SSE: Capex
Assessing total impact to maximise societal and business benefits
In 2010, SSE in conjunction with Scottish Power started work to upgrade one of the main transmission lines running between the towns of Beauly and Denny in the highlands of Scotland. The upgrade, completed in 2016, involved the replacement of 220km of 132kV line with a 400kV line to transmit renewable energy generated in the north of Scotland to other parts of the UK. This was one of SSE’s major capital projects, with over £675m of investment between 2010 and 2016.
Value at risk: We have experienced first-hand the perils of considering sustainability too late in the day. Delays in obtaining planning consents - fuelled by opposition from stakeholders concerned about damage to Scotland’s environment, economy and communities, had already added an estimated 10% to 15% to project costs. Considering this sizable impact, the ability to assess the total impacts to the economy, environment and society was a key focus.
A new approach to project appraisal: We wanted to better understand the impacts that the project had on society and to measure them using a consistent metric. With support from sustainability consultants, we developed a framework comprising over a dozen methodologies to quantify and monetize the environmental, social, fiscal and economic impact, ie the total impact, of the Beauly-Denny transmission line.
Focusing on material impacts: The assessment focused on a number of sustainability impacts that were assessed to be most material to the project, including total economic footprint of the construction expenditure, cultural heritage, traffic management, carbon footprints, building waste and visual amenity.
A sustainable commercial model: The results of the assessment are allowing us to build a sustainable commercial model; one that can evaluate externalities alongside shareholder value to maximize societal and business benefits. This innovative approach reflects our determination to act in a sustainable and socially responsible way, going beyond what is expected and making a positive difference to society as a result. We plan to use our quantitative framework to improve transparency and communication with our stakeholders. Our experience shows that a better understanding (by both SSE and our stakeholders) of the total costs, benefits and consequences of different options can seek to deliver a low carbon economy sooner.
“This type of analysis will add value to society, our customers and our business, by helping us to pinpoint ways to maximize positive contributions like employment and up-skilling, and manage negative impacts such as health and safety, and reductions in visual amenity.”
George Cobb, Sustainability Accountant, SSE
