Sustainable Water

Why is this Important?

Water is a crucial resource in electricity generation, especially in thermal and hydropower plants. Climate change has led to issues of water scarcity and declining water quality, which directly impact the efficiency and continuity of operations. Additionally, the company faces increasingly stringent from legal requirements regarding water usage and wastewater discharge, prompting EGCO Group to manage water resources carefully to mitigate risks and maintain relationships with communities and stakeholders.

EGCO Group has implemented a comprehensive water resource management approach, covering both water usage and wastewater management. The company focuses on efficient water use, reusing treated wastewater, and reducing water consumption at every operational stage. In addition, EGCO Group has adopted advanced technology in water management to address challenges related to water scarcity and changing water quality. The company also collaborates with communities surrounding its power plants to foster understanding and reduce concerns regarding water usage. Each power plant continually assesses water usage and analyzes water resources, which includes preparing backup water supplies to address potential emergencies. These actions help mitigate risks arising from climate change and legal requirements, enabling EGCO Group to operate efficiently and sustainably.

Sustainability Material Topic: Water & Wastewater Management
Stakeholder Impact on Materiality Topics

Community

Management Approach

Sustainable Water Target

Zero freshwater consumption

Reduce fresh water consumption intensity by 2% compared to the previous year.

Fresh water consumption intensity was reduced by 3% compared to the previous year.

Integrated Water Management

[GRI 303-1 (2018), 303-2 (2018)]

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EGCO Group’s water management system follows the company’s Environmental Policy and is based on the 3Rs: Reduce, Reuse, and Recycle. As part of our commitment to sustainable water management, we have implemented a water use assessment to identify opportunities for water efficiency improvements, which helps determining actions to reduce water consumption at the potential activities or functions of the operation, such as increasing water reuse cycles in the cooling tower of EGCO Cogen Power Plant which minimized water and chemical use significantly, leading to a reduction of costs associated with cooling tower operations

The company's efforts to minimize raw water consumption are coupled with robust wastewater management strategies. Our initiatives include the reuse of treated wastewater in various power plants like Klongluang Utilities (KLU) and EGCO Cogen, where treated water will be used for garden watering and facility cleaning, helping reduce overall water costs. Moreover, actions to improve wastewater quality are emphasized through our comprehensive wastewater treatment processes and regular quality monitoring to ensure compliance with environmental standards before discharge.

Water recycling is a key aspect of our approach, with projects like the reuse of treated wastewater within Khanom and Quezon Power Plants for various maintenance and operational activities, thereby reducing the impact on local water bodies and decreasing operational costs

To foster a culture of sustainability, awareness training on water efficiency management programs is held as a part of resource efficiency awareness training, which includes resource efficiency on engineering approach training for optimum operation on water-related machine for water and energy conservation, are provided to all employees, ensuring that our workforce is knowledgeable and engaged in our water conservation efforts.

Water Risk Management

Water Risk Assessment

EGCO Group assesses water risks related to droughts, water scarcity, water quality, and regulatory or water pricing risks that may increase the Company’s water procurement costs. The water risk assessment results, which covered all of EGCO Group’s power plants globally, confirmed that none of EGCO Group’s operations were located in areas with water scarcity.
Impact and Dependency Assessments
WWF Water Risk Filter is used to identify how EGCO's operations are potentially affecting water resources and their dependence on the local water supplies. Managing these risks involves balancing operational needs with sustainable water use practices to mitigate impacts on both the environment and the company's operations

Dependency-Related Water Risks
1. Water Scarcity: EGCO's operations face a risk level of 1 (on a scale likely ranging from low to high), indicating minimal concern regarding the availability of water.
2. Management Instruments: The management score of 2.15 suggests moderate effectiveness in managing water resources.
3. Infrastructure & Finance: A score of 1.2 implies low risks related to water infrastructure and financing capabilities.
4. Basin Reputational Risk: A higher score of 3.68 indicates some reputational risks linked to the basin's water issues.
5. Cultural Importance: Score of 3, which might suggest moderate consideration of cultural aspects in water management.
6. Biodiversity Importance: A score of 4.5, indicating a higher importance of biodiversity which could be impacted by water usage.
Impact-Related Water Risks
1. Water Scarcity Impact: Score of 4, indicating a potential high impact on local water scarcity due to operational activities.
2. Conflict: The conflict risk is very low with a score of 1, suggesting minimal conflict over water resources at the operational sites.
In 2024, EGCO Group conducted a qualitative assessment on the impacts and dependencies of its business on biodiversity, including an evaluation of risks related to water dependencies and impacts. ENCORE (Exploring Natural Capital Opportunities, Risks, and Exposure) was used as the tool for this assessment.

