Environmental performance - management approach

Vattenfall manages many different energy sources and technologies, all with different environmental characteristics and challenges. Most of Vattenfall’s operations are strictly regulated by laws, regulations, and permits – on global, EU, national, regional and local levels. In addition to complying with regulations, Vattenfall considers environmental performance to be a foundation for sound business development, which improves the company’s competitive position and protects the value of current and future assets.

Vattenfall’s key environmental aspects

Vattenfall’s key environmental aspects include energy and resource efficiency, emission reduction, management of waste and production residues, responsible land use and biodiversity protection. This is further described under the respective headings below, and in the Environmental Indicators.

In addition, as an energy utility with large market presence and purchasing power, Vattenfall strives to ensure that its activities to improve environmental performance also target suppliers, customers and policy makers:

• Supplier criteria are developed to ensure that UN Global Compact standards are met in procurement. These are described in Vattenfall ‘s code of conduct for suppliers. Supplier audits are performed and Vattenfall may provide support to improve a supplier’s environmental work (see also Human rights management approach).
• Vattenfall provides retail and industrial customers with support and
  expertise regarding energy efficiency measures (see EN5–7 and PR3).
• Information on the environmental impact of Vattenfall’s energy generation is also provided, and in many markets, Environmental Product Declarations (EPD) are available (see EN5–7 and PR5).
• In relation to policy makers, Vattenfall is actively taking initiatives and entering into dialogue to stimulate the development of frameworks needed to reduce environmental impact from energy generation while at the same time meeting society’s need for secure energy supply. Vattenfall has launched a Climate Map, stretching across industries, in an effort to quantify the global potential for reducing greenhouse gas emissions by 2030.

Energy efficiency

Energy efficiency is one of the most important environmental aspects for Vattenfall. Improved efficiency in power plants means that society’s need for energy will be met while using less resources and causing less environmental impact per generated unit of energy. Many development and investment programmes aim to increase energy efficiency.

Emissions

The most significant environmental impact from Vattenfall’s operations that remains to be handled is from CO₂ emissions from fossil fuel combustion in energy generation, both in terms of quantity and effect on global warming. Vattenfall believes that curbing CO₂ emissions will be the overriding challenge of our time and a defining issue for the power industry. Therefore, Vattenfall has laid out the strategic direction of dramatically reducing emissions from energy generation by developing low CO₂-emitting technologies and reshaping Vattenfall’s energy generation portfolio during the coming 20 years.

Vattenfall has set the target to reduce emissions of CO₂ per kWh in the generation portfolio. The long-term target is a 50% reduction by 2030. Vattenfall’s climate vision is to be climate-neutral by 2050 (2030 in the Nordic countries). As a result, significant investments are currently being made in viable renewable energy sources, such as wind and ocean energy, in the development of coal-fired power generation using Carbon Capture and Storage (CCS) technology, and in increased capacity of nuclear power generation. Improved energy efficiency is also essential for ensuring that customers’ and society’s needs for energy are met while at the same time reducing emissions per kWh.

Vattenfall believes that a global framework for reducing greenhouse gas emissions will be essential to solving the problem and has taken the initiative to propose such a programme for curbing climate change.

Other significant emissions from Vattenfall’s operations, which are reduced by flue gas cleaning, are sulphur dioxide (SO₂), nitrogen oxides (NO_X) and particles. Small amounts of other greenhouse gases, such as nitrous oxide (N₂O) and methane (CH₄), are produced in boilers when any fuel is combusted. Sulphur hexafluoride (SF₆) is still used in some electrical equipment. Vattenfall strives to reduce emissions as far as possible applying advanced technologies to emit below national and regional requirements.

Materials use

The largest quantities of materials used by Vattenfall are fuels for electricity generation and heat production. The main fuels are lignite, hard coal, natural gas, biomass, peat, waste and oil. In nuclear power plants, the fuel is uranium. Lignite is mainly excavated in Vattenfall’s own mines. Other fuels are purchased. Fuel efficiency is part of energy efficiency improvement measures.

Other large quantities of materials include auxiliary chemicals used mainly for flue gas cleaning, for example, limestone, ammonia and urea. Improved flue gas cleaning normally leads to increased use of these chemicals. See also “Emissions” and “Waste and mineral by-products”.

