CDP Water ProgrammeResponse 25062014 › ... › Iberdrola_cdp_2014.pdf · 2019-02-14 · CDP Water 2014 Information Request Iberdrola SA Module: Introduction Page: W0. Introduction

CDPWater 2014 Information Request

Iberdrola SA

Module: Introduction

Page: W0. Introduction

W0.1

Introduction

Please give a general description and introduction to your organization.

IBERDROLA is very proud to participate in the CDP Water Disclosure 2014 and we publish our answer in the CEO WATER MANDATE yearly. Water is an essentialresource and fundamental to its business development, being aware of the importance of a water management and conservation. IBERDROLA started itsoperations at mid 19th century in US and in 1901 in Spain based on hydroelectric power. 12 years ago, we pre-empted the rest of the sector with a focus onrenewables that has made us world leader in wind power and pioneer in measures to combat climate change.IBERDROLA operates in more than 40 countries and over 28 million customers. From the beginning, IBERDROLA's Group has promoted a core business based ona sustainable energy model, covering the need for stable, safe and competitive energy supplies and access for all people to this essential service under affordableeconomic conditions (service competitiveness and universality) with a focus on operations with lower emissions and greater efficiency in the production and use ofenergy where water has a fundamental role.

Our water management in 2013:

IBERDROLA's hydroelectric generation represents 13% of total generation.Water use is defined as the difference between the water captured, excluding seawater or saltwater and the water discharged into the environment. 95.6 % of thewater collected at thermal generation and cogeneration facilities is subsequently returned to the receptor environment in a physicochemical condition that allows it tobe utilized by other users without affecting the natural environment. 1.6 % of the collected water is consumed and/or retained in the various processes and 2.8 % isreturned to the environment in the form of steam generated at the cooling systems of the thermal power plants.

W0.2

Reporting YearPlease state the start and end date of the year for which you are reporting data.

Period for which data is reported

Tue 01 Jan 2013 - Tue 31 Dec 2013

W0.3

Reporting Boundary

Please indicate the category that describes the reporting boundary for companies, entities, or groups for which water-related impacts are reported.

Companies, entities or groups in which an equity share is held

W0.4

Exclusions

Are there any geographies, facilities or types of water inputs/outputs within this boundary which are not included in your disclosure?

No

W0.4a

List of Exclusions

Please report the exclusions in the following table

Exclusion Please explain why you have made the exclusion

Further Information

Module: Current State

Page: W1. Context

W1.1

Please rate the importance (current and future) of water quality and water quantity to the success of your organization

Water quality and quantityImportance

ratingPlease explain

Direct use: sufficient amounts ofgood quality freshwater available foruse across your own operations

Neutral

Each facility introduced its water information because they have on-line control of the main variables. Also,maximum limits on the capture and consumption of fresh water are established and monitored also by thegovernment administrations of each region through the relevant governmental entities.The government alsoestablishes and controls surface level limits and ecological flows at the hydroelectric generation reservoirs.

Direct use: sufficient amounts ofrecycled, brackish and/or producedwater available for use across yourown operations

Important 1.6 % of the collected water was consumed and/or retained in the various processes

Indirect use: sufficient amounts ofgood quality freshwater available foruse across your value chain

NeutralMost of the water withdrawn is surface water, mainly marine or estuary, and is returned to the environmentpartly as evaporated water and the rest included in discharges from the facilities.

Indirect use: sufficient amounts ofrecycled, brackish and/or producedwater available for use across your

Important95.6 % of the water collected at thermal generation and cogeneration facilities was returned to the receptorenvironment in a physicochemical condition that allows it to be utilised by other users without affecting thenatural environment.

Water quality and quantityImportance

ratingPlease explain

value chain

W1.2

Have you evaluated how water quality and water quantity affects /could affect the success (viability, constraints) of your organization's growth strategy?

Yes, evaluated over the next 10 years

W1.2a

Please explain how your organization evaluated the effects of water quality and water quantity on the success (viability, constraints) of yourorganization's growth strategy?

Iberdrola’s strategy, based on the use of production technologies with lower emissions, is achieving a reduction in the consumption ratios for fuel, energy, water, andother materials per GWh produced (i.e. eco-efficiency). Water use (hm3) is defined as the water captured, excluding seawater or saltwater and water dischargedinto the environment.

The water withdrawn to carry out the Group’s activities is mainly used in the cooling systems of the thermal plants, and to a lesser extent in standby services andother processes. A small proportion of the water collected is consumed (by evaporation) in the process itself, and the remainder is returned to the natural receptorenvironment, after undergoing physicochemical and thermal treatment to ensure its quality.The maximum limits on inland water collection and consumption are established and controlled by the government of each country, which assigns the permits anddetermines the maximum allowed volumes of collection to ensure that there are no significant impacts. The government also establishes and controls surface levellimits and ecological flows at the hydroelectric generation reservoirs.For example, in Spain and the United Kingdom the operation of the hydroelectric plants conforms to the requirements of the Water Framework Directive, while thethermal generation plants operate under the Integrated Pollution Prevention and Control Directive. In order to comply with this regulation, water is included as animportant element within the environmental management systems.The best available practices are introduced and used at the facilities so that the withdrawal and consumption of water is the minimum possible and with the leastimpact on the environment, avoiding the withdrawal of water in areas with water stress, and trying to recycle and reuse water to the maximum. There is a goal forefficient and responsible domestic running water consumption by employees at offices and control buildings. For this purpose, there are awareness-raisingcampaigns and the installation of efficient systems to reduce the consumption of water, such as taps with photoelectric cells.

In recent years, the replacement of less efficient production technologies such as conventional thermal generation (coal and fuel-oil) by renewables and combinedcycles has lead to a reduction in water consumption per GWh produced.

W1.2b

What is the main reason for not having evaluated how water quality and water quantity affects /could affect the success (viability, constraints) of yourorganization's growth strategy, and are there any plans in place to do so in the future?

Main reason Current plans Timeframe until evaluation Comment

W1.3

Has your organization experienced any detrimental impacts related to water in the reporting period?

No

W1.3a

Please describe the detrimental impacts experienced by your organization related to water in the reporting period

Country River basin Impact indicator ImpactDescription of

impact

Overallfinancialimpact

Responsestrategy

Description ofresponse strategy

W1.3b

Please choose the option below that best explains why you do not know if your organization experienced any detrimental impacts related to water in thereporting period and any plans you have to investigate this in the future

Primary reason Future plans

Further Information

Module: Risk Assessment

Page: W2. Procedures and Requirements

W2.1

Please select the option that best describes your procedures with regard to assessing water risks and provide an explanation as to why this option issuitable for your organization

Water is integrated into a comprehensive, company-wide risk assessment process incorporating both direct operations and supply chain

W2.1a

You may provide additional information about your approach to assessing water risks here

Risk identification process is wide in the company,beyond the traditional environmental functions.IBERDROLA has specific policies related to environmentalmanagement (Environmental, Biodiversity, Policy against Climate Change, and Sustainability), which determine directives in the development of its strategy andinvestments and the function and control of environmental risks.The management tool is a comprehensive risk system,certified in accordance with the UNE-EN-ISO9001:2008 standard,and which takes into account the principal environmental risks,considering all activities and business.A methodology was developed to

harmonize the identification criteria, assessment, and prioritization of environmental risk.There are commitments in the Procurement area to foster environmental responsibility and promote strict compliance by suppliers with contractual conditions andcurrent legislation, specially focused in the principles established in the United Nations Global Compact.

W2.2

Please state how frequently you undertake water risk assessments, what geographical scale and how far into the future you consider

Frequency Geographic scale Timeframe

Yearly Facility Next 10 years

W2.3

Please state the methods used to assess water risks

Method

FAO/AQUASTAT

WRI water stress definition

W2.4

Which of the following contextual issues are always factored into your organization's water risk assessments?

IssuesChooseoption

Please explain

Current water availability andquality parameters at a local level

Relevant,included

The World Resources Institute defines areas where per capita water supply drops below 1,700 m3/year aswater-stressed areas, where disruptive water shortages can frequently occur. AQUASTAT is FAO's globalinformation system on water and agriculture, it collects, analyzes, and publicizes information on waterresources, water uses, and agricultural water management. By using this method, IBERDROLA affirm thatthe Company DOES NOT have any plant located in any area considered.

Current water regulatoryframeworks and tariffs at a locallevel

Relevant,included

Relationships geared to the enactment of efficient regulatory provisions allowing for development of acompetitive market in activities not subject to a natural monopoly and sufficient remuneration for regulatedbusinesses.There is a continuous and constructive dialogue.As a general rule,we work for the approval ofand respect for the principles of good regulation:proportionality,effectiveness and efficiency,responsibilityand independence,consistency and credibility and,transparency and clarity

Current stakeholder conflictsconcerning water resources at alocal level

Relevant,included

IBERDROLA takes various types of actions to minimise, mitigate, and offset unfavourable socioeconomicimpacts that might be caused by its facilities. Various actions are taken to benefit the community, including:improvements in communication infrastructure, water supply or roadways; public lighting; creation of directand indirect employment; professional training courses; activities to support entrepreneurs, etc.

