ScottishPower Energy Networks
ScottishPower Energy Networks (SP Energy Networks, part of the Iberdrola Group) own and operate the electricity transmission and distribution network in central and southern Scotland and the distribution network in Cheshire, Merseyside and North Wales.
Zero Waste Scotland have worked with SP Energy Networks to establish circular metrics for measuring the impact of their projects. This case study focuses on the process of engaging with the supply chain to develop reporting metrics, outcomes and next steps.
Figure 1: SP ENERGY NETWORKS Sustainable Business Strategy: https://www.SP Energy Networksergynetworks.co.uk/userfiles/file/202003_SP ENERGY NETWORKS_Sustainable_Business_Strategy_2020.pdf
Supply Chain engagement and management
As a regulated energy networks company SP Energy Networks has a duty to deliver and report on environmental sustainability activity. SP Energy Networks cannot deliver sustainability without an engaged supply chain, therefore many of these commitments are embedded within the procurement and contract management process, including:
- Identify, monitor and annually report metrics to track carbon reduction across the value chain.
- Follow an appropriate recognised standard such as BS8001 to embed circular economy principles where relevant throughout business processes.
- Further enhance environmental sustainability standards and performance metrics in contracts and collaborate with the supply chain to target more than 80% of RIIO-ED2 suppliers (by value) in meeting these standards.
- Set targets for reycled and reused materials as a % of total input materials, to be achieved by 2026, 2030 and 2050.
- Implement metrics to measure the sustainability of resource use, with the aim of establishing a baseline to enable target setting during RIIO-ED2.
- Engage with suppliers throughout the duration of their contracts to continue to reduce impacts and benefits.
- Continue our work to minimise the environmental impacts of our use of aggregates (soils and stones) via collaboration with other transmission operators, our supply chain and membership on infrastructure resource optimisation groups with the aim of identifying and implementing solutions to reduce the use and disposal of aggregates, including increased use of secondary aggregates.
Figure 2: SP ENERGY NETWORKS Supply Chain Management Plan
Supply Chain Engagement to Measure Carbon Impact
SP Energy Networks conducted a series of supplier engagement workshops to set out the scope of ambition and are working in collaboration with their supply chain to establish common standards for contract performance measurement.
Eighty-two percent of stakeholders at the workshops were in favour of SP Energy Networks mandating that suppliers, covering 2/3rds or more of their scope 3 emissions footprint, should set their own Science Based Targets within 5 years (ensuring that smaller companies were not unfairly disadvantaged).
The current approach with contractors is to specify the following:
- Sustainability standards in tenders.
- Contractors to use an online SmartWaste tool.
- Supply Chain School sustainability partner; require contractors and suppliers for all new contracts to become members and undertake relevant sustainability and environmental training.
SP Energy Networks recently did a full analysis of their carbon footprint. The greatest carbon emissions occurring in Scope 2 emissions are from transmission and distribution losses (58% of the total value chain).
Analysis of scope 3 emissions indicates that purchased goods and services account for 9% of the total value chain, whereas capital goods accounts for 19%, with upstream transportation and distribution accounting for 2%.
Current waste diversion targets are:
- Divert 95% of waste from landfill by 2023
- Divert 100% of our waste from landfill by 2030
- Achieve zero waste by 2050 – may be brought forward to 2040
There is a focus on collecting more accurate waste data directly from partners in the value chain in terms of construction materials type and quantity, and waste quantity (carbon emissions tCO2e). This will be inputted directly into their SmartWaste tool.
There is a strong focus on improving waste management from contractors, as they account for 98.6% of waste generated overall; of this 85% is recycled and 15% is landfilled. There is a target to of divert 100% of waste from landfill by 2030.
Through Interreg NSR ProCirc support SP Energy Networks will focus on the following metrics, green will be the initial focus, with amber being metrics for future focus:
In order to monitor and measure these metrics SP Energy Networks will:
- Set contract KPIs.
- Develop processes to manage performance.
As other private and public sector bodies have realised carbon calculated from financial spend is the least accurate methodology to calculate scope 3 emissions, lacking detail to inform decision making.
In order to improve this, SP Energy Networks needs to increasingly request carbon information from suppliers.
It will take a number of years before maturity is built up in this area to develop a more accurate baseline.
The next steps are for SP Energy Networks to identify methods of supporting and incentivising the supply chain to meet enhanced environmental standards.
This may include participating in innovation working groups (for example the Scottish Circular Economy Infrastructure Forum), increasing Scottish Power Energy Networks support staff, standardised KPIs across utilities organisations, recognition through awards, and longer-term frameworks.
SP Energy Networks are also working with major Scottish business leaders to develop a support programme for businesses to deliver net zero in their organisations and contracts.
The RIIO-ED2 price control sets the outputs that the 14 electricity Distribution Network Operators (DNOs) need to deliver for their consumers and the associated revenues they are allowed to collect for the five-year period from 1 April 2023 to 31 March 2028.