Circularity (E5)

Achieving the energy transition will require a lot of (critical) materials such as copper, aluminium and plastic. These materials are scarce and increasingly play a role in geopolitical conflicts. For us as a network operator, they are indispensable in the production of cables, transformers and gas pipes. Long-term shortages due to supply problems and lack of production capital affect the performance of our work. Inventory shortages put pressure on relations with our suppliers, putting us at a disadvantage in terms of price. 

Resource inflows and use  

Inflow

Inflows include raw or processed materials that are required for the production of our most important components and equipment. At present, we still disregard the items required to mine or processes these materials, such as water.

Impacts, risks and opportunities 

• Negative impact – Using materials makes a negative contribution to the availability of those materials. 

• Risk – A disruption in the supply chain due to material shortages and/or geopolitical circumstances could lead to higher material procurement costs. 

• Opportunity – Reusing materials and components in our operations and in the value chain, and collaboration between suppliers and network operators could reduce the consumption of (scarce) raw materials. 

• Opportunity – Through greater availability of materials and collaborations with suppliers and sheltered work enterprises for the repair and overhaul of equipment, we can reduce our vulnerability to disruptions in the international value chain. This would reduce purchases of new products and create cost savings. 

Policy and approach

Alliander currently has no formally defined circularity policy. Applying circularity measures to materials, such as reuse (after repair and overhaul), will increase the availability of our existing inventories. This will also improve our ability to anticipate the maintenance of outdated facilities that cannot yet be replaced or do not need to be replaced. Reuse of materials contributes to the feasibility of the energy transition and reduces costs over the long term.   

Together with the other network operators, suppliers, customers and sheltered work enterprises, we are setting the circular economy chain in motion. We do this by being open to opportunities in innovative development, reuse within the chain, and overhaul and repair of existing equipment.  

We want to achieve this by making use of the R ladder methodology to measure our impact. The R ladder is a widely used method for ascertaining circular impact. It works on the basis of rungs: the higher up the ladder you go, the more materials are saved. Alliander has 10 rungs from refuse (0 – the highest rung with the biggest impact) to recover (10 – the lowest rung with the least impact).  

Inflows and material use   

• Reduce raw material use and replace raw materials. Impact from refuse, rethink and reduce   

• Extend useful lives of equipment. Impact from reuse, repair, refurbish, remanufacture and repurpose  

• In order to anchor circularity in our business, the Procurement business unit is working on implementing the draft CSR policy in the procurement function. The ‘Alliander CSR from the perspective of General Prosperity’ policy framework applies to material inflows and use.  

Raw material passport

So that we can calculate our circular procurement, our suppliers provide raw material passports for the products they sell us. The supplier indicates the quantity of each raw material in the product and the percentage that is recycled or otherwise reused or recovered. In 2023, two of our cable suppliers (TKF and Prysmian) received KIWA certification for supplying circular cable. As well as using raw material passports and certification, we also validate the information provided by suppliers by performing audits. 

Passport data is validated at the Centre of Excellence in the Procurement department using the CE Delft methodology. We also check the data from our suppliers against a central database. Using the database helps us to prevent duplicate figures when counting recycled materials that we purchase. 

Reuse 

We at Alliander make an impact by reusing equipment, after repair or overhaul if needed. We do part of this ourselves and part in collaboration with suppliers and sheltered work enterprises. We are not unique in this: other network operators also strive to maximise the reuse of components, and we learn from each other’s experience. Together we investigate the opportunities and risks. 

The incomplete (un)coded material flow is screened upon use by the Circular team. An intake process has been developed in which we distinguish between product types and possible purposes. In so doing we follow the value chain, assessing suitability for: 

1. Alliander 

2. other network operators 

3. suppliers 

4. commercial sales 

5. charities 

If repurposing in one of these categories is not possible, the product is regarded as waste. 

Materiality analysis for circularity 

In 2024, we carried out a materiality analysis for circularity in order to ascertain our positive and negative impact, and identify opportunities and risks. We conducted a qualitative screening of our operations for inflows and material use. We tested the assumptions with experts and stakeholders both in and outside our organisation. We have reported the results in the description of material inflow and use. As the DMA was completed relatively late in 2024, a consultation has not yet taken place.