In construction and maintenance of power plants, distribution networks etc., the materials used are concrete, steel, wiring, cables, etc. This is an important part of life cycle impact from energy sources that have no fuel input, such as hydro power, wind power and ocean energy. (See further information on life cycle analysis on this page page and PR3.)

Hazardous substances such as PCB, mercury and asbestos occur in smaller amounts in Vattenfall’s operations. A long-term strategy has been applied for managing and phasing out undesirable substances.

Water use

Water is used in many operations in Vattenfall. In mining, ground water is removed, cleaned and returned to water bodies. In hydro power plants, the energy source is running water in rivers. In combustion power plants, as well as in nuclear power plants, water is used for cooling. Vattenfall takes a water balance perspective on the management of water use, considering impacts from water withdrawal as well as discharge. Impacts from water use include, for example, temperature changes and the impact on biodiversity in surrounding water bodies. Risks for emissions and leakages, for example of oils, into water bodies are carefully monitored and preventive measures are taken.

Land use and biodiversity

The nature of Vattenfall’s operations, with large power plants, dams, open-cast lignite mines, wind farms and electricity networks, has a physical and visual impact on the landscape. The affected areas have differing biodiversity value, and the conservation processes and actions differ accordingly.

Before starting new construction or major rebuilding work, environmental impact assessments are carried out, including impacts on biodiversity. Vattenfall strives to harmonise operational facilities with the landscape and the environment, and is committed to the protection of flora and fauna in the surrounding area. This is often a requirement of the operation permits granted by the regulatory authorities for the operation of power plants, and processes to obtain permits and protect biodiversity are well established within Vattenfall. This work is done in co-operation with national and regional authorities.

Waste, residues and by-products

Vattenfall’s operations generate different types of waste and residues. Nuclear power plants generate radioactive waste. Combustion of solid fuels such as coal, biomass and waste generate ashes that can be reused and mineral by-products, such as gypsum.

Radioactive waste

Vattenfall operates nuclear power plants in Sweden and Germany. It is Vattenfall’s responsibility to have reliable and acceptable solutions for the management of nuclear waste. High-level radioactive waste, which consists primarily of spent nuclear fuel, must be carefully shielded during the handling and transportation phases. It takes one hundred thousand years for the radioactivity to decline to the level that occurs in the quantity of uranium ore from which the fuel was originally fabricated. Vattenfall supports research and development for permanent storage solutions for radioactive waste, a process that is conducted according to different time plans in Sweden and Germany.

In Sweden, SKB, the Swedish Nuclear Fuel and Waste Management Company, has developed a solution for permanent storage, and the process is now in the final phases of selecting the location, which is expected to be announced in 2009. The choice is between Oskarshamn and Östhammar municipalities, which have both volunteered to host the repository. Evaluations consider several factors, such as extensive requirements on the bedrock characteristics and long-term safety, environmental impact, supporting infrastructure and local acceptance. The first Swedish nuclear waste may be deposited in the final repository by 2020 at the earliest. Until then the spent nuclear fuel – high level radioactive waste – is being stored at a central interim storage facility in Oskarshamn. The Swedish radioactive operational waste is stored in the final repository, SFR. This is a central facility for disposal of short-lived low- and intermediate-level waste from both nuclear power plants and hospitals. SFR is located near the Forsmark nuclear power plant in the municipality of Östhammar, 50 metres beneath the bottom of the Baltic Sea.

In Germany, studies and underground exploration have been conducted on the possibility of using the salt mine in Gorleben as a final repository for highly radioactive waste, however, no further exploration has been done since 2000. The German ministry for the environment intends to look into alternatives to Gorleben. Its goal to set up new safety requirements for final storage in 2008 was not realised. In Germany, interim storage facilities are situated at the nuclear power plants and operated by the nuclear power companies. A repository for wastes with negligible heat generating (low and intermediate level wastes) is under construction at the Konrad mine. Start of operation is planned for 2013.

Costs associated with the final disposal of nuclear waste from today’s electricity generation are borne today. It has been taken into consideration that a significant part of costs for the deep disposal of high-level radioactive waste occurs many years after production has been closed down. In Sweden, the nuclear power companies continuously pay fees to a state-controlled fund (the Swedish Nuclear Waste Fund), which is intended to cover all costs associated with waste storage and the decommissioning of nuclear reactors. In Germany, costs associated with the final disposal of nuclear waste shall be borne by those who produce the radioactive waste. The provisions built up for nuclear waste and decommissioning, however, remain within the nuclear industry, that is, the utility companies, energy companies and research centres. These provisions are reported in their respective financial statements. See also EU8.

