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									REPORT

Environmental Performance Assessment



Prepared for Orion New Zealand Ltd

APRIL 2009
                                                                                        ORION NEW ZEALAND LTD
                                                                              Environmental Performance Assessment




This document has been prepared for the benefit of Orion New Zealand Ltd. No liability is accepted by
this company or any employee or sub-consultant of this company with respect to its use by any other
person.




QUALITY ASSURANCE STATEMENT
PROJECT MANAGER                                              REVIEWED BY
Tom Burkitt
                                                             Zoe Burkitt
PREPARED BY                                                  APPROVED FOR ISSUE BY


Veronica Ulfves                                              Tom Burkitt

CHRISTCHURCH
Tower 2, Deans Park, 7 Deans Avenue, Addington, PO Box 13-249, Christchurch 8141, New Zealand
P + 64-3-366 7449, F + 64-3-366 7780
                                                                                                                  ORION NEW ZEALAND LTD
                                                                                                        Environmental Performance Assessment




ORION NEW ZEALAND LTD

Environmental Performance Assessment


CONTENTS
1        Executive Summary ............................................................................................................................ 1 
         1.1           Background .......................................................................................................................... 1 
         1.2           Study Findings ..................................................................................................................... 3 
                       1.2.1    Orion’s annual carbon emissions ......................................................................... 3 
                       1.2.2    Estimated total embodied carbon in Orion’s network ........................................... 6 
         1.3           Recommendations to improve environmental performance ................................................ 6 
                       1.3.1  Incorporate the cost of carbon into our network investment decisions ................ 7 
                       1.3.2  Demand Side Management.................................................................................. 8 
                       1.3.3  Reduce and where possible eliminate the installation of cable containing lead .. 9 
                       1.3.4  Implement initiatives to promote fuel efficiency.................................................... 9 
                       1.3.5  Ongoing reviews of suitable asset alternatives with better environmental
                              performance ....................................................................................................... 10 
         1.4           Carbon Footprint Offsetting ............................................................................................... 11 
                       1.4.1   Carbon Management Certification Programmes ................................................ 12 
         1.5           Summary and Next Steps .................................................................................................. 13 

Glossary of Terms ....................................................................................................................................... 14 

Glossary of Acronyms ................................................................................................................................. 15 

2        Introduction........................................................................................................................................ 16 
         2.1           Background and Objectives ............................................................................................... 16 
         2.2           Scope of Project................................................................................................................. 17 

3        Project Overview of the Assessment of Orion’s Carbon Footprint .................................................... 20 
         3.1           Scope and Methodology for Measuring Orion’s Carbon Footprint .................................... 20 
                       3.1.1   Emissions associated with servicing the network .............................................. 21 
                       3.1.2   Embodied Carbon in Network Infrastructure ...................................................... 21 
                       3.1.3   Operational Emissions ....................................................................................... 25 

4        Results of carbon footprint assessment ............................................................................................ 27 
         4.1           Summary of Orion’s annual carbon emissions .................................................................. 27 
         4.2           Estimated total embodied carbon in Orion’s network ........................................................ 28 
         4.3           Carbon Footprint from Orion’s office.................................................................................. 29 
                       4.3.1   Electricity ............................................................................................................ 30 
                       4.3.2   Air Travel ............................................................................................................ 31 
                       4.3.3   Waste ................................................................................................................. 31 
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     4.4         Carbon Footprint from Connetics’ Office ........................................................................... 32 
                 4.4.1   Electricity ............................................................................................................ 33 
                 4.4.2   Air Travel ............................................................................................................ 34 
                 4.4.3   Waste ................................................................................................................. 34 
     4.5         Sulphur Hexafluoride, SF6 ................................................................................................. 36 
     4.6         Emissions from Servicing the Electricity Network.............................................................. 37 
                 4.6.1   Orion’s fuel use................................................................................................... 38 
                 4.6.2   Connetics’ fuel use ............................................................................................. 38 
                 4.6.3   Estimated fuel use of other contractors servicing network ................................. 39 
     4.7         Summary of embodied carbon in network assets installed FY2007.................................. 39 
                 4.7.1   Cables and Lines ................................................................................................ 41 
                 4.7.2   Poles ................................................................................................................... 48 
                 4.7.3   Connections........................................................................................................ 52 
                 4.7.4   Kiosk ................................................................................................................... 52 
                 4.7.5   Power transformers ............................................................................................ 53 
                 4.7.6   Protection equipment ......................................................................................... 54 
                 4.7.7   Substation buildings ........................................................................................... 54 
                 4.7.8   Ripple Injection Plant .......................................................................................... 56 
                 4.7.9   Switchgear .......................................................................................................... 57 
                 4.7.10  Distribution Transformers ................................................................................... 58 
     4.8         Estimated Total Embodied Carbon in all Orion’s network assets...................................... 60 
     4.9         Operational Emissions ....................................................................................................... 62 

5    Carbon impact assessment of three of Orion’s activities .................................................................. 63 
     5.1         Emission Reductions Resulting from Demand Side Management .................................... 63 
                 5.1.1    Carbon savings by delaying network growth...................................................... 63 
                 5.1.2    Is DSM saving carbon by avoiding generation? ................................................. 64 
                 5.1.3    Total carbon savings from Orion’s DSM initiatives............................................. 66 
                 5.1.4    New Zealand wide savings................................................................................. 66 
     5.2         Carbon Footprint Associated with Trenching of Underground Cables .............................. 67 
                 5.2.1   Trenching............................................................................................................ 68 
                 5.2.2   Backfilling ........................................................................................................... 69 
                 5.2.3   Interpretation of results associated with trenching and backfilling ..................... 70 
     5.3         A Comparison between the Carbon Footprint of Cables and Overhead Lines ................. 71 
                 5.3.1  Emissions from installation and maintenance .................................................... 72 
                 5.3.2  Embodied emissions in overhead lines and underground cables ...................... 73 
                 5.3.3  Electrical losses .................................................................................................. 74 
                 5.3.4  A Whole life carbon comparison of overhead lines and underground cables .... 74 

6    How can Orion Reduce its Carbon Footprint? .................................................................................. 76 
     6.1         Minimising Electrical losses from the Network .................................................................. 78 
                 6.1.1    Electrical losses from Transformers ................................................................... 81 
                 6.1.2    Electrical losses from cables and lines .............................................................. 81 
     6.2         Embodied carbon in Orion’s network infrastructure........................................................... 82 
                 6.2.1   Demand Side Management (DSM) – Reducing the carbon footprint?............... 83 
     6.3         GHG emissions associated with fuel usage ...................................................................... 85 
     6.4         Choice of fuel and vehicle types ........................................................................................ 85 
                 6.4.2    Encouraging fuel efficient driving behaviour ...................................................... 90 
     6.5         GHG emissions from Orion’s and Connetics’ offices......................................................... 91 
                 6.5.1  Electricity usage ................................................................................................. 92 
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                      6.5.2         Overall building performance ............................................................................. 92 
                      6.5.3         Waste disposal ................................................................................................... 93 

7       Options for Offsetting Carbon Footprint ............................................................................................ 94 
        7.1           Regulatory or Voluntary Carbon Credit Trading ................................................................ 95 
                      7.1.1    Forestry Credits and Tree Planting .................................................................... 96 
                      7.1.2    Technology Based Credits ................................................................................. 96 
        7.2           Using offset fund to invest in local low carbon solutions ................................................... 96 

8       Carbon Programme Certification....................................................................................................... 97 
        8.1           CarboNZero certification .................................................................................................... 98 
        8.2           Certified Emissions Measurement and Reduction Scheme, CEMARS ............................. 98 

9       Summary and Next Steps ................................................................................................................. 99 

10      References ...................................................................................................................................... 100 



Appendix A:           Emission Factors Used for Component Material in Network Equipment 

Appendix B:  Details of asset break-down for the estimation of the total embodied carbon in all Orion’s
     network assets installed as of 31 March 2008 

Appendix C:           Example of offset fund to sponsor low carbon solutions 


LIST OF TABLES
Table 1: Lookup table for factor x to account for manufacturing processes .............................................. 24 
Table 2: Orion’s annual carbon footprint during the Financial Year 2007 .................................................. 27 
Table 3: Estimated total embodied carbon in all Orion’s network assets installed as of 31 March 2008 .. 29 
Table 4: Summary of Orion’s Carbon Footprint from the office for FY 2007 .............................................. 30 
Table 5: Summary of Connetics’ Carbon Footprint for FY 2007 ................................................................ 33 
Table 6: Volume of insulating gas, SF6, in Orion's network ....................................................................... 37 
Table 7: Estimated annual carbon emissions from SF6 losses in network equipment ............................... 37 
Table 8: Carbon emissions associated with the annual fuel usage of Orion and Connetics ..................... 38 
Table 9: List of vehicle types in Connetics’ vehicle fleet ............................................................................ 38 
Table 10: Estimated total carbon emissions directly relating to servicing the network during FY 2007 .... 39 
Table 11: Summary of embodied carbon in network assets installed during FY 2007 .............................. 40 
Table 12: Embodied carbon in underground cables installed during FY 2007 .......................................... 42 
Table 13: Summary of main environmental concerns with Orion’s cable materials ................................... 43 
Table 14: Embodied carbon in overhead lines installed during FY 2007 ................................................... 47 
Table 15: Embodied carbon in power poles installed during FY 2007 ....................................................... 49 
Table 16: Embodied carbon in connections installed during FY 2007 ....................................................... 52 
Table 17: Embodied carbon in kiosks installed during FY 2007 ................................................................ 53 
Table 18: Embodied carbon in power transformers installed during FY 2007 ........................................... 53 
Table 19: Embodied carbon in protection equipment installed during FY 2007......................................... 54 
Table 20: Embodied carbon in assets related to sub stations installed during FY 2007 ........................... 55 
Table 21: Embodied carbon injection plant equipment installed during FY 2007 ...................................... 57 
Table 22: Embodied carbon in switchgear installed during FY 2007 ......................................................... 57 
Table 23: Embodied carbon in distribution transformers installed during FY 2007.................................... 59 
Table 24. Estimated total embodied carbon in all Orion’s network assets installed as of 31 March 2008 . 60 
Table 25: Operational GHG emissions in Orion’s distribution network ...................................................... 62 
Table 26: GHG emissions associated with trenching................................................................................. 69 
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                                                                                                         Environmental Performance Assessment




Table 27: GHG emissions associated with backfilling................................................................................ 69 
Table 28: Assumptions made in a comparison between the carbon footprint of overhead lines and
     underground cables. ........................................................................................................................... 72 
Table 29: Comparison between emissions from installation and maintenance of overhead lines and
     underground cables ............................................................................................................................ 72 
Table 30: Comparison between embodied carbon in assets used in overhead lines and underground
     cables.................................................................................................................................................. 73 
Table 31: Comparison between electrical losses over the lifespan (50 years) of the overhead lines and
     underground cables. ........................................................................................................................... 74 
Table 32: A whole life carbon comparison between overhead lines and underground cables .................. 74 
Table 33: Breakdown of the main contributors to electrical loss in Orion’s network .................................. 79 
Table 34: Example of life cycle comparison of carbon costs for 400kVA distribution transformers using
     New Zealand average grid mix ........................................................................................................... 81 
Table 35: Comparison between different fuel types and key advantages and disadvantages with each
     type ..................................................................................................................................................... 87 
Table 36: Different options for offsetting Orion’s carbon emissions generated during the FY 2007.......... 95 
Table 37: A summary of the options available for offsetting Orion’s carbon footprint ................................ 95 
Table 38: Emission factors used for component material in network equipment ......................................... 1 
Table 39: Asset types included in the estimation of the total embodied carbon in all Orion’s network
     assets installed as of 31 March 2008. .................................................................................................. 1 
Table 40: Asset types excluded in the estimation of the total embodied carbon in all Orion’s network
     assets .................................................................................................................................................. 12 


LIST OF FIGURES
Figure 1: Boundaries of whole life carbon accounting for the Orion Study ................................................ 18 
Figure 2: Overview of direct and indirect emissions which are included in the environmental performance
     assessment ......................................................................................................................................... 20 
Figure 3: The Life Cycle model showing physical processes and flows of energy (Bauman & Tillman
     2004, Hendrickson et al 2006) ............................................................................................................ 22 
Figure 4: Embodied Carbon which are specified per asset type are the sum of emissions from Cradle to
     Gate processes. The embodied carbon figures calculated do not include emissions specific to
     distribution, use or disposal (cradle to grave) ..................................................................................... 23 
Figure 5: Graph showing the estimated carbon savings when DSM reduced load by 150 MW. ............... 64 
Figure 6: A visual comparison between the whole life carbon emissions resulting from overhead lines and
     underground cables ............................................................................................................................ 75 
Figure 7: Summary of Orion’s sources of GHG emissions during FY 2007 including electrical losses ..... 77 
Figure 8: Summary of Orion’s sources of GHG emissions during FY 2007 excluding electrical losses .... 78 
Figure 9: Investment into low carbon solutions can temporarily increase the cumulative CO2 emissions,
     however will lead to emission reductions over time............................................................................ 84 
                                                                                ORION NEW ZEALAND LTD
                                                                      Environmental Performance Assessment




1        Executive Summary
1.1             Background
In Orion’s Statement of intent the company declares that its top priority is the efficient and effective
management of its electricity network with the aim of providing customers with a high level of service, a
reliable and secure supply, and competitive prices.

With regards to effective and efficient management of its assets, Orion has over the years built an
impressive history of working to minimise its impact on the environment. Its efforts have resulted in a
number of environmental awards.

Orion has previously developed and implemented an environmental management system to manage its
environmental risks, including office and network operations. After development of its environmental
management system, Orion wished to go to a further level of detail in the understanding of its
environmental impacts.

Consequently in 2007, Orion engaged MWH to undertake an environmental assessment of its operations,
with a particular focus on the carbon emissions that Orion contributed, either directly, or indirectly. This
focus was chosen given the high level of concern in today’s society regarding climate change.

Many organisations have in recent years measured their carbon emissions or so called ‘carbon footprint’.
It is a new area which is growing in popularity but the way organisations estimate their carbon footprints
differ. Most organisations have so far limited their reporting scope to only include easily identifiable
emissions such as electricity use, fuel use and waste from office based operations. Orion recognised
however that the majority of its environmental impact does not relate to these activities, but rather from
the materials used in its electricity network and from the way its network operates.

Consequently, being eager to uncover all of its carbon impact, Orion set a wide scope that includes,
firstly, office related emissions from its own and key contractors premises, secondly operational
emissions from servicing its network, and thirdly a further detailed step of estimating the ‘embodied
carbon’ in key network assets. Embodied carbon is an estimation of the carbon emitted by the raw
materials extraction and manufacturing processes involved in making assets such as cables, lines and
transformers. A further important disclosure is made in estimating the carbon associated with electrical
losses across the network. This scope is illustrated in the diagram overleaf.

Orion’s approach to carbon assessment was innovative and not the norm. Mapping the company’s
environmental impacts in such a comprehensive manner was an ambitious and challenging task. It is
believed that no other network operator in the world has completed a carbon and environmental
assessment of this scope. This study is an important contribution to the industry’s understanding of
carbon assessment.




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                                                                           Environmental Performance Assessment




                               Whole Life Carbon Accounting Boundary

                                            Servicing Network

                                      Emissions from office activities &
                                       asset maintenance /renewal




                                          Embodied Emissions
                                         Emissions from material
                                       extraction and manufacturing
                                                   assets




                                         Operational Emissions
                                       Emissions from losses during
                                               distribution




Since Orion wished to include emissions which are usually ignored (e.g. embodied carbon and electrical
losses), its total footprint was always expected to be large. A large footprint could be interpreted as Orion
having a poor environmental performance. However, this would be an incorrect interpretation. The vast
majority of Orion’s carbon footprint is simply unavoidable given current technology.

The alternatives to having electricity distributed to all households and businesses are likely to result in
even larger environmental impacts. Without central energy generation, many are likely to heat their home
or workplace by burning fossil fuels. Distributed renewable generation from sources such as wind
turbines and photovoltaics located at business sites or at homes could also generate electricity. These
options are however often far from economically feasible for businesses and home owners compared to
“grid supplied” electricity. Renewable energy is directly affected by the scale of a development. Many
renewable energy technologies would not be economical to operate on a household basis and would still
require infrastructure for electricity storage and distribution.

Quite simply, the negative environmental and social implications from not having a network to enable
electricity distribution are likely to far exceed the impacts from Orion’s electricity network.

Having said that, Orion is committed to better understand how to reduce its environmental impact.

Consequently the key intention of this study was to inform Orion of the environmental impact of any future
investments in its network assets and to gain better understanding of the areas where reduction efforts
should be focused on to maximise carbon savings. Given this intention Orion asked MWH to focus on
assets which were installed recently, and are still being installed, rather than assets that were installed
say 40 years ago. To do this MWH predominantly examined assets installed during the most recent year
where records were available; financial year 2007.

Whilst this study concentrated on carbon emissions the report also includes information on a number of
other environmental issues related to the manufacture of equipment currently in use on Orion’s network.




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                                                                       Environmental Performance Assessment




1.2             Study Findings
Orion’s activities result in greenhouse gas (GHG) emissions being released into the atmosphere. These
are commonly expressed as equivalent emissions of carbon dioxide, shortened to CO2e. The main
greenhouse gases are water vapour, carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O) and
sulphur hexafluoride (SF6). The table below summarises Orion’s annual carbon footprint and the total
embodied carbon across all its network assets. It also shows annual emissions from coal and gas
generated electricity in New Zealand. Orion’s annual direct and indirect emissions are less than 1% of
the total emissions that the New Zealand electricity generation sector in produces.

Summary of Orion’s GHG emissions                                                 Tonnes of
(includes embodied carbon in assets installed in 2007)                         CO2e (tCO2e)
Total annual emissions (2007) excluding emissions resulting from network                 9,800
electrical losses
Total annual emissions (2007) including emissions resulting from network                43,490
electrical losses
Total embodied carbon in Orin’s entire network (regardless of year asset              476,000
installed)


GHG emissions from New Zealand’s electricity generation sector
(excludes embodied carbon in generation assets)
Annual emissions from coal fired electricity generation during 20071               2,342,000

Annual emissions from gas fired electricity generation during 20071                4,295,000

Total emissions from electricity generation sector (including liquid fuels         6,639,000
and biogas)1
1
    MED August 2008

Section 1.2.1 provides further information regarding Orion’s annual carbon footprint while section 1.2.2
highlights the total embodied carbon across all Orion’s network assets.


1.2.1           Orion’s annual carbon emissions

During the financial year 2007 Orion’s activities were estimated to result in the emission of 43,490 tonnes
of CO2e (tCO2e), inclusive of emissions resulting from network electrical losses. For illustrative purposes
only, translating these units into ‘cow equivalents’ and ‘car equivalents’ shows that Orion’s annual carbon
footprint for 2007, including network losses, is equivalent to adding nearly 27,000 cows to the national
herd or a further 11,400 cars to the national fleet. Without network losses those figures are just over
6,000 cows or 2,600 cars. To put these figures in perspective, New Zealand has a national herd of
almost 10 million cows (2007) and approximately 3 million cars (2007) are in service on New Zealand’s
roads (excluding heavy vehicles).

Orion’s annual carbon impact during 2007 equates to emissions of 0.24 tCO2e per customer connection if
losses are included and 0.05 tCO2e if electrical losses are excluded. This compares to estimated annual
household emissions, including car use, of 15-25 tCO2e per year.




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The following chart shows the proportional source of Orion’s annual emissions, including electrical losses.

                                             Fuel Use (contractors)
                                                     1.0%

                                                             Connetics' Office 0.5%
                             Orion's Office 1.1%

                                                             SF6 losses 0.1%
                           Fuel Use (own) 3.4%




                                Embodied Carbon
                                    16.5%




                                               Electrical losses 77.4%




The most striking aspect of this figure is the dominance of the carbon emissions from electrical losses in
the network, which make up 77% of Orion’s total carbon footprint for 2007 (33,658 tCO2e). Electrical
losses are natural phenomena that result from the heating up of cables and lines etc as electricity passes
through them, and cannot be avoided completely. Losses require more electricity to be generated than
finally reaches the customer and carbon emissions are produced during generation. Although electrical
losses are unavoidable, this does not mean that this area should be ignored and we note that Orion
already undertakes measures to reduce losses.

An important assumption within this report is the use of the New Zealand averaged figure for CO2e
emissions resulting from electricity use and electrical losses. Given the design of New Zealand’s
electricity system, Orion, being a South Island company, generally distributes electricity from renewable
hydro sources rather than North Island located carbon polluting generation based on fossil fuels.
Therefore some may consider that electrical losses (and electricity use) due to Orion’s activities result in
no carbon emissions being released (as hydro sources are zero carbon emitting). This assumption is
challenged however since a reduction in electricity usage on Orion’s network results in more hydro
energy being distributed from the South Island to the North Island. Consequently, a reduction in energy
usage across Orion’s network indirectly reduces North Island fossil fuel based generation. For this
reason MWH has assumed that emissions from electricity use or losses on Orion’s network should be
presented using the national average figure for generation emissions (0.209 tCO2e per MWh) 1 , which

1 The emission factor is calculated on a calendar year basis and accounts for the emissions that occur
from all forms of electricity generation in New Zealand. In comparison to the national average figure of
0.209 tCO2e per MWh, coal fired generation has an emission factor of up to 0.93 tCO2e per MWh, gas
fired generation 0.49 tCO2e per MWh and hydro 0 tCO2e per MWh.

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takes into account North Island fossil fuel based generation. This view greatly increases Orion’s annual
footprint. When losses are excluded, Orion contributed a total of 9,800 tCO2e during the financial year
2007.

The following chart compares the emission sources relative to Orion’s total carbon footprint excluding
network electrical losses. Since the majority of the emissions resulting from electrical losses are
unavoidable, these will not be included hereafter when referring to Orion’s total carbon footprint.




                                   Fuel Use (contractors)
                                                               Connetics' Office 2.1%
                                           4.6%
                                                               SF6 losses 0.3%
                           Orion's Office
                               4.7%



                                                                Other



                                 Fuel Use (own)
                                     15.2%
                                                                   Poles and Lines




                                                      Cables

                                                                                          Embodied Carbon
                                                                                              73.1%




When electrical losses are excluded, the largest contributor to emissions is the embodied carbon in
assets installed during 2007, which represent over 73% of Orion’s total carbon footprint for 2007. The
embodied carbon in assets installed does not cover emissions from installing and servicing the network
as these emissions are covered under fuel use. The fact that 73% of Orion’s total carbon footprint for
2007 comes from embedded carbon demonstrates the importance of uncovering carbon implications
within the installation and operation of network assets as compared to the simpler approach of
concentrating on emissions associated with only office based activities.

The two largest sources of embodied carbon were cables and poles used in the network contributing
individually 46% and 15% respectively of Orion’s total footprint during 2007 (excluding electrical losses).
Covered in detail in this report is a comparison between the whole life carbon impacts from the use of
overhead lines versus underground cables for electricity distribution. The comparison showed that
overhead lines had a very similar carbon impact to underground cables. In the specific scenario that was
assessed, lines only had a 6% larger carbon impact than cables; an amount which is not significant within
the scope of the study.



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Aside from embodied carbon, the majority of the remaining footprint is, unsurprisingly, due to the use of
fuel with 15% of the total carbon footprint coming from fuel usage by Orion and Connetics and almost a
further 5% from fuel usage by other contractors responsible for servicing the network. Emissions from
electricity use at Orion’s and Connetics’ office are smaller though important contributors (approximately
5% and 2% respectively). All these percentage figures are based on excluding electrical losses.

SF6 is a significant greenhouse gas which is used as an insulating material in switchgear. Whilst SF6
does have significant global warming potential, the contribution of losses of SF6 from the network during
2007 were only a small contributor to the overall carbon footprint at less than 0.3% of the total excluding
electrical losses (0.1% in total). Orion is committed to select non-SF6 equipment if practical alternatives
are available.


1.2.2           Estimated total embodied carbon in Orion’s network

The total embodied carbon in Orion’s entire network was estimated at approximately 476,000 tCO2e,
which is approximately 66 times the carbon embodied in assets installed during the baseline year
(FY 2007). The total embodied carbon is also equivalent to 11 times Orion’s annual carbon footprint when
electrical losses are included.


Summary of findings:

• Orion directly and indirectly emitted 43,490 tCO2e during the financial year 2007.
• The majority of carbon emissions resulted indirectly from electrical losses, which make up 77% of
  Orion’s total carbon footprint for 2007 (33,658 tCO2e). The majority of these emissions are
  unavoidable as electrical losses are always inherent with electricity distribution.
• The second largest emission contributor was the embodied carbon in assets installed during 2007,
  which represented 17% of Orion’s total carbon footprint for 2007.
• When electrical losses were excluded, Orion contributed 9,800 tCO2e during 2007 with embodied
  carbon in assets installed during the studied year contributing 73% of this figure.
• Orion’s largest emission source after electrical losses and embodied carbon was from fuel usage by
  Orion and all contractors to service the network (contributing 20% excluding losses).
• The total embodied carbon in all assets in Orion’s network is estimated to be approximately
  476,000 tCO2e.
• The carbon footprint caused by 1kW of new load is a combination of embedded carbon in the assets
  of Orion, Transpower and electricity generators, and the carbon emitted during the generation of the
  energy. Assuming the generation is from coal, Orion’s proportion of the footprint is only 0.5%. In
  other words, Orion is far from being the significant contributor to carbon emission in the electricity
  industry.


1.3             Recommendations to improve environmental performance
Orion’s total carbon emissions for the financial year 2007 may appear very high, but it is very important to
emphasise that 94% of the emissions arise from electrical losses and embedded carbon in infrastructure,
for which Orion’s options to make significant improvements are limited. Both emission sources are
unavoidable in Orion’s situation. There are some potential carbon savings to be made, which are
mentioned in the section below, however emphasis has been placed on the remaining 6% of the carbon
footprint which is more manageable, e.g. emissions from fuels use.

Although Orion cannot make significant improvements to its carbon footprint, it can still make
improvements to its environmental performance. It is recommended to focus on five main initiatives, some
of which are already in place but should be encouraged further.




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     1. Incorporate the cost of carbon into network investment decisions, thereby encouraging
        installation of more efficient equipment
     2. Demand Side Management
     3. Reduce and where possible eliminate the installation of cable containing lead
     4. Implement initiatives to promote fuel efficiency
     5. Ongoing reviews regarding suitable asset alternatives with better environmental performance.


1.3.1           Incorporate the cost of carbon into our network investment decisions

Although electrical losses contribute 77% of Orion’s carbon footprint, the opportunities to make significant
improvements are relatively restricted. The majority of the losses are unavoidable and inherent with
distributing electricity.

While it is possible to build a lower loss network by investing more capital (e.g. larger cables have lower
electrical losses), to always select assets with the lowest losses would be too capital intensive and not in
the best interests of customers. Rather, the annual cost of losses needs to be weighed against the
annual cost of capital. From a community cost perspective losses should be optimised, not minimised.

In Orion’s approach to try and optimise losses, it currently factors in the cost of electrical losses into its
purchasing decisions for new assets. However the cost that Orion currently uses only takes into account
the cost of generating and transmitting this “lost electricity”. It does not factor in the carbon cost of it, as
in the absence of an Emissions Trading Scheme (ETS) carbon impact is not priced into electricity cost.

MWH recommends that Orion factor in the price of carbon into its purchasing decision process. The
incorporation of a carbon cost into its decision making process would lead to the installation of more
efficient equipment.

Orion has recently started incorporating carbon cost into its purchasing decisions regarding SF6
switchgear. MWH encourages Orion to widen this approach through to all asset investment decision
making processes. By doing this Orion can lead the way in the electricity sector on reducing carbon
impact.

So what price should Orion put on carbon cost in its decision making process?

South Island based companies, like Orion, largely use energy generated by hydro stations, which is a
renewable energy source that produces no carbon emissions. Hence, by virtue of Orion’s location in the
South Island, some could argue that electrical losses occurring in Orion’s network are not carbon
contributing. However, the nature of New Zealand’s electricity market means that for a significant
proportion of the year any reduction in South Island usage of electricity will actually result in the reduction
in use of New Zealand’s marginal electricity generation sources. These sources are typically carbon
emitting fossil fuels (mainly coal and gas). Consequently reduction in electricity usage on Orion’s network
can result in less fossil fuel based generation occurring.

Given this, MWH encourage Orion to incorporate into its investment decision making the carbon cost of
electrical losses based on an electricity mix between North Island based gas and coal generation.

The carbon impact of 1 MWh of electricity generated from burning coal or gas is estimated to be
0.71 tCO2e (average between coal and gas which generate approximately 0.93 tCO2e and 0.49 tCO2e
respectively). Given the current price of carbon $26.84 (Treasury November 2008), the carbon cost of
1 MWh of electrical losses is $19.06. Factoring in this cost into Orion’s decision making process would
increase the cost per MWh of electrical losses, from the current figure that Orion uses of $80 to $99.06. It
is important to emphasise that the price of carbon is varying and if Orion chooses to use it in its decision
making process, it also should have a system to regularly review the applied carbon cost to reflect the
market price.




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Once an Emission Trading Scheme has been established in New Zealand, the price of carbon will already
be included in the price of electricity, and so Orion will not need to separately account for carbon as it will
then already be incorporated in the electricity hedge contract price.

1.3.2           Demand Side Management

Orion has since 1990 invested heavily in DSM. Implementing programmes that reduce peak demand on
the network has the benefit of controlling annual capital investment and delaying the installation of new
assets. DSM not only makes sense from a capital expenditure perspective, it also benefits the
environment by reducing carbon emissions.

In New Zealand the majority of electricity generation is from hydro power, which is a renewable form of
generation that does not create carbon emissions. However when the New Zealand electricity network
peaks in winter, New Zealand’s hydro sources do not generate sufficient electricity to meet this peak
demand. Some other forms of generation, typically either coal or gas, are required to meet peak
requirements. Any increase in peak demand during winter leads to increased coal/gas generation which
produces relatively high carbon emissions.

Therefore DSM indirectly reduces GHG emissions to the atmosphere by reducing the need for coal/gas
generation.

Unfortunately the majority of Orion’s DSM initiatives do not actually lead to reduced coal/gas generation
since its initiatives simply displace load for a relatively short period of time (i.e. it shifts load rather than
removes load). Although the majority of Orion’s current DSM activities do not reduce electricity use, they
do reduce carbon emissions indirectly through a number of ways.

     a) One-off infrastructure savings of 69,300 tCO2e associated with the postponed network growth.
     b) Annual carbon savings from reduced energy usage of 31.2 tCO2e from customers responding to
        Orion’s high pricing signals.
     c) Annual carbon savings of 121 tCO2e through displacing distant coal/gas generation with local
        diesel generation.

Orion’s DSM initiatives reduce its peak demand by approximately 150 MW. The load reduction lessens
infrastructure requirements resulting in total savings of 69,300 tCO2e. This is a one-off saving that is only
real as long as Orion achieves the same load reduction for subsequent years. The carbon saving from
delaying the expansion of the network through DSM equates to almost 15% of Orion’s total embodied
carbon across the whole network (476,000 tCO2e). DSM is undoubtedly reducing Orion’s carbon impact.

DSM also results in annual carbon savings. Orion achieves a small amount of load reduction
(approximately 0.5 MW) when major customers respond to high pricing signals by turning off energy
intensive machinery. Assuming that this electricity would have been generated at peak times by coal or
gas in the North Island, the 0.5 MW load reduction saves 31.2 tCO2e.

In addition, network peak demand is reduced when major businesses switch to diesel generation in
response to high pricing signals. The use of local diesel generation to reduce network peaks has
conflicting carbon impacts. Nationally coal/gas generation will decrease which leads to carbon savings,
however local diesel usage will increase, thereby producing carbon emissions. Our study showed that
local diesel generation has a lower carbon impact compared to remote electricity from coal/gas. Annually
121 tCO2e of carbon savings occur on Orion’s network through the displacement of distant coal/gas
generation by local diesel generation. Of course the burning of diesel increases particulate matter which
reduces our local air quality; however diesel usage is relatively short ( 80 hours per winter) and has
previously been shown to have an insignificant impact on local air quality.

It can be concluded that DSM initiatives reduce Orion’s carbon impact and should be encouraged in the
future and be made an essential part of Orion’s asset management plan. In general Orion should
continue to prevent over-investment in new network assets with a prudent asset management plan.



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As it is estimated that every 1 MW of growth results in 462 tCO2e of additional carbon embedded in new
assets, large carbon savings through prudent asset management are possible.

Orion is regarded as very pro-active in DSM compared with other electricity distributors in New Zealand. If
all other New Zealand network companies followed Orion’s lead in DSM it could result in carbon savings
which would be equivalent of up to 1% of New Zealand’s total annual emissions. Consequently Orion
may want to encourage other network companies and policy makers to strongly consider the need for
increased DSM in the industry.

Also, DSM will become increasingly important with an increasing proportion of electricity generation
coming from wind power, since this generates a relatively uneven load. DSM is in that situation beneficial
for security of supply as it can compensate for this irregular load.

1.3.3           Reduce and where possible eliminate the installation of cable containing lead

Lead has two different uses in the cable industry; as an armour sheath in cables for a moisture barrier,
and as a stabiliser in PVC resins, which are used in the cable jacketing. The environmental impact of
lead cables buried in the soil is minor thanks to the low mobility of lead in soil. However there are
considerable discharges from the mining and smelting of lead which are bioaccumulative and toxic,

During the studied baseline year Orion installed cables containing approximately 3,300 kg of lead in the
form of armour sheathing. Currently cables with lead sheaths are only installed in 66kV extensions and
Orion is recommended to select cables without lead sheaths if possible.

Orion is already to a large extent using cables free of lead stabilisers, e.g. low voltage cables supplied by
General Cable, however Orion is encouraged to speak to suppliers and clarify the presence of lead in all
cable types used at present and in the future attempt to choose cables without lead stabilisers in the
PVC. If assuming that all cables that Orion installed during the studied year contained lead stabilizers,
excluding the low voltage cables which Orion know are lead free, the total quantity of lead installed by
Orion would range between 450 kg and 1,100 kg.

In general a move towards lead-free cables would benefit the environment and may also avoid future
liabilities for the company. As an initial step, Orion may want to approach its suppliers for environmental
information regarding the various cable types produced. If there are more environmentally sound
alternatives to the lead containing cables used at present, Orion can make an assessment of cost-
benefits of the alternatives.


1.3.4           Implement initiatives to promote fuel efficiency

Burning of liquid fossil fuels for transport contributes nearly 20% of New Zealand’s total carbon emissions
and is an area of significant environmental concern. Similarly fuel use for network maintenance and
corporate transport is a significant contributor to Orion’s carbon footprint when electrical losses are
disregarded (approximately 20% of footprint). Orion is able to reduce this emission source by improving
the fuel efficiency of its own or Connetics’ vehicle fleet and by influencing the fuel efficiency of its’
contractors.

Orion and Connetics are encouraged to complete a thorough review of their vehicle fleets to clarify
specific areas where carbon savings can be achieved. Orion is recommended to review vehicle
acquisition policies, to produce a rolling target of replacement of the fleet with the most efficient vehicles
on the market at that time. Hybrid cars would be suitable for some of Orion and Connetics fleet, since
their fleets are mostly urban based; an environment where hybrid cars perform well. Vehicle numbers
can potentially be reduced by using hire cars or pool cars.

By simply encouraging improved driving behaviour Orion and Connetics together can influence fuel
efficiency with potential carbon savings of up to 149 tCO2. Both companies are recommended to provide
training for all employees who drive operational vehicles on simple techniques on how to drive efficiently

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and how to maintain vehicles to obtain maximum fuel efficiency. A suitable mechanism may be to
incorporate such component into their safe driving educational programme.

Armed with the knowledge from Orion’s internal review, the company is encouraged to work with other
contractors to also influence them to run their fleets more efficiently. Orion can for example consider
adding requirements on the environmental performance of vehicles used by contractors into the
procurement process. Orion and Connetics are already monitoring fuel consumption of individual
vehicles with the use of fuel cards. It appears reasonable to demand all contractors to also monitor and
report their fuel consumptions. Fuel cards can assist in identifying poor performing vehicles or staff using
inefficient driving techniques.

Orion can also reduce fuel consumption by trying to change some existing undergrounding practises.
There are certainly some opportunities to reduce fuel usage if the Christchurch City Council would more
widely allow excavated soil to be re-used as backfill, instead of its current requirements which in most
cases oblige contractors to transport excavated soil off-site to a cleanfill site and to bring back aggregate
as backfill. While recognising that the previous problem with slumping was unacceptable, the current
situation with the majority of excavated soil being taken off-site may not be the best practice solution.

In some cases, excavated soil is very suited to be re-used as backfill, but is still transported off-site for
disposal at an environmental and financial cost. In 2007, a total of 43 km of 11 kV cable was installed by
trenching and backfilling with aggregate. If all excavated soil associated with the installation of this length
of 11 kV cable would have been re-used as backfill on site, a total carbon saving of 172 tCO2e would
have been achieved compared to removing excavated soil and backfilling with aggregate from a remote
site.

It appears that Orion is best to bring together its contractors and the local council to discuss the current
issues with trenching and backfilling. The parties need to investigate practicable solutions regarding how
to ensure that only essential trenched material is disposed to cleanfill and unnecessary emissions from
transporting both trenched material and imported substitute backfill are avoided.

Although not analysed in this report, other research has showed that a trenchless method, such as
directional drilling potentially has a significantly lower carbon footprint than trenching. Orion may be
interested in making such a comparison to quantify the potential environmental and social benefits of
directional drilling and weigh them against the difference in cost.

1.3.5           Ongoing reviews of suitable asset alternatives with better environmental
                performance

Orion is aware of available alternatives to its current assets that may have lower environmental impacts.
For example, there are alternatives to the copper-chromium-arsenic (CCA) treated softwood poles that
Orion uses, but none of these are currently practical options. It is important to regularly discuss options
with suppliers and review alternatives on a frequent basis. The same applies to power transformers
where using bio-based fluid is regarded as a low carbon alternative to the mineral oil traditionally used.
The current designs of these transformers do not meet Orion’s requirements but as the designs are likely
to develop Orion should re-evaluate the option in the future.

The polyethylene used in cables often uses halogen flame retardants to improve the properties. These
additives have suspected negative environmental and human health effects with restrictions on their use
in Europe. Non-halogen cables exist on the market and Orion is encouraged to approach the suppliers to
clarify if these alternative cable materials are suitable for Orion to use.

With increasing knowledge about the environmental impacts of different materials, Orion may want to
revisit some of the findings in this study. For example, with the current accepted methodology to assess
carbon impacts, concrete poles have up to 5 times more carbon embodied per unit compared to poles
made of soft or hard wood. Therefore Orion’s current practices with regard to mostly using softwood or
hardwood poles appears reasonable, however future research will clarify to what extent carbon


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absorption occurs in concrete. These findings may show that locally produced concrete has a lower
carbon footprint than hardwood sourced from Australia.

1.4             Carbon Footprint Offsetting

There are two main options for Orion to manage its residual carbon footprint:
1. Offset its carbon footprint by purchasing carbon credits from external parties; or
2. Directly use offset funds to invest in local low carbon solutions that align with Orion’s environmental
   commitments.


Managing an organisations carbon footprint requires iterative steps of measurement and management for
minimisation. Most organisations, even after investing in minimisation programmes will be left with a
residual carbon footprint. This footprint is likely to be larger for organisations that own and manage
infrastructure and hence have an inherent need to both purchase and maintain assets. This is again
increased where these assets are distributed over a wide area requiring travel for planned and reactive
maintenance and renewals.

