Most important impact measurement and reporting criteria, principles and assumptions

When measuring and reporting on our impact, we use a number of criteria, principles and assumptions of which the most important will be described here. Online contains a detailed explanation of the impact of Alliander. These are in addition to the criteria, principles and assumptions also the explained calculation methodologies.

Most important criteria

For the distribution of impacts is used the value model of the International Integrated Reporting Council (IIRC), which divides impacts in six capitals: Financial, Produced, Intellectual, Natural, Social and Human Capital. For now, we have quantified the financial, Produced and Natural capital. In the coming period we will continue to quantify the remaining capital.

The relevant impacts that we have identified, are reported as fully as possible.

Impacts are quantified in terms of money (euros), to estimate the sum of the individual effects on prosperity and welfare. We use a broad definition of prosperity, which we have taken our most relevant impacts identified in prosperity. Under a broad definition of prosperity is the prosperity of people now and later, understood in the Netherlands and abroad.

The methods used to calculate the impacts are based on techniques that are common in the scientific or social practices, including the Natural Capital Protocol NCC (2016), Environmental management - Life cycle assessment - Principles and framework ISO ( 2010) and the General guidance for social cost-benefit analysis of the CPB. As indicated, further details are available online.

Since Alliander operates in a regulated market and is part of a broader value chain, found by the described attributiewijze attribution to the contribution of Alliander below instead.
The wealth effects are conservatively estimated as there is a choice between several equally reasonable assumptions. Two assumptions are as reasonable as they are equally acceptable on the basis of the criteria used and the scientific practice and are equally plausible in the eyes of experts. That means that if there are several equally reasonable assumptions are possible, that assumption is chosen that results in the lowest estimate for the wealth effect.

    Main principles and assumptions

    Attribution

    Impacts where multiple players in the chain are responsible, be attributed to Alliander on the basis of its gross added value in the chain. The gross value added is calculated as turnover minus the consumption of products (both goods and services) in production, valued at purchase prices. Impacts that Alliander realizes independently be fully allocated to Alliander.

    Financial capital

    The financial impacts are viewed from a cash flow perspective, or from the direction of the company: cash outflows from Alliander have positive impacts on society and vice versa include the negative impacts of the cash inflows for Alliander.

    Produced capital

    The welfare value of the energy transport is calculated on the basis of the consumer surplus. This is the added value that customers are theoretically willing to pay above the regulated price for a service or product. The consumer surplus is currently the most common way and used for the determination of the economic value, as well as for free-regulated markets. The consumer surplus covers all price elements in the energy chain, thus includes taxes and prices for supply and transport of energy. To be allocated as produced capital amounts shown relate to at Alliander (economic) part in the energy chain. The average effect of gas and power failures for Netherlands is included in this estimate, because the price elasticity is based on the demand for energy as it is (including failures). The specific effect of gas and power failures for Alliander in 2016, given the relatively limited impact, not included.

    In the adopted economic model, assumptions were made about the price elasticity. It is assumed that the curve is linear indicating the price elasticity for gas and electricity. This last assumption gives a conservative estimate of the consumer surplus. With the help of the figure below the consumenternsurplus is made visually.

    To determine the slope of the curve, which has an impact on the consumer surplus is based on a study by CE Delft (2012). The contribution of energy to consist of business customers prosperity, in order to avoid double counting, only from the 'revenue' section, without adding the producer surplus of customers.

    Natural capital

    Alliander is partially responsible for the CO2 emissions of electricity and gas to be transported through our network. The impact includes the measurement of the CO2 emissions associated with the direct operations and those of the chain. Emissions in the chain are attributed to Alliander on the basis of gross value added.

    It is assumed that the electricity (which is the ratio of energy from oil, gas, coal and nuclear power) of the energy we supply is equal to the national electricity mix.

    The social cost of a tonne of CO2 equivalent have been estimated based on a study by the US Inter-Agency Working Group of the EPA (2013). This study is in our view still relevant because most of the effects of climate change in the future take place and thus the cost of a tonne of CO2 equivalent have not changed between 2013 and 2016.

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