Costs for the environment

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EN30Terna’s commitment to the environment is shown in the costs it incurs for environmental reasons, as both investment and current expenses. The separate representation of its environmental costs has been developed according to the definitions referred to below, by aggregating information provided by the Company’s general and industrial accounting.

Recording methods

The identification of environmental costs is based in the first place on the available definitions, in particular those of Istat (National Statistical Institute), Eurostat, and the GRI, as well as on the recommendation of the European Commission regarding the recording and disclosure of environmental information in annual accounts and reports (Recommendation 2001/453/EC). According to this recommendation, “the term ‘environmental expense’ includes the cost of measures taken by a company, directly or indirectly through third parties, to prevent, reduce, or recover damage to the environment caused by its operating activities. The costs in question include, among other things, the disposal of waste and measures aimed at preventing its formation, the protection of the soil and surface and groundwater, the protection of the air and climate from pollution, the reduction of acoustic pollution, and the defense of biodiversity and the landscape”.

In the second place, the above-mentioned definitions were applied to the environmental aspects considered significant (for example, the noise of stations, electromagnetic fields) in the Company’s ISO-14001-certified Environmental Management System to identify in the main corporate processes, Terna’s operating and investment activities with environmental significance.

Many of Terna’s activities described in this Report entail environmental expenses. However, several limitations were introduced in determining the recording boundary:

  • exclusion of integrated costs, i.e. regarding activities whose purpose is not exclusively environmental (for example, the use of towers with features that are innovative also from the point of view of their environmental integration) because of the subjectivity of recording only the environmental components;
  • exclusion of the additional costs connected with the consideration of restrictions or requests for the safeguard of the environment during the stage of planning and designing new lines (detours, burials).

Other conditions were that the costs were a) significant, b) consistent with the annual reporting of accounts (operating costs and investments clearly distinguished), and c) directly recordable by the existing corporate accounting system. The last condition regards the need to minimize recourse to estimates based on off-the-books analysis.

Costs for environment

In the light of the foregoing, the following table constitutes the best representation of the costs incurred by Terna for the environment.

These costs exclude expenses regarding internal resources and consider only expenses for external purchases. The “Environmental activities – existing plants” item, which includes the costs of internal personnel, is an exception.

In compliance with the method adopted and the footnotes to the table, it should be noted that the environmental costs shown constitute a subset of the total environmental costs, as defined above, actually incurred.

The costs shown in the table regard Terna S.p.A..

COSTS FOR THE ENVIRONMENT – INVESTMENTS AND OPERATING COSTS - Million euros

2011 2010 2009
Investments      
Environmental offset (1) 15.6 24.1 28.9
Environmental impact studies (2) 1.4 1.5 0.4
Environmental activities – new plants (3) 4.2 4.0 2.8
Environmental activities – existing plants (4) 14.2 15.7 7.8
Demolitions (5) 2.8 5.8 2.7
Total Investment 38.3 51.2 42.6
Costs      
Costs for environmental activities (6) 10.3 9.7 9.0
Total operating costs 10.3 9.7 9.0
1) These are the sums for offsetting the works provided for by the Grid Development Plan, as determined by special agreements entered into with local institutions. They are recorded as investment at the time the commitment is made, i.e. when the agreement is signed, while the cash flow depends on how long it takes to obtain the authorization and construct the works. The reduction in the figure compared to previous years highlights the actual activity phase, i.e. many projects having passed the coordination and the authorization phases. (2) Studies of environmental impact regarding plants included in the Grid Development Plan that are at the construction stage or in the process of being authorized by the relevant governments. (3) The amount shown is the result of an estimate. On the basis of an analysis of several large investment projects, it turned out that at least 1% of the total expenses of the project regard environmental items, usually determined by obligations (for example, masking with trees, barriers against noise, installation of dissuaders for birdlife, environmental monitoring, analysis of excavated earth and rocks). Therefore, a value of 1% of 2009-2011 investment costs for projects with similar features was considered. (4) Expenses for upgrading existing plants in accordance with prescriptions and new regulations in the environmental field (for example, noise, visual landscape aspects). (5) Costs for the definitive dismantling of lines as part of Upgrading projects. For 2011 only the amount regarding the most significant demolition (Santa Barbara-Tavarnuzze and Chignolo Po-Maleo) is reported, because the determination of the sums corresponding only to demolition activities requires an off-the-books analysis. (6) Cutting plants, cutting grass, and waste management and removal activities of limited amounts that are not included in investments. These cost items – the only ones so far determined directly by the industrial accounting – do not exhaust the year’s total environmental costs, but they constitute the preponderant part of them.