Strategy and sustainability / Sustainability

Biodiversity and ecosystems

Business strategy, business model and core values

Global biodiversity is in rapid decline and the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) has identified changes in land use, overexploitation of natural resources, pollution, invasive species and climate change as the main causes. As temperatures rise and the consequences become more visible, reducing greenhouse gas emissions is becoming increasingly important for protecting biodiversity.

Among other things, electrification of transport and industry is crucial for Norway and Europe to meet their climate targets. Increased production of electrical power is a necessity for the climate targets and to protect natural diversity globally, but this needs to be done correctly. Hafslund’s main product, which is electrical power based on renewable energy, has minimal greenhouse gas emissions. Hydroelectric power generation accounts for the majority of the Group’s revenue, followed by the distribution of district heating and cooling, which accounts for a smaller part of the company’s revenue and is largely based on recycling heat from waste incineration, data centres and sewage, as well as renewable fuels. However, Hafslund acknowledges that the revenue base is dependent on natural resources and land for infrastructure. Since there are ambitions to further expand capacity in line with society’s need for power and heating, this must be done with the least possible impact. Through decades of dedicated work with the environment and power development, Hafslund has experienced the amount of biodiversity it is possible to preserve when working long-term and in a knowledge-based manner with the areas the Group has an impact on. Hafslund shall be a driving force for ensuring the transition to a zero-emission society takes place in a way that preserves important biodiversity and ecosystems.

In 2022, the Board supported Hafslund’s ambition to work towards nature-positivity. During 2023, Hafslund developed an understanding of this ambition and defined how the Group can best contribute towards halting and reversing biodiversity loss in line with the Kunming-Montreal Global Biodiversity Framework (GBF) (often referred to as the “Agreement for Nature”). Hafslund will develop and manage energy as part of efforts to make a positive contribution to biodiversity. Like other energy companies that have similar ambitions for biodiversity, the Group is at an early stage of understanding how these ambitions should be realised. Hafslund has defined four areas in which it believes the Group’s efforts will have the greatest impact in the future.

New projects

Hafslund will develop energy projects that, from 2030, will result in net zero loss of biodiversity. Hafslund works together with leading expert groups to establish new methods of calculation and nature accounting for new projects. More information can be found under “Nature accounting for new renewable projects”.

Existing portfolio

Hafslund will quantifiably improve the conditions for biological diversity from the 2023 level in the existing portfolio of facilities. Hafslund is working on an assessment that will identify the Group’s important locations and the potential for improvement initiatives. More information can be found under “Assessing the overall impact from existing portfolio”.

Ripple effects

Hafslund will use its position as customer, partner and investor to create positive ripple effects beyond own business activities. More information can be found under “Strategic partnerships, R&D initiatives and nature innovation”.

Hafslund’s value chain

Hafslund will, by 2025 at the latest, define an ambition associated with reducing the footprint from the upstream and downstream supply chain.

Increased electrification of transport and industry is crucial for Norway and Europe to meet their climate targets.

Transitional plan for "Biodiversity and ecosystems"

Nature accounting for new renewables projects

There is a long road ahead before Hafslund will be able to deliver new energy projects that result in net zero biodiversity loss by 2030. Hafslund is aware that more action will be required in the form of project initiatives. At the same time, there is a need to work in a data-driven and science-based manner by measuring, monitoring and quantifying both impact (such as land changes) and the effect of the Group’s response (mitigating measures) through all project phases, from feasibility studies to the operational phase. An important tool in this work is the establishment of nature accounting for the projects. Nature accounting enables us to quantify nature losses and gains throughout the entire life cycle of renewable energy projects and ensures there is a holistic approach to biodiversity.

Nature accounting as a specialist field is rapidly evolving, with a wide range of standards and methods with various advantages and disadvantages. Hafslund believes in working with other stakeholders both within and outside its own industry to arrive at the best solutions. In 2023, the Group started work on developing a methodology for calculating nature losses and gains in projects. Among other things, Hafslund has initiated partnerships with leading national and international expert groups to establish and test methodologies that satisfy the requirements set by the Group itself and the Group’s stakeholders. In 2024, this will be piloted in several power projects before being rolled out for all new projects at the end of 2024.