Current implications of water onyour key commodities/raw materials

Relevant,included

Materiality analysis for IBERDROLA by KPMG in 2013 has reflected a low risk associated with the supply ofwater (5% of significance).

Current status of ecosystems andhabitats at a local level

Relevant,included

Collection and discharges during 2013 were within the limits indicated by the relevant environmentalpermit,no anomalies were detected that could materially affect water resources or related habitats. Ouractivities can even be beneficial for the ecosystem.This is the case of Altamira plants in Mexico,whichdischarge into the Garrapatas estuary, allowing it to recover its salinity and thus the specific characteristicsof this habitat and the species of fauna and flora adapted thereto.

Estimates of future changes inwater availability at a local level

Relevant,included

IBERDROLA DOES NOT have any plant located in any area considered Water Stressed but we are awareof all areas suffering this problem. Anyway, IBERDROLA has a tool for developing water maps for all of eachplants, available to its users and all the information regarding disclosure of the water strategy of theCompany, is published in the the Water CEO Mandate webpage.

Estimates of future potentialregulatory changes at a local level

Relevant,included

IBERDROLA is acquainted with concerns and proposals of regulatory entities and puts forward its ownopinions in legitimate defence of its interests and those of its shareholders,customers and users. It activelyparticipates in public hearings by regulatory entities to ascertain opinions of the players involved in theprocesses,and in official processes of enactment of laws and regulations and monitoring of its application.

Estimates of future potentialstakeholder conflicts at a local level

Relevant,included

Consultations and permits with the potential population and regular meeting with local authorities are held.

Estimates of future implications ofwater on your key commodities/rawmaterials

Relevant,included

Despite having large water storage capacity,our results depend significantly on the flow contributions.Changes in output with respect to the average value can be up to -4,000GWh in a dry year and +5,000GWhin a wet year,with dry years being more likely than wet years.The variability would be between € -125/+100million.

Estimates of future potential Relevant, Most of the energy infrastructure projects are submitted an environmental impact assessments. In Spain,

IssuesChooseoption

Please explain

changes in the status ofecosystems and habitats at a locallevel

included together with the University of Salamanca, IBERDORLA promotes the development of methods to measureand financially value the eco-systemic services provided by the construction of hydroelectric infrastructure.As an example, the EMBECO project: an ecological study of the Villalcampo and Castro dams.

Scenario analysis of availability ofsufficient quantity and quality ofwater relevant for your operations ata local level

Relevant,included

The availability of water is critical to ensure a good quality of life of the population where our Companycarries on its business, which is directly related to local generation and energy supply security. Climatechanges can have an effect on greater or lesser availability of water resources for energy generation.

Scenario analysis of regulatoryand/or tariff changes at a local level

Relevant,included

IBERDROLA also participates in the regulatory process through domestic and international tradeassociations.Particularly significant are Unesa (Spain) and Eurelectric (Europe).We have also presence inforums and organisations that engage in discussions and research on regulatory matters. IBERDROLA isalso involved in some lobbying activities.In February 2012, IBERDROLA registered within the TransparencyRegister,created by European institutions.

Scenario analysis of stakeholderconflicts concerning waterresources at a local level

Relevant,included

Impact studies, public consultations and work with stakeholders are performed at the majority of projects tokeep the environmental impact as low as possible. By considering broad social and environmental issues inour daily decision-making we are more likely to achieve our goals. Delivering through this approach ensureswe bring benefits to customers, employees, communities and the environment.

Scenario analysis of implications ofwater on your key commodities/rawmaterials

Relevant,included

Despite having large water storage capacity,our results depend significantly on the flow contributions.Changes in output with respect to the average value can be up to -4,000GWh in a dry year and +5,000GWhin a wet year,with dry years being more likely than wet years.The variability would be between € -125/+100million.

Scenario analysis of potentialchanges in the status ofecosystems and habitats at a locallevel

Relevant,included

As an example, IBERDROLA USA is working with landowners in two rustic river basins. These activitiesinclude pretreating run-off water from impermeable sectors of the basin before it enters the river. The aim isto improve water quality and enhance the aquatic and riverbank habitats. Various erosion control measuresare being employed such as removable matting for the passage of excavators. This reduces the biodiversityimpacts of facilities sited on wetlands and bodies of water.

Other

W2.4a

Which of the following stakeholders are always factored into your organization's water risk assessments?

StakeholderChooseoption

Please explain

CustomersRelevant,included

With IBERDROLA 's commitment with society, we are developing awareness campaigns on saving and water useefficiency. For instance, in 2013 water improvement and repurposing projects have been carried out and several “EnergyClassrooms” that offer educational space to the public have been opened. The Company has also made someCampaigns in order to arising awareness given some tips related to water use such as, tips related to Washing Machineand Tumble Dryer and also Dishwasher.

EmployeesRelevant,included

IBERDROLA uses social media as an effective tool to sensitize both its employees and society. In 2013, news werepublished on its internal page, on the website against climate change (http://www.togetheragainstclimatechange.com/en/)and in the Company's blog (http://www.blog.iberdrola.com/en/blog/hidden-servicesprovided- by-reservoirs/) thatdemonstrates our interest and commitment.

InvestorsRelevant,included

IBERDROLA supports transparency regarding water strategy of the company. Signatory of the Global Round Table onClimate Change. In March 2012 the Water CEO Mandate was signed. The Company covers from the first year of itscreation the questionnaire CDP Water and all 2013 information is published in the the Water CEO Mandate webpage,available for everyone.(http://ceowatermandate.org/files/endorsing/ IberdrolaCDP2013.pdf) .

Local communitiesRelevant,included

An example:installation of systems for capturing and storing rainwater for human consumption in the area around theCaetité windfarm in inland Bahia (Brazil).This initiative will supply water to over 3,300 homes that currently have noconnection to the general water system, and no access to any type of storage resource.IBERDROLA and NEOENERGIAwill work on this project with the Brazilian Ministry for Social Development and the Fight against Hunger (MDS) as part ofthe Water for All programme.

NGOsRelevant,included

Prior to the official start of any procedural phase for project under development, IBERDROLA sends a projectmemorandum to a large group of NGOs that might have an interest in it. as an example of collaboration with NGOs,IBERDROLA participates in threatened species-conservation projects. The company Celpe backs Brazil's Sea TurtleConservation Programme, which seeks to protect sea turtles by generating economically sustainable alternatives.

Other water users at alocal level

Relevant,included

Termopernambuco thermal power plant runs an R&D+i programme,the following environmental projects are particularlynoteworthy: development and implementation of artificial reefs near the plant to recover the habitat and fishing resourcesintended for local fishermen; and development of a biodegradable oil for the hydraulic systems in hydroelectric plants toprevent environmental damage caused by oil spilling into water.

Regulators at a locallevel

Relevant,included

During the period of construction and operation of its production and distribution facilities, IBERDROLA carries out certaininfrastructure activities that are unrelated to its facilities and without a specific commercial purpose, but that are intendedto meet the needs of the social environment, resolving needs in neighboring communities. For this purpose, IBERDROLAcooperates with local authorities, with which it establishes agreements to carry out various types of public serviceactivities.

Statutory specialinterest groups at alocal level

Relevant,included

Examples in 2013:Participation and collaboration in application of prevention measures to avoid Mejillón Cebrapropagation (Ebro Hydrographi Confederation Water Department, Spain).Requested materials necessary for circulatingwater from deep well in the Community "Cuixcuatitla" are provided Tamazunchale (México) In the Hydraulic Generationfield.

Suppliers Relevant, IBERDROLA tries to act as reference in water management for all its contractors and suppliers.There are commitments in

StakeholderChooseoption

Please explain

included the Purchasing area to foster environmental responsibility and promote strict compliance by suppliers with contractualconditions and current legislation,with particular emphasis on respect for the principles established in the United NationsGlobal Compact.IBERDROLA’s Procurement Division has a Global Supplier Management Model. None of our suppliers isexposed to water-related.

Waterutilities/suppliers at alocal level

Relevant,included

Water related risk are managed through quality processes and periodic audits.Measures adopted to promote properenvironmental behaviour of suppliers are based on the Procurement Policy,the Suppliers’ Code of Ethics,and the specificenvironmental clauses in the contracting terms of the Group.Subsequently,during the supply stage,the business unitsmonitor the environmental performance of the supplier during the term of the contract.No supplier with negativeenvironmental impact has been detected.

Other

W2.5

Do you require your key suppliers to report on their water use, risks and management?