Objectives and results in 2024 

At the moment, Alliander has set an ambition that focuses on both purchasing recycled core assets and the end-of-life recyclability of core assets. The aim is that, by 2027, 45% of core assets will be circular purchases or recyclable at the end of their lives. This is a voluntary target that we have chosen ourselves. An official target has not yet been set.  
The CSRD requirements established a new KPI in 2024 that indicates what percentage of purchased materials is recycled. A target for the percentage of recycled purchased materials has not yet been set for 2024. The scope of this KPI covers our core assets: low, medium and high-voltage cables, gas pipes, distribution and power transformers, (smart) electricity and gas meters, and switchgear.    

In 2024 we purchased 6.8% of our materials on a circular basis. Among other things, we did so by including conditions in tender processes for cables and distribution transformers that were aimed at increasing the use of recycled materials and stimulating the market’s creativity regarding the development of circular materials.  

The table below shows the total weight and the circularity of materials used:  

The total volume of purchased products and materials is the total weight in tonnes of low, medium and high-voltage cables, gas pipes, distribution and power transformers, (smart) electricity and gas meters and switchgear purchased for our network management activities (electricity and gas). If the exact weight is wholly or partly unavailable, the weight is calculated on the basis of standard weights per core asset. 

The weight of secondary reused or recycled components, products and materials is determined from the raw material passports provided by suppliers. If the exact weight is wholly or partly unavailable, the weight is calculated on the basis of current industry data per core asset. 

The percentage of secondary reused or recycled components, products and materials is determined from the raw material passports provided by suppliers. If the exact percentage is wholly or partly unavailable, the percentage is calculated on the basis of standard weights per core asset. 

To determine the weight of the core assets and the percentage of recycled materials, our suppliers provide raw material passports (RMPs) in which these weights and percentages are stated. Item data for the purchased products is retrieved from SAP and then linked to the RMPs. If the weight of an item is not stated in the RMP, the weight is taken from SAP. This applies to high-voltage cables, some transformers and switchgear. In addition, the recycled percentage from the RMP is compared with data from the independent research and advisory bureau DNVL for verification purposes. To prevent overestimates, the lower of these two values is used in the calculation. If the RMP for an article is unavailable, it is assumed that the percentage of recycled materials is nil. This information is then used to calculate circularity. 

As well as monitoring the circularity of used materials, we have also carried out other activities in relation to circularity. We organised an evaluation session with internal stakeholders on cable assets, with the aim of examining points where technical specifications and the circularity ambition were in conflict. The session drew attention to points of friction and the decisions that then need to be taken. This knowledge was shared with colleagues in procurement, so that they could learn and improve.  

We have set out the definition and terms of (potential) overhaul products and drawn up a budget with the expected revenue and growth up to 2029.  

We set up a pilot project for overhauling multi-joints (gas couplings) with a sheltered work enterprise, who helped us with the cleaning, disassembly and reassembly. The supplier provided missing materials for this purpose. Research shows that over 90% of multi-joints are suitable for reuse. 

In collaboration with suppliers, we had 76 compact stations overhauled. Such stations are made up of a reused transformer and switchgear (magnefix). We collect stations that come from the network and have them checked for reusability by a technical specialist. One milestone is that we are now able to offer these stations through the existing ordering system for engineers, so that new and overhauled stations are available in the same place. 

We have created a circular materials warehouse in SAP, which gives us better insight into our inventory, and we have shared this with Liander Logistics and other parties. In 2024, we began introducing coded tools and so created a blueprint for the systematic introduction of other circular materials. The number of reused tools issued to operations is 1,624.

Our plans

Having established the circularity policy framework, we will set about implementing it in 2025. We want to make circularity a permanent feature of procurement. We are taking an integrated approach based on the overall sustainability ambition. In 2025, we intend to set a target for the percentage of circular procurement in relation to core assets. 

The Strategic Resource Management department will determine the need for scarce materials that should be top of the list for reuse. Together with suppliers and sheltered work enterprises, we will prepare a plan of attack to make these scarce materials suitable for reuse.