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The Magazine

Energy technology

“Can you afford to take that risk?”

A talk about climate change, and whether the energy technology is ready to meet this challenge, with Richard Lancaster, CEO at Hong Kong-based CLP Holdings Limited, a long-term Siemens partner and one of Asia’s largest power utilities.

Siemens Magazine: Mr. Lancaster, some weeks ago you attended the climate conference in Paris. What motivated you to go?

Richard Lancaster: There was a lot of momentum building up and expectations for an agreement in Paris. All the leaders were there during the first week, getting their messages across. The next step was about the details, about making it attainable. That is where a company like CLP can be useful, because we have the practical experience of developing renewable energy in Asia.

CLP is based in Hong Kong, and is the largest power utility in that city. What are your activities with regards to renewables elsewhere in Asia?

For example, we are the biggest foreign investor in China and India in wind energy. We are also active in solar, and we are bringing technology to these markets. We do so at a practical level, and in a way that can be scaled up, so that it can really make an impact.

CEO Richard Lancaster drives the growth of renewables in India and China.


With regards to the impact needed to answer the challenge of sustainable energy — how would you describe the situation as of today?

I think we are getting reasonably close. What we are seeing is that individual countries are stating what they can do. If you put that together, you will limit the rise in temperature to 2.7 degrees. That is not quite the 1.5 degrees that are being targeted in the COP21 agreement. But it is certainly a lot better than the 4 degrees that would be the outcome if we had business as usual. Now if we look at this target, it is certainly not an unrealistic one. The technologies are there. All that needs to be done is to scale them up a little bit more.

What would be the ideal energy mix to bring this about?

Ideally, we would have no carbon emissions. But that involves a huge change. Meanwhile, we have the technologies to navigate through the transition. If you look at that transition, you can’t go for a perfect solution all at once. It would take too long.

This is why we will need more gas, more nuclear, more renewables – and a more efficient use of energy. We need to do all of these things. These are all viable, mainstream technologies. The question it boils down to is: How can we scale this up? This seems to me a manageable issue.

Climate change also means more extreme weather situations in Hong Kong. Richard Lancaster stresses the need to adapt the energy infrastructure to this challenge.
The technologies are there. All that needs to be done is to scale them up a little bit more.




Apart from less carbon intensive sources of energy, you also mentioned a more efficient use of energy as a way to reach climate targets. In this context, smart grids can play an important role. Siemens is very active in this field, and has also partnered with you with regards to smart grid technology. What is it, though, that makes a grid smart and energy efficient?

“Smart grid” means a number of things. Firstly, more information is available about the electricity grid than ever before. This is due to digitalization, to sensors and their costs coming down. If you think of all the information in your smartphone, the same principle applies to a smart grid. Another central aspect of a smart grid is the sophistication of your control systems, your ability to manage the flow of power. This can now be optimized in ways that have never been possible in the past.

This increase in information and control over the grid has several implications that enable us to reduce peak demand. In this manner, a smart grid helps to reduce carbon emissions.

So far, we have mainly talked about climate change in terms of mitigation, that is, the reduction of carbon emissions. Another aspect is adaptation. What is CLP’s take on that?

We have to expect that we will see more extreme weather patterns, and we need to adapt to them. For example, in Hong Kong, the electricity supply is affected by typhoons, and we will see weather changes even with only a small increase in global temperature. So we need to make our grids more robust. We are working on this since about 10 years, for example by strengthening all transmission lines and substations to be able to cope with stronger storms. Smart grids are also instrumental here, because they enable us to react faster and more precisely, and to redirect the flow of energy if needed so that our customers will not be affected.

We need to make our grids more robust.
Richard Lancaster


It is surprising that even as large power utilities like CLP invest in adapting to climate change, there are first tier politicians who claim that the problem does not even exist. What would you say to them?

Can you afford to take that risk? We at CLP take the view that we’ll accept the consensus view in the scientific community. We operate with very long term plans. We are dealing with risk all the time. You’ve got to recognize that climate change is a risk, and you’ve got to have that factored in to your risk assessment. The implications of getting this wrong would be horrendous. This is why for us, it would be entirely unacceptable to ignore this risk.

Justus Krüger, journalist based in Hong Kong.
Picture credits: André Eichman