Once the residual footprint is known for a given period (typically annually) the organisation may choose to
offset this footprint. Offsetting is the process whereby an organisation invests either directly or indirectly
in carbon which is ‘sequestered’ or permanently taken out of the atmosphere often through the use of
forestry whereby the trees sequester the carbon in the tissues but also through other means such as
renewable energy generation. This investment typically occurs through an organisation purchasing
carbon credits from an external party, often on the global market. Each credit being equivalent to 1 tonne
of CO2 sequestered.

The price of carbon credits is currently very volatile, in line with global economic conditions. The most
recent price issued by the Treasury (Nov 2008) being $26.84. If Orion offset all the embodied carbon
across the entire network (476,091 tCO2e) it would cost almost $13 million, which is unrealistic for the
company to bear. If Orion wishes to offset any of its carbon footprint, there are a range of options which
may be more suitable. The table below indicates the range of costs to offset, at a carbon price of $26.84,
the various aspects covered during this study. It is important to note that the emissions relating to
electricity use in offices do not require offsetting as both Connetics and Orion are using carboNZero
certified electricity from Meridian Energy.

                                         Network          Network          Embodied      Embodied
Part of            Office   Office       maintenance      maintenance      carbon of     carbon of             Electrical
operation          Orion    Connetics    Orion &          all other        assets1       assets1               Losses
                                         Connetics        contractors      Growth        Replacements
tCO2e to
                     45        78            1,494               451         4,389             2,805             33,658
offset
Approximate
                $1,000         $2,000         $40,000         $12,000       $118,000        $75,000          $903,000
Offset Cost
$43,000
$56,000
$237,000
$249,000
$1,153,000
1
  The embodied carbon of assets includes all assets which were installed in the network during the financial year
2007. 61% of the capital budget for this year was growth related and 39% related to replacements of assets which
had reached their end of life.

If Orion chooses to offset its emissions there are a number of options available. The advantages and
disadvantages of these being summarised in the next table organised in a rough order of the formal
defensibility of the carbon credits.




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Offsetting Mechanism                   Advantages                         Disadvantages

Purchase carbon credits on             • The most highly auditable and    • Limited ability to choose the
the regulated market                     defendable mechanism               project associated with your
                                       • Compliant with requirements        offsets
                                         under the Kyoto protocol
Purchase carbon credits on             • Ability to choose projects       • Not necessarily Kyoto
the voluntary market                   • Ability to buy audited credits     compliant
Direct purchase of credits             • Removes the cost of the          • Not necessarily Kyoto
from a supplier                          middleman                          compliant
                                       • Supporting preferred projects
Sponsor a nominated                    • Removes the cost of the          • Technical concerns over the
reforestation project                    middle man                         science of forest based
                                                                            sequestration
                                                                          • Not necessarily Kyoto
                                                                            compliant
Development of a bespoke               • Direct use of costs of carbon    • Not necessarily Kyoto
Organisational Offsetting                for company nominated              compliant
Programme                                projects                         • Projects chosen may not
                                       • Programme can be designed          sequester or remove carbon1
                                         to suit organisations
                                         philosophy
1
    Hence this programme may not be actually offsetting the carbon.

The last offsetting option can stimulate research and development into better network technology and
also bring wider benefit to the local community if Orion chooses to fund external projects. Orion is
already funding Community Energy Action which is an initiative that supports local low carbon solutions
that result in healthier living conditions for local households. These types of initiatives may not offset the
exact amount of carbon created by the organisation; however Orion would have full control over which
initiatives it supported. The selection of initiatives may be beneficial to have in consultation with key
stakeholders.


1.4.1           Carbon Management Certification Programmes

Just as an organisation may volunteer to have its quality, health and safety or environmental
management systems audited and certified against an external standard, such standards also exist for
the certification of carbon management systems. The international standard ISO14064-1:2006 Part 1 is
the specification with guidance at the organisation level for quantification and reporting of greenhouse gas
emissions and removals. A number of organisations are capable and licensed to audit an organisation
and its records against this standard, in the same way as would occur for ISO9001 or ISO14001.

Other branded programmes exist that comply with ISO14064 and have added advantages of marketplace
recognition. The most well known of these programmes nationally are carboNZero and CEMARS, which
are both offered by Landcare Research.

The carboNZero programme and its derivative CEMARS both provide an organisation with a framework
for measurement, management and minimisation of its carbon footprint on a rolling basis. The
carboNZero programme requires offsetting of the organisations residual footprint using Kyoto Compliant
carbon credits whilst the CEMARS programme requires only the measurement, management and
minimisation steps.

These programmes and particularly carboNZero have proven very popular with New Zealand companies
where there are risks to their business from stakeholder concerns about the carbon footprint associated

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with their products or services, hence the take up in the export sector and the tourism sector has been
strong.

Given the nature of Orion’s business the need for obtaining carboNZero certification is less compelling
and CEMARS may be a more suitable option if Orion is seeking recognition for its carbon reduction
efforts. Both accreditation schemes require organisations to achieve emission reductions. Of course, an
accreditation can be costly to maintain and some stakeholders may believe that the money can be better
spent on activities that would directly decrease Orion’s carbon footprint. After all, this is the outcome all
businesses should be striving for.

1.5             Summary and Next Steps
Orion has now completed a thorough assessment of its operational carbon footprint and additionally gone
well beyond the scope of many organisations to also understand the embodied carbon in its key network
assets.

Included in this report are a number of recommendations for some practical carbon management and
other environmental risk minimisation programmes. From the study it is clear that there are some key
areas where Orion should focus its efforts:

• Including carbon cost in decisions about network asset investments and influencing the supply chain
• Further improve the load factor in the network where feasible, by demand side management (DSM).
• Managing and considering transitioning fuel and vehicle types to lower the operational footprint

After implementing initiatives to reduce its carbon emissions Orion may wish to consider:

• Pursuing certification against a carbon management scheme and / or
• Purchasing carbon credits or a related programme to offset its residual carbon emissions.
• Using offset funds to invest in local low carbon solutions that align with Orion’s six areas of
  environmental commitment.




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Glossary of Terms
Asset quantity             Any data part-quantifying the construction or operation of the
                           asset, (such as tonnes of steel, litres of fuel, kWh of energy), this
                           is multiplied by an Emission Value or Emissions Factor, to give
                           carbon emissions quantity.
Carbon emissions           (or ‘carbon impacts’ or just ‘carbon’) common shorthand for
                           relevant greenhouse gas emissions, expressed as equivalent
                           emissions of carbon dioxide (CO2e).
Direct Emissions           Those emissions arising directly from a company's activities, e.g.
                           on-site fuel use.
Embodied carbon            The embodied carbon emissions associated with a manufactured
                           product or built asset, that are the direct and indirect emissions of
                           greenhouse gases, expressed as equivalent emissions of carbon
                           dioxide, resulting from the extraction and processing of raw
                           materials required to create that product or asset.
Emission Factor            A basic factor of operational or embodied carbon emissions per
                           unit asset quantity.
Emission Value             Amount of carbon emissions per unit asset quantity, which may
                           be a composite of several emission factors.
Indirect Emissions         Those emissions, such as from grid electricity, which occur as a
                           result of activities undertaken by others on the company's behalf,
                           or through a service company's activities. Nevertheless these
                           emissions are necessary for the successful running of a company
                           and its activities




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Glossary of Acronyms
CO2                        Carbon Dioxide
CO2e                       Carbon Dioxide equivalent
EF                         Emission Factor
ETS                        Emission Trading Scheme
FY                         Financial Year
GHG                        Greenhouse Gas(es)
kWh                        kilowatt hour
IPCC                       Intergovernmental Panel on Climate Change
LCA                        Life Cycle Analysis
SF6                        Sulphur hexafluoride




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2        Introduction

2.1             Background and Objectives
It is now widely accepted that increasing anthropogenic greenhouse gas (GHG) emissions are a
significant contributor to global warming, and that this warming poses a real and present threat to our
current way of life (IPCC 2007).

The widely used terms ‘carbon emissions’, ‘carbon footprint’, ‘carbon impacts’ or just ‘carbon’ all refer to
GHG emissions released into the atmosphere, and are commonly expressed as equivalent emissions of
carbon dioxide, shortened to CO2e. The main greenhouse gases are water vapour, carbon dioxide (CO2),
methane (CH4), nitrous oxide (N2O) and Sulphur Hexafluoride (SF6).

The Ministry for the Environment’s (MfE) latest report on New Zealand's GHG emissions states that
emissions for 2006 were 77.9 million tCO2e; a rise of almost 25% since 1990 (MfE 2008). The Ministry
has warned us that ”if greenhouse gas emissions are not reduced significantly over the coming decades,
the impacts of climate change would more than likely get steadily worse and the costs could be severe”.

The Stern Review Report on the Economics of Climate Change emphasises that although no-one can
predict the consequences of climate change with complete certainty, we now know enough to understand
the risks. The report encourages taking strong action to reduce emissions, which must be viewed as an
investment, i.e. a cost incurred now and in the coming few decades to avoid the risks of very severe
consequences in the future. The Stern report goes on to state that if these investments are made wisely,
the costs will be manageable, and there will be a wide range of opportunities for growth and development
along the way.

As a socially and environmentally responsible organisation, Orion has recognised the need for
businesses to consider how they can help improve their environmental performance. It has recognised
that New Zealanders, its customers and its stakeholders are increasingly interested in knowing that Orion
is acting responsibly and is asking itself what it can do to minimise carbon emissions, reduce business
environmental impact and manage unacceptable risks.

In 2004, Orion took a systematic approach to managing its environmental risks. After considerable time
and effort, it implemented an Environmental Management System, which has helped it to understand and
put in place management plans for the main areas where it has impacts. The use of resources such as
fuel, electricity and water were identified as impacts from office related activities and environmental
targets were set to push for improvements. Orion set an ambitious energy reduction target after a third
party energy audit of its head office buildings was completed and many improvement opportunities were
identified.

Orion has always recognised that its environmental impacts go far beyond the boundaries of the office
from which it operates. Distributing power from the national grid to approximately 190,000 businesses and
households, it is crucial to understand the impacts from the network infrastructure. In 1990, Orion was the
first distribution company in New Zealand to focus on Demand Side Management, DSM, which aims to
manage the peak load in the network to postpone resource intensive expansions of capacity. For the
significant environmental gains that resulted from its DSM initiatives, Orion was awarded the prestigious
Green Ribbon Award in 2001.

Through its Environmental Management System, Orion already manages many environmental risks
associated with its business. Procedures are for example in place to reduce the risk of oil spills from


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transformers with an annual goal of zero uncontained oil spills. Orion actively manages the risk of release
of the potent greenhouse gas, SF6, when servicing switchgear with a target maximum loss of 1%.

In recent years, carbon emissions have been identified by Orion as one of its environmental risks which
may also require better managing. The first step in managing the risk associated with the direct and
indirect production of carbon emissions involves understanding the main sources and quantifying their
impacts. In Orion’s 2007 Annual Report it published the following environmental target associated with
mapping its impact on the environment:

     Target date: September 2008
     Over the last decade a key focus has been to reduce our impact on the environment. We have
     implemented numerous initiatives in our offices and on our network to reduce product use, increase
     recycling and switch to more environmentally friendly products and practices. In this period we won
     New Zealand’s highest environmental award for businesses – the Green Ribbon award. Over the next
     18 months we will engage independent environmental experts to determine our current impact on the
     environment and identify where we can improve our environmental performance while maintaining
     high network reliability.

Measuring carbon emissions is a central requirement to being able to focus efforts to reduce impact on
climate. The subsequent steps along the sustainability journey involve the management and mitigation of
emissions. Good measurement is crucial for making future cost of climate change evident in investment
decisions to drive investment choices with lower emissions. Orion is committed to better understanding its
overall environmental impacts and acknowledges that there are many aspects which can be studied, such
as carbon footprint, ecotoxicity, water use, PM10, acidification, deforestation, etc. As a first step, it has
been agreed that this study will focus on quantifying GHG emissions. This report is not intended to report
on carbon emissions under any future New Zealand Emissions Trading Scheme.

MWH was the independent environmental expert engaged by Orion to undertake this project and this
report is the culmination of over one year’s examination by us into Orion’s infrastructure and work
practises.


2.2             Scope of Project
Climate change is a real concern to Orion. GHG’s cause absorption of infrared radiation that would have
otherwise escaped into space. Increased absorption of infrared radiation leads to an increase in the
average temperature of the Earth. This study addresses that concern and clarifies what direct and
indirect impact Orion has on greenhouse gas concentrations. It also assesses the feasibility of Orion
becoming carbon neutral.

The issue of carbon neutrality is controversial. Typically when an organisation is determining its carbon
footprint it only examines emission sources such as fuel and electricity usage as well as air miles,
although the extent of its carbon emissions can be much wider. For a company with massive
infrastructure requirements, it may seem very limited to measure its carbon impacts in such manner and a
claim of carbon neutrality can seem unwarranted.

As Orion owns, maintains and operates a network of 14,000 km, its true environmental impact is not
reflected with a carbon footprint of solely its head office. Large amounts of material, mainly metals, make
up the distribution network infrastructure. GHG emissions are produced as a result of extracting raw
materials and the transportation and processing of raw materials required to create the network
infrastructure.

Orion has clearly stated throughout this project that it wanted to go beyond the measures which are
typically made, and instead try to determine the carbon footprint of all of its activities. This means that
MWH was asked to look at Orion’s maintenance practices, the assets it is currently purchasing and the
assets that are already in its electricity network.


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Also, Orion wanted to examine the practices of its 100% owned subsidiary, Connetics, over which it has
full operational control. Orion also wanted to assess the carbon emissions from the fuel usage of all the
contractors, not just Connetics, who are responsible for servicing the network. Other businesses often
exclude the impact of their subsidiaries and contractors when measuring carbon impacts.

This report aims to find answers to important questions such as:
     •     ‘What carbon emissions are produced in delivering electricity to customers’;
     •     ‘What are the activities in the asset life cycle that contribute the most to the environmental impact
           associated with the network’; and,
     •     ‘Where are there improvement possibilities in the life cycle of the assets in the network?’

This report aims to be both a starting point for a new mind set to form within Orion and to provide
quantitative information for stakeholders with an interest in Orion’s environmental performance. It is
expected that this information will bring transparency that assists Orion with internal and external
communications around environmental performance and importantly brings knowledge that could drive
innovation in planning and operations to reduce environmental impacts.

This report contains an assessment of the environmental impacts of Orion New Zealand Limited,
including impacts from the wholly owned subsidiary Connetics. This report includes the following sections:

                                                                                                 st
   1. An emission inventory limited to the Financial Year 2007 (FY2007), i.e. 1 April 2006 to 31 March
      2007, unless a different time frame is clearly stated. This year was selected as a baseline year as
      a majority of the data regarding the quantities of Orion’s assets was sourced from the last version
      of Orion’s valuation report from March 2007. The carbon footprint assessment only covers the
      asset types currently used in the network.


                                  Whole Life Carbon Accounting Boundary

                                                Servicing Network

                                          Emissions from office activities &
                                           asset maintenance /renewal




                                              Embodied Emissions
                                              Emissions from material
                                            extraction and manufacturing
                                                        assets




                                             Operational Emissions

                                           Emissions from losses during
                                                   distribution




Figure 1: Boundaries of whole life carbon accounting for the Orion Study




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Figure 1 shows the boundaries of the carbon inventory which included:
                a) Emissions from activities associated with the general maintenance and operation of the
                   network. These include emissions from Orion’s and Connetics’ offices (electricity use, air
                   travel, waste production), the Sulphur Hexafluoride losses from its network and emissions
                   from fuel use by Orion and Connetics as well as other contractors responsible for servicing
                   the network.
                b) Operational emissions resulting from electrical losses.
                c) Embodied carbon emissions in the net number of assets installed into the network during
                   FY 2007, resulting from raw material extraction and manufacturing of the asset (cradle to
                   gate).
   2. Assessing the total carbon footprint based on information from the net number of assets installed
      into the network. This will provide an estimate of the environmental impacts and will give a
      ballpark figure of the total embodied carbon in Orion’s network.
   3. Case studies which highlight the specific levels of carbon emissions resulting from current
      practises such as trenching and backfilling, the carbon impacts of Demand Side Management
      (DSM) practises and a carbon footprint comparison between underground cables and overhead
      lines.
   4. Recommendations regarding alternatives for reducing carbon emissions and other significant
      environmental impacts.




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3               Project Overview of the Assessment of Orion’s
                Carbon Footprint

3.1             Scope and Methodology for Measuring Orion’s Carbon Footprint
Carbon emissions can be divided into ‘direct’ and indirect’ emissions. Direct emissions occur from
sources that are owned or controlled by a company, while indirect emissions refer to emissions, which are
associated with a company, but which occur from sources that are not owned or controlled by the
company. All CO2 equivalents(CO2e) in this study are calculated according to 100-year Global Warming
Potential, GWP, as recommended by Intergovernmental Panel on Climate Change.

Orion has many different sources of carbon emissions (Figure 2). The main areas include:
  a) Emissions from activities associated with the general maintenance and operation of the network.
       These include direct emissions resulting from the combustion of fuel and from any losses of
       sulphur hexafluoride (SF6). The main indirect emissions, which were included in the study, include
       electricity use, air travel, methane production occurring at landfills associated with waste disposal,
       and emissions from fuel usage by contractors servicing network.
  b) Embodied carbon emissions (indirect source) in the net number of assets installed into the
       network, resulting from raw material extraction and manufacturing of the asset (cradle to gate).
  c) Operational emissions (indirect source) from the network resulting from annual electrical losses.

Emission inventories often also separate the emissions into three categories:
            o Scope 1 – Direct emissions
            o Scope 2 – Indirect emissions from electricity use, and,
            o Scope 3 – Other indirect emissions

The assessment of Orion’s emissions follows guidelines for voluntary corporate GHG reporting as
published by Ministry for the Environment (MfE 2008). Carbon emissions from Orion’s and Connetics’
office activities and fuel usage were calculated using the New Zealand specific CO2 Emissions calculator
provided by the New Zealand Business Council for Sustainable Development (NZBCSD).

Whilst Scope 1 and 2 emissions are mandatory to include in the inventory, reporting on Scope 3
emissions is optional under GHG Protocol and ISO14064-1, which MfE has based voluntary reporting
guidelines on. Scope 3 emissions are reported if they are measurable and relevant to stakeholders. In
this study, Scope 3 included emissions from air travel, waste to landfill, embodied carbon in the
infrastructure, electrical losses and fuel usage from other contractors to service the network.



                       Direct Emissions                              Indirect Emissions

                                                              -   Electricity use (Scope 2)
                                                              -   Air Travel (Scope 3)
                 -   Fuel usage (Scope 1)                     -   Waste to landfill (Scope 3)
                 -   SF6 losses in the network                -   Embodied Carbon- Infrastructure
                     (Scope 1)                                    (Scope 3)
                                                              -   Network Servicing – contractors
                                                                  (Scope 3)
                                                              -   Electrical losses (Scope 3)




Figure 2: Overview of direct and indirect emissions which are included in the environmental
performance assessment


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3.1.1           Emissions associated with servicing the network

Orion has a relatively small vehicle fleet and almost all of the activities involved with servicing the network
are undertaken by either its wholly owned subsidiary Connetics, or other contractors. To reflect the actual
carbon emissions involved with servicing the network, Orion believe that the fuel usage of the contractors
is fundamental to include in the carbon inventory.

To clarify, there are three different sources of carbon emissions associated with servicing and maintaining
Orion’s network. These include:

     1. Orion’s own fuel usage (Scope 1)
     2. Connetics fuel usage (Scope 1)
     3. Fuel usage by other contractors (Scope 3)

The estimation of the total fuel usage associated with servicing the network was based on Connetics’ fuel
usage and by knowing how much of Connetics’ contracted work is related to the network. The GHG
emissions associated with servicing the entire network, i.e. the emissions associated with fuel usage of all
the vehicles responsible for installing, maintaining, and replacing assets in the network, were estimated
by assuming that all contractors undertake similar activities and use the same amount of fuel as
Connetics does on a proportionate basis.

It is important to note that since Connetics is wholly owned by Orion, all its emissions from fuel are
considered as Scope 1 emissions. Scope 1 emissions are directly associated with Orion and are required
to be accounted for in MfE’s guidelines for voluntary GHG reporting (2008). The fuel usage relating to
network servicing was only distinguished to enable an estimation of carbon emissions from other
contractors.

Further details regarding assumptions made regarding emissions which are directly linked to servicing of
Orion’s network are discussed in section 4.6.


3.1.2           Embodied Carbon in Network Infrastructure

         3.1.2.1 Life Cycle Model concept

Orion have taken the important step of expanding the extent of its Scope 3 emissions to include an
assessment of the embodied carbon of its network infrastructure.

The carbon footprint of Orion’s assets was determined by taking a Life Cycle Model approach (Figure 3).
A detailed Life Cycle Assessment, LCA, requires significant amounts of data regarding energy and
material balances for all stages of a product life cycle. For example for a car, a full LCA considers aspects
such as the facilities extracting the ores, coal and other energy sources, transport requirements for the
raw materials, the manufacturing processes for producing the car and the replacement parts and the
factories which handle the car at the end of its life.

Orion is committed to assessing the environmental impacts of all its assets but it is outside of the scope of
this project, due to time, budget and particularly added value considerations to undertake a detailed LCA
for each of Orion’s assets. The availability of data at the level required to undertake such an assessment
is also a factor. For instance in considering fuel use (a very important aspect of the overall environmental
impact, and the carbon footprint) it is not possible to ascertain at the moment how much fuel is
attributable to the maintenance of lines vs. cable, or cables vs. transformers as the only data available is
how much fuel has annually been used by Orion’s and Connectics’ vehicle fleets. Similar issues also
arise of course with other emissions, for instance waste. For this reason emissions from these sources
are averaged across the whole of Orion and Connetics operation.



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Whilst this report does not contain detailed LCA results for Orion’s assets, it does contain detailed
information on the embodied carbon footprint of assets. Where there was data available for several
materials used by Orion a comparison was made. This data is expected to be useful to Orion in making
decisions about future investments in its network.



                                  The Life Cycle Model
                                                             Resources, e.g. raw materials
                               Raw material acquisition      energy, land resources




                                     Processes



                                      Transport
       Recycle/Reuse




                                    Manufacture



                                         Use                Emissions to air, water and ground



                                 Waste management




Figure 3: The Life Cycle model showing physical processes and flows of energy (Bauman &
Tillman 2004, Hendrickson et al 2006)

This is the first time that Orion has attempted to measure and monitor its environmental performance in
this manner and it is acknowledged that the quality of the reporting will improve overtime with refinements
to the methodology and improved accuracy of emissions factors etc. A life cycle approach can assist in
selecting materials and processes with a smaller environmental footprint, and these generic LCA results
can provide general guidance and identify key opportunities for reducing the environmental impact.
Decisions about large projects with significant capital investments should be informed by more detailed
LCA assessments.

3.1.2.2                Cradle to Gate approach

Each material used in the manufacturing of an asset has emissions associated with raw material
extraction or processing, manufacture, production and transport. An estimate of the embodied carbon
dioxide by asset type was made by systematically looking at each component and calculating the
emissions from the production of that asset type. The embodied carbon includes direct and indirect
emissions of greenhouse gases and is expressed as equivalent emissions of tonnes of carbon dioxide
(tCO2e).




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Orion is interested in incorporating consideration of carbon impact in future decisions regarding which
types of assets to install, together with traditional factors such as cost and efficiency. Consequently
assessing the embodied carbon of historical asset types is irrelevant and the study will be focused on
current types which are used. Orion has no plans to replace any historical assets until these are due to
normally be replaced, even if they prove to have a significant carbon footprint.

This study only focused on the asset types currently used in the network by assessing the embodied
carbon footprint of the number of assets installed during one year. The Financial Year (FY) 2007 was
selected as a baseline year as much of the data regarding the quantities of Orion’s key assets was last
updated in Orion’s valuation report March 2007. The study was also based on asset information for FY
2007 from the asset register and Orion’s internal GIS system.

For assets which are manufactured from several raw materials, the estimation is based on information
provided by the suppliers. The embodied carbon was assessed for all these assets using a cradle to gate
life cycle (Figure 4). The study included only the emissions associated with the materials of manufactured
components used and the processes involved with manufacturing these. The embodied carbon does not
include the emissions relating to transport of the asset from the supplier to Orion. Even within one asset
type, the accurate location of the manufacturer is difficult to determine. For example some cables are
provided by an Italian manufacturer with 10 different factories all over the world.




Figure 4: Embodied Carbon which are specified per asset type are the sum of emissions from
Cradle to Gate processes. The embodied carbon figures calculated do not include emissions
specific to distribution, use or disposal (cradle to grave)

At an asset type level, the carbon footprint was possible to measure for the cradle to gate processes,
however after Orion has received an asset from the supplier, it become much more difficult to distinguish
what proportion of emissions are associated with installation and servicing of a particular asset. These
emissions were only determined for all assets based on the fuel consumption of the contractors
responsible for these activities as described further in Section 3.1.1. The carbon footprint associated with
the disposal of the specific assets was not calculated, as the majority of the assets have a very long life
expectancy with an uncertain final disposal method. On the other hand, this study includes carbon
emissions associated with the general waste from Orion and Connetics disposed to landfill during the FY
2007, but these are not determined on an asset type level.

In summary, the embodied carbon emissions for an asset were calculated as

                Embodied Carbon = asset component material quantities x emission values

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As there is very little New Zealand data available to calculate the embodied carbon of asset component
materials, European or global emission values were used from a European database, Ecoinvent. As a
large part of Orion’s assets are manufactured outside New Zealand, this is a suitable approach. This
database contains stream-lined international and industrial LCA data covering several industry sectors.
When there were no suitable emission factors in Ecoinvent, factors were used from University of Bath
(Hammond and Jones 2008).

Whilst embodied carbon emission values are available for most raw materials, in general there is little
emissions data relating to specific items or processes used to manufacture a product. A product may be
made of several different materials, each of which undergoes some processing before assembly into the
component and it is difficult to account accurately for all process emissions. For example, the
manufacturing of a coated cable requires multi-stage processes such as metal extraction, refining, wire
drawing and extrusion. Each asset type requires different processes and this study did not determine the
process emissions with this level of accuracy. However, since it is important to make some assessment
of these emissions, as it can significantly impact the total embodied carbon of an asset, an alternative
methodology was used. Since the emission factors for the component materials generally only cover the
emissions associated with raw material, an allowance was added for the energy used in manufacturing
the product to obtain the CO2 (product) emission factor. This is a methodology which has been
recommended in the carbon accounting guidelines for the water industry by UK Water Industry Research,
which was developed by MWH (UKWIR Stage II Carbon Accounting Guidelines).

Specific guidance on how to derive emission factors for CO2 (product) is given below. In most cases,
particularly those products dominated by a few key materials, such as cables and lines, the approach to
estimating the embodied carbon is summarised by the equation below:

                                           n
                                 CO2 (asset) = Σ {CO2 (material i) * (1 + xi)}
                                         i=1
Where:

     •     asset is the manufactured product/asset, which is comprised of n different materials
     •     CO2 (material i) is an emissions factor for the individual materials used in the asset type; and
     •     x is a factor to account for the processing of the material into the component.

The table below contains a set of potential values for process factor “x” based on an assessment of the
amount of energy used in manufacturing the component from its raw materials in comparison to that used
to manufacture a steel pipe.

Table 1: Lookup table for factor x to account for manufacturing processes
      Embodied energy in manufacture                                                             Factor x
      Energy used in manufacturing component from raw material is judged to be                      0.15
      lower than that used in the production of a steel pipe
      Energy used in manufacturing component from raw material is judged to be                       0.3
      similar to that used in manufacturing a steel pipe
      Energy used in manufacturing component from raw material is judged to be                       0.5
      greater than that used in manufacturing a steel pipe
      Energy used in manufacturing component from raw material is judged to be                       1.0
      significantly greater than that used in manufacturing a steel pipe

The final emission factors for all materials which are used in the network equipment are listed in
Appendix A.



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The total embodied carbon emissions (from cradle to gate) are described as CO2e per unit of a particular
asset type. A unit refers to one meter of cable/line or one item of asset installed in network. The total
embodied carbon of one unit is the sum of the emissions generated from extracting and processing the
raw materials and emissions associated with manufacturing the final product.

The carbon footprint has been assessed for all the major assets which are used by Orion. Some asset
types were not included as the assets were relatively small in size, were of complex structures and/or
were installed in small quantities during the studied year. Assets which were not included in the study
include: low voltage maximum demand indication metering at distribution substations (approximately
0.5 kg each and 96 in total), remote terminal units (5 in total) with many small components, one air break
isolator, 11kV surge arresters (3ph) and 33 kV isolation (O/H line). None of these assets are likely to
impact the estimated annual carbon footprint significantly.

3.1.2.3         Estimation of total carbon footprint of Orion’s entire network

The total embodied carbon in Orion’s entire network was estimated on the basis of the calculations of the
asset types which were installed during the FY 2007. If there were asset types in the network for which
no carbon footprint had been calculated, an assumption was made regarding which 2007 asset type was
most similar in design and resource requirements and that asset’s carbon footprint was utilised. For
asset types with small quantities or that are not significantly material intensive, the carbon footprint was
disregarded.

3.1.2.4         Uncertainty in estimating carbon impacts

Any carbon footprint assessment will have factors which affect the reliability of the data. In this study
there were numerous sources of uncertainty in the approach taken, which need to be emphasised:
• Survey errors: uncertainties of basic source data can result in sampling and reporting errors. This
   study often relied on the quality of the data provided by suppliers.
• Missing data: when data is not readily accessible. Assumptions have been made to compensate for
   any missing data. This was done in consultation with Orion’s engineers who have wide expertise
   about the various asset types which were assessed.
• Aggregation of data: A plethora of asset types exist within Orion’s network, but they have been
   aggregated into main asset groups.
• Non-geographic data: The emissions factors are often developed for materials in Europe, even though
   some assets might be purchased outside Europe.

Whilst this assumption list may appear concerning these are not unusual situations for any major carbon
foot printing process where high numbers of different types of complex assets are involved.


3.1.3           Operational Emissions

There is only one source of operational emission considered in the carbon footprint inventory; emissions
resulting from electrical losses over the distribution network.

All electricity networks lose energy when lines, cables and transformers heat up. Electrical losses are
natural phenomena that cannot be avoided completely. Losses mean that more electricity needs to be
generated than what finally reaches the customers and carbon emissions are produced to generate that
extra electricity. Orion’s loss is estimated at below 5% of the energy delivered.

GHG emissions were estimated as a result of the electrical losses, using the grid-average emission factor
associated with the generation of a unit of electricity, purchased from the national grid in New Zealand
during 2006 (MfE 2008). This is an important assumption within this report. Given the design of New
Zealand’s electricity system, Orion, being a South Island company, generally distributes electricity from
renewable hydro sources rather than North Island located carbon polluting generation based on fossil
fuels. Therefore some may consider that electrical losses (and electricity use) due to Orion’s activities
result in no carbon emissions being released (as hydro sources are zero carbon emitting). This

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assumption is challenged however since a reduction in electricity usage on Orion’s network results in
more hydro energy being distributed from the South Island to the North Island. Consequently, a reduction
in energy usage across Orion’s network indirectly reduces North Island fossil fuel based generation. For
this reason MWH has assumed that emissions from electricity use or losses on Orion’s network should be
presented using the national average figure for generation emissions (0.209 tCO2e per MWh), which
takes into account North Island fossil fuel based generation. This view greatly increases Orion’s annual
footprint.

Since the majority of the emissions resulting from electrical losses are unavoidable, these will not be
included hereafter when referring to Orion’s total carbon footprint.




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4        Results of carbon footprint assessment
4.1             Summary of Orion’s annual carbon emissions
The key emission sources from Orion are summarised in Table 2 and include annual emissions from
office related activities, SF6 losses, extraction and processing of raw materials required to create Orion’s
assets (i.e. embodied carbon), electrical losses occurring during electricity distribution and emissions from
servicing the network.

The most significant impact is from electrical losses which contribute 77% of the total annual carbon
emissions. This carbon impact was estimated when a New Zealand average generation mix was used to
estimate these emissions (refer to Section 3.1.3 for reasons behind selecting this emission factor). It is
important to emphasise that the majority of losses are inevitable and inherent with distribution of
electricity.

The embodied carbon in the network infrastructure installed during the FY 2007 contributed 17% of the
footprint (including losses) and 73% if losses were excluded. The third largest emission source (15% of
total excluding losses, but only 3% of total if losses included) was generated from fuel usage related to
servicing the network.

To add some level of perspective to the values in Table 2, a comparison was made to two common
contributors of GHGs; emissions from dairy cows and emissions from cars on the road. The carbon
emissions generated during 2007, including losses, are equivalent to adding nearly 27,000 cows to the
national herd or a further 11,400 cars to the national fleet. Without network losses those figures are just
over 6,000 cows and 2,600 cars. New Zealand has a national herd of almost 10 million cows and
approximately 3 million cars are in service on New Zealand’s roads (not heavy vehicles etc).

Orion’s annual carbon impact during 2007 equates to emissions of 0.24 tCO2e per customer connection if
losses are included and 0.05 tCO2e if electrical losses are excluded. This carbon impact is relatively
small compared to average annual household emissions, which include car use, of 15-25 tCO2 per year
(Landcare Research 2006).

In this report each emission source was compared to Orion’s carbon footprint for the FY 2007 when the
electrical losses were disregarded, ie 9,832 tCO2e.

Table 2: Orion’s annual carbon footprint during the Financial Year 2007
                                                                % of total    % of total
                                                                 carbon        carbon
   Part of                 Source of        Total tCO2e                                      Number          Number
                                                                footprint     footprint
  Operation                emissions          (2007)                                         of cows2        of cars3
                                                                  (incl.        (excl.
                                                                 losses)       losses)
                    Electricity purchased
Orion’s Office      Air Travel                 462                1.1%           4.7%            287             122
                    Waste to landfill
                    Electricity purchased
Connetics’
                    Air Travel                 208                0.5%           2.1%            129              55
Office
                    Waste to landfill
Electricity
                    SF6 losses                 25.1               0.1%           0.3%            16               7
distribution

Embodied            Extraction and
                    processing of raw         7,192              16.5%          73.1%          4,467           1,893
Carbon
                    materials required to

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                                                               % of total    % of total
                                                                carbon        carbon
   Part of                 Source of       Total tCO2e                                        Number          Number
                                                               footprint     footprint
  Operation                emissions         (2007)                                           of cows2        of cars3
                                                                 (incl.        (excl.
                                                                losses)       losses)
                    create Orion’s asset
                    installed during
                    FY2007

Operational
                    Electrical losses        33,658             77.4%                          20,906           8,857
Emissions

                    Fuel use: Orion &
Servicing                                     1,494              3.4%          15.2%              928             393
                    Connetics
Electricity
Network             Fuel use: Other
                                               451               1.0%           4.6%              280             119
                    Contractors
Total tCO2e (2007) including
                                             43,490                -              -            27,012           11,445
electrical losses
Total tCO2e (2007) excluding
                                               9,832           -           -        6,107        2,587
electrical losses
1
  Assuming a dairy cow produces 1.61 tCO2e/yr based on CH4 Emissions per head (MED May 2001)
2
  Assuming a typical petrol car travelling 14,000km/year (used by the AA and Department of Inland
Revenue) with an average fuel consumption of 8.5km/L (Hanson & Giuliano 2004) will produce
approximately 3.8 tCO2e/year.

4.2             Estimated total embodied carbon in Orion’s network
The total embodied carbon of all Orion’s assets across the entire network (i.e. regardless of which year
installed) was estimated at 476,091 tCO2e (Table 3), which is approximately 66 times the carbon
embodied in assets installed during the baseline year (FY 2007). The total embodied carbon in all Orion’s
network assets equates to 2.6 tCO2e per customer.

If the total embodied carbon figure was related to cow equivalents and ‘car equivalents’, Orion’s entire
network would be comparable to adding almost 300,000 cows to the national herd and 125,000 cars to
the national fleet.

The total embodied carbon in all Orion’s network assets was estimated for asset quantities installed as of
31 March 2008. The information was sourced from WASP which is Orion’s internal system where all
installed network assets are recorded. It a live data base that cannot give a snap shot of the total quantity
of assets installed in the network as of 31st March 07, which is the end of the studied baseline year. The
nearest time when such information was captured was in 31st March 2008 for the evaluation of the
network. Therefore the total embodied carbon in Orion’s network was estimated for the end of the
financial year 2008.

A further discussion of total embodied carbon is included in Section 4.8.




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Table 3: Estimated total embodied carbon in all Orion’s network assets installed as of 31 March
2008
                                                                                                         % of total
                                                                                                         embodied
Asset                                                              Number of       Total tCO2e             carbon
                            Asset Type Description
Category                                                             Units           (2007)               footprint
                                                                                                        (all assets)
                       All types of underground cables
                                                                   7,631 km          186,505               39.2%
Cables                 (including lighting),
                       All types of overhead lines including
                                                                   6,787 km          29,640                 6.2%
Lines                  lighting
                       Poles for overhead lines (concrete,
                                                                    95,015           196,588               41.3%
Poles                  hard- and soft wood)
                       Low Voltage Connection with
                       boundary and maxi and multi box               5,298             664                  0.1%
Connections            structure
                       11 kV Switchgear quarter, half and
                                                                     3,275            3,073                 0.6%
Kiosk                  full kiosk
Power
                                                                      60              6,108                 1.3%
transformer            All types of power transformers
Protection             11/33 kV Unit Protection, 11 kV and
                                                                     4,230             117                  0.0%
equipment              66 kV Protection, substation battery
Substation             33 kV substation building and ripple
                                                                      262             4,125                 0.9%
buildings              plant building
Ripple Injection
                       Ripple Injection Plant                         40               282                  0.1%
Equipment
Switchgear             Circuit breakers, Magnefix Units             14,116           22,908                 4.8%
                       Pole and ground mount distribution
Distribution           transformers & pole mounted                  16,689           26,081                 5.5%
Transformer            miscellaneous equipment
Total tCO2 e embodied in all network assets as of 2008                               476,091
Total emissions (tCO2e) per customer connection                                       2.62



4.3             Carbon Footprint from Orion’s office
Summary of findings:

• Total carbon emissions from Orion’s office were 462 tCO2e, or 4.7% of total annual emissions
  (excluding losses).
• Office emissions equated to approximately 3.0 tCO2e per staff member.
• Orion uses carboNZero certified electricity from Meridian Energy and so if offsetting of carbon impact
  is undertaken by Orion only 44.7 tCO2e of the office related emissions would require offsetting.
• Orion’s office buildings use 293 kWh/m2 which is above the expected electricity usage of 200 kWh/m2.
  An energy audit in 2007 identified opportunities which could save Orion 13% of office related carbon
  emissions (54 tCO2). Some of the initiatives in that audit have already been implemented by Orion.
• Waste generated by Orion has a relatively small environmental impact (<1% of office related
  emissions). Many good initiatives are already in place and no further suggestions are made.



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The carbon emissions associated with Orion’s office are presented in Table 4. These include emissions
from electricity purchased, air travel and from waste disposal, which are all considered indirect sources.
The total carbon emissions resulting from the office activities during FY 2007 were 462 tCO2e, which is
equivalent to approximately 3.0 tCO2e per staff member assuming Orion has 150 staff. Office related
emissions contribute to approximately 5% of Orion’s total carbon footprint excluding losses. Direct
emissions from fuel usage by Orion’s vehicle fleet are included in Section 4.6.