Yes

W2.5a

Please provide the proportion of key suppliers you require to report on their water use, risks and management and the proportion of your procurementspend this represents

Proportion of keysuppliers %

Total procurementspend %

Rationale for this coverage

76-100 51-75In 2013, 75% of the suppliers contracts (4% more than 2012), were made to suppliers with certifiedenvironmental management systems. None of our suppliers are located in water-stressed areas.

W2.5b

Please choose the option that best explains why you do not require your key suppliers to report on their water use, risks and management

Primary reason Please explain

Further Information

Module: Implications

Page: W3. Water Risks

W3.1

Is your organization exposed to water risks, either current and/or future, that could generate a substantive change in your business, operations, revenueor expenditure?

Yes, direct operations and supply chain

W3.2

Please provide details as to how your organization defines substantive change in your business, operations, revenue or expenditure from water risk

Liberalised business (including electricity generation) accounted for 23% of IBERDROLA’s EBITDA in 2013. Hydropower generation accounted for 22% of the total.1,500 MW of new hydropower generation will be developed and will enter into operation during the years 2015 and 2016, in Spain and Brazil.

Substantive changes are defined as those events with potential impacts in IBERDROLA Group’s EBITDA (decrease or increase of 5% of EBITDA).

W3.2a

Please complete the table below providing information as to the number of facilities in your direct operations exposed to water risks that could generatea substantive change in your business, operations, revenue or expenditure. Please also provide either the proportion of cost of goods sold, globalrevenue or global production capacity that could be affected across your entire organization at the river basin level

Country River basinNumber of facilities withinthe river basin exposed to

water riskReporting metric

Proportion of chosen metricthat could be affected within

the river basin

Spain Duero 6% global productioncapacity

1-5

Spain Tejo 6% global productioncapacity

6-10

Spain Jucar 3% global productioncapacity

1-5

BrazilOther: Different rivers in Bahia, Goias,Mato grosso

10% global productioncapacity

Less than 1%

United Kingdom Other: Cruachan 3% global productioncapacity

Less than 1%

United States ofAmerica

Other: New York 5% global productioncapacity

Less than 1%

W3.2b

Please list the inherent water risks that could generate a substantive change in your business, operations, revenue or expenditure, the potential impactto your direct operations and the strategies to mitigate them

Country

Riverbasin

Risk driver Potential impact

Description of impact Timeframe

Likelihood

Magnitude of

potentialfinancialimpact

Responsestrategy

Costsof

response

strategy

Details of strategyand costs

UnitedStatesofAmerica

Other: Allriver basinswhereIBERDROLA is located

Physical-Flooding

Closureofoperations

This is not a relevant riskfor IBERDROLA nowadays,because of the location ofour facilities. Future floodsmay affect the operation ofpower stations, includingthe hydro capacityavailable leading todifferent global operationalcosts and stop formaintenance. It may alsoput electricity substationsat risk.

1-3 years UnlikelyLow-medium

Infrastructuremaintenance

Medium

Depending on theavailability of water,climatic variationhas the potential toimpact our hydrooperations, coolingrequirements ofthermal powerstations, thermalefficiencies of ourpower plant,patterns of energyload growth and therobustness of ourtransmission anddistributioninfrastructure inresponse to moreextreme weathervariations.IBERDROLA hasdeveloped a verystrong awarenessof the physical risksassociated withwater availability.The assessment ofrisk is an ongoingactivity, which isdeveloped atvarious levels ofrisk control within

Country

Riverbasin



Likelihood

Magnitude of


Responsestrategy

Costsof

response

strategy


the company. Therisks are informedby individualassessment,industry experienceand assistancefrom various expertgroupings. Forinstance, therestoration andsupport efforts inthe aftermath ofHurricane Sandymade by IberdrolaUSA subsidiariesCentral MainePower (CMP),NYSEG and RG&Eis clear example ofbest practice duringemergencysituations producedby climatedisasters. The threeutilities amassedmore than 6,000people to handle acumulative total ofnearly 500,000electric serviceinterruptions spreadacross Maine andNew York. Oncetheir own

Country

Riverbasin



Likelihood

Magnitude of


Responsestrategy

Costsof

response

strategy


customers hadbeen restored, thecompaniesreleased nearly1,800 line, bucket,pole-setting, digger,tree, gas andsupervisoryemployees andcontract workers toassist National Grid(LIPA),ConsolidatedEdison, ConnecticutLight & Power andFirstEnergy utilities.NYSEG alsosupplied poles,transformers andnatural gasregulators to ConEdfor their restorationefforts in New YorkCity.

Spain


Regulatory-Poorenforcement of waterregulation

Branddamage

Nowadays, financial crisishas taken first importancein the political scenario;new policies on climatechange and nucleargeneration (afterFukushima) are uncertain.Changes in regulationswith less requirements may

1-3 years Probable Medium

Engagement withpublicpolicymakers

Medium

In relation to theinsurance cover,Iberdrola hasinternationalinsuranceprogrammes tocover equity(insurance formaterial damages,

Country

Riverbasin



Likelihood

Magnitude of


Responsestrategy

Costsof

response

strategy


affect the IBERDROLAGroup’s business as soonas other companies withlower financial, social andenvironmental commitmentmay gain competitiveadvantage reducing theGroup's turnover. It canalso lead to an increase inour insurance premiums.

machinerybreakdowns, loss ofprofits, damagesfrom naturaldisasters and risksarising fromconstruction work)and third-partyliabilities (generalcivil liability, liabilityfor environmentalrisks, professionalcivil liability, etc.).

Brazil


Reputational-Inadequateaccess towater,sanitationandhygiene

Branddamage

Access to water resourcesand sanitation is essentialfor the development of anypopulation and business.The risk of difficult accessin the future long-term, candamage directly to theproduction on the overallmix of our Company, anyrisks associated with theproduction, possibleinvestments and its image.

4-6 years UnlikelyLow-medium

Engagement withcustomers

Low-medium

The materialityanalysis forIBERDROLA hasreflected a low riskassociated with thesupply of water (5%of significance forIBERDROLA).IBERDROLA's hasinstalled systemsfor capturing andstoring rainwater forhumanconsumption in thearea around theCaetité windfarm ininland Bahia(Brazil).Thisinitiative will supplywater to over 3,300

Country

Riverbasin



Likelihood

Magnitude of


Responsestrategy

Costsof

response

strategy


homes thatcurrently have noconnection to thegeneral watersystem, and noaccess to any typeof storageresource.IBERDROLA andNEOENERGIA willwork on this projectwith the BrazilianMinistry for SocialDevelopment andthe Fight againstHunger (MDS) aspart of the Water forAll programme.

Mexico


Other: Poorwaterquality

Higheroperatingcosts

Independent separationnetworks are used forindustrial and sanitarywater.The latter issubjected to final treatmentin biodigesters,whereasprocess water goesthrough hydrocarbonseparators before its returnto the natural medium.LaLaguna plant collectssewage for its processes,and the water dischargedby this plant has betterquality than the collected

>6 years UnlikelyLow-medium

Increasedinvestmentin newtechnology

Low-medium

The principal waterwithdrawn withinthe Group’sactivities takesplace in the coolingsystems, processesand standbyservices for thethermal generationplants. Most of thewater is returned tothe environment,partly asevaporated waterand the rest

Country

Riverbasin



Likelihood

Magnitude of


Responsestrategy

Costsof

response

strategy


water.Main plantsaffected:Monterrey,Altamira,La Laguna,Golfo,Tamazunchale.

included indischarges from thefacilities. In all ourplants, water isdischarged underconstant monitoringof variousparameters(temperature,turbidity,conductivity, etc.)by the Companyand theAdministration, tomake sure that thecharacteristics ofthe effluent arealways below theestablished limits.For instance, all thethermal power-generation plants inSpain havetreatment systemsthat treat residualwater beforedischarging it intothe natural receptorenvironment. Waterfrom the processundergoesphysicochemicaltreatment, whichincludes the

Country

Riverbasin



Likelihood

Magnitude of


Responsestrategy

Costsof

response

strategy


separation ofhydrocarbons.Wastewater istreated in compacttreatment systemswith biologicalaerobic processes.As regards thetreatment ofdischarges, at theVelilla thermal plantin Spain, biologicaltreatment fordesulphurisationcommenced in April2012 at theEffluents TreatmentPlant, to reducenitrides and nitratesin the discharge. Anexhaustiveinspection wasperformed of thewater used in thedirect productionprocess at theCofrentes nuclearpower plant. All ofthe effluents fromthe water-steamcycle, from thereactor coolants,and from thestandby systems

Country

Riverbasin



Likelihood

Magnitude of


Responsestrategy

Costsof

response

strategy


are processed inthe liquid wastetreatment systemand are returned tothe cycle for reuse.

