This episode with Kritika Kumar, Product Ops & Innovation at CLP Smart Energy Connect is a departure from the conventional conversations around energy service providers. Simply because of the fact that it's uncommon to see their drive for innovation, especially when it comes to managing energy consumption in commercial buildings, facilities, and beyond.
The episode begins with Kritika telling us a bit about her background, career, and everything that led up to her work so far with CLP SEC. Then, Umesh and Kritika look into what kind of role an energy utility company can play in enabling more efficient use of energy resources within the built environment and figure out which stakeholders in the smart buildings space can lead the wave of innovation and transformation.
Listen to their conversation to uncover what’s new and what’s next at the intersection of energy utilities, energy efficiency, smart buildings and beyond.
Hello everyone. Welcome back to yet another episode of the Forever Forward Podcast. And, today I have a very special guest and I say special because forever I've been wanting energy retailers to play or energy utility companies to play a very important role in the built environment and smart building space.
So, I have Kritika who represents, CLP, , smart Energy Connect, and they've been doing awesome work. So, hey, Kritika, firstly very warm, welcome. To you on the Forever Forward Podcast and thanks Umesh and wow, that's a lovely introduction. No, I probably haven't started with the introduction yet.
Yeah. Now, so. Thanks Kritika. So just to introduce everyone to Kritika. Kritika has been approximately four years with CLP Smart Energy Connect. CLP is a big energy utility company based out of Hong Kong. I mean, I think a lot of it has global presence as well. Why are some of its investments, so on and so forth.
But I think what. But really intrigued. My interest was the very focused work that the group that Kritika represents are in the team that Kritika represents, is doing around, you know, smart buildings, technology and built environment, which was like very different. And that's what I thought that will get critical to come share and experience.
She's also had stays with Infosys, likes Schneider. So I'll love for you to, talk about your sort of past, not just in terms of what you've been doing at CLP, but also your education and all that led up to you doing what you're doing right now at CLP. Thanks. So, yeah, I'll make that a quick intro on the past, but I think, yeah, it all adds up.
So I studied economics in Delhi at lady Shri College. and then I started working at Indira, which is Moody's subsidiary more on the Trading side of things. And I was looking at public finance. So with that it was state governments in India looking at their credit profile, looking at how to assess their credit rating.
And the reason we were doing that when our major clients were state government entities raising bonds for infrastructure projects. And that Power utilities and discounts in India. Ok. And we know that the financial situation, around that time when I was working there, it was 2011, 2014, and we had a lot of losses and debt those kind of entities.
but it was a good exposure because you, I got an understanding of how to evaluate the state finances and then because these are guaranteed bonds, so everything that the, you know, the state's credit profile is what actually mattered more than the entity's profile. So, Yeah, on that front, I did that for three and a half years and then I decided to do my MBA and I came to Hong Kong.
So there it was a dual program. University of Hong Kong, London Business School. I spent time in Beijing, Hong Kong, London, Myanmar. Gathering exposure through internships, through, you know, courses across these countries. And then I landed up at Schneider Electric post my MBA in a strategy role looking at building management systems and exactly this building analytics, the software side of building solutions.
As an MBA doing strategy, you know, it was more around, okay, let's try to figure out where is the ma potential, what kind of products or what kind of startups should Schneider be looking at and how should they actually approach this in terms of, you know, acquisition or doing what are divestment of what they were currently any having portfolio.
So I think the action I would say was not so much in Hong Kong on the strategy side, it was more in Mainly in Boston where the office was. And I would say that, it was a great kick start into this domain and my interest peaked, with the possibility of using this data that Schneider was sitting on from their BMS and how that for different type of analytics and energy saving and those kind of efforts.