Table 4: Summary of Orion’s Carbon Footprint from the office for FY 2007
Scope                   Source of     Units               Emission     Total              % of total        % of
                        emission                          factor       tonnes             Office            annual
                                                          (kgCO2e/     of CO2e            emissions         emissions
                                                          unit)        (2007)                               (excl
                                                                                                            losses)

 Indirect                     Electricity
                  2                           1,997,350kWh      0.209         417.4          90.3%              4.25%
  scope                       purchased

                               Domestic
                                               69,206km         0.159         11.0            2.4%              0.11%
                                Travel
                                Short haul
 Indirect                     international    56,855km         0.132          7.5            1.6%              0.08%
                  3
  scope                        (<3700 km)
                                Long haul
                              international    228,006km        0.107         24.4            5.3%              0.25%
                               (>3700 km)

 Indirect                      Waste to
                  3                             3,380kg         0.529          1.8            0.4%              0.02%
  scope                         landfill

Total indirect emissions (tCO2e)                                               462


4.3.1           Electricity

The carbon emissions resulting from electricity use make up 90% of the total emissions from office
related activities. During FY 2007, electricity was the only power source utilised for Orion’s head office.

The office building consists of two parts; an older building built in 1939 and a newer part built in 1986. The
total area of the office is 6,820 m2, which gives an average usage of 293 kWh/m2. Orion’s office buildings
are comparatively old, large and under-utilised with relatively large power requirements. The energy
usage is also high because of 24 hr operation of computers and call centres. The expected energy
demand for an old office building should be below 200 kWh/m2 and 100 kWh/m2 for a new office building
(Enercon personal communication 2008).

An energy audit undertaken by Enercon in 2007 identified measures that could reduce office energy use
by 13% to approximately 233 kWh/m2 and result in annual carbon savings of 54 tCO2e. Orion has
implemented a few of the initiatives recommended in the audit report, however many of the audit findings
are now out of date, since the company has decided to separate the building into the new and old part.
The opportunities for energy savings need to be revisited in the light of the new direction.

Following the Enercon efficiency audit, Orion committed to reducing its energy costs, rather than the
energy usage, of its head office building. The reason for this focus on costs, rather than usage, was due
to costs better reflecting winter electricity usage (electricity is more expensive in winter than in summer)
and it is during winter that energy usage is having the most impact on the environment. This is because
during the cold winter months, the proportion of renewable energy is lower due to low hydro lake levels
and the general energy demand is high, which forces the country to generate electricity with fossil fuel.


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Orion is however recommended to monitor energy use, which is independent of any temporary price
changes on the market, as well as electricity costs.

Following advice from the energy audit, a LPG driven boiler was installed in April 2008. LPG is mainly
produced as a by-product of natural gas production and petroleum refinement (MED 2008) and has an
emission factor of 0.22 kg CO2e per kWh. This figure is very close to the emission factor which has been
used for generated electricity in this carbon inventory, namely the 2006 New Zealand average of
0.209 kgCO2e/kWh. This study has not made any closer comparison between the advantages and
disadvantages of using LPG as heating fuel versus generated electricity.

It is worth noting that Orion’s energy costs have increased since the installation of the gas boiler and not
decreased as was expected and targeted. A closer study is encouraged to better understand the reasons
behind this unforeseen rise in energy costs.

Also worth noting is that Orion purchases electricity from Meridian Energy, which is a carboNZero
certified organisation. Meridian advises its customers that the emissions associated with its electricity
generation and retail activities are offset. Given this, only 44.7 tCO2e of office related carbon emissions
would require offsetting by Orion if it wanted to become carbon neutral in this area.

Despite Meridian offsetting electricity usage, it is still in Orion’s interest to ensure that its building is as
efficient as possible.


4.3.2           Air Travel

Carbon emissions resulting from air travel contribute approximately 9% of the total emissions from office
related activities. The air travel data provided by Orion (April 06 to March 07) was divided into short,
medium and long haul flights based on voluntary corporate GHG reporting guidelines as published by
Ministry for the Environment (Ministry for the Environment 2008). The per kilometre emissions factor for
long haul air travel is lower than for short haul (domestic) air travel as there are higher emissions during
take-off and landing and these make up a higher proportion of kilometres flown for domestic flights. On
the other hand, emissions are thought to have a greater greenhouse effect in the upper atmosphere than
emissions released at sea level. The emission factors have been developed for three different flight types
to capture the differences in emissions.

Travelling by air is not very common for Orion staff. Trips made are likely to be of a necessary nature;
hence no recommendations to reduce this emission source are made.


4.3.3           Waste

Carbon emissions resulting from disposal of waste to landfill contributes <1% of the total emissions from
office related activities. Orion has for many years strongly encouraged recycling. Approximately 80% of
its paper waste is recycled and the majority of food waste is removed for use as pig feed. During FY
2007, the remaining general waste (3,380 kg), which was disposed to landfill, was estimated to produce
about 1.8 tCO2e.

Emissions from waste disposal were based on assuming a mixed waste (national average) that would be
disposed to Kate Valley landfill which has gas recovery in place. MfE has published emission factors
which are be applied in various waste management situations; however there was no emission factor
which accurately reflected Orion’s situation where office waste is disposed to a landfill with gas recovery
but when composting and recycling is in place. In MfE’s guidelines there were two emission factors which
were considered:
     1. If the organisation does not know the composition of its waste but knows it is going to a landfill
        with a gas recovery system, it should use the default “mixed waste” emission factor (0.529 kg
        CO2 e/kg waste). With this factor the emissions will be overestimated somewhat since Orion is


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           actively recycling and composting and its total waste volume (3,380 kg) does not include food
           waste.
     2. If the office-based organisation has no advanced diversion system (i.e. no recycling or
        composing), it should use default emission factors for “office waste” (0.9 kg CO2e/kg waste). The
        higher emission factor reflects the higher proportion of organic matter (i.e. paper and food) found
        in office waste.

The emission factor for default “mixed waste” emission was selected since this better reflects Orion’s
waste management practises. Use of the latter emission factor would overestimate GHG emissions since
Orion is recycling the majority of its paper waste and most of the food waste is removed for use as pig
feed. If Orion chooses to have an audit against carboNZero or CEMARS (these accreditation schemes
are described further in Section 8), Landcare Reseach uses emission factors for waste which are more
refined that those recommended by MfE. However regardless of emission factor the proportion of
emissions produced by waste disposal is always going to be insignificant.

There are currently no clear directions in carbon accounting guidance in New Zealand regarding when
carbon credits should be awarded for avoiding carbon emissions to the atmosphere from diverting waste
from landfill. To take a conservative approach, no carbon credits relating to recycling of paper and
cardboard have been included in this report.

Waste generated by Orion has a relatively small environmental impact (<1% of office related emissions).
Many good initiatives are already in place and no further suggestions are made.


4.4             Carbon Footprint from Connetics’ Office
Summary of findings:

• Connetics leased buildings, including the office and workshops, have an average electricity usage of
  92 kWh/m2. Electricity used contributes 62% of Connetics office based emissions.
• The majority of Connetics uses carboNZero certified electricity from Meridian Energy and only
  approximately 78 tCO2e of the office related emissions would require offsetting.
• A formal energy audit by Enercon is currently being completed which will help to identify opportunities
  for improvement.
• Carbon emissions from Connetics’ air travel only contributes to 13% of its total office emissions. No
  recommendations for improvements are made.
• Connetics is currently recycling many materials such as metals, cardboard, PVC, etc. Still a relatively
  large volume of waste is generated every year (96 tonnes in 2007), and this makes up 24% of
  Connetics’ office emissions. Connetics waste only contributes to 0.5% of Orion’s carbon footprint
  (excluding losses). A detailed waste audit is recommended to identify waste streams which can
  potentially be diverted from landfills to save money and carbon emissions.



Carbon emissions associated with Connetics’ office are presented in


Table 5. These include indirect emissions from electricity purchased, air travel and from waste disposal.
The total carbon emissions resulting from the office activities during FY 2007 were 208 tCO2e, which is
equivalent to approximately 0.9 tCO2e per staff member assuming Connetics has 220 staff. Direct
emissions from fuel usage by Connetic’s vehicle fleet are included in Section 4.6.2.




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Table 5: Summary of Connetics’ Carbon Footprint for FY 2007
                                                               Emission                     % of           % of
                                                               factor        Total          total          annual
                              Source of                        (kgCO2e/      tonnes         Office         emissions
Scope                                             Units
                              emission                         unit)/        of CO2e        emissi         (excl.
                                                                             (2007)         ons            losses)
                                                               unit))

Indirect                      Electricity
                 2                                619685kWh       0.209        129.5          62.3%           1.32%
scope                         purchased

                              Domestic Travel     120,381km       0.159         19.1          9.2%            0.19%
                              Short haul
Indirect                      international       36,277 km       0.132          4.8          2.3%            0.05%
                 3            (<3700 km)
scope
                              Long haul
                              international       35,942 km       0.107          3.8          1.9%            0.04%
                              (>3700 km)
                              Waste to landfill
Indirect                  (General Waste
                 3                                 95,600 kg      0.529         50.6          24.3%           0.51%
scope                     from Office and
                          workshops)
Total indirect emissions (tCO2e)                                                208




4.4.1           Electricity

Carbon emissions from electricity purchased by Connetics makes up 62% of its total emissions relating to
office and workshop activities. During the FY 2007, electricity was the only significant power source
utilised for its head office. There are a couple of small gas heaters in the workshops, but these emissions
were not included in the calculations, due to lack of accurate data available.

Connetics does not measure the electricity use for the office area separately from the remainder of the
site and its average usage of 92 kWh/m2 (total area of 6,765 m2) cannot be compared to a benchmark for
office energy usage in the same way as Orion’s was. The workshops are not as energy intensive as an
office area.

Connetics are leasing its building and any energy efficiency initiatives will need to be agreed with the
landlord. Enercon are currently conducting a formal energy audit and hopefully that audit will identify
some ways for Connetics to reduce its energy consumption and its carbon footprint. If there are costly
options to obtain large savings, it may want to discuss areas for improvements with the property owner.

Connetics purchases almost all its electricity from Meridian Energy, which is a carboNZero certified
organisation. Meridian advises its customers that the emissions associated with its electricity generation
and retail activities are offset. Trustpower is the electricity provider to one of Connetics’ warehouses. It
may be of interest for Connetics to have all electricity provided by Meridian Energy.

If all electricity is purchased from Meridian, only 78 tCO2e of office related carbon emissions would
require offsetting by Orion/Connetics if it wanted to become carbon neutral in this area.

Even if all electricity is purchased from Meridian, carbon emissions from electricity usage should still be
measured and stated as Connetics carbon emissions

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4.4.2           Air Travel

Carbon emissions from Connetics’ air travel contributes 13% of Connetics total emissions relating to
office and workshop activities, but only 0.3% of Orion’s total annual carbon emissions excluding electrical
losses.

The air travel data provided by Connetics covers travel undertaken during calendar year 2007 (January to
December 2007), as opposed to FY2007 which is the period for which all other emissions are calculated.
No distance figures were provided so in order to calculate the distance between the departure point and
the destination an air travel calculator, Catalyst R&D Ltd (2007) web based calculator, was used. Where
data was not available on the Catalyst flight calculator information was obtained from World Airport
Codes. The methodology for calculating carbon emissions from air travel was the same as described for
Orion (Section 4.3.2).

Travelling by air is not very common for Connetics staff. Trips undertaken are likely to be of a necessary
nature, hence no recommendations to reduce this emission source are made.


4.4.3           Waste

Connetic’s waste is generated by the office, workshops and from servicing Orion’s network. The carbon
emissions resulting from the disposal of this waste, which is taken to landfill, only contributes to 24% of
the total emissions associated with office and workshop activities. Of Orion’s total annual carbon
emissions (excluding electrical losses), Connetics’ waste only contributed 0.5%.

4.4.3.1         Recovered materials

Waste is often created when installing, maintaining and replacing network assets. Connetics currently
recycle many different materials which are feasible to recover from a financial or practical perspective.
During FY 2007, a total of 8.34 tonnes of paper and cardboard were recycled. There are currently no
clear directions in carbon accounting guidance in New Zealand regarding when carbon credits should be
awarded for avoiding carbon emissions to the atmosphere from diverting waste from landfill. To take a
conservative approach, no carbon credits relating to recycling of paper and cardboard have been
included in this report.

Scrap metals are a valuable source which are often easy to recover. Connetics sell scrap metal to scrap
metal recyclers with values ranging from $1.01 to $9.63/kg. During the calendar year 2006 the total value
of scrap metal which Connetics recycled was $153,000, excluding GST. Some of the main materials
which are currently recovered are:
     •     bare copper aerial wire
     •     bare copper bar
     •     PVC covered copper aerial wire
     •     Lead/steel copper armoured
     •     bare aluminium
     •     bare aluminium /steel core
     •     aluminium PVC covered wire
     •     paper insulated/tape aluminium armoured

Copper from cables is granulated and sent to Japan, where it is made into copper foil for printed circuit
boards. Aluminium is sold to a local foundry AW Fraser, where it is made into precision machined
components. Only small quantities of lead are recovered from the network as lead cables are not


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common and most cables are currently left in the ground when decommissioned. The environmental
impacts of this are clarified further in Section 4.7.1.1.

PVC from cables is recycled by Otaki Industries in Auckland, who make mats for playgrounds and for
dairy sheds. Polyethylene has no recyclable value and is reused on training tracks by horse trainers in
granular form. It is expected that the polyethylene eventually is disposed of to landfill.

Connetics disposes insulating oil, used in transformers and cables, as the oil requires changing on a
regular basis. Connetics were unable to provide information regarding the volume of oil disposed during
FY 2007, however in 2008, approximately 1,200 litres of transformer waste TX oil was disposed of by the
contractor ChemWaste. During 2008, Connetics also sent approximately 5,000 litres of cable oil to
ChemWaste for disposal. Only a small fraction of the oil is treated and re-used and the majority of the
waste oil is used for energy production during cement manufacturing. At the cement plant, the used oil is
co-processed with coal as a fuel for the production of cement. In effect, carbon emissions are saved by
reusing the oil. One of New Zealand’s two cement manufacturers, Holcim believes that reusing oil
reduces carbon production by 3.1% compared to coal-firing only (Slaughter G. 2008). No carbon
emissions resulting from the waste oil have been included in this carbon inventory since the emissions
associated with cement production will be covered by the manufacturer.

4.4.3.2         Waste to landfill

Although many of the key assets are able to be recycled, Connetics still generate a relatively large
volume of waste every year (95.6 tonnes in 2007). According to Christchurch City Council, the city
disposed of 253,000 tonnes of waste into the Kate Valley landfill from January 2007 to December 2007.
Connetics contributed 0.04% of this volume.

Carbon emissions from Connetics’ waste disposal to landfill were based on assuming the default “mixed
waste” emission factor (0.529kg CO2e/kg waste), since the composition of the waste was unknown but
was assumed to be disposed to a landfill with a gas recovery system. In a typical waste stream from an
office, there is a large proportion of food waste. The majority of Connetics’ waste is believed to be non-
office related and therefore using the emission factors for “office waste” is not suitable.

According to Connetics, its general waste comprises of office waste including small quantities of food
waste, broken lamps from servicing the council’s lighting, wood waste from broken cross arms and poles,
electrical panels, etc. If a waste audit was completed Connetics would get a better understanding of what
materials it is currently disposing into landfills. Such an audit will assist in analysing which activities and
which asset types produce the majority of this waste stream. The majority of waste may not be directly
related to servicing Orion’s network. It is important to note that often there are more or different types of
waste produced at different times of the year and several waste audits may be required. If it can divert
waste from landfills, the carbon savings are likely to be relatively minor, however it will save the company
money. There are practical waste audit manuals available for self-assessment, or the local council
provides free support to help Christchurch businesses become sustainable through for example reducing
waste.




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4.5             Sulphur Hexafluoride, SF6
Summary of findings:

• Although SF6 is an extremely potent greenhouse gas, actual SF6 losses by Orion only contributed
  25 tCO2e in FY 2007, which represents just 0.3% of Orion’s total annual carbon footprint (excluding
  electrical losses). Management procedures appear robust as measured SF6 losses are always less
  than 0.2%.
• Orion has a policy to select non-SF6 equipment when there are technically and economically
  acceptable alternatives. No recommendations are made to change current practise, which appears
  sensible.


Sulphur Hexafluoride, SF6, is a non-toxic, non-corrosive, non-flammable gas, which is chemically very
stable and has good electrical insulating properties. These properties are the basis for its use as an
insulator in electrical switchgear and transformers. There is increasing environmental concern regarding
its usage due to its GHG potency as the gas is 23,900 times more potent than CO2. However, for Orion,
SF6 losses only contributed 25 tCO2e, which represents 0.3% of Orion’s total annual carbon footprint
(excluding electrical losses) as summarised in Table 2.

In 2004, a non-binding Memorandum of Understanding (MOU) regarding the management of emissions
of SF6 to the atmosphere was signed between the Crown and users, including Orion, of imported SF6 in
the electricity sector. Major users were to be exempt from any climate change policy costs in return for
meeting a specified target. The MOU covers the period to 31 December 2012 and in it users agreed to
adopt best practice in SF6 management.

Subsequent to signing the MOU, Orion have implemented a SF6 gas management procedure to mitigate
the risk of losses whilst handling the gas. Judging by the low gas losses, the management procedures for
handling the potent gas appear to be working well.

According to an Australian discussion report about SF6 and the usage of it in the electricity supply
industry, data suggests that handling losses results in 80 to 85% of all SF6 emissions from the electricity
supply industry, with leakages from equipment representing between 15 to 20% of emissions
(Greenhouse Challenge Australian Greenhouse Office, 2001).

The majority of Orion’s assets containing SF6 have yet not reached the end of their life. The only increase
in Orion’s SF6 stock levels during the FY 2007 resulted from purchasing 66 kV circuit breakers. A
practical alternative to a 66 kV SF6 circuit breakers is a dry air insulated type, however the current design
is not suitable to Orion’s network requirements. It may be a feasible option if the design is optimised in the
future. If there are technically and economically acceptable alternatives to using SF6, Orion has
committed to using them.

In 2007, the Ministry for the Environment initiated an assessment to determine the use of SF6 in New
Zealand. The information Orion provided MfE is summarised in. Orion has a target of limiting SF6 losses
below 1% per annum. The manufacturer has guaranteed a fixed leakage rate of maximum 0.05%. Orion
report on its stock levels each year and has recorded an average SF6 loss of 0.1-0.2%. Every year there
is some minor gas leakage which results in a higher loss than 0.05% which is inherent with the
equipment. In the carbon inventory a worst case scenario with a loss of 0.2% across the total stock was
assumed. Table 7 shows the carbon emissions resulting from these SF6 losses.




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Table 6: Volume of insulating gas, SF6, in Orion's network
Part of Network                              Volume of SF6 (kg)
11 kV Circuit breakers (54 in total)              105.24
66 kV Circuit breakers (20 in total)              352.50
Total volume in storage                               66.6
Total stock (kg)                                  524.34


Table 7: Estimated annual carbon emissions from SF6 losses in network equipment
                                                                                         % of total
                                                                  Emission   Total       carbon
                           Source of
Scope                                         Units               factor     tCO2e       footprint
                           emission
                                                                  (CO2e)     (2007)      (excl.
                                                                                         losses)
                           0.2% SF6 losses
Direct scope        1      in network            524.34 kg         23,900      25.1          0.3%
                           equipment
Total direct emissions (tCO2e)                                                 25.1

It is in Orion’s interest to eliminate losses of SF6 for two main reasons; its extremely high global warming
potential (23,900 compared to CO2) and its high cost. A further discussion regarding the use of SF6 in
switchgear is included in Section 4.7.5.


4.6             Emissions from Servicing the Electricity Network
Summary of findings:

• Orion and Connetics generated 1,494 tCO2e from their combined fuel usage. This represents 15% of
  Orion’s total annual carbon footprint (excluding losses).
• Emissions from Orion and Connetics in relation to activities directly relating to servicing Orion’s
  network were 985 tCO2e, of which Connetics contributed 550 tCO2e and Orion 435 tCO2e.
• Fuel emissions by all other contractors responsible for servicing and maintaining Orion’s network are
  451 tCO2e (5% of Orion’s total footprint (excluding losses)).
• Estimated total emissions directly associated with servicing Orion’s network are 1,436 tCO2e.


Carbon emissions relating to servicing the electricity network only include emissions from fuel
consumption from the vehicles responsible for regular maintenance of existing assets, installation of new
assets, replacement and the disposal of old assets at the end of their life. There are no other significant
emission sources associated with servicing of the electricity network.

Consequently, there are three different sources of carbon emissions associated with servicing and
maintaining Orion’s network. These include:
   1. Orion’s own fuel usage
   2. Connetics’ fuel usage (only a part of its usage is directly related to servicing Orion’s network)
   3. Fuel usage by other contractors (that relates to work on Orion’s network).

A discussion about how Orion can reduce its carbon emissions from fuel usage is included in Section 6.4.




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Table 8: Carbon emissions associated with the annual fuel usage of Orion and Connetics
                                                                         Total tonnes       % of total carbon
                                   Source of     Units        Emission
   Scope                                                                   of CO2e           footprint (excl.
                                   emission     (litres)       factor
                                                                            (2007)               losses)
Direct          1   Orion        Petrol         81,709            2.32       189.6                   1.9%
scope
                                 Diesel         91,875            2.65       243.5                   2.5%
                    Connetics    Petrol         82,000            2.32       190.2                   1.9%
                                 Diesel         328,500           2.65       870.5                   8.9%
Total direct and indirect emissions (tonnes of CO2e)                         1,494                  15.2%

Orion and Connetics use two main fuel types, diesel and 91 Octane petrol. Other contractors are
assumed to use the same types.

Fuel use resulting from taxi and rental car trips was not included in the calculations, since neither Orion
nor Connetics had any available information for the chosen baseline year. These emissions are believed
to contribute a very small proportion of the total carbon footprint as taxis and rental cars are seldom used.

4.6.1           Orion’s fuel use

During FY 2007, Orion’s total vehicle fleet comprised 52 vehicles using petrol and 26 vehicles using
diesel. Approximately 1,550 litres of petrol and 3,050 litres of diesel were used per vehicle per annum.
Orion also owns a generator for emergency supply purposes and peak control activities, which uses
12,000 litres of diesel per annum.

100% of Orion’s fuel usage has been assumed to be in relation to servicing the network.

4.6.2           Connetics’ fuel use

Connetics provided information on the composition of its vehicle fleet (Table 9). The mobile plant items
include some diesel driven jinkers and petrol powered chain saws, compactors etc. Connetics used
82,000 litres of petrol and 328,500 litres of diesel in FY 2007.

Table 9: List of vehicle types in Connetics’ vehicle fleet
         Vehicle and Plant Type                            Number
         Unmarked vehicles (petrol)                          11
         Light vans / Station wagons (petrol)                32
         Heavy vans and Utes (diesel)                        60
         Light Trucks (diesel)                               9
         Heavy trucks (diesel)                               43
         Total Vehicles                                     155
         Mobile Plant (petrol and diesel)                   176
         Total Plant and Vehicles                           331

Based on the network management budgets for FY 2007, we assumed that a total of 52% of Connetics’
fuel consumption was used to service 55% of Orion’s network. Connetics total carbon footprint relating to
fuel usage was 1,060.8 tCO2e. If only 52% of its fuel usage related to servicing Orion’s network, this
equates to 551.6 tCO2e.



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The estimation, of fuel usage, that related to servicing Orion’s network by Connetics did not include
contracted work for land developers, including installing infrastructure for electricity distribution for
subdivisions, which is eventually purchased by Orion once connected to its network. Sufficient figures on
this type of activity to allow its inclusion were not available, however its exclusion does not materially
affect our calculations.


4.6.3           Estimated fuel use of other contractors servicing network

Several contractors, besides Connetics, are involved in servicing Orion’s network. As it is difficult to
collect data from these other contractors, their carbon emissions were estimated on the basis of
Connetics’ fuel consumption.

Fuel usage for these other contractors has been assumed to be proportionate to Connetics’ own fuel
usage. This may not be the case in reality as some other contractors work activities are different from
Connetics. For instance Connetics do not undertake tree cutting whereas some other contractors do.
However in the absence of information a simple assumption of equivalent fuel usage was made.

If Connetics generates 551.60 tCO2e from servicing 55% of Orion’s network, emissions from other
contractors responsible for maintaining the remaining 45% of the network are estimated at 451.3 tCO2e.

It is important to note that since Connetics is wholly owned by Orion, all its emissions from fuel are
considered as Scope 1 emissions. Scope 1 emissions are directly associated with Orion and are required
to be accounted for in MfE’s guidelines for voluntary GHG reporting (2008). The fuel usage relating to
network servicing was only distinguished to enable an estimation of carbon emissions from other
contractors as well as the carbon emissions directly relating to servicing Orion’s network.



Table 10: Estimated total carbon emissions directly relating to servicing the network during FY
2007
                                                                               Total        % of total carbon
      Scope                                    Source of emission             tCO2e         footprint (excl
                                                                              (2007)        losses)
      Direct         1     Orion               Fuel usage
                                                                               433.1                 4.4%
      Scope
      Direct         1     Connetics           Fuel usage for
      Scope                                    maintenance, renewal and        551.6                 5.6%
                                               replacements
      Indirect       3     All other           Fuel usage for
      scope                contractors apart   maintenance, renewal and        451.3                 4.6%
                           from Connetics      replacements
      Total indirect emissions (tCO2e)                                         1,436                14.6%



4.7             Summary of embodied carbon in network assets installed FY2007
As explained in the methodology (Section 3.1.2), our assessment of embodied carbon focused on the
asset types which were installed in the network during the Financial Year 2007.

Table 11 shows a summary of the embodied carbon in the network assets which were installed during
this baseline year. The embodied carbon for each asset category is compared to the total embodied
carbon in the network assets installed during FY2007, as well as Orion’s total annual carbon footprint,
which excludes emissions relating from electrical losses. This has been left out since the majority of these

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losses are inevitable. The table shows that the two largest carbon sources are cables, which is dominant
at 63% of the total, and poles, which also make up a significant minority at 20%.

Table 11: Summary of embodied carbon in network assets installed during FY 2007
                                                                                   % of total
                                                                                   embodied
                                                                                                        % of total
                                                                                     carbon
Asset                                                         Total tCO2e                                carbon
                      Asset Types included                                        footprint of
Category                                                      (2007)                                    footprint
                                                                                     assets
                                                                                                      (excl. losses)
                                                                                    installed
                                                                                     FY2007
                      11 kV, 33 kV and Low Voltage
                      underground cables (including                4,510.3          62.7%                  45.9%
Cables                lighting)
                      11 kV and 66 kV Overhead lines
                      and Low Voltage lines (including             191.5             2.7%                   1.9%
Lines                 lighting)
                      Poles for overhead lines
                                                                   1,440.9          20.0%                  14.7%
Poles                 (concrete, hard- and softwood)
                      Low Voltage Connection with
                      boundary and maxi and multi box               16.2             0.2%                   0.2%
Connections           structure
                      11 kV Switchgear quarter, half
                                                                    59.1             0.8%                   0.6%
Kiosk                 and full kiosk
Power
                                                                   101.8             1.4%                   1.0%
transformer           33/11 kV Power transformer
                      11/33 kV Unit Protection, 11 kV
Protection            and 66 kV Protection, substation               0.7             0.0%                   0.0%
equipment             battery
Substation            33 kV substation building and
                                                                   115.3             1.6%                   1.2%
buildings             ripple plant building
Ripple Injection
                      Ripple Injection Plant                        14.1             0.2%                   0.1%
Equipment
                      33 kV and11 kV circuit breaker
                      630A and 1250A, 11 kV Dropout                411.3             5.7%                   4.2%
Switchgear            Fuse and 11 kV Magnefix Units
                      Pole and ground mount
                      distribution transformers & pole
                                                                   330.6             4.6%                   3.4%
Distribution          mounted miscellaneous
Transformer           equipment
Total tCO2 e embodied in assets installed in
                                                                   7,191.8           100%                  73.1%
FY2007


Total emissions (kgCO2e) per customer
                                                                     40
connection
Total emissions (kgCO2e) per kWh distributed                       0.002
Total emissions (kgCO2e) per km of lines and
                                                                    507
cables



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4.7.1           Cables and Lines

Of Orion’s total carbon footprint for FY2007 (excluding electrical losses), cables and lines (including
poles) installed during this year contributed 46% and 17% respectively. These assets are the biggest
contributors of carbon emissions. With such large environmental impact, even small changes can have
major carbon savings. Unfortunately the opportunity for improvements are limited.

4.7.1.1         Cables

Summary of findings:

• Cables are highly resource intensive and contribute to 46% of Orion’s total carbon footprint for 2007
  when electrical losses are excluded.
• The embodied carbon per meter is much higher for cables compared to lines since they are generally
  thicker due to the insulating medium needed.
• At the end of their life, due to the high cost of recovery, cables are normally left in the soil and metals
  are not recovered. A new national code is likely to require all decommissioned cable to be recovered.
• The environmental impact of lead cables in the soil is regarded as relatively low. However since there
  are considerable lead discharges from mining and smelting of lead, Orion is recommended to choose
  cables without lead. A move towards lead-free cables can avoid future liabilities.
• Orion's current practice to leave decommissioned cables in the ground makes sense environmentally.
  The removal of old cables would result in carbon emissions from trenching and backfilling and
  negative impacts on soil structure. Excavation can also risk old cables, such as oil-filled or lead cables
  to break, and releasing more toxic compounds. Extensive excavation to recover cables would also
  cause traffic delays and inconvenience.
• The polyethylene used in cables often contains halogen flame retardants. These additives have
  suspected negative environmental and human health effects with restrictions on their use in Europe.
  Non-halogen cables exist on the market.
• Orion may want to clarify with all its cable manufacturers if the nitrogen cure process, which is highly
  carbon emitting, is used to manufacture their cables and if alternative processes are available.
• We recommend Orion clarify if any substances which are of environmental concern are used in the
  cables currently being installed and for which feasible alternatives are available.


At the end of FY 2007, there was a total of 7,428 km of underground cable in Orion’s network, including
66 kV, 33 kV, 11 kV and 400 V. The total embodied carbon in all of the cables in Orion’s network was
estimated on the basis of the calculations of the cable types which were installed during the FY 2007. If
there were cable types in the network for which no carbon footprint had been calculated, an assumption
was made regarding which 2007 cable type was most similar in design and resource requirements and
that cables carbon footprint was utilised. Table 12 shows a breakdown of the embodied carbon of the
different cable categories which were assessed. The 66 kV cable was not included in the assessment as
none were installed during the studied year.

Within each cable type category, there were often many different kinds of cables installed; however the
carbon footprint was only calculated for those which made up the majority installed, which amounts to
over 90% of the total cable meters added in 2007. For example, in Orion’s asset register there are two
different kinds of cables which are listed in Orion’s asset register as ‘11kV UG Medium’ but since the
most common type installed was the 185Al XLPE, the embodied carbon was estimated on the basis of
this design. In the cable category LV UG Medium, there were nine different types of cables installed but
since the type 185AXN3p1Al XLPE made up a majority of the meters installed (54% of total quantity of LV
UG Medium added), this type of cable was used for the calculations of the embodied carbon. All
calculations were undertaken on the basis of cable design information provided by the cable
manufacturers.

A cable comprises three key components: a conductor, an insulating medium and an outside cover
(jacket and/or sheath). All Orion’s underground cables have aluminium or copper conductors surrounded


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by an insulating medium such as cross-linked polyethylene (XLPE) or paper. The cable insulation
requires resistance to high temperature, moisture and mechanical strength. The outside cover (jacket),
often made of PVC, protects the enclosed core against damage, fire and other harmful elements present
in the surrounding environment (Greiner Environmental 2002). Sometimes a metal sheath, often made of
lead or corrugated aluminium, provides additional mechanical protection to the cable.

Orion installed a small quantity of 11 kV cables with Paper Insulated Lead Covered Armour, PILCA,
during FY2007. This type of cable is not installed any longer as Orion is requiring XLPE. In the past,
Orion also used oil filled cables (66 and 33 kV), however when XLPE was introduced, Orion moved away
from installing oil-filled cables.

Table 12: Embodied carbon in underground cables installed during FY 2007
                                                                                                    % of total
                                                           Total kg                                 carbon
                                                                        Meters   Total tCO2e
Asset Type                 Cable description               of CO2e                                  footprint
                                                                        added    (2007)
                                                           per meter                                (excl.
                                                                                                    losses)
11kV UG Heavy              300Al XLPE - 10 kA for 1 s         35.2      5,531        194.6               2.0%
11kV UG Light              35Al XLPE- 10 kA for 1 s               4.8   13,292        64.1               0.7%
11kV UG Medium
                           185Al XLPE -10 kA for 1 s          24.1      14,824       357.7               3.6%
185
11kV UG Medium
                           95Al XLPE -10 kA for 1 s           15.2      9,349        142.5               1.4%
95
33kV UG Heavy              300Al XLPE- single core            14.7      2,422         35.6               0.4%
11kV UG Extra
                           400Cu XLPE-10 kA for 1 s           44.1       324          14.3               0.1%
Heavy
11kV UG Heavy
                           185Cu PILCA                        39.6       352          13.9               0.1%
185
Communications             Copper cable, since only
                                                                  0.6   9,510          6.1               0.1%
cable                      2% is fibre optic
LV UG Heavy                300AXN3p1 Al XLPE                  63.7      12,810       816.1               8.3%
LV UG Lighting 2
                           16PN1p, CuPVC, 2 c                     3.6   15,949        58.0               0.6%
Core
LV UG Medium               185AXN3p1Al XLPE                   36.0      77,989      2,807.5             28.6%
Total tCO2e embodied in assets installed in FY2007                                   4,510              45.9%

Cable manufacturing is highly resource intensive and the embodied carbon per meter is much higher for
cables compared to lines (Table 14). Cables are generally thicker than lines as they require an insulating
medium such as XLPE to reduce overheating.

It is worth noting that emissions factors from European databases were used in this study for calculating
the embodied carbon of all assets. As mentioned in Section 3.1.2.2, as the majority of the assets are
manufactured outside New Zealand, this is a suitable approach. However, this approach is conservative if
any of the assets are manufactured locally as the proportion of renewable energy is relatively large here
in New Zealand compared to countries in Europe, and the embodied carbon of these assets will be
overestimated. Also it is noted that emission factors for many materials have not yet been accurately
determined in New Zealand.

To allow for emissions produced during manufacturing of the end product from the component parts,
process factors have been included (see Section 3.1.2). There are some uncertainties regarding


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estimating the emissions from the cable manufacturing process. The process is known to produce nitrous
oxide, which is a potent GHG with the global warming potential of 310 compared to CO2. In a recent draft
from the government regarding regulations for the stationary energy and industrial processes sectors, it is
proposing that cable manufacturers in New Zealand will be obliged to report the volume of nitrous oxide
emitted from the production of cables if a nitrogen cure process is used. General Cable use a moisture
cure process instead of the nitrogen cure process to produce its cables. In the calculation of Orion’s
embodied carbon, carbon emissions from a nitrogen cure process was not included since there is
currently limited information regarding the extent of the gas emitted from cable production and how often
the nitrogen cure process is utilised when manufacturing Orion’s cables. Orion may want to clarify with all
its cable manufacturers if the nitrogen cure process is used to manufacture its cables and if there are
alternatives to use.

There is currently a total of 120 km of 66 kV cables in Orion’s existing network with some future major
projects requiring further 66 kV cables to be installed. Historically, oil-filled cables were used, but these
are no longer installed and because of this will not be further discussed in any great detail. There are
currently two different types of 66 kV cables available; either a cable using a copper conductor with XLPE
insulation and an outside sheath of corrugated aluminium to provide mechanical protection, or a cable
with the same design except for using a lead sheath instead of the aluminium sheath. There are no
significant technical benefits with using lead over aluminium in this case. The price is relatively similar
though the lead is more moisture resistance.


4.7.1.1.1          Overview of cable materials with environmental concerns

There are wide environmental concerns regarding the toxicity of lead and in Europe, the Restriction of
Hazardous Substances, RoHS, Directive has even banned the use of the metal as well as some other
toxic material such as a few brominated flame retardants. In general, there are environmental concerns
regarding most of the common materials used by the cable industry. The main environmental issues
associated with widely used cable materials are summarised in Table 13 together with alternative
materials currently available. The review is based on a large study by Greiner Environmental in 2002 on
environmental, health and safety issues in the coated wire and cable industry. It is important to not only
consider environmental aspects during the cable use, but also from the manufacturing processes for
producing cable insulation, jacketing, and sheathing materials as well as the cable manufacturing process
itself. Alternatives should be designed to safeguard the environment but also extend the cable life and
performance.

At the end of their life, due to the high cost of recovery, cables are normally left in the soil and metals are
not recovered. The benefit with old cables is the ability to utilise them in an emergency situation if
required. A proposed national code is thought to require all decommissioned cable to be recovered.

Table 13: Summary of main environmental concerns with Orion’s cable materials
Material             Properties and use          Areas of concern                  Current alternatives
Lead                 Heat and moisture           Persistent, bioaccumulative    Corrugated Aluminium sheath
                     resistant, low cost, used   and toxic.
                     as sheath in cable and
                     as stabiliser in PVC.
Polyvinyl            Flame retardant, water      Produces Carcinogenic          Use of PVC free alternatives:
chloride, PVC        resistant, flexible,        dioxin above 250°C (e.g.       polyethylene, XLPE,
                     requires stabilisers,       fires)                         ethylene-propylene diene
                     such as lead and                                           elastomer, PVC/nylon
                     cadmium, to improve its
                     properties
                                                 Use of lead and cadmium        Use of lead and cadmium
                                                 heat stabilisers               free heat stabilisers, e.g.
                                                                                mixed metal salt blends,

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Material             Properties and use         Areas of concern                    Current alternatives
                                                                                 organotin compounds or
                                                                                 organic compounds (metal
                                                                                 free).


                                                Some use of halogenated          Use of low or zero-halogen
                                                flame retardants (refer to       PE resins alternatives
                                                Polyethylene)
Polyethylene,        Good insulation            Use of lead and cadmium          Use of lead and cadmium
e.g. XLPE            material since water       heat stabilisers                 free heat stabilisers
                     resistant, lightweight,    Use of halogenated flame         Use of low or zero-halogen
                     chemically inert and       retardants, such as              PE resins alternatives
                     easy to strip              brominated flame retardants,
                                                which is persistent,
                                                bioaccumulative and toxic to
                                                humans and the aquatic
                                                environment.
Mineral oil          Insulating medium in       Risk of contamination of         Use of oil-free cables
                     old types of cables. Not   groundwater after cable
                     currently installed by     leakage
                     Orion

4.7.1.1.2          Environmental issues associated with lead in cables

Lead has two different uses in the cable industry; as an armour sheath in cables as moisture barrier, and
as a stabiliser in PVC resins, which are used in the cable jacketing.

Lead is toxic in high concentrations and affects the blood, nervous system and vitamin D metabolism
during long-term exposure, which poses health and safety issues to workers exposed to splicing of lead
sheaths. When the metal is used in cables it is thought to have minor environmental effects during the
use of the cable, due to its low mobility in soil. The more important environmental impacts of lead are
those from lead emissions resulting from the separation and extraction from the ores, any accidental fires
during use of product and the final disposal method rather than the impacts during the manufacturing and
recycling of lead in products (Greiner Environmental 2002, Hendrickson C T. et al 2006). Virgin material
is often used for cables since using recycled lead is difficult, which increases the GHG emissions. During
the use phase, accidental fires of waste scrap can release the lead and other toxic materials to air and if
the cable is disposed to landfill, lead can leak into the soil and groundwater during acidic conditions in the
landfill (Greiner Environmental 2002).