Spain


Physical-Decliningwaterquality


Access to water resourcesis essential to thedevelopment of anypopulation and business.Even if IBERDROLA'sfacilities are located in anexcellent strategic positionnot being object of waterrisk in the short term, weare aware that pollutionand poor water qualitycould lead to a possibledamage to plants, reducingproduction, increasing thestops for maintenance oreven close.

4-6 years ProbableLow-medium


Medium

All the thermalpower-generationplants in Spainhave treatmentsystems that treatresidual waterbefore dischargingit into the naturalreceptorenvironment. Waterfrom the processundergoesphysicochemicaltreatment, whichincludes theseparation ofhydrocarbons.Wastewater istreated in compacttreatment systemswith biologicalaerobic processes.As regards thetreatment ofdischarges, at theVelilla thermal plantin Spain, biologicaltreatment for

Country

Riverbasin



Likelihood

Magnitude of


Responsestrategy

Costsof

response

strategy


desulphurisationcommenced in April2012 at theEffluents TreatmentPlant, to reducenitrides and nitratesin the discharge. Anexhaustiveinspection wasperformed of thewater used in thedirect productionprocess at theCofrentes nuclearpower plant. All ofthe effluents fromthe water-steamcycle, from thereactor coolants,and from thestandby systemsare processed inthe liquid wastetreatment systemand are returned tothe cycle for reuse.

UnitedKingdom


Physical-Projectedwaterscarcity

Constraint tofuturegrowth

Given the importance ofhydropower generation forIBERDROLA, a decreasein rainfall would have anegative effect on theoverall mix of the company.IBERDROLA is likely to

>6 years Unlikely MediumInfrastructureinvestment

Medium

IBERDROLA'sfacilities are locatedin an excellentstrategic positionnot being object ofphysical risk in theshort term. In

Country

Riverbasin



Likelihood

Magnitude of


Responsestrategy

Costsof

response

strategy


adjust investment andmaintenance strategies.For our thermal plants, theoperation of stations maybe impacted viatemperature changes to thecoolants used to managethe steam production,waste and by product heat.This may require re-calibration of certain planoperations.

existing facilities thecritical elements arebeing reinforced,and physicalsecurityrequirement is apriority elementconsidered in theconstruction of thenew facilities. TheGroup is aware offuture scarcityproblems,especially freshwater for populationand ecosystems.No situations wererecorded duringfinancial year 2013that significantlyaffect waterresources or thehabitats associatedwith the water-collection points,which are for themost part significantmasses of freshwater or salt-water.During 2013, 78.6% of the watercaptured is salt-water or brackishwater and does not

Country

Riverbasin



Likelihood

Magnitude of


Responsestrategy

Costsof

response

strategy


occur in protectedareas. As we statedbefore,IBERDROLA hasdeveloped a verystrong awarenessof the physical risksassociated withwater availability. Inthe UK, thecompany is workingwith Government(DEFRA –Department ofEnvironment, Foodand Rural Affairs) todevelop plans forresilience, floodingand adaptation forthe industry. Ourkey assets need tohave adaptationand resilience plansascribed to them.Various MaterialityStudies have beencarried out in recentyears, whichconsist of reviewingvarious externalsources that mayreasonably reflectthe issues regardedas more significant

Country

Riverbasin



Likelihood

Magnitude of


Responsestrategy

Costsof

response

strategy


by the variousstakeholders inconnection with theCompany’sactivities. The resultof these studiesallows IBERDROLAto improve itsperformance. Thelast materialityanalysis done forIBERDROLA hasreflected a low riskassociated with thesupply of water (5%of significance forIBERDROLA).However,IBERDROLA triesto focus its effortsto solve problemswhich could arisesince stakeholdersattach significanceto reduction andperformancetargets in variousenvironmentalareas, such asemissions, waterconsumption, wastegeneration, etc.,and pay specialattention to

Country

Riverbasin



Likelihood

Magnitude of


Responsestrategy

Costsof

response

strategy


efficiency in themanagement ofresources and tothe externalverification ofemissions data.

Spain


Regulatory-Higherwaterprices


Increase of operationalcosts due to the possibleimposition of new taxes forusing water, with thecorresponding increase inthe cost of the energy.

1-3 years Unlikely Medium

Watermanagementincentives

Medium

The principal watercapture to carry outthe Group’sactivities takesplace in the coolingsystems, processesand standbyservices for thethermal generationplants.Consumption ofwater in relation toglobal production(m3/GWh) haschanged thedownward trend ofrecent years due tothe increase in coaland nuclear thermalproduction and thedecrease inproduction with gascombined cyclesand hydroelectricplants.IBERDROLA, as aleader company in

Country

Riverbasin



Likelihood

Magnitude of


Responsestrategy

Costsof

response

strategy


low emissionstechnologies has along-term industrialproject which issound, profitableand creates value,rooted in a strategyof sustainablegrowth, and byworking every dayto offer morerespectful energysources, where thereduction of waterconsumption is afundamental issue.At the corporatelevel, we track andmonitor thefollowingstatements at alocal level:estimation of futurepotential regulatorychanges andScenario analysiswith potentialimpact of regulatoryor tariff changes onoperations.Company’scomprehensive risksystem, which iscertified in

Country

Riverbasin



Likelihood

Magnitude of


Responsestrategy

Costsof

response

strategy


accordance with theUNE-EN-ISO9001:2000standard, andwhich takes intoaccount theprincipalenvironmental risksat the Group level,covers all of theCompany’sactivities andbusiness units,including affiliatesover which theCompany haseffective control.Related to theidentification ofWater Stressedareas, theCompany combinethe WRI definitionof Water Stressedareas, whichindentify this placeas a water supplyless than 1700 m3per capita and year,based on the‘Falkenmarkindicator’ or ‘waterstress index’.Toward

Country

Riverbasin



Likelihood

Magnitude of


Responsestrategy

Costsof

response

strategy


FAO/AQUASATdatabaseIBERDROLAindentifies whetherthe countries wherethe Company hasfacilities couldpossible beclassified as aWater Stressedarea. This methodallows confirmingthat the Companydoes not have anyfacility or revenuelocated in WaterStressed areas. Inthis regards riskcaused by possiblelocation in WaterStressed areas inthe short term is nota problem for theCompany.

Spain


Regulatory-Increaseddifficulty inobtainingoperationspermit


Tightening on regulationsand standards will requirethe Company to invest incomplying with highenvironmental impactstudies,obtaininglicences,permits and othermandatoryauthorisations.Operational

Current-up to 1year

Probable Medium


Medium

In order to preventany impact,IBERDROLA relieson transparencyand environmentalmanagementsystems.100%IBERDROLA hydrogeneration facilities

Country

Riverbasin



Likelihood

Magnitude of


Responsestrategy

Costsof

response

strategy


impacts related todisruptions in businessoperations will increasedue to more environmentalrestrictions to newplants.IBERDROLA may besubject to legal claims forfuture damages, orpenalties derived fromwaste, emissions, orspillages which might affectthe Group’s image andreputation.

in Spain are underIS0 14000 System:minimisingenvironmental risks,thus improving theCompany'senvironmentalmanagement in linewith its commitmentto environmentalprotection.

UnitedKingdom


Regulatory-Regulatoryuncertainty


The development of theEuropean Water FrameDirective could causedisruptions in businessoperations,it is the waterlegislation to be producedby the EuropeanCommission,a set ofguidelines for managinglarge bodies ofwater,improving waterquality and reducingpotential hazards such asflooding.Each memberstate planning to protectand improve rivers, lakesand coastal waters, toprevent flooding andmanage droughts.

1-3 years Probable Medium


Medium

In the UK thisincludes RiverBasin ManagementPlans for distinctareas, which werepublished inDecember 2009.We are engagedwith regulatorybodies andcontinue to workthroughassessmentarrangements forimplementation ofmeasures arisingfrom the WFD.

Spain Other: All Other: Brand IBERDROLA believes that >6 years Probable Medium Engageme Medium IBERDROLA has

Country

Riverbasin



Likelihood

Magnitude of


Responsestrategy

Costsof

response

strategy


river basinswhereIBERDROLA is located

Reputational Damage

damage the strategy commitmentwith environment andsociety has benefitsachieving higher brandrecognition and improvingits corporate reputation.Any company'sinvolvement andmanagement of crisissituations could have adamaging effect onreputation.

nt withcustomers

developed ageneral System onStakeholderEngagement, tocontrol reputationrisks. There is aReputationCommittee, internalbody chaired by theDirector ofCorporateResources, in orderto coordinate andmonitor thereputational andcorporateresponsibility issuesin the IBERDROLAGroup. The Boardof Directors createda Corporate SocialResponsibilityCommittee (withinthe Board) in 2010.IBERDROLA,member of theSpanish-basedCorporateReputation Forum,from 2005/2006implemented theREPTRAK tool inconjunction with theReputation Institute

Country

Riverbasin



Likelihood

Magnitude of


Responsestrategy

Costsof

response

strategy


and other membersof the Forum, usingREPTRAK to obtaininformation on theimpact of its socialcontributions. .Each quarter, thiseconometric modelmeasures generalpublic opinion onthe corporatereputation ofIBERDROLA,competitors andother companies.The REPTRAK toolstudies 26attributes relating toa company’scorporatereputation. Theseattributes areclassified underseven dimensions,one is “citizenship”with three attributeswhich are analysedregularly: 1)Contributespositively to society;2) Supports socialcauses and 3)Protects theenvironment.

