Carbon Disclosure Project 2011
Water-related risks and opportunities in direct operations and the supply chain
Exposure to risks and opportunities
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%
7% 20% 7% 37% 47% 38% 7% 33% 8% 29%
Responding to risk
• A lower percentage of Utilities companies report policies, strategies, or plans (80%) than the Global 500 (93%). The sector also has relatively low percentage of companies with concrete targets/goals (47%) when compared with other sectors.
73% 35% 55% 33% 63% 60%
• Utilities companies depend heavily on water in direct operations, which may explain why a greater percentage of respondents are exposed to water-related risk in direct operations (73%) than in the Global 500 (55%).
• The most frequently reported risks include increased water stress or scarcity, flooding, increased difficulty in obtaining operations permits, regulatory uncertainty, and regulation of discharge quality/volumes leading to higher compliance costs.
27% 20% Experiencing business impacts Utilities
Global 500
Risk in direct operations
Yes Utilities
Global 500
Risk in supply chain No Don’t know Utilities
Global 500
Opportunities
• The sector experienced a high percentage of water- related business impacts (53%) in the past five years. The Southern Company reports that it incurred US$200 million in additional costs when drought prevented the company from generating electricity from low-cost hydroelectric facilities. To mitigate this impact, The Southern Company maintains a diverse portfolio of generating sources, plans for contingencies at its fossil fuel and nuclear facilities, and works with government agencies to better understand the risk of drought.
Managing the linkages and trade-offs between water and carbon
“Since water is becoming an increasingly scrutinized issue for new projects, the development of our less water consuming energy sources (solar and wind farms) will face less administrative or financing barriers in the future. In addition, our license to operate hydro facilities and to construct new ones will be easier to maintain [and] obtain if our impact to aquatic environment is as low as possible…” Endesa
• A high percentage of Utilities respondents identify linkages and tradeoffs between water and carbon (80%). Given that energy is a core business for Utilities companies, the remaining 20% can be more proactive.
• Reported linkages include the energy requirements associated with cooling, and in some cases, treating water.
• The most commonly reported trade-off between water and carbon is the use of Carbon Capture and Storage (CCS) technology, which requires relatively large volumes of water; other trade-offs reported include the environmental costs of hydroelectricity and the potential for increased water consumption associated with the potential for more stringent GHG regulations.
EDP: identifying water reduction opportunities
EDP’s internal process for identifying water reduction opportunities has produced results. At one power plant, EDP replaced a boiler slag extraction wet system with a dry system, reducing water use by 532,000 cubic meters of water. The dry system also realized other benefits including preventing loss of product associated with hopper water treatment (44 tons annually), significant cost reduction associated with site cleaning, and the possibility of selling bottom ash as a byproduct.
41
Percentage of respondents
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