Cables containing lead are often classified as hazardous waste increasing the cost of disposal. It is
important to note that the majority of Orion’s lead cables are left in the ground after their useful life and
the environmental impact in the soil is regarded as relatively low. In a study completed in 2001 by
Swedish Defence Research Agency, the soil surrounding de-commissioned lead cables was tested for
lead contamination. Although the cables were 30 – 50 years old, very few of the examined samples
showed elevated levels of the metal and the risk of contamination from these cables was considered low.
The cables will corrode over time and leach toxic compound into the soil, however the process is slow
and is expected to take over 1600 – 4000 years (FOI 2001).

Recently in New Zealand, MED has produced a document which discusses the practicability of requiring
all electricity distributors to recover all types of decommissioned cables. The fact that the space below all
footpaths have become densely populated with various services is the main driver for MED’s proposal.
Orion has expressed its concern about such a proposal since it would be very costly to the company and
have potential adverse environmental implications as well.


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The removal of old cables would result in a huge cost to Orion and subsequently its customers.
Excavations to remove decommissioned cables would also have an environmental cost in the form of
carbon emissions, impacts on soil structure and there are also risks of breaking old cables, such as oil-
filled or lead cables, and releasing more toxic compounds during excavations. Extensive excavation to
recover old cables would of course also cause traffic delays and inconvenience. These impacts would
need to be compared to the impacts of keeping the decommissioned cables in the ground, which are
believed to be minor. When the cables are left in the ground, they can be utilised again for other
purposes.

During the studied baseline year Orion installed cables containing approximately 3,300 kg of lead in the
form of lead sheathing. Currently Orion is only installing cables with lead sheaths in the 66 kV extensions
however Orion is recommended to select cables without lead sheaths if possible.

Lead compounds are also often used as a stabiliser in PVC to enable the use of PVC resin in cables.
PVC is only heat resistant below 160°C and since the resins are generally processed at temperatures
between 160°C and 210°C, stabilisers are necessary to enable the use in manufacturing. Lead
compounds typically represent 2-5% by weight of PVC insulation. In some countries there are sometimes
restrictions on the disposal of PVC containing lead to landfills and there is wide interest in replacing lead
stabilisers with more environmentally sound options (Greiner Environmental 2002).

There are three main groups of lead-free stabilisers:
     1. Mixed metal salt blends with barium/zinc and calcium/zinc being the most common metal salts
        used. Barium/Cadmium has been phased out due to cadmium toxicity concerns.
     2. Organotin compounds with sulphur containing organotin compounds being the most efficient
        type. This stabiliser is mostly used for rigid PVC applications.
     3. Organic compounds, e.g. organosulphide or heterocyclic compounds, which are completely metal
        free, are relatively new to the industry and are expected to gain more ground on the global
        market.

It is important to not replace lead stabilisers with compounds that have other environmental impacts
which have not been sufficiently studied. Orion is currently not aware of which specific compounds are
used in all of its cables and this information should be available from the supplier on request. General
Cable, who supply Orion with all its low voltage cables, only produces lead-free products and it would be
beneficial to also ask suppliers such as Prysmian and Olex about their lead-free product ranges.

If all cables, apart from low voltage cables, that Orion installed during the studied year contained lead
stabilisers, the quantity of lead would range between 450 kg and 1,100 kg.

As a proactive distribution company, Orion can move towards lead-free cables and avoid future liabilities.
In most cases the cost differential for the alternatives is relatively low to moderate.

4.7.1.1.3          Other environmental issues associated with PVC and Polyethylene used in cables

Apart from the environmental concerns regarding lead, there are several environmental concerns relating
to the types of Polyvinyl Chloride, PVC, and Polyethylene, PE, plastics which are widely used in electricity
distribution. PVC can produce dioxin and PE uses halogenated flame retardants which are persistent,
bioaccumulative and toxic to humans and the aquatic environment.

Dioxin can be released from several sources during the life cycle of PVC; however there are large
differences in views regarding the extent of the issue. Dioxin is regarded as highly potent and a likely
carcinogen. The combination of heat and chlorine produces dioxin and there is general agreement that
only a small amount of dioxin is produced during the manufacturing of PVC as most of the extrusion
occurs below 200°C. During the use of PVC, the largest risk results from accidental fires. In the past,
many electricity distributors used to recover the valuable metal by stripping the cables by burning them,
which produced dioxin, carbon monoxide, carbon dioxide, and hydrogen chloride gas. Thankfully, this is
no longer allowed due to environmental reasons in New Zealand. Instead today, PVC from cables is

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recycled by Otaki Industries in Auckland, who make mats for playgrounds and for dairy sheds. In many
countries PVC is simply disposed into landfill and apart from taking up space, there are no other
environmental concerns regarding this disposal method (Greiner Environmental 2002).

PE plastics require additives to make the material more flame retardant. Halogen flame-retardants are
often used in cables to reduce the spread of accidental fires and reduce heat and smoke production. PVC
is flame retardant in itself due to the chlorine content, but sometimes requires additives. Halogen flame
retardants used in PE plastics can contain either bromine, chlorine or a halogen/antimony compounds.
Brominated Flame Retardants, BFR, is the most common halogen group to use in cables, however due to
its suspected environmental and human health effects, there are restrictions in place in Europe on some
of the BFR compounds. The compounds are bioaccumulative and have been found in increasing
concentrations in mother’s milk in Swedish studies since the 1970s (Greiner Environmental 2002). Some
BFRs have proven to have potential human health effects and there are suspicions associated with most
current major commercial BFR substances.

There are currently some non-halogen alternatives (also lead free) on the market and these generally use
olefinic polymers as their base and rely on additives to provide ignition resistance. Aluminium trihydrate is
expensive but a common additive to use in polyethylene (Barras et al. 1997). This can also be used in
combination with zinc borate, which becomes an economical alternative used in plastics such as
polyethylene and epoxy resin. The addition of magnesium hydroxide is required when a high heat
resistance is needed (Greiner Environmental 2002).

General Cable offer a range of non-halogen cables and Orion may want to consider using cables such as
the circular XLP single core copper on Orion’s low voltage network, the “flat 2c and E copper” or the
“building/conduit wire single core copper cable” which can be used in district substations or building
substations.

In general, alternatives to most of the environmentally harmful compounds used in cables are often more
expensive. As an initial step, Orion may want to approach its suppliers for environmental information
regarding the cables which are currently used. If there are more environmentally sound alternatives to the
types used at present, Orion can make an assessment of cost- benefits of the alternatives.

Orion has with this initiative reviewed the carbon footprint resulting from different asset types installed in
its network. As a organisation committed to sustainability Orion may want to consider environmental
protection in a broader sense and take into consideration the quantity and range of materials used in
cables, select alternatives which minimise pollution during production, aim to reduce packaging and
transport distances of purchased products where possible, as well as considering the recovery of used
products.

4.7.1.2         Overhead lines

Summary of findings:

• The carbon footprint per meter of line is significantly lower than for underground cables; even when
  the supporting structures such as poles or towers are considered. However in a detailed whole-life
  carbon comparison the overhead line had a 6% higher carbon impact than cables, which is not very
  significant.
• No alternative technology is a feasible option for Orion at the moment.



Of Orion’s total tonnes of CO2e embodied in assets installed in FY 2007 (Table 11) the lines installed
during FY 2007 contribute 3% and the poles 20%.

At the end of FY 2007, there was a total of 6,760 km of overhead lines in Orion’s network. The embodied
carbon in the infrastructure was only calculated for the types of lines which were installed during FY 2007.



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Table 14 shows a breakdown of the embodied carbon of the different line categories. Design information
was provided regarding all the line types from the manufacturer.

In each line type category, there were often many different kinds of line installed; however the carbon
footprint was only calculated for the type which made up the majority installed with >90% of the total line
metres added. All calculations were undertaken on the basis of the line design information provided by
the line manufacturers.

All overhead 66 kV, 33 kV, 11 kV lines have aluminium conductors with steel reinforcement and in
contrast to the underground cable, have no insulation. Low voltage lines (400V) have copper conductors
with a PVC sheath surrounding the core.

Table 14: Embodied carbon in overhead lines installed during FY 2007
                                                                                                       % of total
                                                       Total kg                                        carbon
                                                                    Meters       Total tCO2e
Asset Type                 Description                 of CO2e                                         footprint
                                                                    added        (2007)
                                                       per meter                                       (excl.
                                                                                                       losses)
11 kV OH Heavy             Wolf (three conductors)         15.5       433               6.7                0.1%
11 kV OH Light             Flounder (three
                                                           3.3       14,008             46.3               0.5%
                           conductors)
11 kV OH                   Dog (three conductors)
                                                           3.0       38,820            117.0               1.2%
Medium
11 kV OH Single            Flounder (two conductors)
                                                           2.2       1,255              2.8                0.0%
Phase
11 kV OH SWER              Flounder (one conductor)        1.1       2,455              2.7                0.0%
66 kV OH Heavy             Wolf (six conductors)           31.0       203               6.3                0.1%
LV OH Heavy                19/14 Cu Conductor (four
                                                           18.1        14               0.3                0.0%
                           conductors)
LV OH Light                7/14 Cu Conductor (four
                                                           6.5        922               6.0                0.1%
                           conductors)
LV OH Medium               7/14 Cu Conductor (two
                                                           3.3        561               1.9                0.0%
                           conductors)
LV OH Lighting             7/16(15)Conductor (single
                                                           1.1       1,536              1.6                0.0%
                           conductor)
Total tCO2 e embodied in assets installed in FY2007                                     191                1.9%

The carbon footprint per meter of line is significantly lower than for underground cables. Overhead lines
contain less volume of metal per meter; however they require supporting structures such as poles or
towers. A detailed case study of the carbon impacts of cables and lines is included in Section 5.3. This
comparison concluded that although there are relatively large differences in emissions from the different
life aspects of lines and cables, the overall difference in carbon impact between the studied line and cable
is not significant. Overhead lines proved to be more carbon intensive since they are in general
responsible for greater electrical losses per km than buried cables.

In contrast to underground cables, the aluminium and steel in lines are recycled at the end of their life.
The energy premium declines every time these metals are recycled, thus recycled metal represents a
much smaller energy use than virgin metal does. It is worth noting that Orion is likely to be required to
recover decommissioned cables in the near future as it has been proposed as a national code.




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There are currently no economical alternatives to the types of overhead lines used by Orion.
Internationally, High Temperature Superconductivity power lines have been developed which can replace
copper wires. Superconductors have a higher capacity by having materials which carry electrical currents
with effectively zero resistance at low temperatures. This technology is very new and is not used in New
Zealand, although extensive research is undertaken by Industrial Research Limited (IRL 2009). This type
of distribution system would reduce the resource requirements and subsequently the carbon footprint
since less material is required per meter of cable with this high distribution efficiency. Whilst the
technology is very expensive and probably not a feasible option in the near future for Orion, it has very
interesting future investment possibilities. With Orion’s commitment to saving on energy use and natural
resources, it may be an area which the company should look into.

4.7.2           Poles

Summary of findings:

• Of Orion’s total embodied carbon footprint for activities undertaken in 2007 (Table 11), power poles
  installed contribute 20%. This equates to 15% of Orion’s total carbon footprint for 2007 (excluding
  electrical losses).
• Orion’s current practices with regard to choice of pole material appear reasonable. Wood is a
  renewable material and wood poles are not as energy intensive to manufacture as concrete ones.
• When excluding any carbon uptake by timber or concrete, the latter has a much higher carbon
  footprint than wood poles on a per unit basis (approximately 5 times higher). Future research will
  clarify to what extent carbon absorption occurs in concrete. Locally produced concrete could
  potentially have a lower carbon footprint than hardwood sourced from Australia.
• Softwood poles installed in Orion's network are generally treated with copper-chromium-arsenic
  (CCA), which is known to be environmentally harmful; however previous testing on Orion’s network
  has indicated that Orion’s treated poles pose no health or environmental risk.
• The main issue with CCA treated poles is the disposal method, since burning the wood releases
  arsenic. If no beneficial re-use can be found, the best option is to dispose of the treated timber in a
  well-managed landfill.
• No practical alternatives to CCA treatment are available on the market right now, however Orion is
  advised to regularly discuss options with suppliers.
• Non-wood poles, such as concrete and steel, have a slightly longer expected service life than wood.
  There is a preference for wood above non-wood if one considers toxicity, hazard and resource
  conservation. Concrete is placed well under either perspective, but this material is more expensive
  and is harder to handle.


Towers and poles are used to elevate the lines in the network. Of Orion’s total embodied carbon footprint
for FY 2007 (Table 11), poles installed contribute 20%.

Steel towers are most commonly used for transmission, while wooden and concrete poles are used for
distribution. Orion did not install any steel towers during FY 2007, which is why these are not included in
the assessment. The types of poles which were installed during FY 2007 are shown in Table 15.




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Table 15: Embodied carbon in power poles installed during FY 2007
                                                                                             % of total
                                                       Total kg              Total           carbon
                                                                  Units
Asset Type                 Description                 of CO2e               tCO2e           footprint
                                                                  added
                                                       per unit              (2007)          (excl.
                                                                                             losses)
                           Steel enforced concrete,
                                                         4,336      11           47.7             0.5%
Poles - Concrete           average height 22 m
Poles - Softwood           Average height 9.5 m           804      965          775.7             7.9%
Poles - Hardwood           Average height 11.7 m          949      651          617.5             6.3%

4.7.2.1         Carbon footprint of wood and concrete poles

Wood poles are the most common type of pole used within Orion’s network. Infrequently poles with
special height and strength are required and concrete poles are used. Spun concrete poles have a long
life span, but are relatively expensive and pose some complications with earthing since they are steel
enforced.

There are two types of wood poles; softwood and hardwood. As poles increase in height they require
additional strength. Given this requirement hardwood poles are used in these situations. New Zealand
wood grows too fast to provide sufficient strength, so Orion sources its hardwood poles from Australia.
Softwood poles used by Orion are New Zealand grown

The calculated emission values for wood poles were 804 tCO2e per softwood pole and 949 tCO2e per
hardwood pole. The emission factors which were used were estimated by the International Centre for the
Environment (ICE) at the University of Bath. They emphasised that wood was a very difficult material to
accurately determine emission factors for. The factors included emissions from cradle to gate with an
average to cover harvesting and timber processing mostly from the UK. University of Bath concluded that
the wood pole emission factors are also highly dependant on travel distances.

These emission factors do not include the effects of carbon sequestration resulting from growing trees or
emissions resulting from the disposal methods. There is so far no agreed standardised approach to
account for carbon sequestration. University of Bath believe that it would be inappropriate to account for
carbon sequestration without considering the end of life emissions from wood.

Carbon sequestration in timber was accounted for in a New Zealand specific study in 2003 by Andrew
Alcorn. However Alcorn’s cradle to gate study did not take into account end-of-life disposal methods,
which would have impacted the end result significantly. When including carbon sequestration, the carbon
emission factor for timber (pine) was calculated to be a negative CO2 emission value. Using this negative
emission factor, the resulting carbon footprint of one softwood pole would be -2.6 t CO2e. Of course if the
timber is burnt, the carbon which was sequestered in the timber would be released and the net CO2
emission will be much higher. Also if the wood is disposed into landfill, it will generate methane which is
potent GHG.

Calculating emission factors for concrete poses the same dilemma as with timber. In the past, cement-
based material like concrete has been known to be a high GHG emitter with the cement industry
estimated to contribute 3.8% of all anthropogenic GHG emissions globally (Baumert et al, 2005).
However research in recent years has demonstrated that up to 50% of the CO2 emissions during cement
manufacturing can be reabsorbed (particularly when aged concrete is crushed for recycling).

During the cement manufacturing process, carbon dioxide is produced both as a result of burning fossil
fuels and as a result of the calcination process. Recent research has showed that when concrete is
exposed to air the material will absorb CO2 over time in a process termed recarbonation.




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Recarbonation is likely to occur during the service life of concrete, but more importantly will occur rapidly
with demolition and reprocessing (Lagerblad 2005). The methodology for quantifying concrete
recarbonation has not yet been fully documented and was not included in the quantification of embodied
CO2 emissions in concrete in this report. Specifically, there is a lack of knowledge about the
recarbonation of demolished and crushed concrete. Researchers into recarbonation believe that the
contribution of the cement and concrete industry to net CO2 emissions is strongly overestimated. Until the
methodology has been agreed on internationally, traditional emissions factors for concrete and cement
should be used.

The emission value which was calculated in this study was 4,336 t CO2e for each concrete pole, which is
about 5 times higher compared to a softwood pole.

Wood materials have a relatively small energy requirement in their production compared to concrete and
consequently have lower embodied emission values. When excluding any carbon uptake by timber or
concrete, concrete poles have a significantly higher carbon footprint than wood poles on a per unit basis
(Table 15). The overall impact from Orion’s concrete poles is small due to the low number of concrete
poles installed.

4.7.2.2         Environmental concerns associated with wood treatment

The main advantages of wood poles over concrete poles are their relatively low cost and their availability.
Poles made of softwood generally require chemical treatment in order to prevent decay by the ground,
which often begins after 10-15 years of service. In other countries, some species of trees can be used
untreated, however there are no suitable types available in New Zealand.

A considerable proportion of the over 60,000 wood poles owned by Orion are treated with copper-
chromium-arsenic, CCA, preservative but there is also a small proportion which contain
pentachlorophenates, PCPs, and some larch poles which have been treated with creosote. In 2004,
Orion commissioned MWH to investigate and quantify the extent of leaching of contaminants from treated
wooden power poles, as part of the company’s commitment to sustainable business practices.

The matter of leaching of contaminants from treated timber in contact with the ground has been
extensively investigated both overseas, and in New Zealand, and some concerns have been raised in
certain contexts where the potential exists for human contact with low-level contamination. This is
especially the case where timber treated with CCA preservative has been used in the construction of
recreational amenities at schools or picnic areas, for example playground equipment, tables and seating.
Chronic exposure to arsenic through inhalation is associated with lung cancer.

In 2005 MWH conducted a soil testing study for Orion which showed that there is evidence that some
leaching of CCA components occurs from Orion’s older treated power poles, resulting in elevated levels
of contaminants in the soil. However this is typically found only in very close proximity to such poles;
testing was undertaken at 20cm from the poles. At this distance the levels of these contaminants did not
exceed health-base risk criteria and it is considered highly unlikely that significant environmental effects
are presented. The study did not analyse the impact from CCA leaching on ground water and surface
water.

When wood poles are due to be replaced after 50-60 years in service, the landowner often accepts them
for private use or the contractor sells them cheaply to staff or external customers. The wood is assumed
to often be used as firewood. CCA treated wood has only been used by Orion in the last 30 years and
only a very small quantity of these have required replacement. The majority of wood poles replaced so far
in the network are hardwood, which are not treated and therefore are suitable as firewood. The small
amounts of replaced treated wood poles have mostly been resold for use in sheds by farmers for
example.

It is very important to emphasise that treated wood should never be burned in open fires or in residential
boilers or be used as compost or mulch; since it will produce toxic fumes and spread air-borne residues. It
may be possible to shave off the outer part of the wood that absorbed the preservative and to re-mill the


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preservative-free wood cores to use for purposes such as garden furniture, children’s play equipment,
etc. If no suitable beneficial re-use can be identified, Orion is advised to dispose of the treated timber in a
well-managed landfill. It is crucial to provide any buyer of treated wood with information to inform them
about the environmental impacts of burning it.

In the US, a transition to CCA alternatives is well underway and the use of CCA has ceased. There are
several arsenic-free wood pressure treatment alternatives to CCA already on the market including ACQ,
Borates, Copper Azole, Cyproconazole, and Propiconazole (USEPA 2008). Only limited research has
been conducted on the environmental impacts of ACQ and Copper Azole as they are relatively new to the
market. These options are currently not suitable for Orion’s poles since they are expected to be in service
for 50-60 years in outdoor conditions with high water resistance. As technology changes rapidly, Orion is
advised to regularly consider available alternatives to CCA in New Zealand.

4.7.2.3         Comparison between environmental impacts of various pole materials

There are some other options available apart from concrete and wooden poles. Fibreglass-Reinforced
Composite, FRC, pole comprises glass fibre and polyester resin with the entire pole being wrapped with a
polyurethane coating. FRC poles are not suited for Orion’s use except for lighting poles, since they do not
have adequate strength. For lighting poles, where it is an alternative to Orion’s current use of
timber/concrete poles, FRC is not likely to be used by Orion due to the current high cost. Similarly poles
made of galvanised steel would be a feasible alternative for Orion, yet these are relatively expensive and
have issues with earthing.

In 2005, the Electric Power Research Institute in the United States completed a streamlined life cycle
comparison between different types of distribution poles such as wood, concrete and galvanised steel.
The study showed that CCA- and ACQ-treated poles have a relatively high toxicity hazard potential due to
emissions from manufacturing and from toxic material migration from landfills. The treated wood poles
also had higher carcinogenicity hazard potential than other options. In a comparison of global warming
potential, wood poles scored much better than non-wood poles (concrete and steel) since they release
almost no global warming gases during manufacture. This study also took into account the carbon
sequestered in the trees during growth, but no carbon uptake in concrete.

The study also compared the recycling potential of different poles, which recognises products that can be
reclaimed and reprocessed into high value products based on the size of the market, volume recycled,
and existence of an infrastructure. Steel poles received the best score because they are commonly
recycled into high value products and concrete rated lower as there is little infrastructure in place to
recycle this material. In many countries there are regulatory concerns with the recycling of treated wood
poles given the toxic or hazardous nature of the preservatives and the presence of recycling programs for
any of the treated-wood poles is very locale-specific.

The Electric Power Research Institute emphasised that the preferences for pole types were dependent
upon the perspective and drivers. From an electricity perspective longevity and durability were sought,
which led to a preference for non-wood poles that have a slightly higher expected service life. From a
national policy perspective, which placed a much greater emphasis on toxicity, hazard, exposure potential
and resource conservation, this led to a preference for wood poles. Concrete placed well under either
perspective, but this material is more expensive and is harder to handle. For Orion, any choice of power
pole materials should take account of not only factors such as practicality, availability, and financial cost,
but also their environmental impacts.

Based on this carbon footprint assessment and the findings of other LCA studies, MWH believe that
Orion’s current practices with regard to choice of pole material appear reasonable. Wood is a renewable
material and the poles are not as energy intensive to manufacture as concrete. Future research will clarify
to what extent carbon absorption occurs in concrete. Locally produced concrete could potentially have a
lower carbon footprint than hardwood sourced from Australia.




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4.7.3           Connections

Summary of findings:

• The carbon footprint of connection boxes made of polyethylene is small (<1% of Orion’s total carbon
  footprint excluding losses).
• Orion should strive to divert this waste stream from landfills and may want to explore if the plastic used
  in the connection boxes can be recycled locally. The resulting carbon savings are believed to be
  insignificant.


Network connections are protected by polyethylene boxes. Of Orion’s total embodied carbon footprint for
FY2007, connection boxes installed during this year contributed <1%.

Table 16: Embodied carbon in connections installed during FY 2007
                                                                                              % of total
                                                                                              carbon
                                               Total kg of       Units     Total tCO2e
Asset Type          Description                                                               footprint
                                               CO2e per unit     added     (2007)
                                                                                              (excl.
                                                                                              losses)
                    Multibox                       22.73          147           3.3                0.0%
                    Boundary Box                    5.52          137           0.8                0.0%
                    Maxi box                        7.44         1626.5         12.1               0.0%
Total tCO2 e embodied in assets installed in FY2007                             16.2               0.2%

All the current boxes (multi, boundary and maxi) are made of a rotational moulded medium density
polyethylene plastic. Orion has been using this material for 15 years and the material is disposed of into
landfill when it has reached its end of life. The plastic can be recycled locally either with Comspec or
Astron Plastics and although there are relatively low numbers of boxes replaced every year (<15 in
FY 2007), Orion should strive to divert this waste stream from landfills. There may be some complications
to recycle the boxes if the plastic has been degraded by UV radiation. If the manufacturer is able to
produce the boxes using some recyclable material, the environmental impact could be reduced even
further.


4.7.4           Kiosk

Summary of findings:

• The carbon footprint of kiosks is small (<1% of Orion’s total carbon footprint excluding losses).
• A change from using galvanised steel to using zincshield in network kiosks will be better for the
  environment as well as for the health of the welder.


The calculations of the embodied carbon of the kiosks include mild steel (outer shell) and a concrete
foundation. The carbon footprint of the transformers in the kiosks is covered in Section 4.7.10. Of Orion’s
total embodied carbon footprint for FY2007 (Table 17), the kiosk structures installed during this year
contributed < 1%.




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Table 17: Embodied carbon in kiosks installed during FY 2007
                                                                                                % of total
                                              Total kg of                      Total
                                                                  Units                         carbon
Description                                   CO2e per                         tCO2e
                                                                  added                         footprint
                                              unit                             (2007)
                                                                                                (excl losses)
11kV Switchgear quarter kiosk                       316.8           10            3.2                0.0%
Half Kiosk Outdoor Sub                              608.4           26            15.8               0.2%
Full Kiosk Outdoor Sub                          1,028.5             39            40.1               0.4%
Total tCO2 e embodied in assets installed in FY2007                               59.1               0.6%

Kiosks are made of galvanised steel which requires welding. During this process, fumes are released,
which are hazardous to workers. Orion is actively looking for an alternative and has identified zincshield
as a possible option. Zincshield does not contain any Volatile Organic Compounds (VOCs) and does not
produce any hazardous gases during welding.


4.7.5           Power transformers

Summary of findings:

• Although power transformers are amongst the largest assets by volume, they have a relatively small
  footprint (1% of Orion’s total carbon footprint for FY 2007 excluding losses).
• There is currently no feasible alternative to power transformers using mineral based oil. Using
  biobased fluid is not an option for Orion, but should be reviewed as the design of these transformers is
  likely to develop and the price may fall.


Power transformers are installed at district substations to transform sub transmission voltages of 66 and
33 kV to the distribution voltage of 11 kV. Orion owns a total of 33 power transformers and installed one
unit during FY 2007. Of Orion’s total embodied carbon footprint for FY2007, the power transformer
installed during this year contributed approximately 1% (Table 18). The embodied carbon has been
estimated on the basis of information from the supplier.
Table 18: Embodied carbon in power transformers installed during FY 2007
                                                                                                       % of total
                                                        Total kg of
                                                                         Units    Total tCO2e          carbon
Asset Type                 Description                  CO2e per
                                                                         added    (2007)               footprint
                                                        unit
                                                                                                       (excl. losses)
      Power
                             33/11 kV 11.5/23 MVA           101,798.8      1            101.8                1.0%
   Transformer
Total tonnes of CO2 e embodied in assets installed in FY2007                            101.8                1.0%

In all of Orion’s power transformers, mineral based oil is circulated around the transformer to allow
cooling. There is now a biobased alternative on the market; Envirotemp FR3 fluid, which is a soy based
oil. It has been increasingly popular in the United States. It is suitable to use in specialised circumstances
for fire protection, where the mineral based oil would cause a safety concern. For Orion there are still
some thermal issues since FR3 fluid has higher viscosity and subsequently provides slower cooling. With
its current transformer design and a price of three times higher than the traditional design, the biobased
fluid is not a feasible alternative. There are many practical implications of changing the oil type, since
specific equipment is required to maintain the transformer. Orion is encouraged to regularly review the
options for alternative designs and materials of power transformers.


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4.7.6           Protection equipment

Summary of findings:

• The carbon footprint of protection equipment is small (<0.1% of Orion’s total carbon footprint for FY
  2007 excluding losses).
• Orion may want to investigate what finally happens with its used batteries when they are taken care of
  by the scrap metal dealer.


Protection relays are installed on circuit breakers to protect the electrical network in the event of power
system faults. The equipment which is currently used is electronic in nature and batteries are required to
supply protection relay with electricity during power cuts. Orion uses a total of 51 batteries of this type at
present. Of Orion’s total embodied carbon footprint for FY2007 protection equipment installed contributed
less than 1% (Table 19).

Table 19: Embodied carbon in protection equipment installed during FY 2007
                                                                                                % of total
                                                        Total kg                                carbon
                                                                   Units      Total tCO2e
Asset Type           Description                        of CO2e                                 footprint
                                                                   added      (2007)
                                                        per unit                                (excl.
                                                                                                losses)
                     11.33 kV Unit Protection              25.5      9           0.230                0%
                     11 kV Protection (with OC & EF)        9.9      8           0.079                0%
                     66 kV Unit Protection                 23.0      1           0.023                0%
                     Sealed lead-acid battery
                     (50/100AH) (), Charger (110V) &      384.2      1           0.384                0%
                     Stand
Total tonnes of CO2 e embodied in assets installed in FY2007                      0.72               0.1%

The carbon footprint of protection equipment is relatively small and since Orion is currently not looking for
any alternatives to the ones currently used, this asset group will not be discussed in further detail. The
main environmental concern is regarding the use of batteries and the disposal methods. A large amount
of lead can contaminate the environment if the lead acid battery is not recycled properly. The
manufacturer is recommending recycling of the lead component. Orion’s old batteries are exported
overseas through the scrap metal dealer and Dominion Traders and no information is available about
what parts of the batteries are finally reused. As a responsible company, Orion may want to investigate
what the final destiny of its used batteries is.


4.7.7           Substation buildings

Summary of findings:

• As Orion does not construct buildings very often, the carbon footprint of substation buildings is small
  (1.2% of Orion’s total carbon footprint for FY 2007 excluding losses).
• The preferred option for Orion’s decommissioned buildings is re-use structure when feasible. If a
  concrete building requires demolition Orion should make sure to crush concrete to increase carbon
  absorption.
• Polystyrene is currently used as the main building material in buildings which require easy mobility.
  There are no feasible alternative building materials available at present with a lower environmental
  impact.


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• Orion uses over 7,000 litres of paint annually with 20% solvent based. Orion may want to approach its
  supplier to clarify what levels of VOC are present in the solvent based paints used and explore if there
  are any alternative products with lower VOC levels.


The embodied carbon associated with substations is shown in Table 20 and it includes buildings and
associated equipment which has not been covered under power and distribution transformers. During FY
2007, a district substation was built in Hornby with one of Orion’s standard building designs having a
concrete floor and walls, and steel doors and roof. There are in total 7 buildings of this type. The Ripple
Plant building consists of a so called “sandwiched building” with polystyrene walls and roof and a
concrete foundation of which Orion owns five in total. Of Orion’s total embodied carbon footprint for
FY2007 (Table 20), the three buildings that were constructed contribute 1.6%.

Transformers are often located in buildings owned by the customers and these buildings have not been
included in the carbon footprint assessment.

Table 20: Embodied carbon in assets related to sub stations installed during FY 2007
                                                                                                      % of total
                                                               Total kg                               carbon
                                                                          Units    Total tCO2e
Asset Type                 Description                         of CO2e                                footprint
                                                                          added    (2007)
                                                               per unit                               (excl.
                                                                                                      losses)
District Sub-Small         Outdoor Structure for a 33 kV
                                                               52,938.5     1          52.9              0.5%
building                   substation in Hornby
                           Ripple plant building with
District Sub-block         polystyrene walls and roof,         31,174.6     2          62.3              0.6%
building                   concrete foundation
Total tCO2 e embodied in assets installed in FY 2007                                  115.3              1.2%

Concrete is the most common building material used throughout the network. It is widely used thanks to
its low cost and ease to construct. Concrete buildings also provide good fire protection. Orion has not
demolished any of its buildings so far, however recently it sold a section with a large concrete building
with a requirement from the buyer to re-use the existing building to minimise the environmental impact.
Re-using the building was seen to be a much better option than having it all demolished for land
development.

The cement-based material concrete is resource intensive to produce and known to be a relatively high
carbon emitter. As a global industry, cement production is estimated to contribute 3.8% of all
anthropogenic greenhouse gas emissions globally (Baumert et al, 2005). During the cement
manufacturing process, carbon dioxide is produced both as a result of burning fossil fuels and as a result
of the calcination process. As mentioned in Section 4.7.2.1, research in recent years has demonstrated
that up to 50% of CO2 emissions during cement manufacturing can be reabsorbed (particularly when
aged concrete is crushed for recycling). When concrete is exposed to air the material will absorb CO2
over time in a process termed recarbonation. Recarbonation is likely to occur during the service life of
concrete, but more importantly will occur rapidly with demolition and reprocessing (Lagerblad 2005). The
methodology for quantifying concrete carbonation has not yet been fully documented and was not
included in the assessment of CO2 emissions from concrete used in this report. Specifically, there is a
lack of knowledge about the carbonation of demolished and crushed concrete. Researchers into
recarbonation believe that the contribution of the cement and concrete industry to net CO2 emissions is
strongly overestimated. Until the methodology has been agreed on an international scale, traditional
emissions factors for concrete and cement should be used.

There are emerging cement based products which are manufactured with resource preservation in mind.
For example Holcim New Zealand’s Duracem is blended cement with an iron blastfurnace slag content of

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 around 65%. The use of this cement can reduce the need for Portland cement (Greg Slaughter, Holcim,
 personal communication). Orion is advised to speak to the suppliers of building material regarding more
 environmentally friendly products.

 Orion occasionally uses other building materials than concrete. A “sandwiched building” made of
 polystyrene is only used for ripple plant equipment if it can’t fit in the actual substation building. The
 building needs to be easy to relocate if required. It would also be possible to use a steel container
 instead of polystyrene; however using steel can create issues with condensation and would not allow the
 same flexibility to be relocated to another site. On the other hand, steel is easier to recycle than
 polystyrene at the end of its life.

 All buildings and kiosks, towers etc are painted regularly. Approximately a total of 6,000 litres of acrylic
 paint is used annually of which 2,000 litres is provided for community groups to remove graffiti on Orion’s
 assets. Approximately 1,500 litres of solvent based paint is used by Orion annually, mostly for around
 windows and floor surfacing where the paint needs to be more resistant to wear and tear.

 Solvent-based paints and sometimes water-based acrylic paints are a source of potentially hazardous
 emissions called Volatile Organic Compounds (VOCs), a family of substances that easily evaporate into
 the air to form invisible vapours. When evaporating, the solvents contained in paint emit VOCs into the
 atmosphere. VOCs react with oxygen in the presence of sunlight to form ozone – "bad" ozone. This
 lower-atmosphere ozone can damage vegetation and can have health effects as some VOCs have for
 example been linked to asthma (Smarter Homes 2007).

 In New Zealand, you can find paints which are independently certified. Environmental Choice certified
 products have low levels of VOCs and hydrocarbon solvents, no heavy metals, formaldehyde or harmful
 solvents. To be licensed, a paint must - among other things not contain more than 25% hydrocarbon
 solvents by weight.

 Many manufacturers are trying to produce low or zero VOC paints which are more environmentally
 sound, however low or zero VOC paints can have lower life expectancy and therefore require more
 frequent re-painting. These issues need to be balanced against improvements in indoor air quality.

 Orion may want to approach its supplier regarding what levels of VOC are present in the solvent based
 paints it is using and explore if there are any alternative products with lower VOC levels.


4.7.8            Ripple Injection Plant

 Summary of findings:

 • The carbon footprint of ripple injection plant equipment is small (<1% of Orion’s total carbon footprint
   for FY 2007 excluding losses).
 • As to the ripple control plant equipment, no recommendations were made regarding environmental
   improvements.


 Ripple injection plant provides the ability to control the load by deferring energy consumption and peak
 load in the network and is a most effective method of Demand Side Management. Ripple injection plants
 are connected to the 11 kV systems via circuit breakers at the district substations.

 When calculating the embodied carbon content of the ripple plant, it was assumed that the 11 kV isolation
 transformer design is equivalent to that of a TRX – 50/3/11 transformer of which information was provided
 by the supplier. The carbon footprint of the ripple plant excludes the control panel with electronics since
 there were no details available about component weights, however its relative weight compared to the
 rest of the ripple plant is very small. Table 21 shows that of Orion’s total embodied carbon footprint for
 FY2007 (excluding losses), the ripple injection plant equipment installed contributed 0.1%.


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 Table 21: Embodied carbon injection plant equipment installed during FY 2007
                                                                                                            % of total
                                                               Total kg                                     carbon
                                                                               Units      Total tCO2e
 Asset Type                 Description                        of CO2e                                      footprint
                                                                               added      (2007)
                                                               per unit                                     (excl.
                                                                                                            losses)
                            11kV Isolation transformer,
 Ripple Injection           tuning reactors and coupling        7,038.4          2           14.1               0.1%
 Plant equipment            capacitors
 Total tCO2e embodied in assets installed in FY 2007                                         14.1               0.1%

 The carbon footprint of protection equipment is relatively small and since Orion is currently not looking for
 any alternatives to the ones currently used, this asset group will not be discussed in further detail.

4.7.9            Switchgear

 Summary of findings:

 • Switchgear installed during the FY 2007 contributed to 4% of Orion’s total carbon footprint for that year
   (excluding losses).
 • Annual SF6 losses from switchgear only contribute 25 tCO2e (0.3% of Orion’s total carbon footprint FY
   2007 excluding losses).
 • Orion has a sensible policy to select non- SF6 equipment only when there are technically and
   economically acceptable alternatives. No recommendations are made to change current practise,
   which appears sensible.


 There are different types of switchgear used in Orion’s network. Oil switches exist in the network,
 however no more are being installed. The types which are currently installed and included in the study
 were circuit breakers, drop out fuses and Magnefix units. Of Orion’s total embodied carbon footprint for
 FY2007 (Table 22), switchgear installed during this year contributed 4%.

 Table 22: Embodied carbon in switchgear installed during FY 2007
                                                                                                               % of total
                                                                 Total kg                                      carbon
                                                                               Units        Total tCO2e
 Asset Type                       Description                    of CO2e                                       footprint
                                                                               added        (2007)
                                                                 per unit                                      (excl.
                                                                                                               losses)
 11 kV Circuit breaker
                                  Vacuum insulated                   2,903.1         42         121.9               1.2%
 Sealed 630A
 11 kV Circuit breaker
                                  Vacuum insulated                   3,193.7         7          22.4                0.2%
 Sealed 1250A
 11 kV Dropout Fuse                                                    1.9       310             0.6                0.0%
 11 kV Magnefix Type                                                 4,401.4         39         171.7               1.7%
 33 kV Circuit breaker            Hornby - Vacuum
                                                                 10,534.7            9          94.8                1.0%
 (Indoor)                         insulated
 Total tonnes of CO2e embodied in assets installed in FY 2007                                   411.3               4.2%

 The 11 kV and 33 kV type of switchgear Orion currently installs uses vacuum as an insulating medium. In
 the past oil was used as an insulating medium as well, however these assets are now being phased out
 and replaced by vacuum insulated types.

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Switchgear at 66 kV voltages mostly use SF6. Some electricity distributors have implemented a policy to
ban the use of the gas due to its extremely high GWP. In Europe, a group of key market players, such as
ABB and Siemens, completed a full Life Cycle Assessment in which they compared the environmental
profile of SF6 switchgear with air insulated switchgear (AIS) in the medium voltage range (Preisegger, E.
et al. 2004) . The study stated that AIS are generally larger since they must hold large volumes of air,
which is a worse insulating medium than SF6. Their study showed that SF6 switchgear has a lower global
warming, acidification and nitrification potential than AIS. The study also concluded that the switchgear
itself makes only a very small contribution to global warming. In Germany, SF6 losses only contribute less
than 0.0005% of the global warming potential caused by the electricity distribution network. The main
contributor was the electrical losses in the cables, lines and transformers. Based on these results, the
study emphasised that a ban from using SF6 switchgear is unlikely to be justified since load management
should provide larger carbon emission savings than a further optimisation of the switchgear design.

