Climate change is one of the major challenges of the energy sector, with a vital role in this area, given that production technologies using fossil fuels have an important specific weight in greenhouse gas emissions.
The main options available to face climate change from the energy sector are the promotion of renewable energies and the use of fossil fuels with lower carbon content in thermal production, in addition to improvement in generation, transport and final use of energy.
IBERDROLA supports high-level political negotiations in order to reach an agreement to reduce emissions in the medium and long term, both in industrialized countries and in those which are in the process to reach it. The ambitious objectives provide the right signals to the promotion of technological change in the electricity sector and favors the generation with cleaner technologies.
The Group took an active part in the Doha summit, which was held in December 2012. The agreement reached in Qatar is a step further in the process required to resolve the challenge posed by climate change, whose consequences have been described in the reports of the UN Intergovernmental Panel created for this purpose.
Recognizing the critical role that energy sector plays in this area, IBERDROLA has a Climate Change Policy [PDF] in which undertakes to promote support for the necessary international agreements to tackle this environmental problem, promote technology development efficient in terms of emissions of greenhouse gases, promote energy efficiency and awareness to their customers to make responsible energy consumption.
Moreover, IBERDROLA supports the objective of limiting global temperature increase in 2ºC with emission reduction targets ambitious associated with scientific advances in this area and an important role in the CO2 price signal emerged in the market.
IBERDROLA supports the extension to the Kyoto Protocol. Once again, in the forum of the United Nations, the signatory countries have agreed to formally commit to reduce emissions in order to avoid exceeding an average increase in temperature of more than two degrees centigrade by 2010. However, the development of finance mechanisms and the participation of the private sector in the mitigation of this increase is still pending.
Prior to the Doha summit, the Company signed the Carbon Price Communiqué, which was addressed to governments by leaders of more than 200 companies. This initiative of The Prince of Wales’s Corporate Leaders Group on Climate Change (CLG), managed and developed by the University of Cambridge’s Programme for Sustainable Leadership (CPSL), promotes the setting of a price on carbon as a means of promoting investment in green technologies and reducing emissions.
IBERDROLA is targeting a reduction in emissions intensity 30% by 2020 compared with 2007. More information in this regard can be found at the following microsite: http://www.togetheragainstclimatechange.com/en
Since the implementation of emission trading allowances, the policies to fight against climate change have influenced the management of electricity companies because a new factor has been introduced among electricity generation costs: the value of CO2 emission rights.
AENOR has certified IBERDROLA’s greenhouse gas emissions inventory [PDF] according to the UNE ISO 14064-1:2006 standard (Specification with guidance at the organization level for quantification and reporting of greenhouse gas emissions and removals).
|Total volume (Mt)||35.5||35.9||39.3|
|Specific emissions from global mix (kg/MWh)||264||248||258|
The emission intensity of the IBERDROLA Group is 30% lower than the European average, being one of the European electricity with lower emissions rate per MWh produced.
|2012 ALLOCATION (kt of CO2)||STATUS AT YEAR-END (kt of CO2)|
|United States of America||N.A.||N.A.|
There was a surplus in excess of one million rights at facilities in Spain in 2012, while there was a deficit of 3.3 million rights in Scotland, with the Company’s overall position resulting in a shortfall of 2.2 million rights, which has been gradually covered with purchases on the market that have allowed the Company to cover its position and to comply with established requirements. In comparison with the prior year, there was a 20% improvement in the overall rights shortfall.
Aware of the potential impact of climate change, IBERDROLA is taking various steps to minimize the risks thereof. Climate change can affect hydroelectric generation operations, renewable energy projections, thermal power plant cooling requirements, thermal efficiency of facilities, energy load growth patterns, and transmission and distribution infrastructure stability.
As the specific implications of each of these aspects are under constant review and its effects are the basis of our planning. Drastic changes in rainfall could have positive or negative, depending on the greater or lesser availability of water resources for power generation. Given the significant weight of hydro generation in the generation mix of IBERDROLA, an increase in rainfall could have a beneficial effect on reducing global emissions of the company. IBERDROLA participates in both the UK and Spain in close collaboration with universities in different studies to determine the potential impact on their business. In addition, the Company has joined the initiative "Caring for Climate" platform-driven United Nations Global Compact, which aims to raise climate change solutions.
Of the six Greenhouse Gases (GHGs), the only significant one (by volume) that arises from the Company’s activities is carbon dioxide (CO2), which is produced by combustion during thermal generation. The Company’s strong growth, based on the increase in production, prevents the stabilization or reduction of absolute emission values. The Company’s strategy (increasing CO2-free energy supply based on renewable resources-and-replacing thermal technologies - combined cycle instead of conventional facilities-) is focused on gradually reducing its intensity of GHG emissions. The production structure resulting from its past decisions and from the most recent strategy allows IBERDROLA to continue in its position as one of the leading European companies with fewer CO2 emissions per GWh produced. Other factors, such as fuel prices and CO2 trading rights, as well as hydraulicity(2), also have an effect on the functional sphere of each production technology.