Scatec contributes to the global transition to a low carbon society through its renewable energy generation. The new technology and installations necessary for this transformation also causes climate impacts through production and operation of components and land use changes from solar, wind and hydro projects. We aim to limit the climate impacts in our value chain.
Scatec’s main purpose is to develop and operate solar PV, wind- and hydropower plants to meet this need. Our power plants provide affordable, reliable and emission free electricity in growth markets for about 20-25 years. Managing climate change impacts is an integrated part of Scatec’s overall business strategy.See more
Our business activities are related to large climate emissions from production of solar panels and transformers. We report on our total direct and indirect emissions resulting from our projects. In 2022 we set targets following the Science-Based Targets initiative’s (SBTi) Net Zero framework, which were approved by the SBTi in January 2023. Our targets are to minimise direct emissions by 2030 and achieve net zero emissions across our value chain by 2040
Scatec operates projects with an estimated useful life of 30-40 years. We are increasingly impacted by climate change. Therefore, taking a long-term view on risks, including climate risks, is essential. The processes of climate-related financial impact analysis, scenario analysis and climate reporting help ensure transparency, continuous improvement and enhances our understanding of how climate-related issues can affect us, how we can adapt and how we can mitigate further changes to the climate.
The highest-level of responsibility for managing climate related risks sits with the Board of Directors. The Board and the ESG Committee, which includes Board members and the Chairman, regularly review sustainability issues and climate change. The CEO and the EVP Sustainability, HSSE & Quality are responsible for assessing and managing risks. The Board assesses climate-related risks and opportunities as part of the annual review of the Decision Gate framework and Operating System processes and procedures. The management team reports monthly to the Board of Directors.
Our process of identifying and assessing climate-related risks are integrated into our multi-disciplinary company-wide risk management process. We have extensive policies and procedures in place as part of our operating system to actively manage risks related to the various parts of the Company’s operations. We reviewed climate risks and opportunities for our portfolio in 2022 aligned with the Task Force on Climate related Financial Disclosures (TCFD) recommendations and the EU Taxonomy technical screening.
In 2022, we updated our corporate level climate risk assessment to identify key climate risks and opportunities across our portfolio. Climate risks are assessed during the project planning phase as part of other risk assessments e.g. ESIA, wildfire and hydrology and flooding assessments.
To assess transitional opportunities, we use tools such as Bloomberg New Energy Finance’s New Energy Outlook (BNEF NEO) to inform our strategy and business decisions. New markets are opening due to climate-related financing such as subsidies and partnerships with regional development banks to increase access to energy. Additional opportunities are related to using renewable energy for specific purposes such as adaption to climate change, e.g. reverse osmosis, and decarbonisation of fertiliser and fuel production which Scatec refers to generally as Power to X. Scatec is well-positioned to exploit these opportunities through our experience with public-private partnerships and innovative finance solutions in collaboration with partners like the World Bank, the IFC, regional development banks, export credit agencies and Norfund.
Our physical climate risk exposure of our own operated power plants is assessed with climate scenario data from the World Bank Climate Change Knowledge Portal. We combine the extreme heat exposure and extreme rainfall risk scenarios and time frames, with our existing natural catastrophe risk database to increase understanding of related risks across our project portfolio. Hydropower project risk was assessed by a third party during 2022. We have extensive policies and procedures in place as part of our operating system to actively manage climate risks related to the various parts of the Company’s operations in addition to project specific mitigation measures.
By providing clean electricity, our renewable energy plants significantly contribute to reducing greenhouse gas emissions in every country where we operate. We take advantage of the emission reductions resulting from our plants in operation and our projects continue to be registered with the United Nations Framework Convention on Climate Change (UNFCCC) for verification and certification of electricity generation. One of our 2022 targets was for annual GHG emissions avoided by our projects under operational control to reach 2.1 mill tons by year end. Our plants reached 2.0 mill tons avoided by year end.