A practical alternative to 66 kV SF6 circuit breakers is a dry air insulated type, however the current design
does not meet Orion’s technical requirements. It may be a feasible option if the design is changed in the
future. If there are technically and economically acceptable alternatives, Orion has committed not to
purchase equipment containing SF6.

Orion is currently keeping SF6 under relatively low pressure in the switchgear to reduce the risk of
emissions to air. Orion has a target of limiting SF6 losses to below 1% per annum. The manufacturer has
guaranteed a fixed leakage rate of maximum 0.05%. Orion report on its stock levels each year and has
recorded an average SF6 loss of 0.1-0.2%. Every year there is some minor gas leakage which results in a
higher loss than 0.05% which is inherent with the equipment. In the carbon inventory a worst case
scenario with a loss of 0.2% across the total stock was assumed. Although SF6 is a highly potent GHG, it
does not appear to pose any significant environmental impact with the current management practise to
minimise losses whilst servicing the network.


4.7.10          Distribution Transformers

Summary of findings:

• There is currently no feasible alternative to distribution transformers using mineral based oil which can
  be installed on a large scale. Transformers with biobased insulating oil do not meet Orion’s technical
  specifications with their current designs.
• Waste oil from transformers is used in cement manufacturing as a resource which helps to reduce the
  emissions associated with cement production.


Distribution transformers are used to transform the voltage to a level for consumer connections. These
are single or three phased with sizes varying from smaller types, which are usually pole mounted, to
larger transformers which are usually pad mounted in a building. A total of 10,194 distribution
transformers are currently used in Orion’s network, however the embodied carbon was only calculated for
the number of transformers which were installed during the FY2007 (Table 23). Distribution transformers
installed during FY2007 contributed approximately 3% of Orion’s total carbon footprint for this year
(excluding losses).

All information regarding transformer component material was provided by the supplier, ABB. All the
transformers installed contain the same main materials; steel, copper and/or aluminium (in the coil),
insulating oil, paper (insulation) and porcelain or epoxy bushings. All the distribution transformers which
were installed during FY2007 contain oil as an insulating medium. There is currently only one ‘dry’
transformer in Orion’s network. This type is encased in epoxy resin and not in a metal case such as the
oil filled types.




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Table 23: Embodied carbon in distribution transformers installed during FY 2007
                                           Total kg of                                          % of total carbon
                                                                              Total tCO2e
Asset Type                                 CO2e per           Units added                       footprint (excl.
                                                                              (2007)
                                           unit                                                 losses)
1ph Pole Mount ≤ 15 kVA                       472.9               10               4.7                   0.0%
1ph Pole Mount 30 kVA                         600.4               3                1.8                   0.0%
3ph Pad 100 kVA                              1,081.4              5                5.4                   0.1%
3ph Pad Mount 1000 kVA                       6,682.0              4               26.7                   0.3%
3ph Pad Mount 200 kVA                        2,253.4              6               13.5                   0.1%
3ph Pad Mount 300 kVA                        3,163.2              33              104.4                  1.1%
3ph Pad Mount 500 kVA                        4,172.1              20              83.4                   0.8%
3ph Pad Mount 750 kVA                        5,556.3              5               27.8                   0.3%
3ph Pole Mount ≤ 30 kVA                       777.2               17              13.2                   0.1%
3ph Pole Mount 100 kVA                       1,674.6              14              23.4                   0.2%
3ph Pole Mount 200 kVA                       2,176.7              6               13.1                   0.1%
3ph Pole Mount 50 kVA                    1,005.4                  13              13.1                   0.1%
Total tCO2e embodied in assets installed in FY 2007                               330.6                  3.4%

Mineral based oil is currently used in Orion’s distribution transformers as well as its power transformers.
There is now a biobased alternative on the market; Envirotemp FR3 fluid, which is a soy based oil. This
alternative is discussed further in Section 4.7.5.

A significant part of electrical losses occur in distribution transformers and these are already taken into
consideration when Orion purchases new equipment. The impacts of carbon emissions from electrical
losses are discussed in Section 6.1.

The oil used in transformers occasionally needs changing. In 2008, Connetics changed approximately
1,200 litres of transformer waste TX oil which subsequently was taken care of by the contractor
ChemWaste. The majority of the waste oil is used for cement manufacturing. At the cement plant, the
used oil is co-processed with coal as a fuel for the production of cement. In effect, carbon emissions are
saved by reusing the oil. One of the two New Zealand based cement manufacturers, Holcim, believe that
reusing oil reduces carbon emissions by 3.1% compared to coal-firing only (Slaughter G. 2008). No
carbon emissions resulting from the waste oil have been included in this carbon inventory since the
emissions associated with cement production will be covered by the manufacturer.




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4.8             Estimated Total Embodied Carbon in all Orion’s network assets
The total embodied carbon in all of Orion’s network assets (regardless of year installed) was estimated at
476,091 tCO2e (Table 24). This is approximately 66 times the carbon embodied in assets installed during
the baseline year (FY 2007). The total embodied carbon is also equivalent to 11 times Orion’s annual
carbon footprint when the electrical losses were included.

The estimation was based on the embodied carbon which was calculated for the asset types installed
during FY2007. There were of course a number of asset types which were not installed during the
studied baseline year and assumptions were made regarding which types of the assessed types they
were most similar to. For asset types with small quantities or that are not significantly material intensive,
the carbon footprint was disregarded.

WASP is Orion’s internal system where all installed network assets are recorded. It is a live data base
that cannot give a snap shot of the total quantity of assets installed in the network as of 31st March 07,
which is the end of the studied baseline year. The nearest time when such information was captured was
in 31st March 2008 for the evaluation of the network. Therefore the total embodied carbon in Orion’s
network was estimated for the end of the financial year 2008. A more detailed break-down of asset types
and the emission values used are included in Appendix B.
Table 24. Estimated total embodied carbon in all Orion’s network assets installed as of 31 March
2008
                                                                                             % of total
                                                                               Total         embodied
Asset                                                             Number
                            Asset Types included                              tCO2e           carbon
Category                                                          of Units
                                                                              (2007)        footprint (all
                                                                                              assets)
                      All types of underground cables
                                                                  7,631 km    186,505           39.2%
Cables                (including lighting),
                      All types of overhead lines including
                                                                  6,787 km    29,640             6.2%
Lines                 lighting
                      Poles for overhead lines (concrete,
                                                                   95,015     196,588           41.3%
Poles                 hard- and soft wood)
                      Low Voltage Connection with
                      boundary and maxi and multi box              5,298        664              0.1%
Connections           structure
                      11 kV Switchgear quarter, half and
                                                                   3,275       3,073             0.6%
Kiosk                 full kiosk
Power
                                                                    60         6,108             1.3%
transformer           33/11 kV Power transformer
Protection            11/33 kV Unit Protection, 11 kV and
                                                                   4,230        117              0.0%
equipment             66 kV Protection, substation battery
Substation            33 kV substation building and ripple
                                                                    262        4,125             0.9%
buildings             plant building
Ripple
Injection             Ripple Injection Plant                        40          282              0.1%
Equipment
                      33 kV and11 kV circuit breaker
                      630A and 1250A, 11 kV Dropout                14,116     22,908             4.8%
Switchgear            Fuse and 11 kV Magnefix Units


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                                                                                          % of total
                                                                            Total         embodied
Asset                                                          Number
                            Asset Types included                           tCO2e           carbon
Category                                                       of Units
                                                                           (2007)        footprint (all
                                                                                           assets)
                      Pole and ground mount distribution
Distribution          transformers & pole mounted              16,689      26,081             5.5%
Transformer           miscellaneous equipment
Total tCO2e embodied in all network assets as of
                                                                           476,091
2008
Total emissions (tCO2e) per customer connection                             2.62

Poles and cables make up the majority of the embodied carbon across Orion’s network (each individually
with approximately 40% contribution). The poles only contributed to 20% of the annual embodied carbon
(Table 11). This difference in carbon intensity is caused by Orion historically using concrete poles more
frequently.

The carbon embodied in overhead lines, switch gear and distribution transformers all contribute to almost
equal amounts of the total embodied carbon across the whole network (5-6%). These proportions are not
considerably different in their proportions to the embodied carbon in assets installed during the baseline
year.




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4.9             Operational Emissions
Summary of findings:

• Electricity losses across the network are the dominant contributor to GHGs. They make up 77% of
  Orion’s total carbon emissions for the FY 2007.
• The majority of electrical losses are unavoidable and cannot be eliminated.
• A network loss of 4.9% indirectly generates GHG emissions of 33,658 tCO2e, 73 times more than the
  emissions from Orion’s office activities (462 tCO2e).


Prior to the separation of retailing from distribution in 1999 losses on Orion’s network were assessed at
4.9%. The separation of retailing from distribution made it more difficult to estimate electrical losses and
lead to inaccurate measurements with apparent losses measured as high as 10-15%. The main reason
for these inaccuracies is due to incorrect metering. The network characteristics have not changed
significantly since 1999 and given this Orion has chosen to continue to disclose a loss factor of 4.9%.

Table 25: Operational GHG emissions in Orion’s distribution network

                                                             Emission       Total tonnes           % of total
                                Units             %           factor          of CO2e                carbon
Source of emission
                             distributed      electrical                       (2007)               footprint
in network                                                      kg
                                (kWh)          losses                                              (including
                                                             CO2e/kWh                                losses)
Electrical losses          3,286,554,245          4.9          0.209          33,657.60                77.4
Total indirect emissions from operational losses (tCO2e)                      33,657.60

All electricity networks lose energy when lines, cables and transformers heat up during electricity
distribution. “Distribution Losses” are simply the difference between electricity entering the network and
electricity leaving the network, as measured and billed at the customer connections. Electrical losses are
natural phenomena that cannot be avoided completely. Losses mean that more electricity needs to be
generated than what finally reaches the customers and carbon emissions are produced in the generation
of that extra electricity. According to MED the average transmission losses over the North and South
Island networks vary between 5.5 and 6.5%, but can at times be higher reaching 5-10% over the South
Island and 20-30% over the North Island.

According to Orion’s information for disclosure, the total amount of electricity entering Orion’s network in
FY 2007 from Transpower’s grid exit points was 3,286,554,245 kWh. With an estimated average network
loss of 4.9%, this results in GHG emissions of 33,657.60 tCO2e (using the grid-average emission factor
0.209 kg CO2e/kWh associated with the generation of a unit of electricity, purchased from the national
grid in New Zealand during 2006). The carbon footprint from the electrical losses is approximately
73 times larger than the emissions from Orion’s office activities (462 tCO2e).

As mentioned in Section 3.1.3, the study estimated the carbon emissions resulting from electrical losses
on a national average figure for generation emissions (0.209 tCO2e per MWh) which takes into account
North Island fossil fuel based generation. Orion is indirectly impacting the national grid mix since a
reduction in electricity usage on Orion’s network results in more hydro energy being distributed from the
South Island to the North Island. Consequently, a reduction in energy usage across Orion’s network
indirectly reduces North Island fossil fuel based generation.

A discussion regarding how Orion can better incorporate the environmental impact of the electrical losses
is included in Section 6.1.


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5        Carbon impact assessment of three of Orion’s
         activities
This section will highlight the carbon footprint implications from three different situations:

     1. Demand Side Management:
        Orion wants to quantify the carbon emission savings from its Demand Side Management, DSM,
        initiatives which aim to control and limit the growth of maximum demand and to promote energy
        efficiency by end-users. The emission reductions come from not having to invest in increased
        network capacity in transmission and distribution infrastructure with savings in resource use, such
        as aluminium, copper and steel. The case study will calculate the net gain from DSM, since
        some of the DSM is resulting from energy management from customer owned diesel generation.

     2. The current practise in relation to trenching and backfilling when laying underground cables:
        Christchurch City Council has adopted a code of practise which requires excavated soil from
        trenching to be transported off-site for disposal and aggregate to be used as backfill. Orion would
        like to highlight the extended environmental implications in terms of carbon footprint resulting
        from this legislative requirement. In many cases, the excavated soil is very suited to be re-used
        as backfill, but is still transported off-site for disposal.

     3. A comparison between choosing overhead lines or underground cables:
        As a last case study, Orion wished to clarify the difference in carbon impacts between choosing
        overhead lines with supporting structures or to use underground cables. Overhead lines are
        preferred from a cost perspective but Orion wanted to clarify if that was also the case from a
        carbon perspective.


5.1             Emission Reductions Resulting from Demand Side Management
Orion undertakes Demand Side Management (DSM) measures to reduce the maximum demand on its
network during peak times. Like roads, electricity networks have limited capacity. Orion’s ‘rush hour’
typically occurs on very cold winter evenings when people arrive home from work and turn on their lights
and heaters. By reducing the maximum electricity demand at these times less infrastructure needs to be
built by Orion which saves both dollars for the distributor, and customers, and the use of materials.

Given this reduction in the use of materials, any lowering of network maximum demand has benefits in
terms of reducing the carbon footprint of the network below what it would be without DSM.


5.1.1           Carbon savings by delaying network growth

The assets installed in the 2007 FY had a carbon footprint of 7,192 tCO2e. The assets installed were a
combination of assets required to meet network growth (e.g. new homes, increased business activity) and
assets that replaced existing items that were already in the network (e.g. replacements due to end of life,
product failure).

Approximately 61% of the capital budget for FY 2007 was growth related and 39% associated with
replacing assets which had reached the end of their life. Therefore:

                7,192 × 61% = 4,387 tCO2e = estimated carbon footprint of assets installed to meet
                network growth in 2007

                7,192 × 39% = 2,804 tCO2e = estimated carbon footprint of assets installed in 2007
                that replaced already existing, but no longer usable, assets.


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In 2007 it is estimated that the network growth that Orion witnessed was approximately 9.5MW. This
figure is based on Orion’s long term network growth rate of 1.5% and Orion’s actual maximum demand
recorded in the year to 31 March 2007 of 632 MW (1.5% × 632 MW = 9.5 MW).

Based on growth of 9.5 MW in 2007 and a carbon footprint for assets related to network growth of
4,387 tCO2e, it is estimated that every 1MW of network growth results in Orion’s carbon footprint
increasing by 462 tCO2e (4,387/9.5).

In other words, if network growth can be reduced through such measures as DSM, every 1 MW of peak
load reduction leads to a saving of 462 tCO2e through reduced infrastructure requirements.

Orion operates a variety of DSM initiatives. Combined these DSM initiatives reduce maximum peak load
by some 150 MW. In other words if Orion did not operate DSM its 2007 peak demand figure would have
been approximately 780 MW rather than the 632 MW actually witnessed.

The combination of DSM initiatives that yield approximately 150 MW of load reduction are:
                    •        60 MW from hot water cylinder load control that switches off domestic hot water cylinders during
                             periods of peak demand;
                    •        5 MW from reduced load use when major businesses respond to high pricing signals;
                    •        10 MW from major businesses switching to diesel generation in response to high pricing signals;
                    •        75 MW from night rate price options which shift load from day to night hours.

All of the above DSM activities reduce the requirement for Orion to install new infrastructure. Given
Orion’s combined DSM initiatives reduce load by 150 MW, and consequently lessen infrastructure
requirements, the total “carbon infrastructure savings” are 69,300 tCO2e (provided 1 MW of peak load
reduction that leads to a saved infrastructure requirement, results in a carbon saving of 462 tCO2e). This
carbon saving of 69,300 tCO2e is a one-off saving; not an annual saving (Figure 5).

                                             Without DSM
                                             With DSM
 Cumulative CO2e emissions




                                                                                   150 MW =
                                                                                   69,300 tCO2e




                                    1990                                    2009             time
Figure 5: Graph showing the estimated carbon savings when DSM reduced load by 150 MW.


5.1.2                         Is DSM saving carbon by avoiding generation?

Aside from delaying investment in infrastructure that would otherwise have been needed on the Orion
network, DSM can also reduce the need for the use of fossil fuel based generation.

In New Zealand the majority of electricity generation is from hydro power, which is a renewable form of
generation that does not create carbon emissions (putting aside the issue of initial building of the dams).

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However when the New Zealand electricity network peaks in winter, New Zealand’s hydro sources do not
generate sufficient electricity to meet these peaks. Some other forms of generation, typically either coal
or gas, is required to meet peak requirements. Any increase in peak demand during winter leads to
increased coal/gas generation which produces relatively high carbon emissions.

Therefore DSM may be able to indirectly reduce GHG emissions to the atmosphere by reducing the need
for coal/gas generation. However there are two factors which need to be considered before assuming all
DSM creates such saving.

First, does DSM reduce or merely delay electricity usage? The majority of Orion’s DSM initiatives do not
actually lead to reduced coal/gas generation since its initiatives simply displace load for a relatively short
period of time. In other words Orion’s DSM shifts usage from a network peak time of for example 6pm to
a non-peak time of 8pm. Electricity usage is not reduced. It is rather the time when the usage is occurring
that is altered as the load is shifted, instead of being saved.

With hot water cylinder load control for instance, hot water cylinders are turned off at network peak times
and they are turned back on later when the network is no longer peaking. Consequently energy use does
not change – its occurrence is simply delayed. The delay in usage due to Orion’s DSM initiatives is often
only by a matter of hours, and so coal or gas generation is not displaced.

Electricity usage is however reduced when major businesses switch to diesel generation (10 MW) in
response to high pricing signals. A small amount of load reduction also occurs by major customers
(estimated at approximately 0.5 MW from the total 5 MW of peak load control undertaken). In other
words of the 150 MW of total DSM undertaken by Orion, only around 10.5 MW leads to reduced energy
usage – the remaining 139.5 MW is delayed energy usage.

Second, given Orion is located in the South Island of New Zealand, there is a question over whether the
energy it transports at peak times is from renewable sources or coal/gas sources. In this study the
constrained capacity of the DC link between the South and North Island has not been considered for
simplicity and the power generation mix has been looked at from a “whole of New Zealand” perspective.
This results in an assumption that lower Orion peaks reduce the need for coal/gas generation. If the
constrained capacity of the DC link had been examined it is possible that the finding may have been that
hydro generation is the generation source being displaced and North Island coal/gas generation plants
are unaffected by lower Orion peak demand.

5.1.2.1         Estimated carbon savings from reduced energy usage

When major customers respond to Orion’s high pricing signals by turning off machinery (and reducing
energy use by 0.5MW), the carbon saving is dependent on how many hours the reduced energy usage
occurs for. Orion targets around 80 hours of high price signals to major customers per annum.
Consequently load of 0.5 MW removed for 80 hours will result in 40 MWh of energy savings.

Based on figures from the Ministry of Economic Development it is estimated that every 1 MWh of
electricity generated by coal and gas produces carbon emissions of approximately 0.93 tCO2e and
0.49 tCO2e respectively. As it is difficult to determine whether coal or gas generation is the “peaking
generation capacity”, an average between the two sources has been assumed. Hence the carbon saving
in winter time is estimated to be 0.71 tCO2e for every 1 MWh of energy saved at peak times. These
figures however exclude transmission and distribution losses. Based on electrical losses of 10% the
carbon saving increases to 0.78 tCO2e.

Based on a saving of 0.78 tCO2e per MWh of peak coal/gas load reduction that occurs, 40MWh yields
annual carbon emission savings of 31.2 tCO2e.




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5.1.2.2         Estimation of carbon savings from reduction in coal/gas generation due to local diesel
                generation

The use of local diesel generation to reduce network peaks has conflicting carbon impacts. Nationally
coal/gas generation will decrease which leads to carbon savings, however locally diesel usage will
increase, thereby producing carbon. What is the difference between these two emission sources?:

        -       10MW of reduced coal/gas generation for 80 hours (Orion’s target for length of high major
                customer pricing over winter) results in carbon savings of approximately 624 tCO2e
                (10×80×0.78 tCO2e as from Section 5.1.2.1)

        -       Based on information from Goughs, New Zealand’s largest diesel generator supplier, the litre
                usage per hour for diesel generators is equal to:generator capacity in kW /19 x 4.54. Therefore
                10 MW of diesel generation will burn approximately 2,400 litres of fuel per hour. Given 80
                hours of usage this equates to total diesel usage of 190,000 litres. Using an emission factor of
                2.65 tCO2e for 1000 litres of diesel used, as recommended by MfE, a total of 190,000 litres of
                diesel will result in 503 tCO2e.

        -       When netting these two findings (624 tCO2e and 503 tCO2e), the resulting net emission savings
                by local diesel generation equals 121 tCO2e per annum.

5.1.3           Total carbon savings from Orion’s DSM initiatives

Summarising, DSM initiatives undertaken by Orion result in the following carbon effects:

     a) One-off infrastructure savings of 69,300 tCO2e (Section 5.1.1)
     b) Annual carbon savings from reduced energy usage of 31.2 tCO2e (Section 5.1.2.1).
     c) Annual carbon savings from reduction in coal/gas generation due to local diesel generation of
        121 tCO2e ( Section 5.1.2.2)

The total carbon savings if assuming the one-off infrastructure savings as well as carbon savings over
one year would equate to 69,452 tCO2e.

In this study it was assumed that the net reduction of electrical losses as a result of DSM was
insignificant. Any reduction in losses would be offset by a network loss caused by the postponement of
network upgrade and the use of older and less efficient network equipment.

The carbon saving from delaying the expansion of the network is almost 15% of Orion’s total embodied
carbon across the whole network (476,091 tCO2e), which shows that DSM is undoubtedly reducing
Orion’s carbon impact. For environmental reasons it is essential that DSM initiatives continue. They
should be considered an important part of Orion’s asset management plan.

5.1.4           New Zealand wide savings

Other New Zealand network companies also undertake DSM initiatives; however none undertake
initiatives as extensive as Orion.

For instance, while most New Zealand network companies load control hot water, few, if any, other
network companies load control the proportion that Orion does (over 95%). Also, to the best of Orion’s
knowledge, only one other network company operates pricing policies that seek to reduce network peak
loads.

If other New Zealand network companies followed Orion’s lead in DSM it could result in considerable
carbon savings. Based on Orion representing around 10% of New Zealand’s network capacity and
Orion’s own DSM carbon savings of 69,452 tCO2e, up to 694,520 tCO2e of further carbon savings could
be possible if other network companies undertook the same DSM initiatives as Orion. This is equivalent
of almost 1% of the 77.9 MtCO2e, which was New Zealand’s annual emissions in 2006 (MfE 2008). The

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majority of emissions embodied in the network assets are generated outside of New Zealand. Also this
figure ignores carbon savings that could result through lower transmission capacity being required if all
other networks undertook DSM initiatives. Carbon savings from reduced requirements on the
transmission capacity is likely to be significant.


5.2             Carbon Footprint Associated with Trenching of Underground Cables

Summary of findings:

• In 2007 a total of 43 km of 11 kV cable was installed by trenching and backfilling with aggregate. This
  resulted in 172 tCO2e more than if all soil would have been re-used on site in place of aggregate.
• While recognising that the previous problem with slumping was unacceptable, the current situation
  may not be the best practice solution. In many cases, the contractors believe that the excavated soil is
  very suited to be re-used as backfill, but the soil is still transported off-site for disposal at an
  environmental and financial cost.
• There are potentially substantial financial and environmental savings if the contractor is able to re-use
  excavated soil or at least re-use some of the soil. It would help to reduce the number of heavy
  vehicles on the road and the numbers of vehicles required in the vehicle fleet, as well as help to
  reduce the volumes of soil disposed to cleanfill sites.
• Orion is encouraged to work with contractors and the local council to discuss the current issues with
  trenching and backfilling. The parties need to investigate practicable solutions regarding how to
  ensure that only essential trenched material is disposed to cleanfill and unnecessary emissions from
  transporting both trenched material and imported substitute backfill is avoided.
• Although not analysed in this report, other research has showed that a trenchless method, such as
  directional drilling potentially has a significantly lower carbon footprint than trenching. Orion may be
  interested in making such a comparison to quantify the potential environmental and social benefits of
  directional drilling and weigh them against the difference in cost.


In 2001, the Christchurch City Council (CCC) adopted the Code of Practice for working in the road (SNZ
HB 2002:2003), which in effect restricts Orion in the majority of cases from re-using excavated material
as backfill material when it is laying underground cables. In the past there was a widespread problem
with slumping ground when the original site material had been re-used as backfill. CCC believes that
approximately 95% of the soil in Canterbury is unsuitable for re-use due to the natural soil properties or
due to historical land use. Excavation disrupts the natural soil properties and the integrity of the surface.
In the past when reuse of excavated soil was allowed it often lead to increased road maintenance costs
for the local council and it subsequently adopted the Code of Practise to eliminate the issue.

Orion would like to highlight the extended environmental implications in terms of carbon footprint of the
current legislative requirements; hence it would like to highlight what additional GHG emissions are
produced by having to transport the excavated soil off-site for disposal and by having backfill transported
to the site from a remote location. While recognising that the previous problem with slumping was
unacceptable, the current situation may not be the best practise solution. In many cases, the excavated
soil is very suited to be re-used as backfill, but is still transported off-site for disposal to an environmental
and financial cost.

Since approximately 50% of all trenching is related to laying 11 kV cables, this carbon footprint estimation
will be based on this type of cable. There are two different processes in which GHG emissions can occur:
activities associated with trenching and with backfilling. The emissions were only calculated for activities
which are additional due to the legislative requirements.




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5.2.1           Trenching

11 kV cables require large open trenches as this type of cable should ideally not be laid with joints, as
these significantly reduces its performance. The cables are supplied in lengths of 350 m or 500 m. In
this case study, a cable length of 500 m was assumed. Trenching is therefore required for the entire
500 m section, of which the excavated material needs transport off-site for dumping, before aggregate
can be added as backfill. It is not possible to bring aggregate back in the same truck, which transported
the excavated soil off-site, since the contractor is often not able to stockpile the aggregate at the
trenching site until the entire length of the trench has been excavated. In other words one return trip is
needed to remove excavated soil and another return trip is needed to bring aggregate back to the site.

For the calculations, a common trench size of 400 mm (width) and 800 mm (depth) was assumed. This
results in 160m3 of excavated soil for a 500 m trench, assuming an insignificant bulking factor. A six
wheeler truck with a gross laden weight of 21 tonne that can carry 6.5 m3 is used for transporting the
excavated material off-site. When the truck is used with a trailer unit with a gross laden weight of
15 tonne, it has a total capacity of 12 m3. Approximately 50% of the transports are done with the trailer
unit making an average load of 9.25 m3 excavated soil per trip, which would result in approximately
17 return trips.

To estimate the transport emissions, the site was assumed to be located in central Christchurch, 10 km
from the disposal site in Pound Road (20 km return). A total of 17 return trips to the dumping site are
required to remove all the excavated soil off-site from trenching for a 500 m long cable.

Mobilcard records show an average fuel economy for the trucks of 50 L/km (1.97 km/L). This is a
conservative measurement since the fuel cards may have been used to fuel up excavators in the past,
which would alter the economy ratings. Unfortunately it was impossible to access information regarding
how the fuel efficiency is affected by the load. It is believed that an empty truck will not be much more
efficient than the full truck, especially since the travel distance is short.

CO2 = TR.D.EFT = 17×20×2.65 = 457
       FE            1.97

Where:
     CO2              is kg of CO2 emissions
     TR               is trips required
     D                is distance of trip in km
     EFT              is the emission factor 2.65kg CO2e/L diesel
     FE               is the fuel efficiency of a truck (km/L), 1.97 km/L

All excavated material is taken to Fulton Hogan’s (FH) Pound Road site, which is classified as a cleanfill
site. Cleanfill sites are active or inactive quarry sites which use cleanfill to fill the hole created from the
excavation of aggregate. The excavated material from Connetics is separated into cleanfill (any natural
material sand, clay, gravel, but not soil) construction & demolition waste (concrete and asphalt) and cover
material (soil with little or no stone but no other material). The majority of excavated material is disposed
of into the quarry on-site, which FH has the permission to fill with cleanfill. If clean topsoil has been
separated during excavation, FH uses it as cover material on top of landfills. A cleanfill such as at Pound
Road is only likely to emit minor amounts of methane due to the non-degradable nature of the materials
disposed, therefore GHG emissions were not estimated for the disposal of Connetics’ excavated material
(this approach is consistent with MfE Landfill Gas Standard).




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Table 26: GHG emissions associated with trenching

                                                Distance       Fuel efficiency       Emission Factor
                                     Trips                                                                        Total
  Source of Emission                                             of a truck          (EF) kgCO2e/litre
                                   required      (km)                                                           (kgCO2e)
                                                                   (km/L)                  fuel
Removal of soil off-site
with truck and empty                  17          20                1.97                   2.65                    457
truck returning to site
Total GHG emissions (kg CO2e)                                                                                      457


5.2.2           Backfilling

When using aggregate as backfill, it was assumed that approximately 30% more soil than the excavated
volume was required to allow for compaction. Connetics is currently sourcing all the aggregate from the
site where the excavated material is disposed i.e. FH’s Pound Road site. As explained earlier trenching
was required for the entire 500 m section before aggregate can be added as backfill. Aggregate is not
possible to bring back with the same truck which transported the excavated soil off-site, since the
contractor is often not able to stockpile the aggregate at the trenching site until the entire length of the
trench has been excavated. On-site stockpiling was not an issue in the past before the Code of Practise
was adopted by the council as Connetics previously often stockpiled soil at a suitable adjacent council
owned piece of land, e.g. parking area, with adequate stormwater runoff.

In this case, 208 m3 of aggregate is needed, which requires approximately 23 return trips with the truck,
providing an average load of 9.25 m3 excavated soil per trip. The total amount of aggregate required is
equivalent to 416 tonnes assuming a density of 2,000 kg/m3 (Steve Woods MWH personal
communication).

It was assumed that re-using excavated soil and using aggregate as backfill material require the same
amount of compaction in the trench.

The embodied carbon of the aggregate is based on emissions generated when producing 1 kg or
aggregate. This is included since the aggregate would not be required if excavated soil was able to be re-
used for backfilling.

Table 27: GHG emissions associated with backfilling
Source of                  Trips      Distance     Quantity of          Fuel               Emission            Total
Emission                   required                Aggregate            efficiency of      Factor (EF)         (kgCO2e)
                                      (km)
                                                   Material (kg)        a truck
                                                                        (km/L)
Embodied
                                                                                              0.0023
Carbon of
                               -           -            416,000                  -          kgCO2e per              957
aggregate
                                                                                              kg soil
(backfill)
Empty truck
picking up                                                                                  2.65 kgCO2
                              23           20              -                 1.97                                   619
aggregate and                                                                               e /litre fuel
returning to site
Total GHG emissions (kg CO2e)                                                                                      1,576




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5.2.3           Interpretation of results associated with trenching and backfilling

The total amount of GHG emissions resulting from laying a 500 m 11 kV cable according to the code of
practise is approximately 2 tCO2e. In 2007 a total of 43 km of 11 kV cable was installed which resulted in
172 tCO2e. There were in total 162 km of cables installed during FY 2007, but all of them would not
require as carbon intensive trenching as 11 kV cables do.

The most environmentally sound practise for trenching and backfilling is to re-use excavated material,
however Orion acknowledges that it will need to occur on a case by case basis. There are potentially
substantial financial and environmental savings if the contractor is able to re-use excavated soil or at least
re-use some of the soil. It would help to reduce the number of heavy vehicles on the road and the
numbers of vehicles required in the vehicle fleet as well as help to reduce the volumes of soil disposed to
cleanfill sites. At the moment, the contractor charges the client (CCC or Orion) for a project on the basis
of complying with the Code of Practise. Substantial cost savings to the client (CCC or Orion) could
emerge if the contractor is able to reduce the number of vehicles used on the road.

Fulton Hogan is able to utilise the cleanfill site on Pound Road for another 50-75 years and is expecting to
allow disposal into the quarry on Minor Road in 2010 provided consenting. The issue of space in cleanfill
sites is therefore not the main issue.

Christchurch City Council has recently started to allow limited re-use of excavated material; however the
contractor is required to apply for permission in advance on a case by case basis. This is allowed in
areas with sandy soils (e.g. New Brighton) and also in bermed areas where the requirements of the level
of compaction are not as stringent compared to in paved areas. The council believed that the main
barrier for the contractor was the requirement to apply for permission in advance, as the time scheduled
are often strict.

From the contractors’ perspective, Connetics is hoping that the council will begin to allow reuse of
excavated material more widely. Excavated soil, which is suitable for re-use, can be stored on-site as
space limitations never was an issue in the past before the Code of Practise was adopted by the council.
Connetics previously often stockpiled soil at a suitable adjacent council owned land, e.g. parking area,
with adequate stormwater runoff. After the adoption of the Code of Practise, the council does not allow
stockpiling on its land and have even issued a parking ticket to a load of backfill which took up a council
owned car park. Connetics believe that in an ideal situation contractors should be able to more widely re-
use excavated soil and the council can appoint a person responsible for monitoring the contractors, which
may be possible since there are usually a maximum of ten simultaneous trenching projects across the
council.

It appears that Orion is best placed to bring together its contractors and the local council to discuss the
current issues with trenching and backfilling. The parties need to investigate practicable solutions
regarding how to ensure that only essential trenched material is disposed to cleanfill and unnecessary
emissions from transporting both trenched material and imported substitute backfill are avoided.

Trenching in general reduces the life time of the site and even when using aggregate as backfill, there is
a risk of slumping. When backfilling a trench in Christchurch that contains soft soils, the aggregate can
sometimes migrate towards the side of the trench over time and create slumping. There is another
method for laying cables which does not require any trenching or backfilling; directional drilling. This is a
comparatively expensive method which is used widely in the United States and Europe and is an
emerging technique in New Zealand. Directional drilling is sometimes required in Canterbury, for
example when crossing roads. Currently there are only a few companies who use directional drilling in
the city, however this number is increasing. In a detailed study between the carbon footprint of a water
pipe which was laid by trenching and one which was laid with directional drilling, it was found that the
emissions from the trenchless method were only 30% of that of the open cut method (Jovanovic 2008).

For electricity distribution the comparison is slightly more complex as there are some disadvantages with
directional drilling. When drilling directly into the ground there is no possibility of allowing any thermal
backfill around the cable. When cables are laid in trenches, thermal backfill is added which absorbs the

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heat which is inevitably produced by the cable during distribution. When a cable has been laid directly
into the ground, the cables can only be utilised to a maximum of 70% of its maximum load. To allow for
capacity increase of the network, larger cables than necessary are laid, which is more resource intensive
and hence it is not as simple as stating that directional drilling is more environmentally sustainable than
laying cables by trenching and backfilling. To be able to fully compare the environmental impacts from
these different methods of laying cable, one will need to also consider the implications from directional
drilling when cables which are larger than necessary need to be installed to allow for the low utilisation
potential. Orion may be interested in making such a comparison to quantify the potential environmental
benefits of directional drilling.

There are of course also social benefits with directional drilling as it causes less local disturbance and
inconveniences during the construction. In general the shorter the installation can be completed, the
lower is the social impact.


5.3             A Comparison between the Carbon Footprint of Cables and
                Overhead Lines
Summary of findings:

• Overhead lines have a 6% higher whole life carbon impact compared to underground cables.
• The embodied carbon per km of cable is larger than a line, even when their supporting poles are
  included.
• The carbon emissions involved with cable installation is higher than that involved in installing lines,
  although overhead lines require more maintenance over their lifetime.
• Overhead lines are in general responsible for greater electrical losses per km than buried cables. In
  the studied case the losses in the line resulted in over 30% more carbon emissions compared to the
  cables.
• Although there are relatively large differences in emissions from the different life aspects, the overall
  difference in carbon footprint between the studied line and cable is not very significant.


The local city plan determines when Orion is required to install underground cables instead of overhead
lines when planning a new network line. As mentioned previously in the report, the embodied carbon
figures of underground cables (UGC) are much higher compared to overhead lines (OHL), however this
comparison does not give the full picture of all the carbon impacts, since other emissions such as those
from installation and maintenance of assets are not included.

To incorporate the wider aspects of carbon impacts in choosing UGC versus OHL a more detailed
comparison was completed. When planning the network there are many aspects which are essential to
consider when selecting UGC or OHL, for example; security of supply, electric and magnetic fields, noise
and aesthetics (loss of property value). Many of these aspects do not have an impact on the carbon
emissions and have therefore not been included in the comparison.

The situation that is envisaged to allow this comparison is for Orion to extend the network by 1 km with an
11 kV distribution line located in a grass berm within a rural area approximately 20 km from Christchurch
city. The following table outlines the main differences in emission sources throughout the lifespan of the
assets.




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Table 28: Assumptions made in a comparison between the carbon footprint of overhead lines and
underground cables.
Aspect                      Overhead Lines                              Underground Cables
Installation                Typical vehicles involved:                  Typical vehicles involved:
                            1 excavator                                 1 utility vehicle
                            2 cranes                                    1 excavator
                            2 trucks                                    2 six wheeler trucks
                                                                        1 tonne loader
                                                                        1 reversible plate compactor
                                                                        1 rammers
Maintenance                 Re-tightening after 2 years and a           Assuming no maintenance required
                            second one after 20 years. Typical
                            vehicles involved:
                            2 crane mounted trucks
                            2 trucks with elevator platforms

                            Assuming no tree clearance required
                            as new lines are planned to avoid
                            tree maintenance, or negotiation with
                            land owner to take responsibility.
Embodied                    15 Softwood poles                           1 km 11 KV UG Medium 185 Al XLPE
carbon                      1 km 11 kV OH Medium Dog (three
                            conductors
Electrical                  1.7 kW/km for the DOG overhead line         1.28 kW/km for the 185 Al cable.
losses

This comparison did not include any loss of CO2 resulting from tree clearance for overhead lines. This is
generally not applicable to Orion as very little forest cover is cleared in Canterbury as a result of its
overhead lines.


5.3.1                  Emissions from installation and maintenance

The fuel usage involved in the installation and maintenance of the assets (Table 29) was based on
information provided by Connetics

Table 29: Comparison between emissions from installation and maintenance of overhead lines
and underground cables
                          Machinery           Assumptions         Net             Litres of      Emission         Total
                                                                  working         fuel           Factor           kgCO2e
                                                                  hours                          (EF)
                                                                                                 kgCO2e/L1
                          1 excavator for
                          digging for poles   3 poles per day ×
                                                                        11.25        6.5             2.65              193.8
                          (3 poles per        0.75 hr /pole ×15
                          day)                poles in total
      Installing OHL




                          2 crane
                          mounted trucks
                                                                          4           5              2.65               53.0
                          (1000 m in one      10hr × 20%
                          day)                utilisation
                          2 trucks with
                          elevator
                                                                         16           5              2.65              212.0
                          platforms (1000     10hr × 80%
                          m in one day)       utilisation


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                            Machinery          Assumptions            Net       Litres of      Emission         Total
                                                                      working   fuel           Factor           kgCO2e
                                                                      hours                    (EF)
                                                                                               kgCO2e/L1
OHL sub-total                                                                                                        458.8
             2 crane
      Maintaining OHL




             mounted trucks
                                                                           4        5              2.65               53.0
             (1000 m in one                    10hr × 20%
             day)                              utilisation
             2 trucks with
             elevator
                                                                           16       5              2.65              212.0
             platforms (1000                   10hr × 80%
             m in one day)                     utilisation
OHL sub-total                                                                                                        265.0
OHL total                                                                                                            723.8
             1 utility vehicle                 Utilised 2
             (diesel)                          hrs/day× 25 days
                                                                           50       3              2.65              397.5
             returning to city
             at end of day
             1 excavator                       Utilised 6 hrs/day
                                                                          150      6.5             2.65            2,583.8
             (digger) 5t                       × 25 days
      Installation UGC




             2 six wheeler                     Utilised 5
             trucks to                         hrs/day× 25 days
                                                                          125       5              2.65            1,656.3
             transport loose
             material
                                               Utilised 2
                                                                           50       5              2.65              662.5
                            1 tonne loader     hrs/day× 25 days
                            1 reversible       Utilised 2
                            plate compactor,   hrs/day× 25 days            50       1              2.65              132.5
                            200kg
                                               Utilised 2
                                                                           50      0.5             2.65               66.3
                            1 rammers          hrs/day× 25 days
UGC total                                                                                                          5,498.8
1
  Assuming all vehicles are using diesel.


