Michael Kadoorie's Power Trip

Image: Amit Verma

Michael Kadoorie,chairman of CLP Holdings and the Peninsula Group of hotels

Michael Kadoorie
The Man : Third generation Baghdadi Jew who’s family migrated to China in 1880. The dragon country was good to them and they racked up fortunes dealing in opium, real estate and power. Today the 69-year-old is the chairman of electric utilities company CLP Holdings and the Peninsula Group of hotels
His Company: Headquartered in Hong Kong, CLP supplies over 80 percent of the city’s power and is now focussing on renewable sources of energy
What Next: Expanding to India and China. Focussing on non-coal energy outside India, and coal-based in India
His Interests: Photography buff and collector of Chinese art; owns cars like a type 57 Bugatti, a 1932 Phantom II Thrupp & Maberly, a 1934 Hispano-Suiza J12 Van Vooren Cabriolet, a 1936 Mercedes-Benz 500K, a 1969 P400

Where does India fit into your plans?
Energy of course. And clean energy. In the same way you [India] skipped the telephone exchanges going for mobile phones. We must not forget that pollution touches all our lives. Although it can cost in terms of coal power station — some 6 percent more to generate clean energy out of coal, but it may well be worth subsidising that from another source so as not to go through the cycle that China has just been through and is coming to grips with now. Simply because people and the community will not stand for pollution which is killing them and their children. So there’s a huge pressure in the society — in a democratic society­ — they can decide or not decide. 

India may wish to try and jump some of the pitfalls that China has gotten into.

Do you think wind power can ever be commercially viable?
My knowledge is that it will still have to be subsidised. In wind, there is a base load because wind may be moving one day and it may not be some other day. But technology is moving very quickly. The ability to find a way — and the economics of this may change. There is a large array of work happening on this. [Among renewable energies] Wind is probably the one which is getting the most in terms of publicity today. We have wind power stations being built in Tamil Nadu, Rajasthan and Maharashtra with a combined capacity of 450 MW.

Where would you put your energy bets?
We don’t particularly like coal because of the impact it has on climate as a group. But in India we probably don’t have a choice. But we are not prepared to do coal in Hong Kong. We are not prepared to do coal in Australia. In mainland China and India — coal still probably has a role to play in the next 20-30 years.

Solar, hydro and wind are other areas of opportunities. Nuclear is a very important element in that space.

Our 1,350 MW Jhajjar plant will be the cleanest coal-based power plant in India and will be completed by 2011. We are bringing in the best available technology, equipment. That of course makes us uncompetitive simply because you are bidding for a power station when there is no set regulation for clean energy. So you have to absorb the cost of de-sulphurising coal et cetera which is expensive. India is still largely coal-fired plants. In the short term, we are prepared to absorb that cost. We will make all the necessary investments to generate cleaner energy. It is part of our brand building. But we can’t do it in the long term. But we are hopeful that regulatory standards will come in time.

Considering your India aspirations, your absence from ultra mega power projects  (UMPP) is surprising…
Well we looked at the first one — we pre-qualified. But it was far too big for a single investment. We would rather do 1,200-1,300 MW projects. The biggest problem is external financing. Even the 1,320 MW project we are doing in Haryana, we have had challenges raising funds for that project and UMPP is 3,000 MW.