Clyde Wind Farm Extension – Impact Analysis
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Clyde Wind Farm Extension – Impact Analysis June 2015 In association with: Clyde Wind Farmsiemens.co.uk Extension | 1 Siemens To be a truly sustainable business, Siemens creating more transparency on negatives has to be profitable, but we also have a such as the environmental cost of responsibility to understand the way we manufacturing, installing and operating the affect people’s lives, the environment and onshore wind farm. This greater depth of local communities. To do this we work hard information will help ourselves and our to better understand how the work that we customers make more informed decisions do as Siemens and with our customers on the true value that such a project delivers. impacts society. I believe that it is the duty of responsible This report details work that we have done businesses to look at the broader financial in association with SSE and PwC to and society impact measures when making understand the economic, environmental key business decisions. and social impacts of building an onshore wind farm. Whilst we have looked at the Juergen Maier positive benefits to the economy, jobs and Chief Executive, Siemens plc training we have not shied away from PwC Siemens has used selected elements of We commend Siemens for applying this PwC’s Total Impact Measurement and thinking to its contributions, as one Management framework to understand the constituent of the entire supply chain, to impacts it deemed the most material from the Clyde Extension and its collaboration its contribution to the Clyde Extension with SSE to better understand how their project covering manufacturing, installation impact fits into the broader impact of the and servicing. entire wind farm project. 2 | Clyde Wind Farm Extension It is the duty of responsible businesses to look at the broader financial and society impact measures SSE Already the results detailed within this report anything anyone in the industry has have helped SSE to better understand the understood until now. impact of our developments and operations. Together with Siemens we’ve been able to To date, no turbine manufacturer has assess the total contribution to the UK and undertaken such a detailed exercise as this Scottish economies from the construction of analysis by Siemens and, until now, project Clyde Extension – £108.2m and £76.1m developers like SSE were ‘blind’ to the respectively. impacts beyond the first tier supplier. Sophisticated understanding of the detailed Without this new analysis from Siemens, sustainability impacts of development SSE’s largest contractor for Clyde Extension throughout the supply chain is a mark of the wind farm, SSE’s estimation of this economic growing maturity of onshore wind as an contribution would be 20% lower than we established global industry. now know it actually is. In other words, this study demonstrates the impact to the UK Alistair Phillips Davies economy from onshore wind is way beyond Chief Executive, SSE Plc Clyde Wind Farm Extension | 3 About this impact study Siemens Wind Power (SWP) has undertaken employment impacts, the assessment of an impact study using PwC’s Total Impact greenhouse gas emissions (GHGs) and air Measurement and Management (TIMM)1 pollutants, and the human capital of Clyde- framework and with the support of PwC to trained apprentices, SWP has been able to assess the impact of Siemens’ contribution present the positive value of the Clyde to the Clyde Extension through the phases Extension to Europe, the UK and, in of manufacturing, installation and particular, Scotland. servicing. The objective was to estimate in monetary terms the economic, social and 47km2 environmental direct impacts of SWP and the indirect impacts of the SWP supply 152 currently chain of Clyde Extension wind turbines 206 after extension during their lifetime. Through the analysis of Gross Value Added (GVA) and Clyde 1. http://www.pwc.com/totalimpact Wind Farm 4 | Clyde Wind Farm Extension The Clyde extension will generate a further 173MW of renewable energy About the Clyde Wind Farm The 47 square kilometre Clyde wind farm, additional 54 turbines installed in the area currently one of Europe’s biggest single between existing sections. The Clyde consented onshore wind farms, is located extension will generate a further 173MW of between the towns of Biggar and Moffat in renewable energy bringing the total South Lanarkshire. Officially opened by capacity of the wind farm to just over Scotland’s First Minister, Alex Salmond, 500MW, providing enough power for Clyde started exporting energy to the approximately an additional 125,000 national grid in June 2011. With 152 wind homes. turbines, it has a total installed capacity of 350 megawatts (MW), producing enough The 54 wind turbine extension will be energy to power approximately undertaken in three key phases: 250,000 homes. manufacturing, installation, and a 20 year service plan. In July 2014 the Scottish government gave consent to an extension that will see an Clyde Wind Farm Extension | 5 Approach to this impact study This study represents a gross