efficiently ahead of time, preventing unplanned disruptions to operations and in some cases eliminating the need for blanket routine checks that are resource intensive and hence less cost-effective.

Through the synergy between the new Renewable Energy and Big Data teams, we have already been making good progress. With our long history in pioneering new technologies and the experience we have accumulated in building power infrastructure non-stop over the last decade, I believe CLP can develop this capability and even use it to contribute to new business revenue streams.


What were the positive achievements in 2017?

We are always exploring new technology and ways to operate assets more efficiently and intelligently. In 2017, we conducted trials of a smart energy platform to analyse operational data for enhancing efficiency and energy yield at our renewable and thermal assets across the Group. In Hong Kong, we enhanced our network reliability by installing on-line condition monitoring systems for switchgear and transformers to allow real-time monitoring and advanced detection of emerging fault conditions.

We have also been looking at the implications of increasing operational performance risks on our assets. In the past, developers including CLP, have relied on external service providers to provide operations and maintenance services for its renewable assets. However, given the increasing potential risks, as well as our intentions to strengthen our capabilities for our future business, we have begun to increasingly internalise this capability, thus raising the level of renewable energy operational expertise within the organisation and building upon our extensive expertise in project development and construction.

As we look at new potential business models, the ability to procure efficiently and effectively to fulfill our purpose and expectations, remains a critical component for success. We have begun to shift away from our traditionally more transaction-based approach towards a more holistic and strategic approach. In 2017, we formalised group-level categories of spend and designated a Category Council for each of them, to identify and realise group leverage opportunities, achieving best value for both CLP and our customers. We also appointed a Director of Procurement for the Group to enable deeper analysis of our spend and better leveraging of our Strategic Relationship Management framework with key suppliers.