Sustainable Water

Why is this Important?

Water is one of the key resources required in the power production process, especially for cooling systems. However, as climate change contributes to irregular rainfall or reduced precipitation, the security of this resource may be compromised, leading to potential water shortages that affect the production process. Furthermore, these impacts could extend to communities and ecosystems surrounding the Company’s operations. Thus, in order to avoid these impacts, EGCO Group ensures that all production plants assess their annual water consumption according to their production plans, analyze relevant data to monitor the water situation and maintain water reserves in the power plants’ reservoirs that can be used if an emergency situation occurs.

Management Approach

Sustainable Water Target

[GRI 303-1 (2018)]

Reduce water consumption and increase the proportion of water recycled and reused

Water consumption intensity is not over 0.37 m³/ MWh

Water consumption intensity is 0.32 m³/ MWh

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. This means the Company aims to reduce raw water consumption, reuse water, and treat water in order to recycle it.

The Company’s water management system propels us towards maximizing water efficiency and minimizing raw water consumption within the organization. For example, water discharge is reused for watering plants, cooling exhaust, cleaning roads, and spraying on roads to control dust. Additionally, the Company consistently monitors water discharge quality to ensure that it meets the minimum standards of the area before it is discharged to the natural environment.

EGCO Group continuously tracks and analyzes the water situation. As demonstrated in the breakdown below, the Company follows water risk management guidelines to reduce impacts, mitigate risks, and ultimately secure trust that our power plants can maintain continuous operations.

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.
Risk Assessment of Water Quantity 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. 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.