And then it happened with Infosys. The consulting arm in Hong Kong, which CLP is one of the major clients doing more, I would say documentation. E documentation. So CLP ended approaching you from Infosys. Is it just kidding? No, just,
Just kidding. I'll add my sense of bad humor once in a while, so excuse me for. but CLP, you know, China item power based in Hong Kong, fully vertically integrated utility company serving two and half million customers in Hong Kong, supplying 80% of electricity to the Hong Kong population, major player and having a very strong decarbonization target. When I joined back in 2017, they, like Hong Kong was 50% powered by Coal And 50 and so the rest of the 50% was divided between natural gas and nuclear. And CFV had a mandate of decarbonization not only for Hong Kong, like their own operations, but also for customers.
And towards that end, they launched an innovation team to start looking into what these decarbonization technologies can be. What are some of the new business models that CLP can explore? And given that this is regulated, they had to have a deregulated entity who could actually explore these opportunities.
And when I joined as a consultant there was no team. There was no concrete idea. There was just an innovation. Just one person working in innovation and looking at, okay, we need to start something, we need to do something related to energy saving for customers related to sustainability and make that real.
I think that's where my journey started for the first time with CLP through Infosys. Perfect. So I. That's obviously, you know, from economics to but then you had your power connect. I mean, back in India when the work they did, we are not gonna talk about the health of the power utilities in India.
That's for the next decade for us to talk about. But, so taking, clearly, you said that when you came in to see CLP why everything that you had done, it was very early days, almost like a startup, like you start from scratch. You, you literally, what were the early days like? I. For you as an individual, but also for CLP SEC.
and probably a connected question, maybe it depends on which order you would want to a, what's an energy utility company doing at all? In the energy, sort of the build environment space? I understand the decarbonization angle, but not a very popular move globally.
What SEC's journey is ties into my personal journey as well, because every. Was together like figuring out what actually is the product or what actually is the domain that we needed to build something. And I think the idea was we needed to connect, or CLP needed to connect with customers, who were changing, who had these changing needs of, and that revolved around reducing their electricity bill.
And the key, you know, the fuel for CLP, the power is the electricity that we provide. Makes sense? So if our customers in the future are looking to reduce their energy consumption, right? What I think that the management decided, what kind of role does CLP want to play? Do you just wanna sit on the sidelines and see how this plays out and who the customer goes out to?
Or do you want to have some sort of solutions for the customer so they can see CLP as a player in this change? Right? And that's where in the beginning, I would say, It was important for CLP to understand that yeah, we need to have some digital technology, some tools to enable this transition. Right. But what would the tools actually do and what would they enable the customer to do? Right. So I think like in the beginning, there were a lot of, you know like for me, I worked on solar application. I worked on some sort of tool to connect with the customers who were adopting rooftop solar in the early days.
And seeing how much energy they're producing and then how much energy they, how much can they earn from the feed entire scheme that was being launched. Right. those were some of our early products, I would say. And then I think the opportunity itself was not big enough here. that's only on the solar rooftop part of it.
Okay. Yeah, only on the solar rooftop part, but we needed to find a bigger opportunity with a higher impact on the customers. and I think that's where we recognize that buildings consume like 90% of electricity in Hong Kong within buildings. Of course we know the HVAC height inflation acquisitioning consuming 60%.
And then that's, you know, that became the target to, and to find a digital product that could help save energy for commercial buildings and primarily because our target customers are, you know, big property developers in Hong Kong that own majority of the buildings and across different, so whether it's a shopping mall, whether it's an office space, it's a data center, you have a big opportunity if you can make the right case with the property developer.
That was the opportunity. And the, and the way that, you know, CLPSEC approached it was to actually find the players, the technology players who had established products in other markets, and bring them to find the commercial success rather than start developing something from the scratch or try to launch a new product which was not proven elsewhere.
I think the idea was this is proven, it can save you energy. Let's do it in Hong Kong. So just curious on that. I mean, there are two, two things. So one, you say that almost 80% of the electricity or, or energy supply is via CLP. You almost monopolized right? Why would you even have to bother about innovation?