Country

Riverbasin



Likelihood

Magnitude of


Responsestrategy

Costsof

response

strategy


Spain


Physical-Inadequateinfrastructure


Problems associated withpoor infrastructures maycause direct decrease inthe IBERDROLA'sproduction efficiency,increasing the frequency ofshutdowns andmaintenance, causing anincrease in waterconsumption and the needof greater investment to getthe same production, whichlead to increase energyprices.

Current-up to 1year

Probable Medium


Medium

The principal watercapture to carry outthe Group'sactivities takesplace in the coolingsystems, processesand standbyservices for thethermal generationplants.IBERDROLA isimplementing thebest availabletechnology toimprove thecollection andreduce waterconsumption at allits plantsworldwide, such asreusing wastewater, capturingrainwater andimproving processefficiency. At LaLaguna andMonterreycombined cycleplants in Mexicoand Klamathcogeneration plantin the UnitedStates, a systemhas been designed

Country

Riverbasin



Likelihood

Magnitude of


Responsestrategy

Costsof

response

strategy


for reusing waterfrom the pool, at theVelilla plant, therewas a completeoverhaul of thewater treatmentplant andautomation thereofwithin the plant’scontrol system, andthe final flow metercontrol for waterdischarges wasreplaced by onewith lowermaintenance andeasier calibration.It should be alsonoted that half ofScottishPower’swind farms haverooftop rainwatercollectors andstorage tanks touse the water at thecontrol buildings.

Spain


Physical-Increasedwaterscarcity

Other:Loss ofprofit

Despite having a largewater storage capacity,IBERDROLA's resultsdepend significantly on theflow contributions. Thechanges in output withrespect to the average

1-3 years ProbableMedium-high

Watermanagementincentives

Medium

Although the effectdepends on thetime of year inwhich the rainsoccur, and manyother physicalparameters of the

Country

Riverbasin



Likelihood

Magnitude of


Responsestrategy

Costsof

response

strategy


value can be up to -4,000,000 MWh in a dryyear and +5,000,000 MWhin a wet year, with dryyears being more likelythan wet years.

facilities,considering thehigh inversecorrelation betweenthe wateravailability and theprice of electricity,the variability wouldbe between EUR -125/+100 million.The lost profitwould not becovered as it isconsidered an riskinherent toIBERDROLA.

W3.2c

Please list the inherent risks that could generate a substantive change in your business operations, revenue or expenditure, the potential impact to yoursupply chain and the strategies to mitigate them

Country River basin Risk driverPotentialimpact

Description ofimpact

Timeframe Likelihood

Magnitudeof


Responsestrategy

Costs ofresponsestrategy


Spain

Other: Allriver basinswhereIBERDROLAis located

Regulatory-Changedproductstandards


As aconsequenceof thefulfilment offuture newstandards bythe suppliersand thefacilitiesadaptation tothese new rawmaterials mayincreaseoperationalcosts.


Increasedinvestment innewtechnology

Low-medium

IBERDROLA iscommitted toresearch,development andinnovation, whichare strategicvariables forconfronting thechallenges facingthe Company. Inthis regards we arein a continuousimprovement toadapt all ourfacilities byimplementation ofan innovativemanagement andtechnology strategyover the lastdecade, which hasled us to become aworld leader andbenchmark in R&D,thanks to thesuccessfulimplementation of acommon model inall areas,collaboration withour technologyproviders and thepromotion ofculture ofinnovation. We are




Magnitudeof


Responsestrategy



committed toincreasing theutilization ofdiverse businessesfor ourprocurementneeds. We valuebuilding strongrelationships withour diversesuppliers; theserelationships giveus the competitiveadvantage as beingone of the best inthe utility market.Through ourefforts, we are ableto seek outsuppliers who arecapable ofproviding the bestservice in terms ofcost, quality anddelivery. Pleasefind attached theIBERDROLA'sSupplierContracting andRelationship Policy.

Spain

Other: Allriver basinswhereIBERDROLA

Other:ReputationalDamage

Branddamage

Our companycan beinvolved in aproblem of a


Engagementwithsuppliers

Low-medium

IBERDROLA hasdeveloped aGLOBALSUPPLIER




Magnitudeof


Responsestrategy



is located supplier,despite beingtotally outsidethem. Thismay result in adamage on theimage andreputation ofthe Group, andfinally in areduction incapitalavailability.

MANAGEMENTMODEL (includinga Total SupplierManagementSystem) thatenables thecompany toregister andclassify itssuppliers. Tendersby IBERDROLAinclude contractualconditions requiringthat the parties actwithin stringentlevels of security,occupational riskprevention, andrespect for theenvironment. Oncethe suppliers haveregistered in ourGlobal SuppliersManagementSystem, suppliersare evaluated onthe basis of theirtechnical andproductioncapabilities, amongother things, andtheir status in thefollowing areas isweighted: - Quality- Safety and




Magnitudeof


Responsestrategy



occupational riskprevention -Environment -SocialResponsibility -Economic andfinancial condition -Prior references -Anti-bribery &Corruptionassessment. Thestatus of suppliersas regardssustainability, thefirst four areasmentioned above,has a weight of40% in the totalscore. To improvethe status ofsuppliers with alesser performancein this area,involvement,awareness-raisingand motivationactivities areconductedthroughout theyear, in order forsuppliers toachievecertification inquality, theenvironment and/or




Magnitudeof


Responsestrategy



occupational riskprevention.

Spain


Reputational-Litigation

Fines/penalties

Increasedoperationalcost in order topay possiblefines torespond for thesupplier in civilor criminaljurisdiction.

>6 years Probable MediumEngagementwithsuppliers

Medium

Suppliers areassessed takinginto account theirtechnical andproductioncapacity, amongstother criteria, andtheir credentialsare weighted in thefollowing areas: •Quality • Safetyand occupationalrisk prevention •Environment •Socialresponsibility •Economic financialsituation • Anti-bribery &Corruptionassessment. Theconcept ofresponsibleprocurement, whichmeans that goodsand services mustbe produced ordelivered in linewith the aims ofenvironmentalsustainability andsocial justice, is




Magnitudeof


Responsestrategy



present in contractswith suppliers. Wecontinue to use ourpurchasing powerto achieve win-winsolutions bybuilding supplychains that provideresponsiblysourced productsand services andbalance thebenefits ofglobalisation withthe health of ourlocal and nationaleconomies. Duringfinancial year 2013,there were nohuman-rightsproblemsdiscovered withsuppliers.

Spain


Physical-Flooding


Increasedoperationalcost related toimportantmaterials forongoingbusinessoperation.

>6 years Unlikely MediumInfrastructuremaintenance

Medium

EnvironmentalCorporateDepartment hasincluded, as part ofthe EnvironmentalScorecard of theGroup, the mostimportantoperational risksper region andbusiness to get an




Magnitudeof


Responsestrategy



overall view and toraise coordinatedactions plans ifneeded.IBERDROLA, bysupportingenvironmentalcertification of theirsuppliers, makespossible tominimize the risk ofnatural disastersincluding floods.Moreover, tominimise theimpact of possibleincidents,insurance policiesare contracted.

W3.2d

Please choose the option that best explains why you do not consider your organization to be exposed to water risks in your direct operations that couldgenerate a substantive change in your business, operations, revenue or expenditure


W3.2e

Please choose the option that best explains why you do not consider your organization to be exposed to water risks in your supply chain that couldgenerate a substantive change in your business, operations, revenue or expenditure


W3.2f

Please choose the option that best explains why you do not know if your organization is exposed to water risks that could generate a substantivechange in your business operations, revenue or expenditure and discuss any future plans you have to assess this

Primary reason Future plans

Further Information

Page: W4. Water Opportunities

W4.1

Does water present strategic, operational or market opportunities that substantively benefit/have the potential to benefit your organization?

Yes

W4.1a

Please describe the opportunities water presents to your organization and your strategies to realize them

Country orregion

Opportunity Strategy to realize opportunityEstimatedtimeframe

Please explain

Spain Cost savings

Due to the increase of hydraulic productioncapacity as consequence of physical changes(increased of rainfall patterns), costs savingscould be experimented. Hydraulic production ischeaper than others, such as thermal andcogeneration production, not only for theoperational cost but also for the cost of C02rights.