Assessing the overall impact from the existing portfolio

Continual and specific physical measures are implemented in connection with Hafslund’s infrastructure. The most important measures are described under “Actions”. Hafslund will quantifiably improve biodiversity conditions in comparison to the 2023 level in the existing portfolio of facilities. In order to work in a targeted manner with the ambition for the existing portfolio, a comprehensive assessment will be carried out to identify Hafslund’s important locations and quantify the potential for improvement initiatives. Through the work on the EU Taxonomy, in 2023 Hafslund reviewed all hydropower plants and waterways that are impacted to assess whether they satisfy the requirements in the Taxonomy. The assessment will build upon the work with the Taxonomy and include all of Hafslund’s business areas. The methodology will be based on TNFD’s LEAP methodology.

Strategic partnerships, R&D initiatives and nature innovation

Biodiversity and ecosystems at any location are often impacted by different stakeholders at the same time. Players within road construction, property development, aquaculture, forestry, agriculture, mining and fisheries impact different populations of species in the areas in and around where they carry out their business activities. This connection between impacting player and effect means that there is a need to work together across sectors because a single player cannot, in principle, comply with the obligations in the Agreement for Nature alone. The Science Based Targets Network and other guiding standards for corporate governance in line with the Agreement for Nature therefore state that companies should contribute to system changes, as well as avoid, minimise and compensate for the impacts of their own activities and value chain. Hafslund will therefore use its position as a customer, partner and investor to create positive ripple effects beyond the Group’s own direct footprint.

In line with this ambition, Hafslund is currently a partner in a wide range of initiatives, especially in research and development, but also with important innovation communities in Norway. Hafslund acknowledges that there is a serious need for more knowledge and more solutions, as well as start-ups and operators that make nature-positive solutions commercially available. Nature-positive solutions include everything from nature monitoring technology to physical measures in nature. More knowledge and solutions are particularly necessary for being better able to protect and strengthen biodiversity around energy infrastructure, while also maintaining the performance of the power plants. Only in this way can Hafslund contribute to the efficient utilisation of land and natural resources.

Norwegian Research Centre for Hydropower Technology (HydroCen):

Hafslund participates in HydroCen together with over 60 national and international partners from insurance, business, and public sector administration. The centre focuses on developing knowledge to maintain natural fisheries recruitment in reservoirs, without adversely impacting the flexibility of power generation.

The “FunkyFish” project:

The project’s ambition is to examine spawning conditions for fish in hydropower reservoirs. The aim is to map spawning areas using sonar, underwater cameras, temperature measurements and hydrodynamic models. The project, which involves scientists and the hydropower industry, will develop a method for cost-effective mapping of spawning and rearing conditions. The goal is to reduce the use of hatchery fish and promote natural fish recruitment in the reservoirs. This research can contribute to more sustainable power generation by improving habitat conditions for lake-spawning fish.

The “DeGas” project:

The project has the objective of developing solutions to reduce gas oversaturation in Norwegian hydropower plants, a problem which in some cases has led to fish suffering from “decompression sickness”. The primary objective is to create a technical solution that can be installed downstream of hydropower plants to keep gas levels within the limits tolerated by aquatic fauna. A secondary objective is the development of a technique that uses ultrasound to reduce gas oversaturation by increasing the size of gas bubbles in the liquid so that they float to the surface.

The “LakES” research project:

The project started in 2021 and will conclude in 2024. The project will develop new knowledge about salmon migration in lakes and waterways impacted by hydropower regulations. Hafslund will continue the project with further surveys in Vassbygdvatn in 2024. The project is being led by the Norwegian Research Centre (NORCE).

The “VisAviS” research project:

As part of the Blåvinge partnership, Hafslund is engaged in environmental studies and research to understand and improve the coexistence between offshore wind development and nature in Norway. This project is surveying migratory bird routes along the Norwegian coast. The goal is to support the sustainable development of coastal and offshore wind energy by understanding the migration patterns of the birds. The project is headed by the Norwegian Institute for Nature Research (NINA).

