Hong Kong's biggest electricity company, CLP Holdings, plans to eliminate 75 per cent of carbon emissions by 2050 in its drive to reduce the impact of global warming, which may have contributed to the coldest winter here in more than 40 years. The company hopes to reach this target by investing in renewable energy, natural gas, clean-burning coal and nuclear power. 'The [power] industry is quite stable. But when you look at the next 10 to 20 years, there'll be a lot of changes in the industry as a consequence of the impact of global warming,' said Andrew Brandler, CLP's chief executive. The company started turning to other sources of energy in 2004, when it set a target of using 5 per cent renewable energy by 2010. 'We've actually achieved that target three years earlier, in 2007. Right now, it's a small part of our business, but over the next 10 to 15 years we'll see that part growing quite rapidly,' Mr Brandler said. This target was achieved largely because of CLP's investment in wind farms, hydro-electric power stations and a biomass unit, all in the mainland. Last April, the Hong Kong government granted CLP an environmental permit for an HK$8 billion liquefied natural gas terminal on Lantau Island. The company hopes to get the green light from the government to begin the project this year. CLP recently reached agreement with a Melbourne-based company to develop the world's largest solar power plant in Australia. When completed, the plant will be able to produce enough power for 45,000 households in northern Victoria. Wind-power projects in India are expected to be completed in mid-2009. The firm will also explore opportunities for renewable energy and nuclear power in different regions. When it announced its corporate results last month, CLP Holdings said it had set realistic targets while continuing to expand its overseas business to cushion the expected downfall in the coming year as a result of the new scheme of control. Excluding all exceptional gains, the company had a 1 per cent drop in recurring profit to HK$9.39 billion last year. With one-off gains from selling a power station in Taiwan and trading a power plant in Australia, the net profit climbed 7.2 per cent to HK$10.6billion. Mr Brandler said the results were not particularly exciting in 2007, but the financial results were in line with the company's and market expectations. Though CLP business in Hong Kong recorded a 4.1 per cent growth to HK$7.58 billion last year, profits were expected to plummet over the next few years due to the new scheme of control, which comes into effect in October, and will see a 30 per cent cut in CLP's guaranteed return on assets to 9.99 per cent. Mr Brandler said while he thought the agreement, announced earlier this year, was reasonably fair and balanced, the company was 'slightly disappointed' as Hong Kong represented about 70 per cent of the company's earnings. 'We will certainly report lower results in 2008. It's not a secret,' he said. One positive about the scheme was that it clarified the uncertainty that had been hanging over the company for years. 'For the next 10, possibly 15 years, we've got regulatory certainty on the business which is a very strong anchor for us and gives us the confidence to take forward our investment not just in Hong Kong, but also outside Hong Kong,' Mr Brandler said. To smooth out the drop, the company had been diversifying its business outside of Hong Kong and making overseas investments, but deals in Australia, the mainland, India and Southeast Asia tended to produce volatile results last year. 'There are ups and downs in the performance of the businesses outside Hong Kong, some of which are a little bit disappointing, but not outside our expectations,' Mr Brandler said. Despite being well-positioned to grow, the company has been affected by the overwhelming competition for new investment opportunities and the overly competitive behaviour of other companies in the marketplace, partly driven by an overheated stock market in the mainland, India and Southeast Asia. In spite of the solid and stable business in Hong Kong, CLP is facing the problem of a rapidly ageing workforce and a gap in management ranks. 'We have an unbalanced workforce,' said Mr Brandler. 'We have many people who grew up with the company in the boom time in the '70s and '80s who are getting close to retirement. It's not an immediate problem, but it's something we've been looking to address over the past few years in recognising that within the next 10 to 15 years, we are going to have a whole generation of people who are going to retire.'