analysis, capital impacts of Siemens’ contribution which does not take into account the extent to the Clyde Extension. The global analysis to which part of these impacts might have only covered economic and happened anyway in the absence of the environmental impacts. project. Data on capital expenditure, direct • In terms of the economic analysis, data employment, supply chain purchases, and from Siemens on direct impacts were financial accounts were provided by SWP to added to data from two separate input- PwC and have not been audited by PwC. output models2. The first, a global model This study only looks at the impact of SWP which covered indirect economic and its supply chain. It does not consider contribution and indirect employment the involvement of any other businesses only, and the second, a UK & Scotland working on the Clyde Extension. model which covered indirect and induced impacts along with the associated Scope employment. This impact study included a UK and The respective scopes for the UK & Scotland Scotland-level analysis and a global and global analyses are summarised in the analysis, with slight differences in scope: table below. • The UK & Scotland analysis covered economic, environmental, and human UK & Scotland analysis Global analysis Impact areas Economic: GVA, employment Economic: GVA, employment Environmental: GHG, air pollution Environmental: GHG, air pollution Social: Human capital Value chain Economic: Direct, indirect, induced Economic: Direct, indirect Environmental: Direct, indirect Environmental: Direct, indirect Social: Direct Project phase Manufacturing, Installation (occurs in 2016) and timing Servicing (occurs 2017 to 2036) NB: social impacts considered for Installation and Servicing phases only 2. Input-output models describe models describe how different industries of an economy relate to each other. These models can be used to estimate how activity by one company stimulates activity elsewhere in the economy. 3. See http://www.pwc.co.uk/naturalcapital for more information on PwC methodologies for valuing environmental impacts. 6 | Clyde Wind Farm Extension Methodology Economic Social Direct GVA and employment are estimated Human capital impact is assessed on the using SWP’s own financial and employment basis that qualifications earned through data for the Clyde Extension. For the UK SWP’s apprenticeship schemes are expected and Scotland, indirect and induced impacts to increase an individual’s productivity and are derived using SWP expenditure data and expected future earnings. To estimate the UK national and Scotland regional input- human capital impact of the apprenticeship output models. For the global analysis, programmes, SWP data on the number of indirect impacts are estimated using SWP apprentices and earnings were combined expenditure data and a global input- with UK government data on earnings uplift output model. and growth associated with the relevant types of qualification. We attributed this Environmental impact to Clyde on the basis of the share of total training spent on Clyde and adjusted SWP has performed a lifecycle assessment for double counting with wage impacts (LCA) of its onshore wind turbines. The LCA measured as part of the economic impact quantifies the direct and indirect emissions assessment by only counting additional of greenhouse gases and six types of air wages earned by apprentices when not pollutants (SOx, NH3, PM10, PM2.5, VOCs, and working on Clyde. NOx) associated with manufacturing, installation, and servicing. To attach a monetary value to these emissions, PwC methodologies for valuing GHGs and air pollution emissions were applied3. Clyde Wind Farm Extension | 7 PwC’s TIMM Framework In recent years an increasing number of PwC’s Total Impact Measurement & companies have started to use impact Management Framework (TIMM) measurement as a way to move beyond traditional reporting to understand the PwC’s TIMM framework is a flexible tool, costs and benefits of their activities for which uses robust methodologies to society. More sophisticated ways of doing measure and value (in monetary terms) the this include the monetary valuation of most material impacts of any business impacts such as air pollution and activity across economic, social, training programmes. environmental and fiscal dimensions. It covers both market impacts (which Benefits from measuring and ultimately cause changes in the Gross managing impact Domestic Product (GDP) of a country or local area) and non-market impacts With this understanding management can (impacts which have societal costs or better understand the consequences of benefits, but are not reflected in markets – decisions, evaluate trade-offs and steer the for example, negative health impacts of air business in a way that optimises both the pollution). This framework can be applied benefits to society and the bottom line. at the level of a product, a project, a site or Achieving this requires all material impacts even an entire global organisation. to be considered holistically across the value chain. 8 | Clyde Wind Farm Extension Economic Impact Two indicators were used to estimate years5 of employment.