5.3.2                    Embodied emissions in overhead lines and underground cables

The estimation of embodied carbon in the assets was based on the carbon inventory result in Section 4.7.
Table 30: Comparison between embodied carbon in assets used in overhead lines and
underground cables.

                           Asset description                        Number of   Emission Factor (EF)             Total
                                                                    units       kgCO2e/unit                      kgCO2e


OHL                        15 Softwood poles                                                                       12,060.0
                                                                          15            804.0 /pole
OHL                        1 km 11 kV OH Medium DOG
                           (three conductors, hence actually          1,000               3.0 /m                     3,000
                           3 km of DOG line
OHL total                                                                                                          15,060.0
UGC                        1 km 11 KV UG Medium 185 Al
                                                                      1,000              24.1 /m                    24,100
                           XLPE
UGC total                                                                                                           24,100


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5.3.3           Electrical losses

A large part of the carbon footprint relates to level of electrical losses that occur in the asset type. These
electrical losses are the assumed average load losses in cables and lines with a total load factor of 50%
(Table 31) and a New Zealand emission factor from the average grid mix (MfE 2008).

Table 31: Comparison between electrical losses over the lifespan (50 years) of the overhead lines
and underground cables.
          Assumptions                              Hours in         Load          Emission                Total
                                                   operation        Factor        Factor                  kgCO2e
                                                                                  (kgCO2e/kwh)
OHL       An average load loss of 1.7 kW/km for
                                                      438,000          50%               0.209              77,811
          the DOG overhead line
UGC       An average load loss of 1.28 kW/km                           50%
                                                      438,000                            0.209              58,587
          for the 185 Aluminium cable

The actual electrical losses are very dependant on various conditions, however the losses in OHL are
generally higher than in UGC. For OHL, there are a number of factors influencing the losses: wind speed,
ambient air temperature, angle of wind, solar heat gain, radiated heat loss and finally the amount of
current flowing in the line. All these factors influence the conductor temperature, which influences the
lines electrical resistance and the electrical losses. In addition, the electrical resistance is also affected
by magnetic core effects on DOG steel-cored conductors and the amount of current flowing in the line is
also affected by changes in overhead line reactance, which varies with the spacing of conductors.

Cables are also affected by several factors, including temperature and thermal resistivity of the ground,
depth of burial, heating effect from adjacent cables, dielectric losses in the cable insulation and circulating
current losses depending on how the cable screen is bonded (earthed).

All these factors could not be considered in this comparison and the losses are based on average load
losses assuming a load factor of 50%.

5.3.4           A Whole life carbon comparison of overhead lines and underground cables

A complete emission comparison between OHL and the UGC over the whole asset lifespan (50 years) is
shown in Table 32.

Table 32: A whole life carbon comparison between overhead lines and underground cables
Aspect                                             Overhead Lines             Underground Cables
Installation                                       459                        5,499

Maintenance                                        265                        0

Embodied carbon                                    15,060                     24,100

Electrical losses                                  77,811                     58,587

Total emissions tCO2e                              93,595                     88,186

A comparison between the whole life carbon emissions is also displayed in Figure 6.




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           100000

           90000

           80000

           70000

           60000
   tCO2e




           50000                                                        Installation

           40000                                                        Maintenance
                                                                        Embodied carbon
           30000
                                                                        Electrical losses
           20000
           10000

                0
                      Overhead Lines    Underground Cables

Figure 6: A visual comparison between the whole life carbon emissions resulting from overhead
lines and underground cables
The comparison showed that overhead lines have a 6% higher whole life carbon impact compared to
underground cables; an amount which is not significant within the nature of the study. The annual carbon
impacts of lines versus cables are 1,872 tCO2e and 1,764 tCO2e respectively.

The embodied carbon detailed only includes cradle to gate emissions (see Section 3.1.2.2). The final end
of life disposal option is disregarded. All metal from the overhead lines is easily recoverable. The metal
in the cables is also recoverable although it requires slightly more processing than overhead lines.

Up until now, Orion have left the majority of cables in ground at the end of the asset life, however a new
national code has recently been proposed which is believed to require line companies to recover
decommissioned cables. There are of course carbon impacts if decommissioned cables require
recovering. New cables are very rarely laid in the same trench as the old cables and therefore, the
decommissioned cables are likely to create equally as many carbon emissions as the installation of them
did. If this is taken into account, the whole life carbon comparison between cables and lines would be
near exactly the same (93,595 tCO2e for lines and 93,685 tCO2e for cables).

Although there are relatively large differences in emissions from the different life aspects, the overall
difference in carbon footprint between the studied line and cable is not significant. It is important to
remember that these conclusions can only be drawn for the studied situation, i.e. 1 km of an 11 kV
distribution line located in a rural area.

The study assumed a life span of 50 years for both OHL and UGC. The XLPE aluminium cables have not
been used long enough by Orion to confirm the accurate life span. The earliest XLPE cables which were
installed only lasted 40 years but the current models are believed to last longer. Any changes in the life
span from the assumed 50 years will change the overall whole life carbon impacts.

As mentioned previously, there are many aspects which are essential to consider when planning the
network, for example; security of supply, electric and magnetic fields, noise and aesthetics (loss of
property value). Orion is of course restricted by these factors when selecting lines or cables.




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6        How can Orion Reduce its Carbon Footprint?
Summary of findings:

There are a few key areas which Orion is encouraged to focus on:
• Incorporate the cost of carbon into its network investment decisions. Prior to the establishment
  of any Emissions Trading Scheme, Orion is encouraged to factor in the price of carbon into its
  purchasing decision process for new assets.
• A small reduction in losses such as 1% of the current losses would save 337 tCO2e (equivalent of
  1.5 times the annual carbon emissions from Connetics’ office activities.

• Continue investing in Demand Side Management initiatives that assist with delaying network
  expansion. The total carbon savings thanks to the postponed network growth is estimated to be
  69,300 tCO2e.
• The embodied carbon savings from DSM are significant as it makes up 15% of Orion’s total embodied
  carbon across the entire network.
• Total annual emission savings of DSM are estimated at 152 tCO2e resulting from customers
  responding to Orion’s high pricing signals and by reducing the need for coal/gas generation due to
  local diesel generation.

• Reduce and where possible eliminate the installation of cable containing lead. The
  environmental impact of lead cables in the soil is regarded as relatively low, however since there are
  considerable environmentally harmful lead discharges from mining and smelting of lead, Orion is
  recommended to choose cables without lead. A move towards lead-free cables can avoid future
  liabilities.

• Implement initiatives to promote fuel efficiency.
• Orion is recommended to complete an internal review that focuses on:
• its vehicle acquisition policies, to produce a rolling target of replacement of the fleet with the most
  efficient vehicles on the market at that time.
• The suitability of using hybrid cars, since Orion’s and Connetics’ vehicle fleets are mostly urban
  based, where hybrid cars are performing well.
• Reducing vehicle usage, incorporating the use of hire cars, pool cars
• Developing an educational programme that encourages improved driving behaviour to influence fuel
  efficiency. This initiative has a potential savings of up to 149 tCO2 of carbon savings for Orion and
  Connetics together.
• Add requirements of environmental performance vehicles used by contractors into the procurement
  process. Orion can ask all contractors to monitor and report their fuel consumptions to aim to
  minimise fuel consumption.
• Work with contractors and local council to investigate practicable solutions to ensure that only
  essential trenched material from laying cables is disposed to cleanfill and unnecessary emissions from
  transporting both trenched material and imported substitute backfill is avoided. There are some
  substantial financial and environmental savings if contractors are able to a larger extent re-use
  excavated soil as backfill material.

• Ongoing reviews of suitable asset alternatives with better environmental performance
• Regularly review if there are practical alternatives to the copper-chromium-arsenic (CCA) treated
  softwood poles that Orion uses.
• Re-assess suitability to use power transformers with bio-based fluid as the design is improved.
• The polyethylene used in cables often uses halogen flame retardants to improve the properties. These
  additives have suspected negative environmental and human health effects with restrictions of their
  use in Europe. Non-halogen cables exist on the market and Orion is encouraged to review how
  suitable these are to use.

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• Concrete poles have up to 5 times more carbon embodied per unit compared to poles made of soft or
  hard wood. Orion’s current practices with mostly using soft and hardwood with regard to choice of pole
  material appear reasonable. Future research will clarify to what extent carbon absorption occurs in
  concrete.


Orion has many different sources of GHGs. To make the biggest carbon reductions possible Orion
should firstly focus its efforts on those areas which contribute the most carbon currently. This is counter
to the practise of many businesses who implement minor “feel-good” initiatives which in the end lead to
relatively small reductions in overall carbon emissions.

For instance, in 2007 Orion generated waste which only contributed to 0.4% of its office related emissions
(excluding fuel use). If Orion was to put considerable resource into waste minimisation, even if highly
successful, it will only lead to a minor improvement of its carbon footprint. On the other hand even small
improvements in the areas of electrical losses, or the carbon embodied in assets purchased, will make
comparatively large gains.

This study has helped Orion to better understand which aspects of its business have the largest carbon
impacts and where efforts are likely to result in large direct or indirect carbon savings.

The results of the study revealed a total carbon footprint for the FY 2007 of 43,583 tCO2e, of which 77.4%
is due to electricity losses across the network and 16.5% is embodied carbon in assets installed during
2007 (Figure 7). In effect almost 94% of the emissions arise from electrical losses and embedded carbon
in infrastructure, for which Orion’s options to make significant improvements are limited.
                                            Fuel Use (contractors)
                                                    1.0%

                                                               Connetics' Office 0.5%
                            Orion's Office 1.1%

                                                           SF6 losses 0.1%
                           Fuel Use (own) 3.4%




                               Embodied Carbon
                                   16.5%




                                              Electrical losses 77.4%




Figure 7: Summary of Orion’s sources of GHG emissions during FY 2007 including electrical losses




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Electrical losses aside, the emissions from fuel usage by Orion and Connetics contribute to 15.2% of the
total footprint and other contractors who service the network represent 4.6%. Orion’s and Connetics’
office related emissions represent 4.7% and 2.1% respectively (Figure 8). Although SF6 is an extremely
potent GHG, Orion appears to manage the risk of gas leakage very well. The estimated annual loss only
contributes to 0.3% of the total footprint (excluding losses).



                                   Fuel Use (contractors)
                                                               Connetics' Office 2.1%
                                           4.6%
                                                               SF6 losses 0.3%
                           Orion's Office
                               4.7%



                                                                  Other



                                 Fuel Use (own)
                                     15.2%
                                                                    Poles and Lines




                                                      Cables

                                                                                        Embodied Carbon
                                                                                            73.1%




Figure 8: Summary of Orion’s sources of GHG emissions during FY 2007 excluding electrical losses


6.1             Minimising Electrical losses from the Network
Summary of findings:

• Electrical losses in Orion’s network indirectly resulted in the generation of 33,658 tCO2e in 2007. The
  losses make up 77% of Orion’s total carbon footprint for 2007.
• Orion is already monitoring transformer losses thoroughly. There appear to be considerable
  uncertainty in determining losses in the cables and lines.
• Orion is encouraged to incorporate the carbon cost resulting from electrical losses when making
  purchasing decisions about investment into new network assets.
• A small reduction in losses such as 1% of the current losses would save the equivalent of 337 tonnes
  of CO2e (equivalent to 1.5 times the annual carbon emissions from Connetics’ office activities.
• Given the considerable difficulty of determining electrical losses, it is more feasible for Orion to focus
  on losses which will result from the installation of new assets. Accurate loss measurement is very
  expensive and Orion is thought to better invest in actually attempting to reduce the losses.


All electricity networks lose energy when lines, cables and transformers heat up. Electrical losses are
natural phenomena that cannot be avoided completely. Losses mean that more electricity needs to be
generated than what finally reaches the customers and carbon emissions are produced in the generation
of that extra electricity.


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During FY 2007, a total of 33,658 tCO2e was produced as a result of electrical losses. As reported in
Orion’s asset management plan from 2007, the main contributions to the losses are lines and cables
followed by transformers (Table 33).

Electrical losses have by far the largest carbon footprint impact for Orion. It contributed 77% of Orion’s
total carbon footprint for 2007. Unfortunately however most of these losses are unavoidable.

Table 33: Breakdown of the main contributors to electrical loss in Orion’s network
   Asset Category           Urban (%)             Rural (%)             Overall network (%)
   Subtransmission                  0.4
                                                          1.0
   lines and cables
   Power
                                    0.4                   0.4
   Transformers
   11 kV lines and
                                    1.4                   3.5
   cables
   Distribution
                                    1.1                   1.0
   transformers
   230/400V       lines
                                    1.2                   0.3
   and cables
   Transformers                                                                  1.7
   Average electrical losses in Orion’s network                                  4.9

While it will be impossible for Orion to ever reduce losses to anywhere near zero, given it makes up such
a large contribution of Orion’s overall annual carbon footprint, even a small reduction in losses will lead to
comparatively big gains in environmental performance. For instance a reduction from the current
estimate of 4.9% down to 4.8% would save the equivalent of 687 tonnes of CO2e. This is equivalent to
1.5 times the annual carbon emissions from Orion’s office activities (excluding fuel usage). While such a
reduction would be admirable, the effort and cost involved to measure energy losses to this level of
accuracy would be very significant.

To try to reduce the amount of electrical losses occurring on the network, Orion has two options:

                a. reduce electrical losses which are currently occurring from assets already installed in the
                   network.
                b. reduce electrical losses which will result from the installation of future assets.

The separation of electricity retailing from distribution has made it more difficult to estimate electrical
losses occurring in the existing network. Apparent losses have been measured by Orion as high as
10-15%. The main reason for these inaccuracies is incorrect metering.

Since there is currently limited accurate knowledge regarding the level of losses occurring in cables and
lines, immense investment would be required to enable a precise measurement of the losses. It would
also not provide direct benefits as it would not be financially viable for Orion to replace historical assets in
its network even if they prove to result in relatively high losses.Orion has no plan to replace any historical
assets on a large scale until these are due to normally be replaced.

Given the considerable difficulty in determining electrical losses and the need for other parties, such as
retailers, to also be interested in doing so, it is likely to be more feasible for Orion to focus on losses
which will result from the installation of assets in the future. Orion’s network planners are already using
engineering models of the network to calculate the theoretical losses. It would be more beneficial for
Orion to use these engineering models to determine energy loss improvements rather than attempt a very
costly loss measurement. Every dollar spent trying to measure losses is better spent trying to implement
initiatives to actually reduce them.


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Orion is also encouraged to incorporate the implications of carbon costs on a project by project basis
when planning the network.

Orion is already factoring in the current financial cost of electrical losses into some of its purchasing
decisions. It incorporates the cost of generating electricity and transporting it from the generator through
to Orion’s network. Based on electricity hedge pricing, Orion estimate this cost at 8 cents per kWh
($80 per MWh).

So how is Orion already factoring this financial cost of losses into its decision making processes? For
example, given a financial cost of $8 per kWh, if for instance Transformer A loses 100 MWh over its life,
while Transformer B loses 1000 MWh, provided all other factors being equal, Orion will purchase
Transformer A even if its purchasing price is up to $7,200 (being $8 times 900 MWh) higher than
Transformer B.

This electricity price of $80/MWh does not however include the cost of carbon as New Zealand currently
has no Emissions Trading Scheme (ETS) or carbon tax in place. Orion could though, in advance of an
ETS, factor in the price of carbon into its purchasing decision process for assets. Given the design of
New Zealand’s electricity system, Orion, being a South Island company, generally distributes electricity
from renewable hydro sources rather than North Island located carbon polluting generation. Some may
consider that electrical losses (and electricity use) due to Orion’s activities result in no carbon emissions
being released (as hydro sources are zero carbon emitting). This assumption is challenged however
since a reduction in electricity usage on Orion’s network results in more hydro energy being distributed
from the South Island to the North Island. Consequently, a reduction in energy usage across Orion’s
network indirectly reduces North Island fossil fuel based generation. The carbon impact of electrical
losses which occurred during the studied year were estimated based on a national average figure for
generation emissions (0.209 tCO2e per MWh) which takes into account all generation including North
Island fossil fuel based generation, as well as generation from hydro.

When considering future asset investments Orion, as an environmentally pro-active organisation, is
encouraged to take an even more conservative approach. The carbon impact from Orion’s electrical
losses would most of the time be close to zero, however it can during the coldest winter days be
significant and any reduction in South Island usage of electricity will actually result in the reduction in use
of New Zealand’s marginal electricity generation sources. These sources are typically carbon emitting
fossil fuels (mainly coal and gas). Consequently reduction in electrical losses in Orion’s network can
result in less fossil fuel based generation occurring.

Given this, MWH encourage Orion to incorporate into its investment decision making the carbon cost of
electrical losses based on an electricity mix between North Island based gas and coal generation. This
would be justified for future investment decisions to drive the selection of assets with lower electrical
losses. MWH believes that it is sufficient to only use the New Zealand national average emission factor
for the calculation of carbon impact from historic electrical losses.

The carbon impact from 1 MWh of electricity generated from burning coal or gas (0.71 tCO2e, Section
5.1.2.1). Given the current price of carbon $26.84 (Treasury November 2008), the carbon cost of 1 MWh
of electrical losses is $19.06. If Orion is factoring in this cost into decision making process would
increase the cost per MWh from $80 to $99.06. It is important to emphasise that the price of carbon is
varying and if Orion chooses to use it in its decision making process, it also should have a system to
regularly review the applied carbon cost to reflect the market price.

MWH strongly encourage Orion to incorporate carbon cost into future investment decisions until ETS is
established. Once an Emission Trading Scheme, ETS, has been established in New Zealand, the price
of carbon will already be included in the price of electricity, Orion should then not add in $19.06 into the
evaluation process.




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6.1.1           Electrical losses from Transformers

Transformers are believed to result in losses of on average 1.7% of the total energy distributed. During
FY 2007, this was equivalent to 11,677 tCO2e (27% of Orion’s total carbon emissions including losses).

As mentioned above Orion already takes into account losses which occur in a transformer over its life
when comparing offers of distribution transformers for purchase. In this manner, Orion ensures to select
the most cost-effective transformer that also helps to reduce network losses.

In a Dutch study (Croezen and Bello 2004), the environmental profiles of three different transformers with
a varying efficiency were compared and this showed that a small difference in transformer efficiency has
a large impact on the total carbon emissions produced over the life time of the asset. The most efficient
transformer had a larger embodied carbon footprint which can be explained by generally containing larger
volume of metals. The life cycle impacts on climate change are mainly due to the power consumption
during operation, and more specifically to the climate change impacts of the electricity grid mix.

When using the same life cycle data for embodied carbon as was presented in the Dutch study and
including the climate change impact per kWh of the electricity generated from coal and gas (emission
factor 0.71 CO2e/ kWh), the differences in carbon cost between the most efficient and the worst model
would be approximately $18,000 over the lifetime of the asset (Table 34). This comparison provides a real
sense of the cost in terms of climate change impacts from choosing different types of distribution
transformers which can appear to be fairly similar. As mentioned earlier Orion is currently taking into
account the financial implications from load losses when comparing transformers. It may want to expand
its current cost analysis to also include the cost of carbon to also incorporate the environmental cost from
various options.

Table 34: Example of life cycle comparison of carbon costs for 400kVA distribution transformers
using New Zealand average grid mix
                                                            Climate
                              Embodied      Energy      change impact     Total Carbon         Gain relative
                 Efficiency
    Model                       Carbon       use          from power        Cost per             to type 1
                     (%)
                              (kg/ CO2e)   MWh/year      consumption        lifetime2           ($/lifetime)
                                                        (tonnes CO2e)1
Type 1
                   98.4       2,010.05      3561.0          75,849.3       2,089,744.95                -

Type 2
                   98.6       2,634.60      3552.3          75,664.0       2,101,534.16          11,789.20

Type 3
                   99.4       3,446.70      3525.2          75,086.8       2,107,838.07          18,093.11
1
 Assuming all three types to have a running time of 8,760 hours with a life time of 30 years.
2
 Assuming a carbon price of $26.84/tCO2e (Treasury November 2008).

6.1.2           Electrical losses from cables and lines

Cables and lines are believed to result in losses of on average 3.3% of the total energy distributed. During
FY2007, this would be equivalent to 22,667 tCO2e. The loss is dependent on the current from the
connected load as well as the resistance of the conductor. The larger the conductor size, the lower the
resistance and hence the losses. It has always been possible to build a lower loss network by investing
more capital in the network, but Orion has adopted the principle to aim to optimise losses, not just to
minimise them. Larger conductors are more resource intensive and costly, so there has to be a trade off
between capital costs and the cost of losses. The trade off also needs to consider collective benefits of
selecting larger conductors, including increased security of supply and reduced transmission charges.



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There is also a trade off between using overhead lines, which have higher electrical losses and
underground cables which are more efficient but also need more resources. There are a number of
factors that determines the final electrical losses in the network. Overhead lines are in general
responsible for greater electrical losses per km than buried cables. In the comparison of carbon
emissions from the losses in the lines and cables (4.7.2.3) showed a 30% higher carbon impact from lines
compared to the cables.


6.2             Embodied carbon in Orion’s network infrastructure
Summary of findings:

• The embodied carbon in assets installed during 2007 represents a total of 16.5% of Orion’s total
  carbon footprint for the financial year 2007 excluding losses (7,192 tCO2e).
• There are some assets on the market which use materials with lower environmental impacts, but many
  may not be realistic options for Orion. It is encouraged to approach suppliers to ask for information
  about the environmental performance of the network assets.
• The large number of poles contribute almost 15% of Orion’s total annul carbon footprint for 2007
  (excluding losses).
• Concrete poles have up to 5 times more carbon embodied per unit compared to poles made of soft or
  hard wood. Orion’s current practices with mostly using poles made of soft and hardwood appear
  reasonable. Future research will clarify to what extent carbon absorption occurs in concrete.
• Historically concrete poles were used more widely in the network which is why the poles contribute to
  almost 40% of the total embodied carbon across Orion’s entire network.
• The carbon footprint caused by 1kW of new load is a combination of embedded carbon in the assets
  of Orion, Transpower and electricity generators, and the carbon emitted during the generation of the
  energy. Assuming the generation is from coal, Orion’s proportion of the footprint is only 0.5%. In
  other words, Orion is far from being the significant contributor to carbon emission in the electricity
  industry.
• Demand Side Management assists with delaying network expansion. The total carbon savings
  associated with the postponed network growth is estimated to be 69,300 tCO2e.
• The carbon savings from delaying the expansion of the network is almost 15% of Orion’s total
  embodied carbon across the whole network (476,091 tCO2e). DSM is undoubtedly reducing Orion’s
  carbon impact and is essential to continue making an important part of Orion’s asset management
  plan.
• If other New Zealand network companies followed Orion’s lead in DSM it could result in carbon
  savings which would be equivalent of up to 1% of New Zealand’s total annual emissions.


Orion is committed to choosing asset equipment which cause as little harm to the environment as
possible. As an electricity distributor, it is naturally obliged to ensure security of supply to its customers
and is often relatively restricted in its selection of asset types for this reason.

When evaluating whether to install new types of assets, it considers the functionality, physical properties,
asset life and cost. Environmental aspects which should be judged as part of this process are the
implications for disposal, the possibility for reuse of the material, the extent of hazardous substance use
and the carbon footprint of the asset. The first step is to ask the supplier for environmental information
about the assets they are offering. In many cases they may not have such information, but Orion may be
able influence with its purchasing power and encourage them to clarify environmental impacts of their
offered equipment. Unfortunately it is recognised that Orion is a relatively small player in the world
electricity market. Although it’s influence on which product are provided by suppliers will often in reality
be minor, this should not stop Orion from questioning suppliers and pushing for improvements of their
products’ environmental performance.

There are already many assets on the market which have lower environmental impacts than the types
currently used by Orion, but for various reasons these may not be realistic options for Orion. For example


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transformers which use the bio-based insulating oil are currently not meeting Orion’s technical
requirements. Orion would benefit from regularly reviewing the suitability of alternatives in the market as
designs are frequently improved.

Some alternatives may use less toxic compounds but actually have a higher carbon footprint than the
asset type currently used. This is part of the complexity of comparing the environmental profiles of
different assets. In this study carbon impact was the only environmental aspect that was quantified mainly
due to the significance society places on climate change as a major environmental issue.

In an assessment of the difference between the embodied carbon in concrete or wood poles, the latter is
5 times less carbon intensive. The benefits of using concrete is that is has a longer life expectancy and
does not require any chemical treatment like soft wood does. At the moment Orion is mostly using
softwood and hardwood in its network. Orion’s current practices with regard to choice of pole material
appear reasonable. Wood is a renewable material and the poles are not as energy intensive to
manufacture as concrete. Future research will clarify to what extent carbon absorption occurs in concrete.
Locally produced concrete could potentially have a lower carbon footprint than hardwood sourced from
Australia. Orion would benefit from keeping updated on research findings about carbon impacts of some
of the company’s most frequently used material.

It is important to remember that for an accurate LCA comparison between options much more detailed
information is required than what was used in this assessment. It was outside of the scope of this project,
due to time, budget and particularly added value considerations to undertake a detailed LCA for each of
Orion’s assets.

Estimating the embodied carbon in network assets enabled an analysis of the carbon savings relating to
DSM. Managing the load in the network makes sense from a financial perspective since DSM is
effectively postponing expensive network expansions. Orion was also interested to know if it also makes
good sense from an environmental perspective.


6.2.1           Demand Side Management (DSM) – Reducing the carbon footprint?

The implications on the carbon footprint from DSM was analysed in Section 5.1. Orion implemented its
first DSM initiative in 1990 and since then its initiatives have been very successful in terms of load
management. DSM saves carbon in three different areas:

     1. One-off infrastructure savings of 69,300 tCO2e;
     2. Annual carbon savings from reduced energy usage of 31.2 tCO2e; and
     3. Annual carbon savings from reduction in coal/gas generation due to local diesel generation of
        121 tCO2e.

The total carbon savings if assuming the one-off infrastructure savings as well as carbon savings over
one year would equate to 69,452 tCO2e.

In comparison to the emissions generated by Orion’s office the annual saving of 152 tCO2e is about a
third. The continuous savings are not huge, but if you consider the much delayed carbon generation
associated with the delayed network expansion (saving 69,300 tCO2e), DSM really pays off, not just
financially, but also environmentally.

The carbon savings from delaying the expansion of the network is almost 15% of Orion’s total embodied
carbon across the whole network (476,091 tCO2e). DSM is undoubtedly reducing Orion’s carbon impact.




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                                                     Emissions rate
                              Investment             without investment
  Cumulative CO2e emissions




                                                                          Emissions reduction from investment
                                                                          Operational emissions since investment
                                                                          Embodied emissions from investment

                                           Reduced emissions rate
                                           with investment                Cumulative emissions up to investment



                                                                               time

Figure 9: Investment into low carbon solutions can temporarily increase the cumulative CO2
emissions, however will lead to emission reductions over time.

Investing in local alternative energy sources, whether it is diesel or hydro, or photo voltaic power
generation, always results in an inherent increase in carbon emissions. However these alternatives do
reduce the cumulative carbon emissions over time compared to a situation without any investment made.
Figure 9 shows how low-carbon technology will save emissions in the long run. The time it takes for the
emission levels in a situation without investment to exceed the ones with the investment can be referred
to as “carbon pay back period”.

Given the considerable carbon savings that DSM results in Orion should continue to undertake its DSM
initiatives and to increase the number of businesses that respond to its high price signals through either
load curtailment or diesel generation. These initiatives will lead to on-going carbon savings.

It is noted that given the large one-off carbon savings that has been achieved by Orion, if other network
companies in New Zealand undertook similar DSM initiatives to Orion, the gain to New Zealand in terms
of reduced carbon emissions would be considerable and equivalent to 1% of New Zealand’s annual
emissions. It is worth mentioning that the majority of emissions embodied in the network assets are
generated outside of New Zealand.




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6.3             GHG emissions associated with fuel usage
Summary of findings:

Orion is recommended to initially complete an internal review that focuses on:
• Its vehicle acquisition policies, to produce a rolling target of replacement of the fleet with the most
   efficient and low emitting vehicles on the market at that time.
• The suitability of using hybrid cars. Orion’s and Connetics’ vehicle fleets are mostly urban based:
   where hybrid cars perform well.
• Reducing vehicle usage, incorporating the use of hire cars, pool cars
• Developing an educational programme that encourages improved driving behaviour to influence fuel
   efficiency.

Orion is encouraged to work with contractors to improve fuel efficiency:
• Add requirements of environmental performance vehicles used by contractors into the procurement
   process. Orion can ask all contractors to monitor and report their fuel consumptions to aim to
   minimise fuel consumption.
• Work with contractors and local council to investigate practicable solutions to ensure that only
   essential trenched material from laying cables is disposed to cleanfill and unnecessary emissions from
   transporting both trenched material and imported substitute backfill is avoided. There are some
   substantial financial and environmental savings if contractors are able to a larger extent re-use
   excavated soil as backfill material.


The transport sector is one of the largest and the fastest growing contributor to New Zealand's
greenhouse gases. Transport is responsible for approximately 19% of the total greenhouse gases
emitted in New Zealand (MoT 2008). Peak oil has become an accepted term, meaning that the maximum
production level of petroleum has been reached. Fuel costs have until the recent global market recession,
been steadily rising with increasing demand. Oil prices are impacted by a number of factors, including
geopolitical events, fluctuations in demand, economic growth levels, decisions by oil producers on
production levels, security around supply and market psychology. Roughly 97% of all energy consumed
by our cars, trucks and airplanes, is still petroleum-based.

In the light of this situation, Orion and Connetics need to consider what are the suitable fuels to use in
their vehicle fleets to ensure the security of electricity supply to the customers long term. However, no
matter which fuel type a vehicle is using, it is very important to select cars based upon whole life costs
(incorporating fuel efficiency) rather than the lease or purchase cost.

A larger part of Orion’s carbon emissions are generated by the contractors’ fuel use responsible for
servicing of Orion’s network. Orion does not have direct influence over how these other contractors
operate their vehicle fleets (apart from Connetics), but Orion may want to include some requirement
regarding vehicle performance in its procurement criteria.


6.4             Choice of fuel and vehicle types
Connetics is mainly using diesel for its vehicle fleet (73%) with the remaining part using petrol. Orion’s
fleet uses 56% diesel and the remaining part petrol. Based on fuel usage, Orion and Connetics emitted
433 tCO2e and 1,061 tCO2e in 2007 respectively. Together their fuel usage contributed 15% of Orion’s
total annual carbon footprint (excluding losses).

There are other fuel options apart from petrol and diesel and a summary of the main alternatives is
provided in Table 35. The choice of fuel type affects the level of harmful pollutants such as carbon
monoxide, hydrocarbons, nitrous oxides, and particulate matter, as well as the levels of GHG emissions.

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In Christchurch, we have a notorious issue with smog during cold days during the winter, however the
main concern is considered to be the burning of wood and coal on home fires with transport emissions
only contributing to 10% of the particulate matter in the air (Environment Canterbury 2008).

When selecting company cars, the best guideline to reduce your vehicle emissions is to choose the
lightest vehicle possible for the purpose, the most fuel efficient model and to use the vehicle to its full
capacity most of the time. Orion appears to have robust maintenance schedules on all company cars. It
is worth noting that a simple trick like maintaining the right tyre pressure can save 1-2% of fuel use
(saving up to 30 tCO2 for Orion and Connetics together).




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Table 35: Comparison between different fuel types and key advantages and disadvantages with each type

Fuel Type            Emission        Description                                                Advantages                               Disadvantages
                     Factor
Petrol               2.32 kg         Utilises petroleum derived liquid mixture                  • Common, emits low levels of          • Relatively high CO2
                     CO2e/L                                                                       carbon monoxide, hydrocarbons,         emissions
                                                                                                  nitrous oxides, and particulate
                                                                                                  matter

Diesel               2.65 kg         The most common is a distillate of petroleum fuel oil      • Engines using diesel are generally   • Relatively high CO2
                     CO2e/L                                                                       more efficient than with petrol        emissions
                                                                                                                                       • Emits high levels of
                                                                                                                                         sulphur oxide, carbon
                                                                                                                                         monoxide, hydrocarbons,
                                                                                                                                         nitrous oxides, and
                                                                                                                                         particulate matter which
                                                                                                                                         increase the risk of
                                                                                                                                         respiratory and
                                                                                                                                         cardiovascular diseases
Biofuels, e.g.       Varying, 1.07   Produced from biological carbon sources, such as           • Classified as renewable resources    • Can lead to increased
biodiesel,           kg CO2e/L if    plants. Emission factors are affected by factors such                                               food prices if competing
                                     carbon source used, the application of fertilisers and     • Can be made from algae and             for agricultural land or
ethanol              100%
                                                                                                  lignocellulosic parts of biomass
                     biodiesel1      pesticides.                                                                                         using e.g. canola or sugar
                                                                                                                                         canes as feed stock
                                     Mainly two groups of crops are used; crops high in
                                     sugar which produce ethanol after fermentation                                                    • Inherent higher carbon
                                     (e.g. corn, sugar cane) or crops with high amounts                                                  emissions if produced
                                     of vegetable oil (e.g. soy bean, oil palm), which are                                               outside New Zealand
                                     burned directly in a diesel engine, so called bio-
                                     diesel.
Liquefied            1.61 kg         Mixture of 90% propane with several other gases.           • Significantly lower carbon           • Still fossil fuel based.
petroleum gas        CO2e/L                                                                       emissions than petrol and diesel.    • Security of supply is
(LPG)                                                                                           • The GHG emissions are lower            affected by the ability to
                                                                                                  since LPG is mainly a natural by-      transport gas supplies
                                                                                                  product of natural gas production      from ports, and by the
                                                                                                  and petroleum refinement (MED          increasing price of LPG on
                                                                                                  2008).                                 the international market.
                                                                                                • Possible to use both petrol and      • Vehicles with bi-fuel

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Fuel Type            Emission         Description                                                Advantages                                 Disadvantages
                     Factor
                                                                                                     LPG                                     systems have to
                                                                                                                                             accommodate two tanks:
                                                                                                                                             petrol and LPG.

Electricity          2.09 – 4.08      Utilises electric motor instead of internal combustion     • No direct GHG emission                 • Require a significant
                     kg               engine                                                                                                amount of on-board
                                                                                                 • Electric cars typically use 10 to 23
                     CO2e/100km                                                                                                             storage
                                                                                                   kW·h/100 km, which is
                                                                                                   approximately 2-4 times more           • Technical issues with
                                                                                                   efficient than using petrol              reducing charging time
                                                                                                                                          • Indirect GHG emissions
                                                                                                                                            from electricity used
Electricity/petr     Varies, e.g.     Hybrid cars use a combination of an engine using           • Generally very efficient               • Potential toxicity during
ol (hybrid car)      12.064 kg        traditional fuel, such as diesel or petrol, and an                                                    materials
                     CO2e/100km       electric motor. They do not require recharging as                                                     extraction/processing and
                     (Toyota Prius)   the batteries automatically recharge when driving.                                                    battery manufacturing

1
 Values of other blends of bio-diesel can be calculated by a pro-rata calculation based on the values for “Diesel” and “100% Bio-diesel”, e.g. carbon
emissions from 5% biodiesel = (0.05 ×1.07) + (0.95 ×2.65) = 2.55 kg CO2e/L.




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6.4.1.1         Petrol vs. Diesel

Petrol (91 Octane) emits 14% less carbon emissions than diesel (emissions factors of 2.32 versus
2.65 kgCO2e/L respectively), but diesel cars are generally more efficient. If a diesel vehicle is more than
14% more efficient per kilometre travelled, the carbon footprint would be lower for the diesel vehicle. The
information regarding the average fuel economy of a petrol and diesel car ranges between sources.
According to New Zealand Transport Authority, diesel engines are generally between 10-30% more
efficient than petrol engines and there are huge differences between various technologies (Davey
Uprichard, NZTA, personal communication 2008). A hatchback using diesel was listed as second most
efficient car after a hybrid-diesel, generating only 12.3 kg CO2/100km travelled (Auto express News
2007).

If Orion or Connetics wish to change some of their petrol vehicles to diesel, they are encouraged to
choose new diesel vehicles which meet Euro V, Japan JE05 or ADR 80/02 international emissions
standards to ensure low levels of GHGs and other hazardous emissions.

There are other fuel options apart from petrol and diesel that emit less GHG. In many cases Orion and
Connetics may not have any choice to change fuel type as some of the heavy duty vehicles, trucks,
excavators, can only use a limited range of fuel types.

6.4.1.2         Biofuels

New Zealand may start using biofuels more widely in the near future, especially when an ETS or carbon
tax will put a price on carbon. Biofuels are derived from renewable resources plants or other biological
sources including animal wastes. Some biofuels, depending on the specific biofuel blend, may be exempt
from a probable ETS. In New Zealand bioethanol-blended petrol is available in blends of up to 10%
bioethanol and bio-diesel is expected to become more common in the market (EECA July 2008). Whilst
the intent of supplementation or replacement of fossil fuels with renewable biofuels was initially seen as
positive from an environmental perspective, there are now a number of known environmental and social
risks. In particular it is known from experience in America that demand for biofuels can lead to increase
in the amount of land used to grow biofuel crop and this can lead to displacement of land previously used
for food production. This results in food price increases which can significantly affect people, particular
those in poverty. In addition, it becomes economically favourable to clear forest for biofuel crops which
threatens biodiversity.

As the social and environmental risks of bio-fuel production have become highlighted, alternatives which
avoid these risks are being developed. Some of the current focus areas are inedible waste products from
forestry, agriculture and horticulture. The use of algae, which is produced in large quantities during
wastewater treatment, is also considered but not available as a fuel on a commercial basis yet.

A 5 % bio-diesel blend (emission factor 2.55 kgCO2e/L) would only save Orion and Connetics a total of 42
tCO2e per year compared to using petroleum based diesel, which is a minor carbon saving.

At this point in time Orion and Connetics should only consider using biofuels if these are locally produced
and are also not made from any crop which is resulting in decreased biodiversity. The most ideal biofuel
come from waste products. The fuel supplier will have information regarding which types of fuels could
become an alternative to two existing fuel types, petrol and diesel.

6.4.1.3         Liquid Petroleum Gas

LPG can be used as a fuel within a modified internal combustion engine. Most cars and vans that operate
on LPG are designed to run in bi-fuel mode; the engine is able to operate on gas or petrol. The most
efficient vehicles that are converted to bi-fuel mode use electronically controlled gas-injection systems.
Since the infrastructure supply for LPG is less developed than petrol it is beneficial to have a bi-fuel
system. LPG is becoming more popular to use. In the UK, there are over 100,000 LPG vehicles in use.
The increasing price of petrol and diesel made many convert to LPG. The majority of these are cars and



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light-duty vans, most which are bi-fuel. Connetics operated some vehicles with bi-fuel mode in the past,
but currently have no vehicles using LPG.

