Hervé Casterman, GDF SUEZ Group Environment Director

How are GDF SUEZ Group business activities impacted by climate change?

Hervé Casterman: Climate is now an important factor for our business. Demand for energy, particularly in terms of gas to heat buildings, clearly has a direct link to climate and temperature. Energy production is also extremely sensitive to weather conditions: for example, the availability of water is key to hydroelectric power generation, and essential for cooling our conventional generating plants. Climate fluctuations, which can be quite significant from one year to the next – take the winter of 2013/2014 in France, which was the warmest since 1900 – are already causing substantial variations in the supply/demand balance for electricity and gas. These factors, combined with significant impacts on prices and volumes, have a direct effect on Group financial results. Looking further ahead, the Fifth Assessment Report of the UN Intergovernmental Panel on Climate Change (IPCC) reminds us that the rise of between 2°C and 4°C  in global temperatures predicted by current models poses a ‘considerable’ risk to global economic and health balances: shortages of water, more frequent and more extreme weather disruption (rising water levels, heatwaves, etc.), a substantial loss of biodiversity, population migration, an increase in conflict over water, health risks…  the list goes on. These are multiple challenges.


What is the Group strategy for coping with climate risks and climate change?

Hervé Casterman: The GDF SUEZ strategy is built on developing a diverse energy production mix (hydro, gas, nuclear, coal, wind, etc.) to boost its resilience, and on maintaining a presence in a range of different countries and regions so that it can respond as effectively as possible to climate variations. The Group also hedges against demand-side risks by using mechanisms that regulate its purchases of gas, and by optimizing its electricity generating resources for maximum control of production and supply costs. As part of gaining a clearer understanding of future climate change, GDF SUEZ is a contributor to external collaborative projects, such as the Extreme Events for Energy Providers project run by the Climate Knowledge and Innovation Community. This project uses IPCC scenarios to produce climatic indices dedicated to the needs of energy providers. Its aim is to enable energy companies to exploit the latest scientific advances to evaluate the impacts of climate change on their businesses, and improve their resilience to climate-related risks. So-called ‘climate-proofing’ is a challenge, but it’s also an excellent opportunity at every level: international, national, industry and local.


What are the GDF SUEZ priorities in terms of climate change?

Hervé Casterman: They form part of the Group’s commitment to delivering responsible growth that responds to energy needs, at the same time as combating climate change. To achieve that, we have identified four priorities. The first is to focus the efforts of Group managers and employees on the latest scientific advances and public policy recommendations on the need to adapt to climate change. The second aims to make the Group’s business activities more resistant to climate change now and in the future. For example, the Group recently conducted a water stress evaluation for its energy facilities, in conjunction with local risk analyses.

The development of new products, services and solutions for our customers is our third strategic priority. It includes innovations such as combining seawater desalination plants with power generating plants, which allows us to respond to the needs of regions where freshwater is a scarce resource; regions like the Middle East, where GDF SUEZ is the leading independent power generator.  Lastly, we are convinced that communication and dialog with our stakeholders – via partnerships in some cases – are essential for the success of our strategy. So that is the focus of our fourth priority. GDF SUEZ Energy UK has therefore submitted a report to the British authorities detailing the current and future impacts of climate change on its business activities, and how it proposes to respond to those challenges. Cooperation with other energy companies and the Met Office has identified 17 risks to the conventional power generating sector, each of which has then been evaluated on the basis of trends in climate indices.


Are there other examples of climate service surveys conducted elsewhere in the GDF SUEZ Group?

Hervé Casterman: CNR (Compagnie Nationale du Rhône) recently conducted a climate change impact study on water resource availability and management for the River Rhône, based on climate indices. CNR is particularly interested in the implications for the Génissiat dam, which generates 420 MW of power and relies on a catchment area of 10,900 square kilometers. The study was based on hydrometric data for the Rhône, the generating potential of the Génissiat installation, the outcomes of the Explore 2070 project funded by the French Ministry for Ecology, Sustainable Development and Energy, and the simulations produced by Metéo France as part of the Explore 2070 project. The median scenario for greenhouse gas emissions used for IPCC climate predictions for the period 2046-2065 was adopted for this purpose. Seven different climate models were used.


So what have you learned from these climate models?

Hervé Casterman: The results reveal a reduction in average annual flow rates of between 3% and 23%, depending on the model used, with a median value of 10% by 2050. This reduction in flows is matched by an identical reduction in the generating potential of the Génissiat dam. Over and above the reduction in runoff itself, the monthly average production profile also shows a time shift in the snow melt season, as well as reduced water flows in summer and fall. For the operator, this means an inevitable need to adapt, not only in terms of production management, but also in managing non-availability and restrictions.