Because I've heard this a long, like every time whenever you're having a conversation with someone in the energy retail side, it's saying, Hey, you know, business is doing good. We are 25, 30% of the market. You know, why even bother? So, just wanted to understand, were there initial friction that you had that you CLP SEC as a team had to overcome while promoting these internally?
Would love to have some light on that. I was hoping for, I mean, I was sure for a yes, but, so now I'm more intrigued about how are I gonna describe that further for us kritika? Yeah. I, I think. Yes. The first challenge was internal, definitely like internally making the case of existence of this CLP SEC team, right?
So when it wasn't a team, it was just a room in, in the head office, and in that room were two people who were trying to make prototypes, wire frames, and go to key stakeholders and showcase. And I was one of that, one of those people who in the first case were like, firstly, who are you? Why do you want a meeting with me?
And if that meeting was granted, what do you want me to do with this information? My business is not changing anytime soon and I don't see how your app or your prototype can benefit me in any way. it was almost like naive to be like, look at my application, which can, you know, help visualize all your data in one place.
And you know, it was just around visualization and analytics at that time. And there was also a question about why can't it do what you are doing? Why do we need you? You know, so there were lot of these kind of aspects coming in. But I think what I would like to commend is, you know, management's, especially our senior director, Austin's vision around why this innovation date function was important for CLP.
it was not only related to internal use case or helping unknown customer, but also for This department kind of to form its own top line contribution to CLP group. And yeah, if you continue down the path of the regulated business, of course, you know, that is, that has a guaranteed rate of return with the government of Hong Kong.
So I don't think that. You know, people, obviously people are not worried about that happening anytime in the next 10 years. But I think having that capability, having that connection with the customers, and also recognition that, hey, CLP is doing something to, to achieve this decarbonization, not only internally, but also for our customers success.
I think that was a key aspect. Yeah. I mean, I love this fact that you, that you as a company knew that your main business was not going anywhere for whatever reason, but still wanted to get, be more. Close to the customer, come across as an entity, which knows that you'll probably buy electricity, but there's a bit more love.
You'll help them save cost and energy. So that's wonderful brings me to the second question over there. You know, cross the initial hurdles. Where is CLP SEC today? How many people. what's your moonshot looking like and you know, a connected question. Do you walk around with a little bossy feeling around the office not being in that one room in the office anymore?
We have our own office space now in, that happened in 2018, so it's been a few years, but the team expanded from about, I would say 10 people to 40, almost 40 people now in Hong Kong Science technology park. So, you know, we kind of enjoy that startup kind of vibe but having said that, our presence and our acknowledgement in the group also increase.
So initial days, you know, we, we would call them zoo days, where we would just invite different departments to come to our office and see firstly who is there, what are we doing, what have we achieved, what are our products, how are we engaging with customers, what are customers saying about our product. And even like at the CEO level and the that executive committee level have visit our office every year to see what this team is actually doing.
So I think there is a lot of love given by management. And also now other departments are understanding that these people are not just some stepchildren doing something, they actually seized product delivery. I just wanna mention that those products are mainly around energy optimization and commercial building, like plant optimization software, energy benchmarking software.
we also have, Air side optimization, hardware, software solution, an entire IOT platform for smart office. So all these different type of products. I would say we are working with 15 different partners from across. We have partners in obviously coming from China, Hong Kong, Australia, Spain, Portugal, also Israel.
So we have partnered with different type of hardware sense. Distributors or non-exclusive partners. And then we package that solution to ultimately provide an integrated solution to the customers. and I would say that we've also achieved internal targets around revenue and also around carbon dioxide emission reduction for our customers.
So I think those are two aspects that we've focused on the building energy management side. So, I mean, obviously you mentioned that congratulations on not being a stepchild anymore in the business, which is, which is a wonderful feeling. But I mean, I'm, I've been personally following a lot of your work over the lot in your, as in SEC’s work over the last two to three years, and it's been super encouraging to see.