Re-use of residues, ash and mineral by-products

The burning of solid fuels and cleaning of flue gases result in large amounts of useful ash and gypsum, which are considered as by-products. When ashes and by-products substitute other materials, it leads to less consumption of new resources. It also significantly reduces the amount of ash that has to be deposited, which leads to shorter transports and less emissions.

Most ash and mineral by-products from Vattenfall plants are re-used, and increased use is encouraged. Studies show that the risks associated with using ash as construction material are very small. Vattenfall undertakes research efforts together with the construction industry to improve the use of ash.

Waste management

Depending on different national legislation, some of the ash generated in Vattenfall’s power plants also falls under waste legislation. Vattenfall strives to enable re-use of ash by applying quality and environmental standards. Hazardous waste is treated according to permits and regulations.

Waste from construction and the decommissioning of power plants, distribution grids, etc. is handled according to the respective national legislation. Vattenfall strives to stimulate re-use and recycling of construction waste. For example, discharged distribution poles are used for energy recovery, see EN22.

Most waste from Vattenfall’s administrative offices, such as paper, etc. is recycled, and many offices minimise the use of paper cups, etc. in order to reduce the amount of waste. Waste from IT is handled locally by the vendor of the equipment, or by assigned specialised companies.

Environmental impact of products and services

The direct environmental impact of Vattenfall’s main products, electricity and heat, is very small. Most impact refers to the generation and distribution of energy, such as emissions, resource use, etc., where a life cycle perspective is taken. Additional environmental impact is described below.

Operational safety

Safety is a fundamental aspect and basic requirement for all of Vattenfall’s operations. Negative impact on human health and safety is minimised through comprehensive safety work and well-established risk management systems. Within the nuclear operations area, the Vattenfall Group co-ordinates all safety work through the Chief Nuclear Officer, who reports directly to the CEO (see also EU20).

Dam safety is an important aspect of hydro power, since a dam failure could have serious consequences, causing substantial property damage and a threat to human life. The risk of a dam failure is extremely small, and current requirements are calculated for water flows that statistically occur every 10,000 years. Vattenfall has invested actively in improved dam safety and is active in the industry’s dam safety work. International audits indicate that Vattenfall’s dam safety has a very high standard.

Risks for incidents, contamination and significant spills are carefully monitored, managed and mitigated locally (at the plant and regional level). Examples of risks include oil leaks from transformer stations and oil filled cables in the distribution grid, accidental discharges to water from power plants (for example, hydro power plants), etc. Training in co-operation with local authorities to prepare for possible incident
scenarios is regularly carried out in parts of the organisation.

In addition, incidents, including such where there is a risk for environmental impact, are handled according to Vattenfall’s Incident and Crisis Management (ICM) framework, which is applied to enhance preparedness and provide effective and proactive ways of handling events that could lead to an incident or crisis (see EU20).

Life Cycle Assessments

Vattenfall uses Life Cycle Assessments (LCAs) as one method to analyse and estimate the environmental impact of its operations “from the cradle to the grave”. For additional information, see PR3.

Electromagnetic fields (EMF)

Vattenfall complies with recommended and legal guidelines regarding electromagnetic fields (EMF), see PR1.

Noise levels around power plants

In addition to other environmental aspects, some power plants also generate noise. Most permits include requirements on noise levels, which are carefully monitored during the construction and operation of power plants.

Benefits from heat and electricity use

Electricity and district heating are efficient carriers of energy. Therefore, centralised energy generation often leads to improved efficiency, with less impact per kWh compared with other energy use. For example, replacing an oil-fired furnace for household heating with a heat pump will radically decrease the total CO₂ emissions for the household, while the use of electricity would increase. Another example is a plug-in hybrid car, which produces less emissions than a car that uses fossil fuel. Vattenfall is contributing to research and development on future use of electricity and heat in order to generate sustainability advantages in society (see EU7).

Environmental management

Vattenfall governs environmental issues at all organisational levels. Environmental performance is a business responsibility and is described in the Vattenfall Management System, which applies for the entire Vattenfall Group.

