Research Topics: China Light And Power Company Limited In Hong Kong

China Light and Power Company Limited in Hong Kong

CLP holding limited was founded in 1901 as China Light and Power Company Limited in Hong Kong, the CLP Group is invested owned and it is now one of the leading power companies in the world. CLP holding limited supplies electricity in Kowloon and the New Territories, including Lantau and several outlying Islands. The supply to consumer is at 50Hz alternating current while the voltage is 220 volts single-phase and 380 volts three-phase. Throughout the years CLP has grown to become a conglomerate of companies with a portfolio of over 30 generation assets and retail businesses in different countries in Asia Pacific Region.     The government monitors the company through mutually agreed scheme of control agreements. These agreements require each company to seek the approval of the government for certain aspects of their financial plans, including projected tariff levels. The agreements do not grant the company any exclusive rights. They are not franchises, nor do they define a supply area for other company or exclude new entrants to the market.     As of 2005, CLP holding limited has approximately 6059 employees with 4.1% senior management, 41.6% Managerial staff, and 54.3% Technical, Administrative and support staff. The average age of the employees are 41.6 years old with an average of 15.2 years service year.     The Castle Peak Power Company Limited, which is 60 per cent owned by Exxonmobil Energy Limited and 40 per cent by CLP Power, supplies electricity to CLP Power from its Black Point (1875MW), Castle Peak (4 108MW) and Penny’s Bay (300MW) power stations, with the total installed capacity being 6283MW plus two more 312.5MW generators are being used at Black Point Power station during 2005-2006.      The CLP Power and HEC (Other electricity supplier in HK) transmission systems are interconnected by a cross-harbour link. This provides emergency back-up and achieves cost savings to consumers through economic energy transfers between the two systems and a reduction in the amount of generating capacity that needs to be kept as spinning reserve against the tripping of other units. The interconnection link, commissioned in 1981, currently has a total capacity of 720 megavolt-amperes (MVA) (i.e. 720 000 kilovolt-amperes (kVA)).     CLP Power’s transmission system is also interconnected with the electricity network in Guangdong Province which facilitates the export and import of electricity to and from the province. The electricity sales to Guangdong are made from existing reserve generating capacity of CLP Power and are governed by an agreement with the Government, signed in March 1992, under which CLP Power’s consumers receive priority of supply and 80 per cent of the profit from the sales.   Right now CLP holding company is in monopoly competition in the Kowloon and NT market, however competition in electricity business may come in a number of forms such as competition from gas suppliers in the domestic and commercial sectors, which may become more intense with the introduction of natural gas as a new feedstock for gas production and loss of business to electricity competitors, whether domestic or from Guangdong. Their strategies to faces these risks of competition is to aim to provide a reliable supply of electricity and quality customer services at a reasonable cost which ensures that their customer would choose CLP even if alternative suppliers were or were to become available. They will make considerable efforts to introduce new products and applications to customers and continue to promote the efficient use of electricity; and will seek to ensure that the Hong Kong Government provides the opportunity for CLP Power to compete for customers outside their traditional supply area if others are encouraged to compare within it.     In 2005, the operating earnings of the Group increased by 10.4% to HK$ 9,097 million, reflecting an increased contribution from all of their main business streams.   Earnings from their Hong Kong electricity business by 3.8% to HK$ 7,047 million as a result of ongoing investment in the transmission and distribution network, as well as investment in generation facilities by Castle Peak Power Company Limited.   Operating earnings from their Asia-Pacific energy/other business recorded an encouraging increase, from HK,671 million in 2004 to HK,339 million. The Major contributions to this increase came from GPEC, India and their integrated electricity and gas business in Australia, following the acquisition of the merchant energy business from Singapore Power in mid 2005. In addition to the contribution to the operating earnings, their Australian business also recognized a tax consolidation benefit amounting to HK$ 2,004 million. However, it should be noted that this is one-off benefit and is a non-cash item until the tax benefits is utilized in the future.   Total earnings, inclusive of the above operating earnings, the tax consolidation benefit and a profit of HK$ 267 million from the sales of remaining units of Hok Un redevelopment were HK,368 million, an increase of 32.0% as a compared to HK,614 million in 2004. Operating earnings per share and total earnings per share increased by 10.4% to HK 3.78 per share and 32.0% to HK 4.72 per share respectively, as compared with the pervious year.   Credit:ivythesis.typepad.com

China Light and Power Company Limited in Hong Kong

CLP holding limited was founded in 1901 as China Light and Power Company Limited in Hong Kong, the CLP Group is invested owned and it is n...