That you guys continue to put in the kind of effort you're putting in because I think it's and who probably would, would know it better than you would having had your stent across from Schneider and stuff. Smart buildings and the built environment is complex for whatever reason and a number of reasons.
what's been some of your learnings and challenges so far, particularly from the customer side of things? You spoke about the challenges that have been there from internally, but what's been there from the customer side of space. Yeah for me, I think I would say that technology adoption, any new technology adoption is obviously not easy, and especially in the space.
Because of sales cycle and because of proving technology takes longer. So obviously that timeline is one thing. but for me, what I was doing was basically bringing an established technology of from another market into Hong Kong and then Pitching that to customers, big property developers who manage electricity, bills of over a million dollars.
and then having them to adopt these technology solutions and see the value from it. I think that was a bit challenging. In the beginning, there were two types of customers. One who were open to new technology and then one who were like, I had no idea what this product from Australia can do for me.
Why are you pitching this to me? So I think for me, the key learning was how to make that match with the customers strategy as in what are they looking for and why are they looking for this kinda a solution? They're coming from CEM management. Is it coming from facility management team? Is it coming from.
Team, you know, who are the key stakeholders and how many stakeholders do I need to engage with to actually make a case? the second aspect was linked to more around the trial and learning aspect. So for all our products, we do have a trial case. With customers. And doing that deployment obviously takes time.
But what I learned was finding the right site is very important. Sure. And that discovery takes time because each product is different. And for each product, the right site is different. Whether you want to match the data points, whether you want to see how sophisticated the BMS is, if you can even control the key points on the bms, then your optimization technology makes sense.
Otherwise, like what can you do with, you know, very basic 30 year old BMS, which may not, you know, have those features that you need for the software to, you know, make that 20%, 30% energy savings. I think a lot of my learning came on the ground, being able to go on site visits, looking at the chiller plant setups, looking at how this actually works out, which are the, which are the brands which are more likely to not open their BMS data for you versus brands which are willing to cooperate.
you kind of get that idea as well. So I think those. Some of the onsite learnings, and I think the final third aspect is more around how the match between the ROI and the price. So we are looking at products which are not primarily from Hong Kong, maybe Europe, Australia, USA. And then the pricing is completely different in such markets.
And somehow working with all these partners, you know, they can assume Hong Kong is one of the most expensive cities. So,
and I'm like, no, this is not, we're automated. Asian country price sensitivity is there. So You cannot use your European price list. So, coming to that understanding of what is that price point that can work. Even selling SaaS is not easy here. Like the concept of there's still, there's still more involvement towards the conventional software on premise, you know, license.
Yeah, one time payment. Why do I need to pay record? Why is it cloud based? You know, those were some of the initial discussions and conversations that we had to work with. A bit more risk friendly, like I would say risk friendly or I would say like more progressive kind of customers. Customers that.
Explore these new technologies. And finally, the ROI piece is so important. Like ultimately they have to support their business. And if we are set, you know, deploying any kind of technology, we have to show them a payback. We have to show them by when can your payback be achieved?
Most of our technology solutions, you know, some of the best products have a two to three year payback. but then there might be another reason why somebody is looking at The payback might be calculated differently. It might just be a digitization piece that they want do. So then our, some of our products, so for some maybe the ROI wouldn't really matter because they're probably the part of an overall tech stack they want implemented and there are multiple use cases they would say.
So interesting when you mentioned about ROI, right? And, and clearly mentioned that the pricing is not gonna work. You can't have the European or the US prices being taken over here. Right? So, How much do you get involved beyond the selling of the, so one, when you spoke about the discovery and the time, so it's like typical, like a B2B sales process.
I mean, you've kind of unravelled that, but how much do you get involved beyond the sale that happened, the, let's say the trial has happened, or how much do you get involved and stuff like that? So my role is to nurture these partnerships, so I because.