As EGCO Group has direct operations as a power producer, renewable energy power plants and electric utilities operations results in priority impacts on freshwater ecosystem use and water use. The cooling tower systems require large amounts of water, and water withdrawal from public water sources may affect the living organisms in those water sources.

The assessment of dependency across the value chain shows that the company's operations are dependent on surface water, water flow maintenance, climate regulation, and flood and storm protection. Additionally, surface water is crucial for the production process in thermal power plants.
Future Changes on Water Quantity and Quality

EGCO Group conducts assessment of water quality and projects future changes in water availability at the local level and assessed potential impacts on water demand and water availability up to 2040. Implementing Water Supply Risk Management and integrating drought concerns into Enterprise Risk Management helps assess effects on profit and risk scenarios. While most of EGCO's plants are safeguarded against drought, two hydro plants might face moderate to low impacts, affecting revenues variably. Mitigation strategies include optimizing water and power management, adjusting financial obligations, and reducing operational costs to lessen these environmental impacts on business operations.
Sensitivity Analysis on Water Availability and Quality
EGCO Group reviews all water-related risks and issues before initiating construction or development of new power plants and collects baseline data for all sites. Following the commercial operation date, the Company monitors water levels in the area on a regular basis. Furthermore, the Company consistently assesses physical risks in the area, including water quantity (i.e., water scarcity, climate variability, and droughts) and water quality (i.e., wastewater) risks, through using the AQUEDUCT Water Risk Atlas tool. This assessment revealed that due to existing water reservoirs, mitigation measures, and their location outside areas with droughts, the majority of EGCO Group’s power plants will not be affected by water scarcity.

EGCO Group assesses potential impacts in different scenarios, including where water supply is reduced by 10%, 30%, and 50%. The analysis accounts for water scarcity during droughts that may be affected by climate change. The following assumptions are used:
1. Water flow is reduced by 35% during January – June from the budget.
2. Forecast water flow during Quarter 2 according to the budget.
3. Reduction impacts on electricity generation and net profits.
EGCO Group assesses risks related to water quantity and quality by considering the likelihood and severity of potential impacts. This assessment revealed that due to the presence of sufficient water supply and existing mitigation measures put in place for water scarcity, the majority of EGCO Group’s power plants have limited to no risks in this area.

Furthermore, EGCO Group has assessed the impacts of different scenarios from established operational plans and has calculated the value of impacts from mitigation scenarios.
Risk Assessment of Regulatory Factors and Potential Impacts on Increased Water Prices

EGCO Group consistently monitors changes in regulations, policies, and water procurement costs in all areas of operations, and assesses potential impacts that may occur from those changes. The Company also forecasts future changes that may affect water procurement costs or standards needed to maintain compliance, such as those relating to water treatment and other licenses as outlined in the Water Resources Act B.E. 2561 (2018) through using the AQUEDUCT Water Risk Atlas tool.
Managing Water-Related Risks and Impacts on Stakeholders

Beyond managing water-related impacts on the organization, EGCO Group gives importance to managing impacts on external stakeholders as well. EGCO Group estimates future potential stakeholder conflicts by implementing a strategic plan to identify the water resources and water stress before constructing new power plants to avoid stakeholder conflicts. To that end, the Company works with surrounding communities to monitor their satisfaction, understand their concerns and challenges, and collaboratively find solutions relating to water issues. Additionally, EGCO Group consistently inspects the water quality of discharged water to ensure that it meets expected standards and does not create adverse impacts on communities living downstream.

EGCO Group organizes meetings with communities at least twice a year. During these meetings, representatives from our power plants join representatives from government agencies and local communities to report the environmental performance of the power plant and take feedback and suggestions from all stakeholder groups.

EGCO Group takes action to prevent and mitigate water-related conflicts with communities, which may occur if water use is not managed properly for agricultural and industrial users in the operational area. The Company has completed a scenario analysis to forecast impacts on water sources in the future and prepared a water risk management plan with defined emergency prevention and response measures. This ensures that the Company can manage water-related risks in all aspects, including water distribution, water consumption, and the quality of water discharge. Furthermore, EGCO Group has joined integrated watershed management initiatives in the area. For example, the Company supported the Thai Conservation of Forest Foundation in its upstream forest conservation and rehabilitation efforts.