Phase III of the “SEATRACK” research project:

As part of the Blåvinge partnership, Hafslund is engaged in a collaborative project which is focussing on identifying the distribution and area use of seabird populations during the non-breeding season in the North-East Atlantic. It also examines how environmental conditions in wintering areas impact seabird demography and population dynamics. The project is headed by the Norwegian Polar Institute, Norwegian Institute for Nature Research and Norwegian Environment Agency.

FME Areal – “Research Centre for Renewable Energy and Nature Management”:

Hafslund is among the organisations seeking support for the creation of FME Areal. The research centre consists of nine research partners and 23 user-partners who have joined forces to submit an application to the Research Council of Norway for NOK 200 million to develop knowledge that will help the renewables industry take better account of nature in the planning, execution and operation of energy infrastructure. The research will establish improved methods for assessing, modelling and compiling accounts for ecosystem distribution, status and services, both on land, in lakes and at sea. Hafslund’s intention is to contribute project practices to develop and test technology and methods that reduce the impact on ecosystems from renewable energy.

Project Trilemma:

This initiative is led by ZERO in professional cooperation with PwC and Sabima, as well as a number of industry players from different sectors. Among the objectives of the project are to formulate best practices and nature goals in the business sector, and to quantify the potential for natural restoration and compensation, as well as prioritisation of land. Furthermore, the project will provide input for national policy that can contribute towards increasing the prevalence of nature-positive initiatives, such as restoration and mitigation measures, in the business sector. Hafslund will contribute expertise and professional input to this work.

PowerPlant with EUrelectric:

EUrelectric has initiated a project with the objective of achieving scalability and standardised measurement of the effect of nature initiatives by harmonising individual company methodologies as much as possible. The project also has a goal of developing the electricity sector as a pioneer in the protection of biodiversity compared to other sectors by establishing best practices. Hafslund contributes expertise within hydropower and internal processes for preserving biodiversity, development and management.

What happens when the fish migrate:

Hafslund’s hydropower business area is participating in a research project together with Akershus Energi to learn more about fish migration through the turbines at Hafslund’s hydropower plants. An exciting pilot project has been carried out at the Kongsvinger and Funnefoss power plants, where high-tech sensors were sent through the power plants to collect data. Sintef Energi is leading this work.

Policy/Guidelines

As part of the transitional plan for “Biodiversity and ecosystems”, Hafslund is in the process of developing its own specific principles for preserving biodiversity. These principles will be integrated in connection with the update of relevant procedures, policies and project models during 2024.

The principles in the Group sustainability policy that are directly related to the material sustainability topic of “Biodiversity and ecosystems”:

All employees and companies in Hafslund shall continuously work to reduce Hafslund’s greenhouse gas emissions and impact on nature.
All of Hafslund’s facilities must be operated without serious environmental non-conformities or violations of licence conditions.
All activities shall have the least possible impact on nature and measures shall be implemented to improve nature that has already been impacted.
There shall be continual work on increasing employee knowledge about the Group’s environmental impact and ongoing measures.
By 2025, environmental requirements must be set for all procurements when this is relevant. Until 2025, environmental requirements shall be imposed for all major procurements.
Water must be managed in a manner that protects the environment, people and society.
All employees and companies at Hafslund shall continuously strive for optimal resource utilisation. Repair, reuse or recycling must always be considered.

Impact, risks and opportunities

Having a portfolio consisting of hydropower plants, wind power plants and the production and distribution of district heating means that Hafslund has a material impact on flora and fauna both above and below the water. The Group’s direct impact is linked to geographic areas around the infrastructure, including rivers, intakes, dams and roads. Downstream of the power plants’ value chain, power is distributed through the power grid to consumers. This entails further impact from power lines and other grid infrastructure. Upstream in the value chain, Hafslund’s activities involve the extraction of raw materials such as metals, minerals and biofuels for the production of district heating.