>6 years

IBERDROLA has an installed capacity of 306 MW in minihydro plants. This capacity includes 176 MW under theOrdinary Production Regime for electrical energy and the restunder the terms of the Special Regime.

Portugal Cost savings

Due to the increase of hydraulic productioncapacity as consequence of physical changes(increased of rainfall patterns), costs savingscould be experimented. Hydraulic production ischeaper than others, such as, thermal andcogeneration production, not only for theoperational cost but also for the cost of C02rights.

>6 years

In 2008, an agreement was signed with the PortugueseGovernment for the construction of the Támega riverhydroelectric complex, one of the largest to be built in Europein the past 25 years, with 1,054 MW in capacity.

Botswana Cost savings

Due to the increase of hydraulic productioncapacity as consequence of physical changes(increased of rainfall patterns), costs savingscould be experimented. Hydraulic production ischeaper than others, such as, thermal andcogeneration production, not only for theoperational cost but also for the cost of C02rights.

>6 years

In Brazil IBERDROLA has a 39% interest in Neoenergia, thelargest distributor in north-eastern Brazil, with the largestnumber of customers in the country (30 million customers and8.8 million supply points). It is also developing major hydroprojects in the country, notably Telepires (900MW), BaixoIguaçu and Belo Monte (1500 MW) development.

UnitedKingdom

Cost savings

Due to reducing water use and the need fordischarge permits as a consequence ofoperational efficiency, re-use waste water, andrainwater collection costs savings could beexperimented.

Current-upto 1 year

In Daldowie Sludge Processing Plant, the effluent, previouslytreated and filtered, is recycled for use in its manufacturingprocesses. In the United Kingdom, the Rye House combinedcycle power station can reduce up to 75 % of water usethrough a rainwater collection system which, after beingtreated, is used as process water. Half of ScottishPower’s wind

Country orregion


Please explain

farms have rooftop rainwater collectors and storage tanks touse the water at the control buildings.

Mexico Cost savings

Due to reducing water use and the need fordischarge permits as a consequence ofoperational efficiency, re-use waste water, costssavings could be experimented.

Current-upto 1 year

At the Klamath plant in the United States of America, 92.7 % oftreated wastewater was used for all of its processes.

UnitedStates ofAmerica

Cost savings

Due to reducing water use and the need fordischarge permits as a consequence ofoperational efficiency, re-use waste water, costssavings could be experimented.

Current-upto 1 year

The reuse of wastewater for the cooling systems of someplants in Mexico (Monterrey, La Laguna) is noteworthy. At theLa Laguna plant, all water withdrawn is wastewater, which isfiltered at the facility.

Spain Cost savings

Due to reducing water use and the need fordischarge permits as a consequence ofoperational efficiency, costs savings could beexperimented.

Current-upto 1 year

At Tarragona Power CCGT,part of the water collected isreused as steam,supplying calorific energy (5.297 GWh), usedfor industrial processes or heating systems.At EscombrerasCCGT, there has been a reduction in the consumption ofpotable water at the demineralised water treatmentplant,reusing industrial effluents generated by the plant,11,6%of industrial effluents were recovered as compared to thepotable water consumed, with a reduction of 531 m3.

Company-wide

Increased brandvalue

Improve image due to IBERDROLA's water-related actions.

1-3 years

IBERDROLA promotes the transparency of its actions throughthe EMAS.IBERDROLA is signatory of the Global Round Tableon Climate Change and the CEO Water Mandate.Informationon water strategy through CDP Water is published in theWater CEO Mandate webpage. No situations were recordedduring 2013 that significantly affect water resources or thehabitats associated with the water-collection points.78,6% ofcaptured water is seawater or saltwater and does not occur inprotected areas.

Company-wide

Other: Positiveimpacts ofelectricitygeneration

Activities related to the electricity generation,where hydraulic plants have a key role, have thepotential to have the most significant indirectimpact, and the studies and analysis to identifysuch impacts takes place during thegovernmental process for approval by thecompetent bodies, normally during theenvironmental impact studies.

4-6 years

Electricity facilities are built in dispersed geographiclocations,often in depressed areas. This generates economicactivity,boosting the regional economy and generatessignificant employment.In addition, it strengthens thedevelopment of the related infrastructure, especially in ruralareas,and,results in improvements to portinfrastructure.Electricity activity generates taxes,tributes,andlevies and allows for the generation of significant income.

Mexico Improved water At Dulces Nombres combined cycle plant uses Current-up During 2013, Dulces Nombres combined cycle plant was

Country orregion


Please explain

efficiency treated wastewater in its operations. to 1 year recognised by the public institution Servicios de Agua yDrenaje de Monterrey (SADMON) due to its work with treatedwastewater. It was pioneer in the use of this kind of water.

W4.1b

Please choose the option that best explains why water does not present your organization with any opportunities that have the potential to providesubstantive benefit


W4.1c

Please choose the option that best explains why you do not know if water presents your organization with any opportunities that have the potential toprovide substantive benefit


Further Information

Module: Accounting

Page: W5. Water Accounting (I)

W5.1

Please report the total withdrawal, discharge, consumption and recycled water volumes across your operations for the reporting period

Water use Quantity (megaliters)

Total volume of water withdrawn 3065875

Total volume of water discharged 2932752

Total volume of water consumed 133120

Total volume of recycled water used 1919569

W5.2

For those facilities exposed to water risks that could generate a substantive change in your business, operations, revenue or expenditure, the number ofwhich was reported in W3.2a, please detail which of the following water aspects are regularly measured and monitored and an explanation as to why orwhy not

Water aspect% of

facilitiesPlease explain

Water withdrawals- totalvolumes

76-100

Maximum limits on inland water collection and consumption are established and controlled by governments,whichassigns the permits.The government also establishes and controls surface level limits and ecological flows at thehydroelectric generation reservoirs.Best available practices are used so that the withdrawal and consumption ofwater is the minimum possible and with the least impact on the environment,trying to recycle and reuse water to themaximum.

Water withdrawals- volumeby sources

76-100Maximum limits on inland water collection and consumption are established and controlled by governments,whichassigns the permits.The government also establishes and controls surface level limits and ecological flows at thehydroelectric generation reservoirs.Best available practices are used so that the withdrawal and consumption of

Water aspect% of

facilitiesPlease explain

water is the minimum possible and with the least impact on the environment,trying to recycle and reuse water to themaximum.

Water discharges- totalvolumes

76-100Effluents from the generating plants are treated before they are discharged into the receptor environment (i.e. thesea, reservoirs or rivers, wastewater treatment plants, etc.).These treatment plants and other facilities allow formonitoring and improving the quality of the effluents and reducing the risk of polluting discharges.

Water discharges- volume bydestination


Water discharges- volume bytreatment method


Water discharge quality data-quality by standard effluentparameters


Water consumption- totalvolume

76-100


Water recycling/reuse-totalvolume

76-100


W5.3

Water withdrawals: for the reporting period, please complete the table below with water accounting data for all facilities included in your answer toW3.2a

Facilityreferencenumber

Country River basin Facility name

Total waterwithdrawals

(megaliters/year)at this facility

How does thetotal water

withdrawals atthis facility

compare to thelast reporting

period?

Please explain the change ifsubstantial

Facility 1 SpainOther: All river basinswhere IBERDROLA islocated

IBERDROLA's facilities inSpain

1119603 Much lowerCCGT power plants haveoperated in a lower proportionthan previous years.

Facility 2UnitedKingdom

Other: All river basinswhere IBERDROLA islocated

IBERDROLA's facilities inUnited Kingdom

1805070 LowerCockenzie thermal plant did notoperate from April 2013.

Facility 3United Statesof America

Other: All river basinswhere IBERDROLA islocated

IBERDROLA's facilities inthe United States ofAmerica

3713 Higher

Facility 4 MexicoOther: All river basinswhere IBERDROLA islocated

IBERDROLA's facilities inMexico

54403 About the same

Facility 5 BrazilOther: All river basinswhere IBERDROLA islocated

IBERDROLA's facilities inBrazil

3085 HigherInformation has been collectedfrom some facilities for the firsttime in 2013.

Further Information

Page: W5. Water Accounting (II)

W5.3a

Water withdrawals: for the reporting period, please provide withdrawal data, in megaliters per year, for the water sources used for all facilities reported inW5.3


Surface waterGroundwater(renewable)

Groundwater(non-

renewable)Municipal water Recycled water

Produced/processwater

WastewaterBrackish/salt

water

Facility 1 625525789 0 669308 1187389 0 0 122209 572097814

Facility 2 45978 0 521530 3267247 0 0 0 1801235806

Facility 3 0 0 202388 177951 0 0 3333140 0

Facility 4 8392370 0 2206 2067830 0 0 9281897 34657480

Facility 5 0 0 0 153671 0 0 0 2930607

W5.4

Water discharge: for the reporting period, please provide the water accounting data for all facilities reported in W5.3

Facility referencenumber

Total water discharged (megaliters/year)at this facility

How does the total waterdischarged at this facility

compare to the last reportingperiod?