Let's say 20%. We are self-developing. We have our own tech team. We do make our own software, but 80% we are partnering. Makes sense? So that partnership piece becomes increasingly important. some, all those legal agreements and those partnership agreements, that's something that. I get involved in very heavily with all the key partners.
So whether we have, airside technology solution from China, we have the city management solution from Portugal. We have energy consumption management from Spain. We have a HVAC optimization and chiller plant optimization product in Australia. So one thing you're very proud of because your LinkedIn shows the excitement.
Hey guys, if all of the partners are listening, she's biased towards that particular partner. Just kidding. So, yes, so we, I think that was one of the questions I would've eventually come to, but yeah, I'll let you complete. Yeah, so the involvement is around, actually monthly, I have monthly catchups with all these partners and it's more about our sales pipeline progress and also some of, some exclusivity targets we have commitments to.
So visibility and transparency on that and any kind of New opportunities we are exploring beyond Hong Kong, let's say in mainland China. how do we work on those new opportunities? I have to say we have a separate sales team that actually does the deployment on the ground connect management with customers and also the pipeline management.
But my role comes more on the partner management to make sure that this information is shared between the sales and the customers and. I think very interesting. So I'll probably go to the third aspect of it, the business model of it, maybe. Yeah. So are you, because I mean, when you work in the built environment, I'm sure you would've come across as different competitors, companies who are facility management companies, the ones who are very large, a couple of them very large.
Have their own technology fund and stuff like that. So are you, are you kind of ending up competing with people outside of your industry? The likes of the BMS OEMs or facility, a property management companies? how's that the competition landscape looking like for you for CLP?
Absolutely. Yeah. And I think because we are not only doing products in one domain Mm uh, which is building energy management, but we are also starting to now look into electric vehicles of web product. We're starting to look into, um, you know, energy storage solutions. So our competitor base, I mean, competitor Segment will just keep on expanding.
But it's true that, you know, for different products you'll have different competition or different solutions. You'll have different competition, right? Yes. So either we are, you know, our competitor is an SI, which is, you know, integrating different solution is the BMS OEM themselves if they have product or it's another startup that is based in Hong Kong that's doing their own pitch and own customer generation.
So that, it's a combination of I think the brand and also the product capability that we need to come in with. Thanks. And that is why we have a very rigorous testing process of every product. So that by the time we go to customer, we know exactly how to deploy it. So that brings me to and given the fact that you've been involved so much in partners scouting and looking for what's there?
One question on the business model. So are you going to be turning into energy as a service or you are eventually gonna be a marketplace? You did men, you did mention that your energy is a regulated business. you know, this might be disconnected to the regulated business. So what is it? It's more like a marketplace approach that you're thinking and saying that SEC will become more like a market.
Marketplace. Do you mean like you will have aggregation of different products. People can choose what they want to, you would also push in your own product, whichever you are developing, or you are going to be more like saying, okay, hey, you only get this because you're part of a. You buy electricity from us and stuff like that.
So just responding to understand what's your business model here? Okay. In terms of going to customer, because of our unregulated nature of the new, like of SEC customers, I have a, we can approach any customer. It doesn't have to be the regulated one. The vision was actually when we began, it was kind of an energy app store wherein we would invite different.
the different products to basically send list and then if customers were interested, they could like follow up and so that already we looked into that approach, but I don't think that that is successful because, Ultimately we did want to have a vetting aspect cause our brand and our name was on the line.
So, I think that we tried that approach, but also that's not how B2B will work. Like the FM person has so many different vendor coming to them and pitching them solutions. He's not going to go online and look for a product or even if he doesn't expect to reach out himself.
Right. Or, so it's more like outbound and like outbound. make those relationships and make, you know, demonstrate the value of your product. and yes, on vertical side, like on the kind of solutions, when customers also request us for something custom or something very specific, which we don't have in our portfolio, if there's enough justification and enough business case that we can have, we will look and find a product for the customer.