Environmental goals and performance

At the Group level, Vattenfall sets long- and short-term business planning targets for reducing CO₂ emissions (see EN16–18). The long-term development of Vattenfall’s generation portfolio requires significant investments, which are co-ordinated at the Group level. At the Business Group and business unit levels, additional environmentally related targets may apply.

Environmental management system

At the Vattenfall Group level, environmental data from operations is reported and consolidated annually in a dedicated reporting process. In addition, reporting on qualitative issues, such as risks and incidents, is done quarterly to the Executive Group Management.

Vattenfall’s Group Environmental Management System includes annual Environmental Management Reviews where corrective actions can be initiated. Most parts of Vattenfall have their own environmental management sub-systems aligned with recognised standards, many of which are certified. Thirty-five units are covered by ISO14001, eight power plants are covered by EMAS, and eight by other recognised environmental management systems. The certificates cover approximately 50% of installed capacity or approximately 30% of revenues.

Organisational responsibility for environmental performance

Regarding environmental issues, the Vattenfall Group Management focuses on strategic development, long-term development and financing, managerial principles and deviation analyses. Based on targets set by the Executive Group Management, each Business Group and business unit has full responsibility for planning, carrying out, following up on and developing its business. This includes taking responsibility for environmental concerns.

Business Groups (BG) and business units

All organisational units are required to have access to relevant competence to manage environmental aspects. All units are responsible for their environmental performance, for identifying, prioritising and implementing initiatives and activities to improve environmental standards and fulfil the strategic ambition to be Number One for the Environment. In addition, each unit shall monitor and manage environmental risks.

Group Environment function

Vattenfall’s Group Environment function manages and follows-up environmental issues within the Group and ensures that an efficient and competent environmental organisation is in place at the Group level to support the organisation. The Group Environment function also monitors and evaluates environmental opportunities and risks of importance for the Vattenfall Group and the Vattenfall brand. The Group Environment function creates and supports platforms for sharing best practice within the Vattenfall Group. The Head of Group Environment executes the functional responsibility for environmental issues as described in the Vattenfall Management System and is the Environment Management Representative for the Group.

Environmental Committee

The Group Environmental Committee is an advisory function to help set strategies and support the Group Environment function. It is also a meeting place for sharing best practice and identifying cross-border benefits from extended co-operation within Vattenfall. The Committee is chaired by the Head of Group Environment. It has members representing all Business Groups.

Centres of Excellence

As a major player in the European electricity market, Vattenfall has considerable experience and knowledge in the environmental field and is a key dialogue partner for European and national policy makers. Under the Vattenfall Group Environmental Committee, the following five Centres of Excellence have been established: Air quality, Soil protection, Water protection, Waste and by-products, and Chemicals management.

The Centres of Excellence monitor and analyse policy developments and serve as a forum for information exchange and knowledge transfer, within Vattenfall but also externally.

Environmental experts

Vattenfall has significant environmental competence across the organisation. Vattenfall consultants provide expertise in energy efficiency, environmental and sustainable strategies, etc., and participate in projects and initiatives not only throughout the Vattenfall Group, but also in other industries, thereby stimulating knowledge transfer.

Environmental risk management

Environmental risks are monitored, managed and mitigated locally in Vattenfall. The Group Environmental Risk Management approach includes six different components:

• Environmental Debt – Established debt, in relation to existing regulatory conditions
• Legal & Regulatory Risk – Relating to future changes in regulatory conditions
• Environmental Risk – Relating to future event resulting in environmental damage
• Health & Safety Risk – Relating to future event with an impact on health or safety
• Incidents – Incidents having occurred, with a potential for environmental damage
• Accidents – Accidents having occurred, resulting in environmental damage

Environmental risks (qualitative as well as quantitative estimations of probability and consequences) are reported and aggregated at the Vattenfall Group level annually.

Training and awareness on environmental issues

Training is important as a foundation for awareness and environmental work. E-learning on important environmental issues is available for all employees. Environmental issues are included in management training programmes.

Compliance with codes, agreements and frameworks

Vattenfall is a signatory of the UN’s Global Compact, which is the underlying framework of Vattenfall’s overall sustainability work, and as such it has the most important influence. Environmental law sets an important regulatory framework for Vattenfall’s operations, and a wide range of legal instruments in this field are relevant for Vattenfall.