Today you can see taxi companies advertising to be “green” by running on LPG. Is the use of LPG
actually better for the environment? Several websites recommend the use of LPG to reduce GHG
emissions. Compared to petrol, LPG has 31% lower carbon content (2.32 compared to 1.61 kg CO2e/L),
however the fuel efficiency of LPG cars is between 20-30% lower than for petrol (Whatgreencar 2008),
which would make the types very similar in final carbon emissions. Converting to LPG is not believed to
reduce carbon emissions significantly. There is currently not a strong case to change to LPG to save
carbon emissions. Compared to diesel, LPG is likely to have higher GHG emissions since the diesel
engine has higher fuel efficiency. On the other hand LPG generates less noxious emissions that cause
air pollution and illnesses.

6.4.1.4         Electricity – Electric car or Petrol Hybrid

Hybrid cars have been very popular on the market the last few years and many companies are now using
them in their vehicle fleet. The hybrid car has a petrol engine and an electric motor and can improve fuel
efficiency by automatically selecting the most efficient engine for the driving conditions. Slow city driving
usually uses the electric motor while fast travelling uses petrol. Hybrid cars could be an option for Orion
and Connetics as most of their vehicles are mostly city bound. Efficient diesel vehicles are more suited
when travelling long haul or when towing or climbing grades. Petrol-electric hybrid cars often have similar
fuel efficiency to very efficient diesel cars. Orion is recommended to complete a more detailed review to
clarify if hybrid cars are suited to replace some of the current petrol or diesel driven cars.

Critics have been concerned that manufacturing hybrid cars produces more carbon than making
traditional cars, pointing out that the battery is very carbon intensive to manufacture. One LCA study
showed that the massive Hummer even had a lower life carbon than the Toyota Prius. Recent research
by the Pacific Institute (2007) showed that this study was misleading and that hybrid cars have a much
lower climate impact than Hummers.

When hybrids use their petrol engines, these are generally less fuel efficient than diesel engines. Diesel-
electric hybrids have also been developed and are expected to become more common in the market in
the near future. Auto express News (2007) listed a diesel-hybrid hatchback as the top performer
generating only 12.9 kg CO2/100km travelled.

Fully electric cars, which there are not that many of in New Zealand at the moment, are 2-4 times more
efficient compared to an efficient petrol car (using 5 l/100km). This is calculated by assuming that petrol
has an average energy content of 9.6 kWh/l (Wikipedia), which means 48 kWh/100km. Electric cars
typically use 10 to 23 kWh/100 km (Wikipedia 2008). The demand for electric cars is very small in New
Zealand, as there is no infrastructure to support their use. Electric cars would certainly be attractive for
Orion to consider as a very proactive player in the market; however it is not expected to be a feasible
alternative to Orion’s current vehicles in the immediate future.


6.4.2           Encouraging fuel efficient driving behaviour

All fuels have some adverse affects and it is important to focus on lowering emissions by reducing the
actual fuel use. Orion and Connetics are already monitoring the performance of all their vehicles on a
monthly basis by using fuel cards. Receiving information from the fuel supplier assists in maintaining an
efficient vehicle fleet as it can identify poor performing vehicles or staff using inefficient driving
techniques.

For some purposes, it may be feasible to consider the use of hire or pool cars. From a cost perspective,
pool cars need high utilisation to be effective. The use of pool cars and hire cars does not reduce the fuel
use, but it reduces the number of vehicles required in the vehicle fleet.




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An area which neither Connetics nor Orion have focused on so far are ways to encourage improved
driving behaviour to influence fuel efficiency. It is essential to communicate what are the techniques to
drive fuel efficiently and ensure that the message is communicated to all staff who drive on business. .
Efficient driving techniques can potentially be emphasised during training for safe driving. Adopting fuel
efficient driving techniques can significantly improve fuel consumption with a typical saving of 5-10%,
which would mean up to 149 tCO2 saved for Orion and Connetics together

6.4.2.1         Working with contractors to reducing fuel use

After Orion has more thoroughly reviewed its own fuel usage, the company is recommended to work with
other contractors to also influence them to run their fleets more efficiently. Orion can for example
consider adding requirements of the environmental performance of vehicles used by contractors into the
procurement process. Orion and Connetics are already monitoring fuel consumption of individual
vehicles with the use of fuel cards. It appears reasonable to demand all contractors to also monitor and
report their fuel consumptions to minimise fuel consumption and lower Orion’s indirect environmental
impacts.

Orion can also attempt to reduce fuel consumption by changing some of the existing practises. There are
certainly some opportunities to reduce fuel usage if Christchurch City Council would more widely allow
excavated soil to be re-used as backfill, instead of its current requirements which in most cases oblige
contractors to transport excavated soil off-site to a cleanfill site and to bring back aggregate as backfill.
While recognising that the previous problem with slumping was unacceptable, the current situation with
the majority of excavated soil being taken off-site may not be the best practice solution.

In some cases, the excavated soil is very suited to be re-used as backfill, but is still transported off-site for
disposal at an environmental and financial cost. In 2007, a total of 43 km of 11 kV cable was installed by
trenching and backfilling with aggregate. If all excavated soil associated with the installation of this length
of 11 kV cable had been re-used as backfill on site, a total carbon saving of 172 tCO2e would have been
achieved compared to removing excavated soil and backfilling with aggregate from a remote site.

Whilst this practice has recently been somewhat modified as trenched material can now sometimes be re-
used, subject to the trenching being undertaken in a berm or in a sandy area, it is still a concern for both
waste, carbon and fuel economy reasons that in most instances excavated soil is not re-used.

It appears that Orion is best to bring together its contractors and the local council to discuss the current
issues with trenching and backfilling. The parties need to investigate practicable solutions regarding how
to ensure that only essential trenched material is disposed to cleanfill and unnecessary emissions from
transporting both trenched material and imported substitute backfill is avoided.

Although not analysed in this report, other research has showed that a trenchless method, such as
directional drilling potentially has a significantly lower carbon footprint than trenching. Orion may be
interested in making such a comparison to quantify the potential environmental and social benefits of
directional drilling and weigh them against the difference in cost.


6.5             GHG emissions from Orion’s and Connetics’ offices
Summary of findings:

• In 2007 Orion had an energy audit completed on its’ buildings. It identified opportunities for energy
  savings in Orion’s office building, which would lead to energy costs savings of up to 13% and annual
  carbon savings of 54 tCO2e. The audit findings need to be revisited as Orion recently decided that the
  existing building will be separated into its old and new parts.
• Connetics is having an energy audit conducted by EECA in January 2009 and hopefully there will be
  some opportunities identified which can assist to reduce its carbon footprint.



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• Connetics is disposing of a relatively large quantity of waste to landfill every year, but has limited
  knowledge about which activities are generating the waste. Connetics may want to complete a waste
  audit to promote waste minimisation.
• Orion may want to better assess the environmental performance of the building it owns. The Green
  Building Councils’ Greenstar Building rating tools, which take into account many other areas than
  carbon emissions, are available to use.


The total amount of carbon emissions associated with Orion’s and Connetics’ office activities during 2007
was 462 tCO2e and 208 tCO2e respectively, not including fuel usage. The carbon footprint per staff is
equivalent to approximately 3.0 tCO2e per Orion staff member and 0.9 tCO2e per Connetics staff
member. Orion’s emissions are similar to those of the Ministry for the Environment, which has for three
years measured emissions of approximately 3 tCO2e per FTE. Emissions relating to offices are highly
dependent on if the organisation has any significant sized vehicle fleet. When MfE measured its carbon
emissions, it only had three cars in its fleet. In this report, fuel usage was separated from the office
emissions. It would not be relevant to compare Connetics with organisations which are solely office-
based, since the nature of a network contractor work with a large vehicle fleet is very different to that of
an office based organisation.


6.5.1           Electricity usage

There are certainly opportunities for improvements associated with the energy efficiency of Orion’s office
premises. An energy audit undertaken by Enercon in 2007 identified measures that could reduce the
energy use to approximately 233 kWh/m2 from 293 kWh/m2 with total energy costs savings of up to 13%
and annual carbon savings of 54 tCO2e. Connetics is having an energy audit conducted by EECA in
January 2009 and hopefully there will be some opportunities identified which can assist to reduce its
carbon footprint. Orion has implemented a few of the initiatives recommended in the audit report,
however many of the audit findings are now out of date, since the company has decided to separate the
building into the new and old part. The opportunities for energy savings need to be revisited in the light of
the new direction.

Meridian Energy is the main electricity provider for both Orion and Connetics. As a carboNZero certified
electricity provider Meridian ensures that the emissions associated with its electricity generation and retail
activities are offset. It is only generating electricity from renewable energy sources and if the amount sold
to customers exceeded the amount generated, it calculates the emissions associated with the balance
and offsets it. Meridian has not offset carbon emissions that were generated by constructing the
infrastructure it owns. Although electricity which Orion and Connetics use is ‘carbon neutral’, they are still
strongly encouraged to measure and publish their annual carbon emissions. Finally it is in their interest to
ensure that their building operates as efficiently as possible.

6.5.2           Overall building performance

If Orion or Connetics have an interest in benchmarking the environmental performance of their building,
they may want to use the Green Building Councils’ Greenstar Building rating tools. The New Zealand
Green Building Council has developed a building performance rating tool to determine how sustainable
existing buildings are. Some of the key areas which are examined are energy and water efficiency, indoor
environment quality, resource conservation, transport, land use, ecology and GHG emissions. Initially a
self-assessment can be undertaken, using the pilot tool, to decide whether Orion wishes to proceed with
a third party recognition of its improvements made to the building. The assessment identifies areas where
further improvements may be made across the key areas. To rate a building, an organisation can engage
a Green Star accredited professional to prepare a submission for assessment by the Green Building
Council to a specific star rating.




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The Green Building Council will release the office tool for existing buildings in April 2009. This will allow
current office spaces to become Greenstar rated for any beneficial retrofitting that results in increases of
sustainable practises.

The Australian Green Infrastructure Council, AGIC, is currently developing a Greenstar for infrastructure
and it is expected that similar benchmarking tools will be developed for New Zealand as well eventually.

6.5.3           Waste disposal

In the past waste minimisation in Orion’s office has been highlighted and practises were improved. Orion
is recycling many different materials and food waste is not sent to the landfill, but fed as pig feed instead.
Further improvements in this area will not save significant carbon emissions and it is more important to
focus on areas with “bigger wins”. Nonetheless Orion’s current practises are certainly worth continuing.

Connetics is disposing of a relatively large quantity of waste to landfill every year and it appears to not
fully understand which activities are generating the waste. It would be beneficial to know which of Orion’s
assets create much waste to be able to improve and make changes. Connetics may want to complete a
waste audit to better understand its waste streams and promote waste minimisation. It may also assist
Orion in choosing assets which contain more easily recoverable materials.




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7        Options for Offsetting Carbon Footprint
Summary of findings:

There are two main options for Orion to manage its residual carbon footprint:
1. Offset carbon footprint by purchasing carbon credits; or
2. Directly use offset funds to invest in local low carbon solutions that align with Orion’s environmental
   commitments.


Once an organisation has determined an annual carbon footprint, there is an opportunity to ‘offset’ those
emissions. Offsetting means that for each tonne of CO2e emitted, a tonne of carbon can be purchased
which has either been sequestered long term in biomass (usually permanent forestry) or the carbon has
been avoided from being emitted to atmosphere for instance through the implementation of a renewable
energy project rather than fossil fuel generation. These units are commonly known as ‘carbon credits’
with each credit being equivalent to one tonne of carbon (tCO2e) sequestered or avoided. An
organisation that calculates its carbon footprint and subsequently buys credits to cover the emissions may
formally or informally brand itself as ‘carbon neutral’.

Important to note for novices in the carbon market is that not all carbon credits are created (or traded)
equal and there is significant scientific and economic debate about the validity of credits and therefore the
claims of carbon neutrality that they are often traded to support.

Critics often highlight the issues of double accounting for carbon savings. Where an organisation
purchases offset credits from projects that have been developed within a country which has reporting
requirement under the Kyoto Protocol, the actual emission reduction that is achieved from the project
activity is likely to being counted twice: First, by the organisation through its claim to offset its footprint
and second, by the country as part of its national inventory on actual emissions under the Kyoto
agreement (Climate Change & Business 2008). There are a number of voluntary carbon credit standards
that are recognised internationally as representing good quality, credible offset credits. These standards
include the Voluntary Carbon Standard (VCS), the Gold Standard and VER+, which all have processes
which ensure no double accounting (Climate Change & Business 2008).

The credits at the voluntary market vary in price, but during December 2008 ranged between $15-$30 in
New Zealand (Nick Main, Deloitte, personal communication 2008). The price of carbon credits is
currently very volatile, in line with global economic conditions. The most recent price issued by the
Treasury (Nov 2008) being $26.84 was used to calculate the cost to offset Orion’s carbon footprint in this
study.

If Orion offset all the embodied carbon across the entire network (476,091 tCO2e) it would cost almost
13 million dollars, which is unrealistic for the company to bear. If Orion wishes to offset any of its carbon
footprint, there are a range of options which may be more suitable. Table 36 indicates the range of costs
to offset at this carbon price including the various aspects covered during this study. It is important to note
that the emissions relating to electricity use in offices do not require offsetting as both Connetics and
Orion are using carboNZero certified electricity from Meridian Energy.




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Table 36: Different options for offsetting Orion’s carbon emissions generated during the FY 2007.
                                                Network           Network       Embodied      Embodied
Part      of         Office     Office          maintenance       maintenance   carbon of     carbon of             Electrical
operation            Orion      Connetics       Orion &           all other     assets1       assets1               Losses
                                                Connetics         contractors   Growth        Replacements
tCO2e           to
                       45            78             1,494                451      4,389             2,805             33,658
offset
Approximate
                $1,000         $2,000         $40,000         $12,000       $118,000        $75,000          $903,000
Offset Cost
$43,000
$56,000
$237,000
$249,000
1
  The embodied carbon of assets includes all assets which were installed in the network during the financial year
2007. 61% of the capital budget for this year was growth related and 39% related to replacements of assets which
had reached their end of life.

Should Orion wish to offset its carbon emissions there are a number of options available, each of which
has advantages and disadvantages as summarised in Table 37, and detailed in the following sections.

Table 37: A summary of the options available for offsetting Orion’s carbon footprint

Offsetting Mechanism                          Advantages                              Disadvantages
Purchase carbon credits on the                • The most highly auditable and         • Limited ability to choose the
regulated market                                defendable mechanism                    project associated with your
                                              • Compliant with requirements             offsets
                                                under the Kyoto protocol
Purchase carbon credits on the                • Ability to choose projects            • Not necessarily Kyoto compliant
voluntary market                              • Ability to buy audited credits
Direct purchase of credits from a             • Removes the cost of the               • Not necessarily Kyoto compliant
supplier                                        middleman
                                              • Supporting preferred projects
Sponsor a nominated                           • Removes the cost of the middle        • Technical concerns over the
reforestation project                           man                                     science of forest based
                                                                                        sequestration
                                                                                      • Not necessarily Kyoto compliant
Development of a bespoke                      • Direct use of costs of carbon for     • Not necessarily Kyoto compliant
Organisational Offsetting                       company nominated projects            • Projects chosen may not
Programme                                     • Programme can be designed to            sequester or remove carbon1
                                                suit organisations philosophy
1
    Hence this programme may not be actually offsetting the carbon.



7.1             Regulatory or Voluntary Carbon Credit Trading
There are two types of carbon credit markets. Regulated markets operate for participants who have
obligations within emissions trading schemes (ETS), such as the proposed New Zealand ETS or the
established EU ETS. These markets trade in various credits certified by an appropriately authorised body.

The other type of market is the voluntary, which exists for those without formal obligations, but who wish
to purchase carbon credits. These credits can be issued by any party which claims that its activities or
projects result in the removal or avoidance of GHG emissions. It is becoming more common to have the
carbon credits independently assessed against one of a number of certification standards operating in the
voluntary market (e.g. Gold Standard, Voluntary Carbon Standard). Key requirements include that the


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project results in emission reductions which would otherwise not have taken place and that the project
does not result in increased emissions elsewhere (Estrada et al. 2008).

The carbon credits traded within both regulated and voluntary markets may come from a number of
different sources. Two common sources, forestry and renewable energy technology are discussed
below.

7.1.1           Forestry Credits and Tree Planting

Planting trees is, at face value, one of the most elegant and environmentally beneficial methods of
offsetting a carbon footprint. The effectiveness of tree-planting has however been questioned because
trees can take decades to mature whilst offset retailers typically pay for the project and sell the promised
reductions up-front. It is also difficult to guarantee the permanence of the planted trees, which may be
vulnerable to burning, clearing, mismanagement or natural disaster. Where planting projects are used it is
important to understand and plan for these risks. There has also been criticism of forestry projects which
are based on monoculture exotic species. Whilst an exotic forest may be the most efficient way to quickly
build up early biomass there are risks of displacement of native habitat and introduction of pest species.

In New Zealand, Landcare Research manages carbon credits which are generated by native forest
regeneration sites located throughout the country. The project known as EBEX21 (Emissions-Biodiversity
Exchange) is designed to help landowners choose sustainable land-use options for marginal farmland,
whilst enhancing biodiversity and saving carbon emissions. The credits are only available to purchase as
part of the carboNZere programme (Section 8.1).

There may be an opportunity for Orion, in consultation with Christchurch City Council, to plant native trees
or allow more forest regeneration in some suitable areas in the Port Hills. This initiative may not be
eligible for Kyoto compliant credits, but would be improving the environment of our local community by
removing carbon, increasing biodiversity and amenity values.

7.1.2           Technology Based Credits

The main alternative to forestry credits are technology based. The principle is that if a carbon neutral
technology is implemented where the alternative, possibly preferred, solution would have led to significant
carbon emissions, credits can be bought from that project to the magnitude of the tonnes of carbon
prevented from reaching the atmosphere on an annual basis.

Criticisms of technology based credits are often based on a lack of what is termed ‘additionality’. The
term was coined during the development of the EU emissions trading scheme. A technology carbon
credit can only claim to have additionality if the project would not have gone ahead without the existence
of the trading scheme or other mechanism that the credits it generates will support. Additionality is a core
requirement for a projects carbon credits to be recognised to most European standards such as Voluntary
Carbon Standard (VCS), the Gold Standard and VER+.

7.2             Using offset fund to invest in local low carbon solutions
If Orion does not see any benefit in participating in carbon credit purchase it is possible to still
demonstrate to stakeholders a willingness to financially account for carbon emissions through reporting
the value in its annual report and then investing the money required to purchase equivalents credits in
support of other community or environmental initiatives. An example of this practice is MWH UK Ltd’s
‘Carbon Care” programme, see Appendix B.

A programme such as this could be demonstrably in support of Orion’s Environmental Sustainability
Policy which shows commitment in six different areas.
    1. Protection of the biosphere
    2. Sustainable use of natural resources
    3. Sustainable waste management


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     4. Wise use of energy
     5. Environmental risk reduction
     6. Restoration of the environment

A “carbon care fund” can stimulate the R&D into better network technology and also bring wider benefit to
the local community if Orion chooses to fund external projects.

An existing initiative which aims to invest in local solutions is Orion’s funding of Community Energy
Action. This initiative does not only deliver low carbon solutions, it also results in social benefits such as
healthier living conditions.

Another initiative which would deliver low carbon solutions as well as restoration of the environment is if
Orion planted native trees in some suitable areas in the Christchurch. This may not be eligible for Kyoto
compliant credits, but would be improving the environment of our local community by removing carbon,
increasing biodiversity and amenity values.

Although these types of initiatives would not offset the exact amount of carbon created by the
organisation, Orion would have full control over which initiatives it supported. The selection of initiatives
may be beneficial to have in consultation with key stakeholders.



8               Carbon Programme Certification
Just as an organisation may volunteer to have its quality, health and safety or environmental
management systems audited and certified against an external standard, such standards also exist for
the certification of carbon management systems. The international standard ISO14064-1:2006 Part 1 is
the specification with guidance at the organization level for quantification and reporting of greenhouse gas
emissions and removals. A number of organisations are capable and licensed to audit an organisation
against this standard in the same way as would occur for ISO9001 or ISO14001.

Other branded programmes exist that comply with ISO14064 and have added advantages of marketplace
recognition. CarboNZero offered by Landcare Research is the most widely known programme offered in
New Zealand.

The carboNZero programme and its derivative CEMARS both provide an organisation with a framework
for measurement, management and minimisation of its carbon footprint on a rolling basis. The
carboNZero programme requires offsetting of the organisations residual footprint using Kyoto Compliant
carbon credits whilst the CEMARS programme requires only the measurement, management and
minimisations steps. These programme and particularly carboNZero have understandably proven very
popular with New Zealand companies where there are risks to their business from stakeholder concerns
about the carbon footprint associated with their products or services, hence the take up in the export
sector and the tourism sector has been strong.

Achieving carbon neutrality is increasingly seen as good corporate responsibility and there are today a
growing list of corporations and even cities that have announced dates for when they intend to become
fully carbon neutral. Is of utmost importance however that buying your way to neutrality is not seen as a
means to an end and that the organisation rather focuses on emissions minimisation in order to avoid
accusations of ‘greenwashing’.

Given that there are limited marketing gains for Orion from becoming labelled as carbon neutral and that
its priority should be on emissions reduction, spending money on obtaining certification may not be the
best use of its funds in this area. An accreditation can be costly to maintain and some stakeholders may
believe that as an environmentally and socially responsible organisation the money can be better spent
on activities that would directly decrease Orion’s carbon footprint. After all, this is the outcome all
businesses should be striving for.



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Having said that however, MWH would be remiss if it did not provide information to Orion on its options if
it wishes to join a formal programme, which assists to achieve recognition of its efforts to manage and
mitigate its carbon emissions.

8.1             CarboNZero certification
The carboNZero programme is an internationally recognised greenhouse gas emissions management
and reduction scheme offering optional mitigation strategies through the provision of credible and verified
offsets or carbon credits. The programme is divided into three steps: measure, manage and mitigate. To
achieve certification requires measuring of carbon emissions in compliance with ISO 14064-1 followed by
demonstration of emission reductions. Any unavoidable emissions are then offset through the purchasing
and cancelling of verified and Kyoto compliant carbon credits.

If Orion wanted to become carboNZero certified, the estimated annual cost is $86,850, which includes
$12,500 in registration fee to access support material, an estimated $44,350 to offset its office related
emissions (including Connetics) and a further $30,000 to be able to use the carboNZero certification
mark. The final amount of carbon credits required is determined from the final verified emissions inventory
(i.e. carboNZero’s figure for office related emission may differ slightly to MWH’s calculation).

This programme would only require offsetting emissions by companies which Orion has operational
control over, i.e. Orion itself as well as Orion GFN Ltd, Orion NZ Ventures Ltd, and Connetics Ltd.
Therefore subsidiaries that Orion NZ Ltd does not have operational control of will be excluded from the
inventory. This is anticipated to be 4rf Communications Ltd, Whisper Tech Ltd and EnerTech ECP11
fund.

The main emission sources which need offsetting include electricity, air travel and fuel use. The
programme would not require offsetting of embodied carbon in company owned infrastructure or electrical
losses in the distribution network.

If Orion does not wish to mitigate (offset) its measured GHG emissions and make a carbon neutral claim,
another programme called CEMARS (Certified Emissions Measurement And Reduction Scheme) may be
appropriate.

8.2             Certified Emissions Measurement and Reduction Scheme, CEMARS
CEMARS is also administered by Landcare Research and comprises only the first two steps of the
carboNZero programme, e.g. measurement and management of carbon emissions. It enables
organisations to measure their emissions, understand their carbon liabilities, and put in place
management plans to reduce emissions in their organisation and more widely through their supply chain.

CEMARS has been developed for businesses and organisations who are large emitters and for whom
offsetting is not a viable business proposition or have not yet made the business case for carbon neutral
status.

The programme is relatively new, but Landcare Research expects it to be rolled out to some 32,000
clients in 24 countries who need to report for the Carbon Reduction Scheme, the Carbon Disclosure
Project as well as annual corporate reporting. Westpac New Zealand is one of the most recent
companies to become CEMARS accredited.

The cost of CEMARS is the same except Orion is not required to offset its emissions, i.e. $42,500,
including $12,500 in registration fee to access support material and $30,000 to be able to use the
CEMARS certification mark. Westpac recently announced that it is CEMARS accredited.
There is of course the option of offsetting carbon emissions without going through a specific certification
body.




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9               Summary and Next Steps
Orion has now completed a thorough assessment of its operational carbon footprint and additionally gone
well beyond the scope of many organisations to also understand the embodied carbon in its key network
assets.

Included in this report are a number of recommendations for some practical carbon management and
other environmental risk minimisation programmes. From the study it is clear that there are some key
areas which Orion should focus its efforts on:

• Including carbon intensity in decisions about network asset investments and influencing the supply
  chain
• Improve the load factor in the network where feasible, by demand side management (DSM).
• Prevent over- investment in the new network assets with a prudent asset management plan.
• Managing and considering transitioning fuel and vehicle types to lower the operational footprint

After implementing initiatives to reduce its carbon emissions Orion may wish to consider:

• Pursuing certification against a carbon management scheme and / or
• Purchasing carbon credits or a related programme to offset its residual carbon emissions.
• Using offset funds to invest in local low carbon solutions that align with Orion’s six areas of
  environmental commitment.




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10 References

Ainger, Baker, Crishna, Cziganyik, Fenn, Johnson, Jowitt, Robertson, Smith (2008) Carbon Accounting in
the UK Water Industry: Guidelines for Dealing with “Embodied Carbon” and Whole Life Carbon
Accounting, UKWIR Stage II 08CL01B, UK Water Industry Research Ltd

Barras R E, Bow K E, Snow J H, Volz D A (1997) A new era in cable designs and materials to resolve
environmental issues. Volume 33, Issue 5, Sep/Oct 1997 Page(s):1321 – 1330.

Bauman H & Tillman A-M (2004) The Hitch Hiker's Guide to LCA, Studentlitteratur

Baumert K A, Herzog T, Pershing J (2005) Navigating the Numbers: Greenhouse Gas Data
and International Climate Policy. World Resources Institute.
(available at http://www.wri.org/publications/climate ).

Constantine Samaras and Kyle Meisterling (2008) Life Cycle Assessment of Greenhouse Gas Emissions
from Plug-in Hybrid Vehicles: Implications for Policy, Department of Engineering and Public Policy,
Carnegie Mellon University, 15213-3890 Environ. Sci. Technol., 2008, 42 (9), pp 3170–3176.
(available at http://pubs.acs.org/doi/full/10.1021/es702178s?cookieSet=1)

Dr. Peter H. Gleick (2007) Pacific Institute, Hummer versus Prius - “Dust to Dust” Report Misleads the
Media and Public with Bad Science (available at
http://www.pacinst.org/topics/integrity_of_science/case_studies/hummer_vs_prius.pdf)

Electric Power Research Institute, EPRI, (2005), Environmental Profile of Utility Distribution Poles
(available at http://mydocs.epri.com/docs/public/000000000001010143.pdf )

Enercon (2007) Enercon, Level 2 Energy Audit Orion NZ Ltd

Estrada M, Corbera E and Brown K, (2008) How do regulated and voluntary carbon-offset
schemes compare? Tyndall Centre for Climate Change Research
(available at http://www.tyndall.ac.uk/publications/working_papers/twp116.pdf)

Greenhouse Challenge Australian Greenhouse Office (2001) Discussion Paper - Sulphur Hexaflouride
and the electricity supply industry, (available at
http://www.environment.gov.au/settlements/challenge/publications/pubs/sulphurhexafluoride.pdf )

Greiner Environmental Inc, 2002, Environmental, Health and Safety Issues with the Coated Wire and
Cable Industry, Prepared for Massachusetts Toxics Use Reduction Institute, University of Massachusetts
Lowell. Technical Report No 51.

Guidance for Voluntary, Corporate Greenhouse Gas Reporting: Data and methods for the 2006 calendar
year, Ministry for the Environment, April 2008, Ref. ME871.

Hammond, G. & Jones, C. (2008) International Carbon and Energy Version 1.5 Beta, University of Bath.

Hanson S, Giuliano G (2004) The Geography of Urban Transportation (Third Ed), Guilford Press, pg 284

Hendrickson CT, Lave LB, Matthews H S (2006) Environmental Life Cycle Assessment of Goods and
Services: An Input-Output Approach, Resources for the Future

IPCC Fourth Assessment 2007 (AR4)

Jovanovic, D. GHD Ltd, (2008) Reduction of Carbon footprint by going trenchless



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Lagerblad B (2005) Carbon dioxide uptake during concrete life cycle – State of the art, Swedish Cement
and Concrete Research Institute (available at
http://www.dti.dk/_root/media/21043%5F769417%5FTask%201%5Ffinal%20report%5FCBI%5FBjorn%20
Lagerblad.pdf )

Kodjack D (2004) Policy Discussion – Heavy-Duty Truck Fuel Economy, 10th Diesel Engine Emissions
Reduction (DEER) Conference

MfE (2008) New Zealand’s Greenhouse Gas Inventory 1990-2006: An Overview, Ministry of the
Environment, New Zealand

MWH (2005) Investigation of Environmental Effects of Leaching of Contaminants from Treated Wooden
Poles, Prepared for Orion New Zealand Limited.

New Zealand Energy Data File 2007, Ministry of Economic Development, Hien D T Dang, report
(available at http://www.med.govt.nz/energy/info/ )

Orion New Zealand Limited, Valuation of electricity distribution assets for financial reporting purposes as
at 31 March 2007.

Preisegger E, et al. (2004) Life Cycle Assessment Electricity Supply Using SF6 Technology
Swedish Defence Research Agency, FOI (2001), Environmental risk assessment of underground cables
at military installations. Field study.

USEPA (2005) Emission Facts: Average Carbon Dioxide Emissions Resulting from Gasoline and Diesel
Fuel, EPA420-F-05-001


Internet References

Auto express News 2007:
http://www.autoexpress.co.uk/news/autoexpressnews/209792/top_100_most_fuelefficient_cars.html

Carbon Group:
http://www.co2group.co.nz/Emissions-Management/About-Offsetting-and-Carbon-Credits/default.aspx

Carbon Point (September 2008):
http://www.pointcarbon.com/productsandservices/carbon/

Catalyst R&D Ltd (2007) web based calculator:
http://catalystnz.co.nz/adobe/692/documents/ACEv101.xls

Christchurch City Council:
http://www.targetsustainability.co.nz/TargetWaste/

Climate Change & Business (2008):
http://www.climateandbusiness.com/pdfs/Voluntary-Market-Credits-Credibility-in-a-Compliance-
Environment.pdf

Energy Efficiency and Conservation Authority, Bioethanol blended petrol:
http://www.eeca.govt.nz/eeca-library/renewable-energy/biofuels/brochure/bioethanol-blended-petrol-
consumer-Jul-08.pdf

Environment Canterbury (2008):
http://www.ecan.govt.nz/Our+Environment/Air/OtherIssues/Transport.htm

Industry Research Limited, IRL, High Temperature Super Conductors, January 2009:

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http://www.irl.cri.nz/newsandevents/Mediareleases/IRLGeneralCablejointventureamilestoneforHighTempe
ratureSuperconductivity.aspx

Landcare Research (2006): RSNZ Science in the City lecture series:
http://canterbury.rsnz.org/downloads/RSNZ_What_You_Can_Do.pdf

Ministry of Agriculture and Forestry (2007):
http://www.maf.govt.nz/mafnet/rural-nz/statistics-and-forecasts/sonzaf/2008/tables/A-1.xls

Ministry of Economic Development: Gas and LPG Safety:
http://www.energysafety.govt.nz/templates/ContentTopicSummary____17672.aspx

Ministry of Economic Development August 2008, New Zealand Greenhouse gas emissions 1990-2007:
http://www.med.govt.nz/upload/63349/GHG%20Report.pdf

Ministry of Economic Development May 2001:
http://www.med.govt.nz/templates/Page____11671.aspx

Ministry of Economic Development, New Zealand Energy Quarterly March 2008:
http://www.med.govt.nz/templates/MultipageDocumentPage____37374.aspx

Ministry of Economic Development: Transmission Losses and Costs
http://www.med.govt.nz/templates/MultipageDocumentPage____10235.aspx

Ministry for the Environment, An Electricity Emission Factor (2003):
http://www.mfe.govt.nz/publications/climate/electricity-emissions-factor-reports/electricity-factor-aug03.pdf

Ministry for the Environment, Emissions trading bulletin Climate Change (Liquid Fossil Fuels) Regulations
2008: draft for consultation:
http://www.mfe.govt.nz/publications/climate/emissions-trading-bulletin-2/bulletin-no2-feb08.html

Ministry for the Environment, The Proposed Landfill Gas Standard:
http://www.mfe.govt.nz/publications/air/nes-landfill-emissions-analysis/html/page5.html

Ministry of Transport, (2008):
http://www.transport.govt.nz/climate-change-and-energy1-2/

Ministry of Transport, (2007):
http://www.transport.govt.nz/assets/Images/NewFolder-2/Copy-of-NZ-Vehicle-Fleet-Graphs-2007-
v2.xls#'1.1, 1.2'!A1

New Zealand Carbon Exchange (September 2008) New Zealand Emissions Trading Scheme:
http://www.nzcx.com/nzets.htm

Rightcar:
http://www.rightcar.govt.nz/index.html?session=clear

Smarter Homes, Department of Building and Housing (2007):
http://www.smarterhomes.org.nz/materials/painting-and-decorating/

Treasury, New Zealand Liability under the Kyoto protocol:
http://www.treasury.govt.nz/government/liabilities/kyoto

The Governor General of New Zealand, Draft for Consultation, Climate Change (Stationary Energy and
Industrial Processes) Regulations 2008:
http://www.climatechange.govt.nz/consultation/draft-regulations-seip/consultation-draft-stationary-energy-
and-industrial-processes.pdf


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US Environmental Protection Agency, High GWP Gases and Climate Change:
http://www.epa.gov/highgwp/scientific.html#sf6

US Environmental Protection Agency (USEPA), Chromated Copper Arsenate (CCA):
http://www.epa.gov/oppad001/reregistration/cca/

WhatGreenCar, Petrol and Diesel:
http://www.whatgreencar.com/petdiesel.php

Whatgreencar – The independent guide to green cars in the UK (2008):
http://www.whatgreencar.com/lpg.php

Wikipedia: Carbon offsets (2008):
http://en.wikipedia.org/wiki/Carbon_offset

Wikipedia: Electric car:
http://en.wikipedia.org/wiki/Electric_car#Energy_efficiency_and_carbon_dioxide_emissions

Wikipedia: Toyota Prius:
http://en.wikipedia.org/wiki/Prius

World Airport Codes:
http://www.world-airport-codes.com




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                Appendix A: Emission Factors Used for Component Material in
                Network Equipment
Table 38: Emission factors used for component material in network equipment
                                                                                                                                             Estimated
                                                                                                                                               Carbon
                       Carbon                                                                       Estimated
                                                                                                                                              Emission
                      Emission              Data                                                     Process             Assumption re.
    Material                        Unit                     Data source Assumption                                                          Factor incl.
                      Factor (kg           Source                                                   Emission             process factor
                                                                                                                                               process
                      CO2e/unit)                                                                      Factor
                                                                                                                                              factor (kg
                                                                                                                                             CO2e/unit)
                           8.2400   kg       1        General Aluminium, 33% recycled                   0.15             Sheathing              9.48
                                                      content was assumed as typical                                     operation welds a
                                                      market values. Obtained from the IAI                               continuous layer
Aluminium
                                                      (International Aluminium Institute)                                of aluminium
                                                                                                                         sheet around the
                                                                                                                         insulator
Cement                     0.7612   kg       2                                                          0.00                                    0.76
Concrete                   0.1590   kg       1                                                          0.00                                    0.16
                           0.2020   kg       1                                                          0.00             Process factor         0.20
Reinforced                                                                                                               already built in.
Concrete                                                                                                                 Approx 100 kg of
                                                                                                                         steel per pole
                           3.8300   kg       1        General Copper, 46% recycled                      0.50             Wire drawing           5.74
                                                      content was assumed as typical                                     process is energy
                                                      market values. Obtained from the                                   intensive
Copper
                                                      Environment Agency. Took
                                                      conservative number from range
                                                      3.18-4.38
General                    0.5500   kg       1        A relatively low confidence in this               0.15                                    0.63
Ceramics                                              data
                           1.8145   kg       2        Ecoinvent: Aggregated data for all                0.15             Granules into          2.09
LDPE                                                  processes from raw material                                        resin
                                                      extraction until delivery at plant

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                                                                                                                                              Estimated
                                                                                                                                                Carbon
                       Carbon                                                                       Estimated
                                                                                                                                               Emission
                      Emission              Data                                                     Process             Assumption re.
    Material                        Unit                     Data source Assumption                                                           Factor incl.
                      Factor (kg           Source                                                   Emission             process factor
                                                                                                                                                process
                      CO2e/unit)                                                                      Factor
                                                                                                                                               factor (kg
                                                                                                                                              CO2e/unit)
                           2.4755   kg       2        Ecoinvent: Aggregated data for all                0.15             Extrusion step          2.84
PVC                                                   processes from raw material
                                                      extraction until delivery at plant
                           2.5300   kg       1        General Plastic: Determined by the                0.15                                     2.91
General
                                                      average use of each type of plastic
Plastic
                                                      used in Europe
                           1.7700   kg       1        General Steel, 42.4% recycled                     0.15             Applicable for          2.04
                                                      content was assumed as typical                                     kiosks that
General Steel                                         market values. Obtained from the                                   requires less
                                                      International Iron and Steel Institute                             processing than
                                                                                                                         transformers
                           1.7700   kg       1        General Steel, 42.4% recycled                     1.00             Emissions from          3.54
                                                      content was assumed as typical                                     manufacturing of
                                                      market values. Obtained from the                                   the component
Steel                                                 International Iron and Steel Institute                             are judged to be
                                                                                                                         great (Ecoinvent).
                                                                                                                         Applicable for
                                                                                                                         Transformers
                       502.3900     m³       2                                                          0.15             Emissions only         577.75
MDF                                                                                                                      involved with
                                                                                                                         cutting of board
                           0.4700   kg       1        Sawn hardwood, Variable data                      0.00                                     0.54
                                                      range dependent upon the distance
Hardwood
                                                      travelled. Likely to be smaller in New
                                                      Zealand
                           0.4500   kg       1        Sawn softwood, Variable data range                0.15             Production and          0.52
                                                      dependent upon the distance                                        application of
Softwood                                              travelled. Cradle to gate, Likely to be                            preservatives
                                                      smaller in New Zealand