As part of the transitional plan for “Biodiversity and ecosystems”, Hafslund is working to identify and locate risks that specifically apply to biodiversity and ecosystems at location level for the Group’s entire portfolio of assets. This work has begun and will continue through 2024. In 2023, the risks and opportunities relating to biodiversity and ecosystems for Hafslund were identified at an overarching level. These are summarised in the table below:

Risks		Opportunities
• Physical risk		Contributing to the production of renewable energy to reduce climate change, which is also a driver of nature loss.
• Loss of biological diversity as a result of changes in land and waterways.		Awarding of new licences as a result of Hafslund’s ability to preserve biodiversity and ecosystems.
• Damage to property and infrastructure resulting from avalanche, flood and landslide (linked to climate risk).		Policies and regulations for stricter environmental requirements, and higher weighting of nature and the environment when processing licences.
o Transitional risk		Better financing terms through access to green capital.
o Policies and regulations set stricter environmental requirements, and higher weighting of nature and the environment when processing licences.		Competitive advantage and new business opportunities when transitioning to more nature-friendly power production.
o Reputational risk if Hafslund and others in the industry are not able to take biodiversity into account. - Lawsuits/claims relating to the absence of measures to preserve biodiversity and ecosystems.
- Liability risk
- Lawsuits/claims relating to the absence of measures to preserve biodiverity and ecosystems

Actions

Hafslund and its subsidiaries are continually working to reduce the total impact on nature from the Group’s activities. Some of this work takes place in connection with government-imposed regulatory audits, while other work is on a voluntary basis.

Below is a summary of some of the actions related to “Biodiversity and ecosystems” that were planned, underway or implemented in 2023:

Restoration of Paddehavet in Inner Oslofjord

Together with technology supplier Troll Systems and the Norwegian Institute for Water Research (NIVA), Hafslund has initiated a pilot project and developed a technical solution for restoring the seabed at Paddehavet. Due to the topography of Inner Oslofjord, there is naturally low water circulation that makes the fjord vulnerable to emissions of nutrient salts such as phosphorus and nitrogen. Although emissions of nutrient salts are decreasing and positive developments are being seen in the fjord as a result of this, there are still large areas of Inner Oslofjord that are essentially uninhabitable for underwater flora, fish and benthos, because oxygen levels are reduced to virtually zero. The installation will be brought online in 2024 and comprehensively monitored by NIVA. The goal is to demonstrate and document how the seabed can be brought to life by moving oxygen-rich surface water downwards and enabling this to be mixed together with oxygen-poor water on the seabed. In addition, Hafslund wants to investigate whether learning derived from the research project can be used in connection with offshore energy infrastructure or in connection with district cooling, when water will be used from Oslofjorden to cool commercial buildings in Oslo.

Roe planting in Aurland

In order to strengthen the endangered wild salmon population, each year salmon roe are planted in Aurlandselvi and Vassbygdelvi in accordance with the Norwegian Environment Agency’s recommendations. In 2023, approximately 450,000 roe and yolk-sack fry produced at a dedicated cultivation facility were introduced to increase the survival rate and diversity of salmon in the river.

Harrowing in the Dokka River

Spawning gravel in the Dokka River, which is important for lake trout, is improved through the process of harrowing, which involves a type of “stirring” of the riverbed. About eight thousand square metres of spawning area was harrowed in 2023. Harrowing with an excavator aerates and washes the riverbed, which is necessary due to sedimentation caused by the number of floods being reduced by the presence of the hydropower plants.

Nesting boxes for white-throated dippers in the Hallingdal watercourse

A collaboration with an upper secondary school in Ål led to the deployment of eight new nesting boxes for white-throated dippers in the Hallingdal watercourse in the summer of 2023. The boxes are designed to increase the probability of successful nesting, and have been specifically adapted to the needs of the white-throated dipper.

Biotope measures in the Glomma River near Tolga

In order to improve spawning conditions for trout in Hørta, about 300 metres of the stream were protected in September 2023. The measures are intended to create better access for spawning fish in the spillway and the outlet of the stream, which has been made difficult by reduced water flow.

Biotope initiative in Lake Savalen

To increase trout density in Lake Savalen, 500,000 square metres of rocks were placed in the lake in 2017, and there are plans for similar measures in 2024. This has resulted in a marked increase in the trout population, and further measures outside Naustdalsbekken are planned to continue this success.