But again, it would be like just for one customer, right? If we can actually scale it up to more customers, if it makes sense, then we will definitely, we do look out for new products and technology. So one final question for you Kritika, what are those couple of solutions that you wish to add in 2023?
Like what core problems you think you haven't solved by the product basket that you have right now? and what are you aiming for in 2020? Great. I think, yeah. What happened in 2022? from innovation, we became a digital department. We got added into, formally into a digital team. so you know that helps to also connect better with internal needs and requirements and also align on maybe similar topics that different teams are working on.
Okay. So, That's one internal alignment. Externally, customers asking to have a better view on their decarbonization. By that I mean when our products were initially targeting on scope to emission. That is the use of electricity, right? We are helping to reduce the use of electricity, thereby reducing scope to emission.
I think now what customers are looking for across the board is like entire emissions. What is my scope? 1, 2, 3. What does the roadmap look like in the next 30 years? And that's a huge challenge I think for anyone. And then our position, like I would say that CRPS position would be to decide how to approach or tackle this.
We have good understanding of our own emission. We have good understanding of somewhat of the customers emission. Can we take this in a more comprehensive way forward for our customers whether it's by technology, whether it's by whatever business model that we can develop, but actually help to expand that understanding of emission data.
One final question, promise, this is the final one. If any of the startups watching this would like to reach out to you or CLP SEC and explore prospects, what's the best possible way for them to do so? I am actually the front facing for, um, all the new technology solutions. So anytime we are looking at new products the first call would be with me so you can reach out to me.
but basically guys you have to impress with otherwise, sorry, just kidding. Once again, that that's, it's a few more. Yeah, but we have a team like this department Yeah. That is basically syncing with different internal departments and also customer side and also like finding that business case is most important.
Basis. Yeah. Makes sense. Hey, Kritika, thank you so much. I mean, I probably have more questions, but I think we'll be running short of time. But I think, if I could just do a quick recap and then maybe leave you to have a final, remark or something that you would like to add. I think, one of my biggest acre base has been that, Which I think wasn't unexpected, but something that was very good to hear is the fact that you did have, or any energy utility company trying to get into innovation, particularly from the fact of trying to move away from conventional business to a new digital oriented business, which is more like recurring revenue and stuff, will have internal frictions which are.
Because they, like in your case, help you think better about the kind of production solutions you would want to have. And then obviously once everyone's on board, the journey becomes all the more exciting and then you're able to do well. So I think that's been a key learning from my side.
So hopefully anyone who's listening to this conversation, particularly from the energy utility side of things, if you are not able to impress your seniors or your CEO. Probably show them this podcast. They probably should have a better relation with innovation, sort of going forward.
So, I mean, thanks so much, Kritika. This was, this was really wonderful. any, anything else that you would like to say that probably you didn't say and, uh, in, in your final recap? I think, Important for this team to have succeeded. And I would say that for the entire team is that whenever we heard a no, we didn't take it literally as a no.
You know, we tried to find a way to make it happen. and even if it did happen, it did not mean that our idea or our business would, has failed. We did try because we believed essentially, This is the future and customers do want this. We kept that contact and that feedback coming in from customers.
Through either way so whether it's a one-on-one interview, whether it's a concept test, whether it's a UX test, whether it's take my product and try it and tell me if you find it useful. We ensured that the customer voice or the customer feedback for our products was what we based our decisions on, and not just because someone said no to us.
That's inspiring. Uh, Kritika, I mean, uh, so yeah, guys, uh, hope you enjoyed, uh, listening to this podcast as much as I enjoyed hosting Kritika, and hopefully we'll have, uh, more conversations going forward. Kritika, once again, thank you so much for joining us. Uh, you have a great day ahead. Uh, and thank you once again.
Yeah. Thank you Umesh. Thanks a lot. This was really, this was fun. Thanks.