GRI 302-1 and 3: Energy
Scatec’s energy consumption consists of electricity from the grid and own production, as well as fuels for vehicles and equipment. Energy consumption and intensity is presented in the table below.
|Type||Unit||2019||2020||2021||2022||Change 2021 - 2022|
|Energy consumption (electricity and fuel) 1)||MWh||21,506||19,712||19,305||27,182||41%|
|Renewable electricity consumption (I-RECs)||MWh||0||5,743||2,394||13,809||477%|
|Electricity production (operational control)||GWh||1,654||2,817||3,461||3,582||3%|
|Energy consumption per unit of produced energy (operational control) 2)||GWh||0.013||0.007||0.006||0.008||36%|
GRI 305-1, 2 and 3: Emissions
Scatec calculates and reports our GHG emissions according to the Greenhouse Gas Protocol and our carbon inventory is divided into three main scopes of direct and indirect emissions. Our GHG emissions for 2019-2022 is presented in the table below.
|Scope 2 (Location-based)||tCO2e||6,657||8,875||8,690||8,357|
|Scope 2 (Market-based)||tCO2e||6,682||6,106||7,508||800|
|- Purchased goods & services||tCO2e||1,630||2,036||2,643||5,313|
|- Purchased capital goods||tCO2e||327,749||168,241||19,626||1,451,834|
|- Well-to-tank: fuels/electricity||tCO2e||2,759||2,759||3,202||3,208|
|- Upstream transportation||tCO2e||8,953||1,393||827||3,535|
|- Waste generated||tCO2e||78||68||93||11|
|- Business travel||tCO2e||3,666||753||568||2,437|
|- Employee commuting||tCO2e||201||294||912||1,574|
|- Investments (hydropower)||tCO2e||0||0||1,080||1,031|
|Total Scope 1, 2 (market based) and 3||tCO2e||353,704||182,984||37,696||1,472,873|
KPI performance against targets, 2019-2022:
|GHG emissions (Scope 1 and 2)||tonnes CO2e||3,930||8,745||7,117||8,669||-97%|
|GHG emissions intensity (Scope 3)3)||tonnes CO2e/GWh||410||8||62||209||-55%|
|Deploying electric vehicles (EVs) on sites||sites w/EVs||0||0||0||0||100%|
|Renewable electricity consumption (I-RECs)||% RE use||83||15||34||0||100%|
3)GRI 305-4: GHG emissions intensity
GRI 305 descriptions
GRI 305-1: Direct (Scope 1) greenhouse gas emissions
GRI 305-2: Energy indirect (Scope 2) greenhouse gas emissions
GRI 305-3: Other indirect (Scope 3) greenhouse gas emissions
Scatec calculates and reports our GHG emissions according to the Greenhouse Gas Protocol “A Corporate Accounting and Reporting Standard, Revised edition”, “GHG Protocol Scope 2 Guidance – An amendment to the GHG Protocol Corporate Standard” and the “Corporate Value Chain (Scope 3) Accounting and Reporting Standard”.
The Global Warming Potential (GWP) used in the calculation of carbon dioxide-equivalents (CO2e) are based on the Intergovernmental Panel on Climate Change (IPCC) Fourth Assessment Report (AR4) over a 100-year period.See more
The carbon inventory is divided into three main scopes of direct and indirect emissions.
Scope 1 includes all direct emission sources. This includes all use of fossil fuels for stationary combustion resulting from onsite backup generators, transportation (in owned, leased, or rented vehicles), and fugitive emissions of sulphur hexafluoride (SF6) from electrical equipment. Emission factors used for fuels are from the Department for Environment, Food, and Rural Affairs (DEFRA), 2022. Data is collected monthly and reported externally on an annual basis.
Scope 2 includes emissions from all purchased/acquired and consumed electricity, heat, steam, or cooling. The electricity consumed from the national grid is consumed during the night to keep the transformers energised, to heat the inverters to keep them dry (avoid moisture build up) and for securing auxiliary services. Smaller amounts are used from the national grid for lighting and other O&M purposes. The electricity emission factors are based on national gross electricity production mixes from the International Energy Agency’s statistics (IEA Stat). Emission factors per fuel type are based on assumptions in the IEA methodological framework.
Primarily two methods are used to “allocate” the GHG emissions created by electricity generation to the end consumers of a given grid: the location-based and the market-based method. The location-based method reflects the emission intensity based on the power generation connected to the grid. The market-based method reflects a contractual allocation of emissions from electricity production where companies choose to purchase, or not purchase, renewable electricity available on the grid through contractual instruments (contracts, certificates, or supplier-specific information). Our Scope 2 emissions are reported using both methods. Data is collected monthly and reported externally annually.
Scatec purchases International Renewable Energy Certificates (I-RECs). In 2022, 13,809 MWh of renewable electricity was sourced through the cancellation of own I-RECs from our operations and purchased I-RECs for Honduras and Malaysia. Each I-REC represents proof that 1 MWh of renewable energy has been produced and includes the environmental benefits this renewable energy has generated. Scatec also consumes own generated renewables on most sites, however this is not always gathered or measured.
Scope 3 includes indirect GHG emissions resulting from the company’s activities upstream and downstream. Data is collected and reported externally on an annual basis.