Key principles and assumptions for measuring and reporting on impact

Key principles and assumptions

Attribution

Impacts that are caused by multiple players in the supply chain are attributed to Alliander on the basis of its gross added value in the supply chain. The gross added value is calculated as revenue minus goods and services used in production, measured at purchase price.

Impacts that Alliander achieves independently are entirely attributed to Alliander.

The attribution values were recalculated as the average of the years 2020, 2021 and 2022 and fixed for three years. This is possible because the supply chain positions are quite stable. This gives a clearer overview of the organisation’s own influence on changes in impacts, which helps manage the impacts.

Financial capital

The financial impacts are viewed from the perspective of cash flows to and from society: cash outflows from Alliander are positive impacts for society; Alliander's cash inflows are negative impacts for society.

Manufactured capital

The prosperity value of energy transmission is calculated on the basis of the consumer surplus. This is the extra amount that customers are in theory prepared to pay above the regulated price for a service or product. The consumer surplus is currently the most commonly used method to determine economic value, both free and regulated markets. The consumer surplus relates to all price elements in the energy value chain, including the taxes and prices for the supply and transmission of energy. The amounts presented as manufactured capital concern the economic part of the energy value chain that is attributable to Alliander. Alliander’s impact in making ‘feed-in’ possible consists primarily of the financial impact of using solar panels (PVs) and enhanced well-being from the use of greener energy. The generic impact of gas and electricity outages for the Netherlands is included in this estimate, as the price elasticity is based on the actual demand for energy (including outages). The specific impact of gas and electricity outages for Alliander was calculated for 2018 and extrapolated for 2017. The impact of interruptions in the energy transmission on the well-being of consumers concerns interruptions in the electricity network as well as in the gas network.

Assumptions about price elasticity were made in the adopted economic model. The gas and electricity price elasticity relationship is assumed to be linear. This assumption produces a conservative estimate of the consumer surplus, which is visualised in the figure below.

The slope of the line, which affects the consumer surplus estimate, was determined on the basis of a study by CE Delft (2012).

In order to avoid double counting, the contribution of energy transmission to the prosperity of business customers consists exclusively of the revenue component, without adding the producer surplus of these customers.

Natural capital

Alliander is partly responsible for the CO₂ emissions from the quantities of electricity, gas and heat transported through its network. The impact comprises the measurement of the CO₂ emissions associated with the direct operations and those of the supply chain. Emissions in the supply chain are attributed to Alliander on the basis of gross added value.

Alliander's electricity mix ratio (the respective shares of oil, natural gas, coal and nuclear power) is assumed to be equal to the national electricity mix.

The social costs of a ton of CO₂ equivalent have been taken from the True Price publication ’Monetisation factors for true pricing’. This value is based on a meta-analysis of the social costs per ton of CO₂ so as to remain within the 2-degree target of the Paris Agreement. This value is updated and published regularly by True Price. Alliander uses this source.

The scope for the Eco-cost materials indicator is based on the four major network components : cables, pipelines, transformers and smart meters. The scope of materials included in the analysis is largely the same as the one included in our report on the Circular Procurement KPI. This scope is limited because the KPI’s ‘other’ category is not included in the impact measurement.

The eco-costs indicator is determined based on where the waste ends up. In the case of recycling, the materials are used circularly. To avoid counting it double, the eco-costs of recycling should either be considered at end-of-life, or with the procurement of materials. To shift responsibility to the fore-front and stimulate a greater positive impact, the costs of recycling are included in the eco-costs of procurement. They are generally lower than those relating to the procurement of primary raw materials. In the case of recycling, the eco-costs for waste are zero.

Human capital

Only the staff members that are directly employed by Alliander are included in the calculation of this type of capital.

Well-being impacts of having work were calculated relative to not having work in the Netherlands. This is done separately for two groups of people: those who have difficulty finding work and those who do not. The indicator exclusively concerns the non-financial direct well-being impact. It is assumed here that work satisfaction has a direct positive impact on well-being.

It is also assumed that sickness absence not recorded as ‘work-related’ has no connection with the work at Alliander. The calculation of the impacts of work-related sickness absence and employee accidents (safety) is limited to direct effects. An accident or illness may be the underlying cause of other accidents or illnesses, but this is not measured here.

As an indicator of the impact of employee development, future wage growth due to promotions during the past year is used. This is multiplied by the productivity of the human capital to arrive at the total impact.

Social capital

The reputational value is calculated using the brand value method. This method has been established for commercial utility companies. Alliander’s value is estimated with a correction factor on the basis of data for European organisations in the top 10 utilities. The number of European utilities in the top 10 varies from year to year. 2019: 7; 2020 5, 2021: 6, 2022: 6; 2023 6.

Intellectual capital

The value of data collection for market facilitation is calculated on the basis of the practical value. Here, it is assumed that downloading and opening data sources has and creates a direct net positive value.

The proportion of data that is used is less than that which is consulted. A factor is used to calculate this.