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                                                                                                                                              Estimated
                                                                                                                                                Carbon
                       Carbon                                                                       Estimated
                                                                                                                                               Emission
                      Emission               Data                                                    Process              Assumption re.
      Material                       Unit                     Data source Assumption                                                          Factor incl.
                      Factor (kg            Source                                                  Emission              process factor
                                                                                                                                                process
                      CO2e/unit)                                                                      Factor
                                                                                                                                               factor (kg
                                                                                                                                              CO2e/unit)
                           3.4251    kg       2        Direct impacts of processing are not             0.15                                     3.94
Epoxy Plastic
                                                       included.
                           1.9084    kg       2        No value for XLPE, but as almost all             0.15             Melting of plastic      2.19
XLPE                                                   are made of HDPE, this value was                                  granules around
                                                       used.                                                             the conductor
                           1.9084    kg       2        Similar properties and processes to              0.00             No complex              1.91
Oil                                                    refine as making light fuel oils                                  processes
                                                                                                                         required
                           1.3200    kg       1       For general construction purposes                 0.15             No complex              1.52
Paper                                                                                                                    processes
                                                                                                                         required
                           63.5970   kg       2        This data set includes combined                  0.50                                     95.40
                                                       mining of gold, silver, copper, zinc
Silver                                                 and lead in Sweden incl. energy and
                                                       material use, water and air
                                                       emissions of metals and land use
                           0.0023    kg       3                                                         0.00             No additional          0.0023
Aggregate
                                                                                                                         processes
(general)
                                                                                                                         required
Lead                       2.1273    kg       2        Assuming no recycled lead used.                  0.30                                     2.77
                           0.1379    kg       2        Ecoinvent: Inventory refers to 1 kg              0.00                                     0.14
Sulphuric Acid
                                                       100% sulphuric acid, liquid, at plant
                           3.9000    kg       1                                                         0.15             Injection moulding      4.49
                                                                                                                         already covered
Polypropylene
                                                                                                                         in Emission
                                                                                                                         Factor
                           4.1163    kg       2        Ecoinvent: This dataset can be used              0.15             Coating of              4.73
Polystyrene                                            in the construction building sector.                              polystyrene
                                                       The cutting of the extruded
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                                                                                                                                         Estimated
                                                                                                                                           Carbon
                       Carbon                                                                      Estimated
                                                                                                                                          Emission
                      Emission              Data                                                    Process             Assumption re.
    Material                        Unit                     Data source Assumption                                                      Factor incl.
                      Factor (kg           Source                                                  Emission             process factor
                                                                                                                                           process
                      CO2e/unit)                                                                     Factor
                                                                                                                                          factor (kg
                                                                                                                                         CO2e/unit)
                                                      polystyrene blocks is not included in                             material
                                                      the process.
Solvent based              2.7916   kg       2                                                         0.00                                 2.79
Paint
Water based          2.9388     kg        2                                                            0.00                                 2.94
Paint
Data Source Key:
1 = International Carbon and Energy Version 1.6 Beta, University of Bath
2 = Ecoinvent
3 = Embodied Energy and CO2 coefficients for NZ building material




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                Appendix B: Details of asset break-down for the estimation of the total
                embodied carbon in all Orion’s network assets installed as of 31 March
                2008
Table 39: Asset types included in the estimation of the total embodied carbon in all Orion’s network assets installed as of 31 March 2008.
                                                  Asset Type
                           Type of asset          assumed to                              Total kg of
                           installed in the       estimate carbon   Units in total        CO2e per               Total tCO2e (all   Assumption where
 Asset Category            network                footprint         (meter/number)        meter/unit             the network)       different assets used
                                                  11 kV UG Medium
                                                                        40,775                  24.1                983,747.9
 Cable                     11 kV UG Extra Heavy   185                                                                               Similar design
 Cable                     11 kV UG Heavy         11 kV UG Heavy       182,971                  35.2               6,436,905.1
                                                  11 kV UG Medium
                                                                       344,841                  24.1               8,319,774.0
 Cable                     11 kV UG Medium        185
 Cable                     11 kV UG Light         11 kV UG Light       186,622                   4.8                899,515.6
                           11 kV UG Extra Heavy   11 kV UG Extra
                                                                       150,018                  44.1               6,618,777.0
 Cable                     Dcct                   Heavy
                                                  11 kV UG Heavy
                                                                       303,788                  39.6              12,039,128.1
 Cable                     11 kV UG Heavy Dcct    Dcct 185
                           11 kV UG Medium        11 kV UG Medium
                                                                       590,316                  24.1              14,244,322.7
 Cable                     Dcct                   185
 Cable                     11 kV UG Light Dcct    11 kV UG Light       357,187                   4.8               1,721,641.1

 Cable                     33 kV UG Heavy         11 kV UG Heavy        14,606                  35.2                513,821.5       Similar design
                                                  11 kV UG Extra
                                                                        11,544                  44.1                509,321.3
 Cable                     33 kV UG Heavy Dcct    Heavy                                                                             Similar design
                                                  11 kV UG Medium       14,606                  24.1                352,430.7
 Cable                     33 kV UG Medium        185                                                                               Similar design

                                                                                                                                    Similar design to 33 kV
                                                                        9,247                   44.1                407,977.6
                                                  66 kV UG Extra                                                                    cables so assume same
 Cable                     66 kV UG Extra Heavy   Heavy                                                                             footprint per m



Status: Draft                                                                                      March 2009
                                                                         Our ref: R_Environmental Performance
Project number: Z1612700                            Page 1
                                                                          Assessment report Orion April 09.doc
                                                   Asset Type
                           Type of asset           assumed to                               Total kg of
                           installed in the        estimate carbon    Units in total        CO2e per               Total tCO2e (all   Assumption where
 Asset Category            network                 footprint          (meter/number)        meter/unit             the network)       different assets used


                                                                          55,179                  44.1               2,434,476.3      Similar design to 33 kV
                                                                                                                                      cables so assume same
 Cable                     66 kV UG Heavy Dcct     66 kV UG Heavy                                                                     footprint per m
 Cable                     Comms UG                Comms UG              1,042,834                 0.6                667,413.8
                           LV 2 Way Linkbox /
                                                                          3,171                   22.7                72,076.8
 Connections               Multibox                Multibox
                           LV 3 Way Linkbox /
                                                                          1,292                   22.7                29,367.2
 Connections               Multibox                Multibox
                           LV 4 Way Linkbox /
                                                                           835                    22.7                18,979.6
 Connections               Multibox                Multibox
 Cable                     LV UG Heavy             LV UG Heavy           240,638                  63.7              15,331,047.0
                           LV UG Heavy Shared
                                                                          58,868                  63.7               3,750,480.3
 Cable                     Trench                  LV UG Heavy
                           LV UG Lighting 2 Core   LV UG Lighting 2
                                                                         415,950                   3.6               1,509,898.5
 Cable                     (on own)                Core
                           LV UG Lighting 2 Core   LV UG Lighting 2
                                                                         321,723                   3.6               1,167,854.5
 Cable                     (with LV)               Core
                           LV UG Lighting 5th
                                                                         1,118,734                36.0              40,274,424.0
 Cable                     Core (with LV)          LV UG Medium
 Cable                     LV UG Medium            LV UG Medium          1,382,001                36.0              49,752,036.0
                           LV UG Medium
                                                                         485,233                  36.0              17,468,388.0
 Cable                     Shared Trench           LV UG Medium
                           LV UG Service Main      LV UG Lighting 2
                                                                         303,559                   3.6               1,101,919.2
 Cable                     (16mm2 NS)              Core                                                                               Similar design
                           LV Connection UG
                           1ph (dedicated                                 4,521                    5.5                24,955.9
 Connections               boundary box)           Boundary box
                           LV Connection UG
                           1ph (shared boundary                           47,720                   7.4                355,036.8
 Connections               box)                    Maxi box
                           LV Connection UG
                                                                          2,020                    5.5                11,150.4
 Connections               3ph (dedicated          Boundary box
Status: Draft                                                                                        March 2009
                                                                           Our ref: R_Environmental Performance
Project number: Z1612700                             Page 2
                                                                            Assessment report Orion April 09.doc
                                                    Asset Type
                           Type of asset            assumed to                                 Total kg of
                           installed in the         estimate carbon      Units in total        CO2e per               Total tCO2e (all   Assumption where
 Asset Category            network                  footprint            (meter/number)        meter/unit             the network)       different assets used
                           boundary box)
                           LV Connection UG
                           3ph (shared boundary                              20,503                   7.4                152,542.3
 Connections               box)                     Maxi box
                           11 kV Switchgear         11 kV Switchgear
                                                                              115                   316.9                36,437.8
 Kiosk                     Cabinet (1/4 Kiosk)      quarter kiosk
 Lines                     11 kV OH Heavy           11 kV OH Heavy           46,789                  15.5                724,762.7

 Lines                     11 kV OH Medium          11 kV OH Medium         1,084,971                 3.0               3,265,764.0

 Lines                     11 kV OH Light           11 kV OH Light          1,150,319                 3.3               3,796,051.3

 Lines                     11 kV OH SWER            11 kV OH SWER           102,125                   1.1                112,337.5
                           11 kV OH Heavy
                                                                               97                     3.0                  293.1
 Lines                     Underbuilt               11 kV OH Medium                                                                      Similar design
                           11 kV OH Medium
                                                                            262,506                   3.0                790,143.5
 Lines                     Underbuilt               11 kV OH Medium
                           11 kV OH Light
                                                                             27,143                   3.3                89,571.9
 Lines                     Underbuilt               11 kV OH Light
                           11 kV OH Single          11 kV OH Single
                                                                            577,287                   2.2               1,270,031.3
 Lines                     Phase                    Phase
                           11 kV OH Single          11 kV OH Single
                                                                             11,825                   2.2                26,014.9
 Lines                     Phase Underbuilt         Phase
 Lines                     33 kV OH Heavy           11 kV OH Heavy           -8,687                  15.5               -134,561.6       Similar design
 Lines                     33 kV OH Light           11 kV OH Medium         310,239                   3.0                933,819.4       Similar design
                           66 kV OH Heavy (Dcst
                                                                             83,558                  31.0               2,588,626.8
 Lines                     Wolf)                    66 kV OH Heavy
                           66 kV OH Medium
                           (Single circuit wooden                            60,856                  15.5                942,659.4
 Lines                     pole)                    11kV OH Heavy                                                                        Similar design
 Lines                     LV OH Heavy 4 wire       LV OH Heavy 4 wire       67,681                  18.1               1,227,737.0
                                                    LV OH Medium 4
                                                                            936,935                   6.7               6,239,985.3
 Lines                     LV OH Medium 4 wire      wire

Status: Draft                                                                                           March 2009
                                                                              Our ref: R_Environmental Performance
Project number: Z1612700                              Page 3
                                                                               Assessment report Orion April 09.doc
                                                   Asset Type
                           Type of asset           assumed to                                  Total kg of
                           installed in the        estimate carbon       Units in total        CO2e per               Total tCO2e (all   Assumption where
 Asset Category            network                 footprint             (meter/number)        meter/unit             the network)       different assets used
 Lines                     LV OH Light 4 wire      LV OH Light 4 wire        645,328                6.5                 4,220,445.6
                                                   LV OH Medium 2
                                                                            106,893                   3.3                355,953.2
 Lines                     LV OH Medium 2 wire     wire
                                                   LV OH Medium 2
                                                                              421                     3.3                 1,403.2
 Lines                     LV OH Light 2 wire      wire                                                                                  Similar design
                           LV OH Heavy 4 wire      LV OH Medium 4
                                                                             2,421                    6.7                16,126.1
 Lines                     Underbuilt              wire                                                                                  Similar design
                           LV OH Medium 4 wire     LV OH Medium 4
                                                                            272,862                   6.7               1,817,259.2
 Lines                     Underbuilt              wire
                           LV OH Medium 2 wire     LV OH Medium 2
                                                                             61,808                   3.3                205,820.0
 Lines                     Underbuilt              wire
                           LV OH Light 2 wire      LV OH Medium 2
                                                                             1,236                    3.3                 4,116.6
 Lines                     Underbuilt              wire                                                                                  Similar design
                           LV OH Lighting (on
                                                                             97,496                   1.1                102,370.8
 Lines                     own)                    LV OH Lighting
                           LV OH Light 4 wire
                                                                             20,912                   6.5                136,764.5
 Lines                     Underbuilt              LV OH Light 4 wire
                           LV OH Lighting (with
                                                                            832,024                   1.1                873,625.2
 Lines                     LV)                     LV OH Lighting
                           LV OH Lighting (with
                                                                             31,567                   1.1                33,145.4
 Lines                     HV)                     LV OH Lighting
                           11kV Neutral Earthing   Full Kiosk Outdoor
                                                                               9                   1,028.5                9,256.3
 Kiosk                     Resistor                Sub                                                                                   Similar design
                           LV Lighting Control     11/33 kV Unit
                                                                             2,070                   25.5                52,867.8
 Protection                Relay                   Protection                                                                            Similar design
                                                   3ph Pad Mount
                                                                               1                   6,682.0                6,682.0
 Transformer               33/11 kV 1.5 MVA        1000 kVA                                                                              Similar design
 Power tsfr                33/11 kV 10/20 MVA      Power tsfr 33/11 kV         4                 101,798.8               407,195.3       Similar design
 Power tsfr                33/11 kV 11.5/23 MVA    Power tsfr 33/11 kV         6                 101,798.8               610,792.9
                                                   3ph Pad Mount
                                                                               4                   6,682.0               26,727.9
 Transformer               33/11 kV 2.5 MVA        1000 kVA                                                                              Similar design
 Power tsfr                33/11 kV 7.5/10 MVA     Power tsfr 33/11 kV         1                 101,798.8               101,798.8       Similar design

Status: Draft                                                                                           March 2009
                                                                              Our ref: R_Environmental Performance
Project number: Z1612700                             Page 4
                                                                               Assessment report Orion April 09.doc
                                                    Asset Type
                           Type of asset            assumed to                                  Total kg of
                           installed in the         estimate carbon       Units in total        CO2e per               Total tCO2e (all   Assumption where
 Asset Category            network                  footprint             (meter/number)        meter/unit             the network)       different assets used
 Power tsfr                33/11 kV 7.5 MVA         Power tsfr 33/11 kV          16              101,798.8               1,628,781.1      Similar design
 Power tsfr                66/11 kV 11.5/23 MVA     Power tsfr 33/11 kV         5                 101,798.8               508,994.1       Similar design
 Power tsfr                66/11 kV 20/40 MVA       Power tsfr 33/11 kV         23                101,798.8              2,341,372.9      Similar design
 Power tsfr                66/11 kV 7.5/10 MVA      Power tsfr 33/11 kV         3                 101,798.8               305,396.5       Similar design
                           11/33 kV Feeder
                           Protection (with OC &    11 kV Protection            33                     9.9                  325.4
 Protection                EF)                      (with OC & EF)                                                                        Similar design
                           11/33 kV Unit            11/33kV Unit
                                                                               714                    25.5                18,235.6
 Protection                Protection               Protection
                           11/33 kV Unit            11/33kV Unit
                                                                               334                    25.5                 8,530.4
 Protection                Protection (with OC)     Protection                                                                            Similar design
                           11 kV Protection (with   11 kV Protection
                                                                               683                     9.9                 6,734.4
 Protection                OC & EF)                 (with OC & EF)
                           11 kV Protection (with
                           OC, EF, reclose & CB     11 kV Protection            91                     9.9                  897.3
 Protection                fail)                    (with OC & EF)                                                                        Similar design
                           66 kV Unit Protection    66 kV Unit
                                                                                41                    23.0                  942.2
 Protection                (with intertrip)         Protection
                           Bus Bar Protection       11 kV Protection
                                                                                34                     9.9                  335.2
 Protection                Relay                    (with OC & EF)                                                                        Similar design
                           Directional
                           Overcurrent Relay        11 kV Protection            34                     9.9                  335.2
 Protection                (with CB fail)           (with OC & EF)                                                                        Similar design
                                                    11 kV Protection
                                                                                2                      9.9                   19.7
 Protection                Pilot Box 140 way        (with OC & EF)                                                                        Similar design
                                                    11 kV Protection
                                                                                27                     9.9                  266.2
 Protection                Pilot Box 280 way        (with OC & EF)                                                                        Similar design
                           Transformer Diff         11 kV Protection
                                                                                41                     9.9                  404.3
 Protection                Protection & Control     (with OC & EF)                                                                        Similar design
                           Transformer Diff
                           Protection & Control     11 kV Protection            14                     9.9                  138.0
 Protection                (+intertrip)             (with OC & EF)                                                                        Similar design

Status: Draft                                                                                            March 2009
                                                                               Our ref: R_Environmental Performance
Project number: Z1612700                              Page 5
                                                                                Assessment report Orion April 09.doc
                                                   Asset Type
                           Type of asset           assumed to                                 Total kg of
                           installed in the        estimate carbon      Units in total        CO2e per               Total tCO2e (all   Assumption where
 Asset Category            network                 footprint            (meter/number)        meter/unit             the network)       different assets used
                           Battery (50/100 AH),
                           Charger (110V) &                                   51                   384.2                19,592.7
 Protection                Stand                   Substation battery
                           Battery (50/100 AH),
                                                                              18                   384.2                 6,915.1
 Protection                Charger (50V) & Stand   Substation battery                                                                   Similar design
                           Distn Sub - Pad Mount
                           (Orion 1/2 kiosk        Half Kiosk Outdoor        509                   608.4                309,680.7
 Kiosk                     Outdoor Sub)            Sub
                           Distn Sub - Pad Mount   Full Kiosk Outdoor
                                                                            2,642                 1,028.5              2,717,244.2
 Kiosk                     (Orion full kiosk)      Sub
                           Distn Sub - Pole        Distn Sub - Pole
                           Mount (>50 kVA, <100    Mount (>50 kVA,           142                  1,005.4               142,769.1       3 ph 75 kVA transformer
 Transformer               kVA)                    <100 kVA)                                                                            is simiar to 3 ph 50
                                                                                                                                        Is similar to 1 ph 15 or
                                                                                                                                        30 KVA or 3 ph 50 KVA.
                                                                            5,164                 1,005.4              5,191,968.2      Took conservative
                           Distn Sub - Pole        Distn Sub - Pole                                                                     approach assuming 50
 Transformer               Mount (≤50 kVA)         Mount (≤50 kVA)                                                                      KVA
                                                                                                                                        Took an average of the
                                                                                                                                        carbon footprint of the
                                                                             862                  3,818.1              3,291,166.1      types included: 100,
                           Distn Sub - Pole        Distn Sub - Pole                                                                     200,300, 750 and 1000
 Transformer               Mount (≥100 kVA)        Mount (≥100 kVA)                                                                     KVA

                           District Sub-11kV                                  10                 23,293.0               232,929.5       Assumed 44% of District
 Substation                Urban                   District Sub-Small                                                                   Subsmall (19*6.8*4 m )
                                                                                                                                        Assumed 79% of District
                           District Sub-66kV or                               12                 41,821.4               501,857.3       Subsmall
 Substation                33 kV Indoor            District Sub-Small                                                                   (19.5*11.7*4m )

                           District Sub-66or33kV                              25                 25,410.5               635,262.4       Assumed 48% of District
 Substation                wth Outdoor Struct      District Sub-Small                                                                   Subsmall (20*7*4 m )
                           District Sub-Block                                 18                 31,174.6               561,143.0
 Substation                Building                Ripple plant bldg

Status: Draft                                                                                          March 2009
                                                                             Our ref: R_Environmental Performance
Project number: Z1612700                             Page 6
                                                                              Assessment report Orion April 09.doc
                                                    Asset Type
                           Type of asset            assumed to                                  Total kg of
                           installed in the         estimate carbon       Units in total        CO2e per               Total tCO2e (all   Assumption where
 Asset Category            network                  footprint             (meter/number)        meter/unit             the network)       different assets used
                           District Sub-                                                                                                  Assumed 65% of District
                           Individually Assessed                                1                  34,410.0               34,410.0        Subsmall
 Substation                Structure                District Sub-Small                                                                    (16.5*11.5*4m )
                           District Sub-Small
                           66or33kV wth Outdoor                                 2                  52,938.5               105,877.1
 Substation                Struct                   District Sub-Small
                                                    11kV Protection             43                     9.9                  424.0
 Protection                GXP Check Metering       (with OC & EF)                                                                        Similar design
                                                                                                                                          District Sub-Small
                                                                                                                                          (18.8m * 10.3m) was
                                                                               194                 10,587.7              2,054,014.8      approximately 5 times
                           Network Sub-Orion        Network Sub-Orion                                                                     larger than the network
 Substation                Owned                    Owned                                                                                 substation
 Ripple Injection          Ripple Injection Plant   Ripple Injection
                                                                                25                  7,038.4               175,960.3
 Plant                     (11 kV, 175 Hz)          Plant
 Ripple Injection          Ripple Injection Plant   Ripple Injection
                                                                                7                   7,038.4               49,268.9
 Plant                     (11 kV, 317 Hz)          Plant                                                                                 Similar design
 Ripple Injection          Ripple Injection Plant   Ripple Injection
                                                                                5                   7,038.4               35,192.1
 Plant                     (33 kV, 317 Hz)          Plant                                                                                 Similar design
 Ripple Injection          Ripple Wave Trap         Ripple Injection
                                                                                3                   7,038.4               21,115.2
 Plant                     (66 kV 175 Hz)           Plant                                                                                 Similar design
                           11 kV CB 630A            11 kV CB 630A
                           (District & Network      (District & Network       1,403                 2,903.1              4,073,049.3
 Switchgear                Sub)                     Sub)
                           11 kV CB Sealed
                           1250A (District &        11 kV CB Sealed             28                  3,193.7               89,422.8
 Switchgear                Network Sub)             1250A
                           11 kV CB Sealed
                           2500A (District &        11 kV CB Sealed             8                   3,193.7               25,549.4
 Switchgear                Network Sub)             1250A                                                                                 Similar design
                           11 kV CB Sealed 630A
                           (District & Network      11 kV CB Sealed            520                  2,903.1              1,509,612.0
 Switchgear                Sub)                     630A
                           11 kV Dropout Fuse
                                                                                97                     1.9                  184.3
 Switchgear                (1ph)                    11 kV Dropout Fuse
Status: Draft                                                                                            March 2009
                                                                               Our ref: R_Environmental Performance
Project number: Z1612700                              Page 7
                                                                                Assessment report Orion April 09.doc
                                                 Asset Type
                           Type of asset         assumed to                                 Total kg of
                           installed in the      estimate carbon      Units in total        CO2e per               Total tCO2e (all   Assumption where
 Asset Category            network               footprint            (meter/number)        meter/unit             the network)       different assets used
                           11 kV Dropout Fuse
                                                                          1,696                    1.9                 3,222.4
 Switchgear                (2ph set)             11 kV Dropout Fuse
                           11 kV Dropout Fuse
                                                                          6,301                    1.9                11,971.9
 Switchgear                (3ph set)             11 kV Dropout Fuse
                           11 kV Magnefix Type   11 kV Magnefix
                                                                            30                  4,401.4               132,042.9
 Switchgear                1K2T                  Type                                                                                 Similar design
                           11 kV Magnefix Type   11 kV Magnefix
                                                                            4                   4,401.4               17,605.7
 Switchgear                1K3T                  Type                                                                                 Similar design
                           11 kV Magnefix Type   11 kV Magnefix
                                                                           974                  4,401.4              4,286,992.8
 Switchgear                2K1T                  Type
                           11 kV Magnefix Type   11 kV Magnefix
                                                                            53                  4,401.4               233,275.8
 Switchgear                2K2T                  Type                                                                                 Similar design
                           11 kV Magnefix Type   11 kV Magnefix
                                                                            1                   4,401.4                4,401.4
 Switchgear                2K3T                  Type                                                                                 Similar design
                           11 kV Magnefix Type   11 kV Magnefix
                                                                           372                  4,401.4              1,637,332.0
 Switchgear                2KB2K                 Type
                           11 kV Magnefix Type   11 kV Magnefix
                                                                           533                  4,401.4              2,345,962.2
 Switchgear                2KBK                  Type                                                                                 Similar design
                           11 kV Magnefix Type   11 kV Magnefix
                                                                           441                  4,401.4              1,941,030.6
 Switchgear                3K                    Type
                           11 kV Magnefix Type   11 kV Magnefix
                                                                           341                  4,401.4              1,500,887.6
 Switchgear                3K1T                  Type                                                                                 Similar design
                           11 kV Magnefix Type   11 kV Magnefix
                                                                            3                   4,401.4               13,204.3
 Switchgear                3K2T                  Type                                                                                 Similar design
                           11 kV Magnefix Type   11 kV Magnefix
                                                                            1                   4,401.4                4,401.4
 Switchgear                3KX                   Type                                                                                 Similar design
                           11 kV Magnefix Type   11 kV Magnefix
                                                                            2                   4,401.4                8,802.9
 Switchgear                4K                    Type                                                                                 Similar design
                           11 kV Magnefix Type   11 kV Magnefix
                                                                            19                  4,401.4               83,627.2
 Switchgear                4K1T                  Type                                                                                 Similar design
                           11 kV Magnefix Type   11 kV Magnefix
                                                                            18                  4,401.4               79,225.7
 Switchgear                5K                    Type
                           11 kV Magnefix Type   11 kV Magnefix
                                                                            25                  4,401.4               110,035.8
 Switchgear                KB2K                  Type

Status: Draft                                                                                        March 2009
                                                                           Our ref: R_Environmental Performance
Project number: Z1612700                           Page 8
                                                                            Assessment report Orion April 09.doc
                                                     Asset Type
                           Type of asset             assumed to                                   Total kg of
                           installed in the          estimate carbon        Units in total        CO2e per               Total tCO2e (all   Assumption where
 Asset Category            network                   footprint              (meter/number)        meter/unit             the network)       different assets used
                           11 kV Magnefix Type       11 kV Magnefix
                                                                                 188                  4,401.4               827,468.8
 Switchgear                KB2KBK                    Type
                           11 kV Magnefix Type       11 kV Magnefix
                                                                                 460                  4,401.4              2,024,657.8
 Switchgear                KBX                       Type                                                                                   Similar design
                           11 kV Magnefix Type       11 kV Magnefix
                                                                                  44                  4,401.4               193,662.9
 Switchgear                KTB                       Type
                           11 kV Magnefix Type       11 kV Magnefix
                                                                                 141                  4,401.4               620,601.6
 Switchgear                UT                        Type
                           11 kV Oil Switch          11 kV Magnefix
                                                                                 124                  4,401.4               545,777.3
 Switchgear                (Fused)                   Type
                           11 kV Oil Switch (Not     11 kV Magnefix
                                                                                  27                  4,401.4               118,838.6
 Switchgear                Fused)                    Type                                                                                   Similar design
                           11 kV Ring Main Unit -    11 kV Magnefix
                                                                                  2                   4,401.4                8,802.9
 Switchgear                3 Way                     Type
                                                                                                                                            No similar types
                                                                                                                                            assessed before,
                                                                                                                                            however significant
                                                                                 102                  1,008.9               102,907.8
                                                                                                                                            structure. Assumed
                           33 kV A B Isolator        33kV Isolation (O/H                                                                    (95kg * 3) = 285 kg
 Switchgear                (Substation)              line)                                                                                  majority steel
                                                     11 kV CB Sealed
                                                                                  20                  3,193.7               63,873.4
 Switchgear                33 kV CB (Indoor)         1250A                                                                                  Similar design
                                                     11 kV CB Sealed
                                                                                  36                  3,193.7               114,972.1
 Switchgear                33 kV CB (Outdoor)        1250A                                                                                  Similar design
                                                                                                                                            No similar types
                                                                                                                                            assessed before,
                                                                                                                                            however significant
                                                                                  45                  1,008.9               45,400.5
                                                                                                                                            structure. Assumed
                                                     33 kV Isolation (O/H                                                                   (95kg * 3) = 285 kg
 Switchgear                66 kV A B Isolator        line)                                                                                  majority steel
                                                                                                                                            No similar types
                                                                                                                                            assessed
                                                                                  26                  1,168.2               30,373.2        beforehowever
                           66 kV A B Isolator with   33 kV Isolation (O/H                                                                   significant structure.
 Switchgear                E/Sw                      line)                                                                                  Assumed (110kg * 3) =

Status: Draft                                                                                              March 2009
                                                                                 Our ref: R_Environmental Performance
Project number: Z1612700                               Page 9
                                                                                  Assessment report Orion April 09.doc
                                                   Asset Type
                           Type of asset           assumed to                                  Total kg of
                           installed in the        estimate carbon       Units in total        CO2e per               Total tCO2e (all   Assumption where
 Asset Category            network                 footprint             (meter/number)        meter/unit             the network)       different assets used
                                                                                                                                         330 kg majority steel




                                                   11 kV CB Sealed
                                                                               31                  3,193.7               99,003.8
 Switchgear                66 kV Circuit Breaker   1250A                                                                                 Similar design
                                                   1 ph Pole Mount ≤
                                                                               34                   472.9                16,078.3
 Transformer               11 kV AT (15kVA)        15 kVA
                           11 kV Regulator
                                                                               2                 101,798.8               203,597.6
 Power tsfr                (20MVA)                 Power tsfr 33_11 kV                                                                   Similar design
                           11 kV Regulator         3 ph Pad Mount
                                                                               10                  6,682.0               66,819.7
 Transformer               (4MVA)                  1000 kVA                                                                              Similar design
                                                   1 ph Pole Mount ≤
                                                                               82                   472.9                38,777.0
 Transformer               11 kV VT (3ph)          15 kVA                                                                                Similar design
                           1 ph Pad Mount ≤ 15     1 ph Pole Mount ≤
                                                                               4                    472.9                 1,891.6
 Transformer               kVA                     15 kVA                                                                                Similar design
                           1 ph Pad Mount 30       1 ph Pole Mount 30
                                                                               3                    600.4                 1,801.3
 Transformer               kVA                     kVA                                                                                   Similar design
                           1 ph Pole Mount ≤ 15    1 ph Pole Mount ≤
                                                                             1,568                  472.9                741,491.5
 Transformer               kVA                     15 kVA
                           1 ph Pole Mount 30      1 ph Pole Mount 30
                                                                               67                   600.4                40,229.5
 Transformer               kVA                     kVA
                           1 ph Pole Mount 50      1 ph Pole Mount 50
                                                                               3                    600.4                 1,801.3
 Transformer               kVA                     kVA
                           1 ph Pole Mount 75      1 ph Pole Mount 50
                                                                               6                    600.4                 3,602.7
 Transformer               kVA                     kVA                                                                                   Similar design
                                                   1 ph Pole Mount ≤
                                                                               13                   472.9                 6,147.6
 Transformer               33 kV VT (3ph)          15 kVA                                                                                Similar design
                           3 ph Pad Mount 100      3 ph Pad Mount 100
                                                                              122                  1,081.4               131,925.9
 Transformer               kVA                     kVA
                           3 ph Pad Mount 1000     3 ph Pad Mount
                                                                              136                  6,682.0               908,747.9
 Transformer               kVA                     1000 kVA
                           3 ph Pad Mount 1250     3 ph Pad Mount
                                                                               2                   6,682.0               13,363.9
 Transformer               kVA                     1000 kVA

Status: Draft                                                                                           March 2009
                                                                              Our ref: R_Environmental Performance
Project number: Z1612700                             Page 10
                                                                               Assessment report Orion April 09.doc
                                                  Asset Type
                           Type of asset          assumed to                                  Total kg of
                           installed in the       estimate carbon       Units in total        CO2e per               Total tCO2e (all   Assumption where
 Asset Category            network                footprint             (meter/number)        meter/unit             the network)       different assets used
                           3 ph Pad Mount 1500    3 ph Pad Mount
                                                                              6                   6,682.0               40,091.8
 Transformer               kVA                    1000 kVA
                           3 ph Pad Mount 200     3 ph Pad Mount 200
                                                                            1,267                 2,253.4              2,855,095.8
 Transformer               kVA                    kVA
                           3 ph Pad Mount 300     3 ph Pad Mount 300
                                                                            1,554                 3,163.2              4,915,628.3
 Transformer               kVA                    kVA
                           3 ph Pad Mount 500     3 ph Pad Mount 500
                                                                             694                  4,172.1              2,895,444.3
 Transformer               kVA                    kVA
                           3 ph Pad Mount 750     3 ph Pad Mount 750
                                                                             273                   556.3                151,856.3
 Transformer               kVA                    kVA
                           3 ph Pole Mount ≤ 30   3 ph Pole Mount ≤
                                                                            2,513                  777.2               1,953,003.1
 Transformer               kVA                    30 kVA
                           3 ph Pole Mount 100    3 ph Pole Mount 100
                                                                             740                  1,081.4               800,206.4
 Transformer               kVA                    kVA
                           3 ph Pole Mount 200    3 ph Pole Mount 200
                                                                             320                  2,253.4               721,097.6
 Transformer               kVA                    kVA
                           3 ph Pole Mount 300    3 ph Pole Mount 300
                                                                              7                   3,163.2               22,142.5
 Transformer               kVA                    kVA
                           3 ph Pole Mount 50     3 ph Pole Mount 50
                                                                            1,085                 1,005.4              1,090,880.7
 Transformer               kVA                    kVA
                                                  1 ph Pole Mount ≤
                                                                              7                    472.9                 3,310.2
 Transformer               66 kV VT (3ph)         15 kVA                                                                                Similar design
 Poles                     Pole - Concrete        Poles - Concrete          32,700                4,336.5             141,802,242.0

 Poles                     Pole - Hardwood        Poles - Hardwood          32,440                 948.6              30,771,935.2

 Poles                     Pole - Softwood        Poles - Softwood          29,875                 803.8              24,013,823.8




Status: Draft                                                                                          March 2009
                                                                             Our ref: R_Environmental Performance
Project number: Z1612700                            Page 11
                                                                              Assessment report Orion April 09.doc
Table 40: Asset types excluded in the estimation of the total embodied carbon in all Orion’s network assets

                                              Units in total
 Type of asset installed in the network       (meter/number)                                  Assumption
                                                               No similar design assessed in FY2007 and not resource intensive
 LV Connection OH 1ph                              73,602      structure
                                                               No similar design assessed in FY2007 and not resource intensive
 LV Connection OH 3ph                              11,639      structure
                                                               No similar design assessed in FY2007 and not resource intensive
 LV Connection UG 1ph (fuse only)                  22,072      structure
                                                               No similar design assessed in FY2007 and not resource intensive
 LV Connection UG 3ph (fuse only)                   1,909      structure
 Peak load generator                                  1        No significant carbon footprint since only one unit
                                                               No similar design assessed in FY2007 and not resource intensive
 Distn Sub - LV MDI Metering (1500A)                    375    structure
                                                               No similar design assessed in FY2007 and not resource intensive
 Distn Sub - LV MDI Metering (800A)                 3,972      structure
 Network Sub-On Customer's Premises                   72       Owned by the customer
                                                               No similar design assessed in FY2007 and not resource intensive
 RTU (large urban District Sub)                          8     structure
                                                               No similar design assessed in FY2007 and not resource intensive
 RTU (medium Network Sub)                               10     structure
                                                               No similar design assessed in FY2007 and not resource intensive
 RTU (medium urban District Sub)                        14     structure
                                                               No similar design assessed in FY2007 and not resource intensive
 RTU (small Network Sub)                                53     structure
                                                               No similar design assessed in FY2007 and not resource intensive
 RTU (small rural District Sub)                         18     structure
                                                               No similar design assessed in FY2007 and not resource intensive
 RTU (small urban District Sub)                         16     structure
                                                               No similar design assessed in FY2007 and not resource intensive
 RTU Aux Equip (Pole mount on LCB)                      46     structure
                                                               No similar design assessed in FY2007 and not resource intensive
 SCADA Master Station                                   1      structure
 Structure 33 kV - Bus Section                          25     No significant carbon footprint since minor structure
 Structure 33 kV - Feeder                               31     No significant carbon footprint since minor structure
 Structure 33 kV - Incomer                              9      No significant carbon footprint since minor structure

Status: Draft                                                                                     March 2009
                                                                        Our ref: R_Environmental Performance
Project number: Z1612700                      Page 12
                                                                         Assessment report Orion April 09.doc
                                                Units in total
 Type of asset installed in the network         (meter/number)                                   Assumption
 Structure 33 kV - Isolator Section                     5        No significant carbon footprint since minor structure
 Structure 66 kV - Bus Section                         13        No significant carbon footprint since minor structure
 Structure 66 kV - Feeder                              19        No significant carbon footprint since minor structure
 Structure 66 kV - Incomer                             15        No significant carbon footprint since minor structure
 Structure 66 kV - Isolator Section                     5        No significant carbon footprint since minor structure
 UHF Masters                                            7        No significant carbon footprint since minor structure
                                                                 No similar design assessed in FY2007 and not resource intensive
 UHF Remote Unit                                          65     structure
                                                                 No similar design assessed in FY2007 and not resource intensive
 UHF Repeaters                                            7      structure
 11 kV Circuit Breaker / Recloser ( Pole-                        No similar design assessed in FY2007 and not resource intensive
 Mounted)                                                 43     structure
                                                                 No similar design assessed in FY2007 and not resource intensive
 11 kV Disconnector (3ph)                             1,024      structure
 11 kV Sectionaliser                                    6        No significant carbon footprint
 11 kV Single Phase Breaker                             9        No significant carbon footprint
                                                                 No similar design assessed in FY2007 and not resource intensive
 11 kV Surge Arresters (3ph)                              802    structure
                                                                 No similar design assessed in FY2007 and not resource intensive
 33 kV Isolation (O/H line)                               25     structure
                                                                 No similar design assessed in FY2007 and not resource intensive
 33 kV Surge Arresters (3ph) [O/H-Cable term]             16     structure
                                                                 No similar design assessed in FY2007 and not resource intensive
 33 kV Surge Diverter (3ph) [Substation]                  5      structure
                                                                 No similar design assessed in FY2007 and not resource intensive
 66 kV Surge Diverter (3ph)                               17     structure




Status: Draft                                                                                      March 2009
                                                                         Our ref: R_Environmental Performance
Project number: Z1612700                        Page 13
                                                                          Assessment report Orion April 09.doc
                Appendix C: Example of offset fund to sponsor
                low carbon solutions




Status: Draft                                                             March 2009
                                                Our ref: R_Environmental Performance
Project number: Z1612700           Page 1
                                                 Assessment report Orion April 09.doc
Carbon Care
Will support green projects across EMEAI
Green community projects across the EMEAI region are set to benefit from MWH
UK’s Carbon Care Programme. All that is needed to set the green initiative
rolling is suggestions from EMEAI staff of environmentally friendly schemes
in their community that deserve support.

As part of its Climate Change Commitment, MWH is working hard to reduce the company’s and clients’ carbon footprint. In the
UK, the Carbon Care Programme is driving this and is based on three key actions in alignment with MWH’s Climate Change
Commitment:

      Work innovatively with clients to deliver low carbon emission projects and support client initiatives on carbon
      management
      Drive carbon reduction in our own business operations
      Engage with local community initiatives and support community projects that help reduce carbon emissions to offset
      unavoidable emissions from the company.

The objective is to be the leading company in being effective on carbon reduction, and as part of the Carbon Care Programme
the MWH UK executive team has committed to offsetting emissions for 2006, 2007 and 2008. The team has established a
dedicated Offset Fund covering the UK operation’s carbon emissions, based on a valuation of £25 for each tonne of CO2
emitted, the UK Government’s recommended level. This will provide a significant sum of money to support green community
initiatives.

The fund will be administered by a Carbon Panel comprising members of the management team, an Environmental Champion,
a Technical Leader, a Future Leader and Sustainable Development experts, who will meet quarterly to decide which suggestions
should go ahead.

Members of staff from across EMEAI are invited to offer their suggestions. Examples of suitable projects would be those that
reduce energy consumption, for example the insulation of buildings; projects investing in renewable energy; and schemes that
improve carbon sequestration, such as peat restoration.

To submit a suggestion, visit the Carbon Offsetting Team Site Link (click) and fill in the entry form
in the left hand navigation bar. Suggestions received by 12th May 2008 will be considered by the
Carbon Panel meeting in May.
                                                                                David Smith, MWH UK’s Director of Business
                                                                                Strategy and Chair of the new Carbon Panel,
                                                                                said: “This initiative is a perfect example
                                                                                of how, by doing the right thing on carbon
                                                                                management, we can also support worthwhile
                                                                                community projects. It is a win/win situation
                                                                                and demonstrates how MWH is building a
                                                                                better world.”

								
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