Please explain the change if substantive

Facility 1 1203467 Much lowerCCGT power plants have operated in a lower proportionthan previous years.

Facility 2 1698538 Lower Cockenzie thermal plant did not operate from April 2013.

Facility 3 1560 About the same



W5.4a

Water discharge: for the reporting period, please provide water discharge data, in megaliters per year, by destination for all facilities reported in W5.3


Surface waterMunicipalTreatment

PlantSaltwater

Injection forproduction/disposal

Aquifer recharge Storage/waste lagoon

Facility 1 630966628 119130 572381730 0 0 0

Facility 2 0 2131712 1696405741 0 0 0

Facility 3 0 1559353 0 0 0 0

Facility 4 2346414 1936672 23877142 0 0 0

Facility 5 0 89841 934795 0 0 0

W5.5

Water consumption: for the reporting period, please provide water consumption data for all facilities reported in W5.3


Consumption(megaliters/year)

How does thiscompare to

the lastreportingperiod?



Data estimated.We engage in activities to improve the efficient use of water.Activities at Spanish thermalplants during 2013:at Lada,a system was designed for reusing water from the pool;at Escombreras,therewas a reduction in the consumption of potable water at the demineralised water treatment plant,reusingindustrial effluents generated by the plant;at Tarragona Power, part of the water collected is reused assteam,supplying calorific energy used for industrial processes or heating systems.

Facility 2 106533108 Higher

Thermal production has been given in greater proportion in the facilities with a closed cooling circuit. Whenthe thermal energy generation is higher in power stations with closed cooling circuit the water useincreases as evaporated water. Even though,it should be noted that the Rye House CCGT can reducewateruse by up to 75% through a rainwater collection system.At some of ScottishPower’s wind farms,thecontrol buildings have rooftop rainwater collectors and storage tanks to use the water.

Facility 3 2154126 Higher Mayor producción


Consumption(megaliters/year)

How does thiscompare to

the lastreportingperiod?




W5.6

For the reporting period, please provide any available water intensity values for your organization's products or services across its operation

Country River basin Product name Product unit Water unit

Water intensity(Water

unit/Productunit)

Water use type Comment

SpainOther: All river basins whereIERDROLA is located

Electricitygenerated

Other: MWh Liters 826Water use inoperations

Dataestimated.

United KingdomOther: All river basins whereIERDROLA is located



United States ofAmerica

Other: All river basins whereIERDROLA is located



MexicoOther: All river basins whereIERDROLA is located



BrazilOther: All river basins whereIERDROLA is located



W5.7

For all facilities reported in W3.2a what proportion of their accounting data has been externally verified?

Water aspect % verification What standard was used?

Water withdrawals- total volumes 76-100KPMG verified this data according to GRI-4 andWorld Business Council.

Water withdrawals- volume by sources 76-100KPMG verified this data according to GRI-4 andWorld Business Council.

Water discharges- total volumes 76-100KPMG verified this data according to GRI-4 andWorld Business Council.

Water discharges- volume by destination 76-100KPMG verified this data according to GRI-4 andWorld Business Council.

Water discharges- volume by treatment method 76-100KPMG verified this data according to GRI-4 andWorld Business Council.

Water discharge quality data- quality bystandard effluent parameters

76-100KPMG verified this data according to GRI-4 andWorld Business Council.

Water consumption- total volume 76-100KPMG verified this data according to GRI-4 andWorld Business Council.

Water recycling/reuse-total volume 76-100KPMG verified this data according to GRI-4 andWorld Business Council.

Further Information

Module: Response

Page: W6. Governance and Strategy

W6.1

Who has the highest level of direct responsibility for water within your organization and how frequently are they briefed?

Highest level of directresponsibility for water

issues

Frequency ofbriefings onwater issues

Comment

Individual/Sub-set of theBoard or other committeeappointed by the Board

Scheduled-annual

Commitment of the Board of Directors is to make the environment a strategic element.We support transparencyregarding water strategy,and water performance information is disclosed in the Sustainability Report 2013.Inmarch 2012,we endorsed the CEO Water Mandate,an initiative by the United Nations,designed to helpcompanies in developing,implementing and disseminating sustainability policies for water management.Waterstrategy is in accordance with The CEO Water Mandate framework.

W6.2

Is water management integrated into your business strategy?

Yes

W6.2a

Please choose the option(s) below that best explain how water has positively influenced your business strategy

Influence of water onbusiness strategy

Please explain

Establishment ofsustainability goals

IBERDROLA has specific policies regarding the management of environmental issues: the Environmental Policy, the Climate ChangePolicy, the Biodiversity Policy and the Sustainability Policy. These policies define the specific guidelines that the IBERDROLA Groupmust follow both in the process of defining and developing its strategy and investments and with regard to its operations and control ofenvironmental risks.

Introduction of watermanagement KPIs

Since 2010 IBERDROLA has launched an Environmental Scorecard in which is displayed a set of KPIs. This scorecard is the systemelement determining the quality of the environmental strategy, defines the standards for the Group’s environmental risk mitigation,serves to calculate the value generated by such strategy, and ultimately provides coherence to the overall system, ensuring the

Influence of water onbusiness strategy

Please explain

convergence of the Group’s strategic goals.

Publicly demonstratedour commitment towater

IBERDROLA is an influential company and intends to boost best practices in the area of the environment,optimize management andpromote the search for solutions to problems linked to the natural surroundings were water is included.In march 2012,we endorsed theCEO Water Mandate,an initiative by the United Nations,designed to help companies in developing,implementing and disseminatingsustainability policies for water management.Water strategy is in accordance with The CEO Water Mandate framework.

Tighter operationalperformance standards

For IBERDROLA, the environmental dimension of its activities is a necessary baseline for the formulation of its Strategic Plan and theoperational planning of its businesses is fostering innovation, eco-efficiency, ecodesign and a progressive reduction in theenvironmental impacts of its activities and in the supply chain (as WATER consumption).

W6.2b

Please choose the option(s) below that best explains how water has negatively influenced your business strategy

Influence of water on business strategy Please explain

Other: Presence in water stressed areasIBERDROLA is not present at water-stressed areas, so water has not negativelyinfluenced our business strategy,

W6.2c

Please choose the option that best explains why your organization does not integrate water management into its business strategy and discuss anyfuture plans to do so


W6.3

Does your organization have a water policy that sets out clear goals and guidelines for action?

Yes, a publicly available company-wide water policy with performance standards for direct operations including supplier, procurement and contracting best practiceand acknowledges the human right to water and sanitation

W6.4

How does your organization's water-related capital expenditure (CAPEX) and operating expenditure (OPEX) during the most recent reporting periodcompare to the previous reporting period?

Water-relatedspending: % of

total CAPEXduring this

reporting periodcompared to lastreporting period

Water-relatedspending: % of

total OPEXduring this

reporting periodcompared to lastreporting period

Motivation for these changes

60% 20%

IBERDROLA is developing new hydropower generation plants: € 105 million in 2012 and €35 million in 2013. The restof CAPEX includes treatment of effluents, and systems to control and avoid spills, among others. Considering OPEX:it is noteworhty the reuse of wastewater for the cooling systems of some plants in Mexico (Monterrey, La Laguna) andin the United States of America (Klamath).

Further Information

Page: W7. Compliance

W7.1

Was your organization subject to any penalties and/or fines for breaches of abstraction licenses, discharge consents or other water and wastewaterrelated regulations in the reporting period?

No

W7.1a

Please describe the penalties and/or fines for breaches of abstraction licenses, discharge consents or other water and wastewater related regulationsand your plans for resolving them

Facility nameIncident

descriptionFinancial penalty

or fineCurrency

Incidentresolution

W7.1b

Please indicate the total of all penalties and/or fines for breaches of abstraction licenses, discharge consents or other water and wastewater relatedregulations as a percentage of total operating expenditure (OPEX) compared to last year

Further Information

Page: W8. Targets and Initiatives

W8.1

Do you have any company wide targets (quantitative) or goals (qualitative) related to water?

Yes, targets and goals

W8.1a

Please complete the following table with information on company wide quantitative targets (ongoing or reached completion during the reporting period)and an indication of progress made

Category oftarget

Motivation Description of targetQuantitative unit of

measurement

Base-lineyear

Targetyear

Proportionof target

achieved,% value

Other:Engagementwith suppliers

Recommendedsector bestpractice

Water management depends on both operational level andsupply chain level.We try to act as reference in watermanagement for contractors and suppliers.There arecommitments in the Purchasing area to foster environmentalresponsibility and to promote strict compliance by suppliers withcontractual conditions and current legislation,with particularemphasis on respect for the principles established in the UnitedNations Global Compact.In 2013, 75 % of the suppliers contracts(4 % more than 2011),

Other: % ofsuppliers withenvironmentalmanagementsystem

2012 2013 100%

Absolutereduction ofwaterwithdrawals

Cost savings

In the United Kingdom, the Rye House combined cycle powerstation can reduce water use by up to up to 75 % through arainwater collection system which, after being treated, is used asprocess water. At some of ScottishPower’s wind farms, thecontrol buildings have rooftop rainwater collectors and storagetanks to use the water.

% increase inrainwater harvestingper facility

2012 2013 100%

W8.1b

Please describe any company wide qualitative goals (ongoing or reached completion during the reporting period) and your progress in achieving these

Goal Motivation Description of goal Progress

Strengthen links withlocal community

Shared value

We are conscious about facing global problems, such aswater scarcity, climate change and poverty. In this senseIBERDROLA holds continued dialogues with itsstakeholders to identify which are their most importantissues related to the environment with the aim of improvingthe Company performance and to focus on its efforts.

There are different ways of communication with thestakeholders: webpage contact, email, stakeholders'forums, etc. Moreover, various Materiality Studieshave been carried out in recent years to be aware ofour stakeholder's needs. The results show the issuesthat to some extent capture the interest of thestakeholders, as well as those issues regarded asmore significant among them.

Other: TransparencyBrand valueprotection

IBERDROLA supports transparency regarding waterstrategy of the Company.

In February 2012, IBERDROLA registered within theTransparency Register, created by Europeaninstitutions to give adequate transparency to therelations of such institutions with companies, NGOs,citizens’ associations, think tanks, among others.Since march 2012, IBERDROLA has endorsed theCEO Water Mandate.

Increase access toSafe Water,Sanitation, andHygiene (WASH)

Shared value

IBERDROLA notes that there is still a proportion of thepopulation without access to safe drinking water. Inaddition a lack of appropriate sanitation profoundly affectsthe health and well-being of billions of people.

The Company,as part of its commitment to corporatesocial responsibility,is working in a number ofcountries to offer specific projects,know-how andresources.For instance,the development of theIberdrola-Sao Paolo International CooperationProject,to train youths at risk of social exclusion inBrazil.IBERDROLA is also a member of the GlobalSustainability Electricity Partnership (GSEP),group ofthe world’s largest and most influential powercompanies.

Engagement withpublic policy makersto advancesustainable waterpolicies andmanagement


Establish a constructive dialogue with GovernmentAgencies, non-governmental organizations, shareholders,customers, local communities and other stakeholders inorder to: 1) Work jointly in the search for solutions toenvironmental problems. 2) Contribute to the developmentof a useful public policy from the environmental standpoint

IBERDROLA puts forward its opinions in defence of itsinterests and those of its shareholders andcustomers.It also participates in public hearings heldby regulatory entities to ascertain the opinions of theplayers involved in the processes of determination ofregulations, in the official processes of enactment of


that is efficient in economic terms. 3) Raise awareness onthe importance of taking measures to reduce greenhousegases.

the laws and regulations and the monitoring of theapplication thereof, in domestic and international tradeassociations, and in some lobbying activities.

Other: Implementationof EnvironmentalManagement Systems

Risk mitigation

We aim to improve the compatibility of its infrastructureswith the environment and develop a clean managementsystem.We have a Global Environmental ManagementSystem implemented(accordance to ISO 14001:2004standard,certified by AENOR).We also have EnvironmentalManagement Systems (EMS) specific to thebusinesses,based on the ISO 14001:2004 and EMASstandard,which allow for a reduction in environmental risks,improvement in the management of resources, andoptimisation of investments and costs.

Global Environmental Management Systemimplemented (according to UNE-EN ISO 14001:2004)was certified in 2006 and renewed in 2013 byAENOR.Maximum limits on the capture andconsumption of fresh water are established andmonitored by the government administrations of eachregion through the relevant governmentalentities.Government establishes and controls surfacelevel limits and ecological flows at the hydroelectricgeneration reservoirs.

Other: Water use Cost savings

IBERDROLA is greatly concerned with finding savings andgreater efficiency.We do not have any plant located inareas considered Water Stressed and our materialityanalysis has reflected a low risk associated with the supplyof water (5% of significance).According to a preventiveapproach,IBERDROLA aims for an optimal water use andplants follow strict environmental managementauthorizations and their quality is maintained due to thewater treatment equipments installed.

New implementations for achieving the goal: At the LaLaguna and Monterrey combined cycle plants inMexico and at the Klamath cogeneration plant in theUnited States of America, the water collected forcooling comes from municipal wastewater treatmentstations and is treated at the Company’s plants,producing a positive impact by returning water to theenvironment that is of higher quality than thatwithdrawn..

Watershedremediation andhabitat restoration,ecosystempreservation

Risk mitigation

IBERDROLA is committed to the energy,cultural and socialdevelopment of the communities where it operates,wherewater has an essential role.Fundación IBERDROLAcarryes out initiatives that make an effective contributiontowards enhancing people’s quality of life in the territoriesand countries where the IBERDROLA operates, particularlyin the fields of training and research, energy sustainabilityand biodiversity, art and culture.

No situations were recorded during 2013 thatsignificantly affect water resources or the habitatsassociated with the water-collection points, which arefor the most part significant masses of fresh water orsalt-water. Fundación IBERDROLA relies on thefollowing areas of activity regarding water resources:Training and Research; Sustainability and Biodiversity;and Cooperation and Solidarity.

Educate customers tohelp them minimizeproduct impacts


According to IBERDROLA'S commitment with society,IBERDROLA is developing awareness campaigns onsaving and water use efficiency.

As examples, the Company has made somecampaigns in order to raise awareness given sometips related to water use such as, tips related toWashing Machine and Tumble Dryer and alsoDishwasher. The main goal of these tips is to care forthe environment at the same time that our consumerscan also save money.

Watershed Risk mitigation TEVA Project for Reducing the Temperature of Thermal Project already developed, with an investment of over


remediation andhabitat restoration,ecosystempreservation

Discharge in Almaraz. The cooling system of the AlmarazNuclear Plant is semiopen, basically cooled by theArrocampo Reservoir, which acts as its cooling circuit. Thegoal is to improve and optimise the capacity for cooling thetemperature of the water of the Arrocampo Reservoir, inany case guaranteeing that the temperature of thedischarge into the Torrejón-Tajo Reservoir does notexceed 30 ºC.

€38 million. It complies with environmental legislationand has a positive repercussion on the surroundings,controlling the risk of eutrophication of the reservoirs,improving the ecologic equilibrium of the reservoir andcontributing toward conserving the naturalsurroundings around the Plant. The area surroundingthe Arrocampo reservoir and its shores are a SpecialProtection Area for birds (SPA).


Shared value

Disposal of ash produced by Longannet power station inUK has reclaimed 200 hectares of land from thesea,creating Valleyfield Ash Lagoons.The lagoons,5kmeast of Longannet, are an important element in the make-up of the Inner Forth Estuary,internationally recognised forits value to wildlife,and covered by natural heritagedesignations including the Firth of Forth Ramsar site andSpecial Protection Area. Our biodiversity action planensures that Longannet works in harmony with our wildlife.

Valleyfield Lagoons were designated part of the Firthof Forth Site of Special Scientific Interest (SSSI) in1991and in 1996, included in the wider Torry BayLocal Nature Reserve designation. The reserveextends to 683 hectares and a Fife Coast andCountryside Trust Ranger, jointly funded bycottishPower, Scottish Natural Heritage and FifeCouncil, is employed to monitor and manage itswildlife communities and liaise with members of thepublic.


Shared value

The grounds of Cockenzie Power Station in UK, itscoalplant and ash settling lagoons provide a range ofhabitats that are attractive to wildlife, including woodland,meadows and wetlands.

The 120-hectare ash lagoons in Musselburgh arewidely recognised as one of the best places to watchbirds in Scotland. In particular, Lagoon No.8 andwaderscrapes – shallow freshwater poolslined with clay builton adecommissioned area – have beenincluded withinthe Firth of Forth Site ofSpecial Scientific Interest(SSSI) inrecognition of their value to birds.

W8.1c

Please explain why you do not have any water-related targets or goals and discuss any plans to develop these in the future

Further Information

Module: Sign Off

Page: Sign Off

W9.1

Please provide the following information for the person that has signed off (approved) your CDP water response

Name Job title Corresponding job category

CDP

Documents

CDP Water ProgrammeResponse 25062014 › ... › Iberdrola_cdp_2014.pdf · 2019-02-14 · CDP Water 2014 Information Request Iberdrola SA Module: Introduction Page: W0. Introduction