Biotope initiative in Storbekken, Fundin

Restoration of about 800 metres of Storbekken is planned in collaboration with Folldal mountain authority to improve the spawning conditions for the Fundin trout. The initiative involves the reopening and restoration of the stream, which has been channelled and partially disconnected, to strengthen natural trout recruitment.

Fish migration measures at Hunderfossen power plant

Detailed planning of measures to ensure safe fish migration at Hunderfossen power plant, with construction scheduled to commence in 2024. This is important for protecting the brown trout, a species that is highly valued in Norway, and to address the challenge associated with fish passing through the turbines.

Testing of fish survival when passing through turbines

Testing with sensors simulating fish passing through the turbines at Funnefoss and Kongsvinger power plants was carried out in 2023, and the results are expected in spring 2024. The goal is to assess whether large Kaplan and propeller turbines can be a safe migration route for fish, which is a critical question for fish welfare in the waterways.

Furuset Seson Storage

Furuset Seson Storage is a project that has been planned in a green area at Furuset in Oslo, and work is being carried out to implement several nature-positive solutions. The technical building will be covered with plants and materials that promote insect life, and a flower meadow will be planted around the building. Although some trees have to be removed, several new trees will be planted to compensate for this. The outer wall has been designed to serve as a sanctuary for bats to preserve the decreasing population.

Processing plants in “Grey Areas”

Hafslund Oslo Celsio is primarily constructing its processing plants in urban areas in Oslo. This is a policy which limits the impact on the natural environment. This approach is particularly relevant in a compact city like Oslo, where land use is an important factor.

Certified sustainable bioenergy

Hafslund Oslo Celsio uses biofuels such as biomass and bio-oils that are certified in accordance with the EU sustainability criteria. A small proportion of fossil liquefied natural gas (LNG) is still used in order to comply with emergency response requirements for the grid. Hafslund Oslo Celsio purchased guarantees of origin for biogas in 2023 as a measure to reduce the use of fossil natural gas.

Metrics and targets

During 2024, Hafslund will establish key indicators and set quantitative targets for the topic of “Biodiversity and ecosystems”.

	Unit	2023	2022	Comment
Land restored or improved	m2	21,000	847
Number of new developments in areas defined as encroachment-free nature	Number	0	0
Number of violations of license conditions and description	Number	3	3	Holsfjorden in Hallingdal: Breach of LRV (lowest regulated water level) for two hours on 17 June 2023. Holsfossen power plant in Gausdal: On 8 June, the minimum water flow in Jøra, past the power plant, was below the requirement of 500 l/s for three hours. Synna in the Dokkavassdraget: To safeguard personal safety, it was not possible to manually open the valve for the release of minimum water (100 l/s) from Synna no later than 15 May due to a lot of snow and ice.
Costs for watercourse-related R&D and voluntary nature surveys	NOK	8,758,352	5,732,000	Includes all environmental surveys/nature mapping
Affected rivers with anadromous fish	Number	3	3
Affected national salmon watercourses	Number	0	0
Environmental audits carried out	Number	23	22
Environmental measures implemented	Number	4	22
Environmental measures implemented, of which voluntary	Number	3	19
Environmental studies carried out	Number	42	37
Environmental studies carried out, of which voluntary	Number	34	33
Release of salmon roe	Number	460,000	337,000
Migration in fish ladders and migration routes. Number of fish ladders that are monitored	Number	11	10
Closed watercourse installations returned to more natural conditions	Number	0	0
Voluntary release of minimum water flow to protect the fish in Hallingdal and Aurland watercourses	NOK million	13.5	9.2	The figure is for the voluntary release in Aurland. The voluntary release in Hemsil has been replaced by a mandatory release.
Voluntary release of minimum water flow to protect the fish in Innlandet watercourses	NOK million	7.9	14.1	NOK 7.5 million Hunderfossen self-imposed test regulation, NOK 0.3 million Mesna self-imposed minimum water for winter, NOK 0.1 million Sagnfossen self-imposed minimum water for winter.

*All the indicators for biodiversity and ecosystems apply to the hydropower business.

	Unit	2023	2022	Comment
Hafslund Eco Vannkraft
Number of incidents involving emissions into the soil/air/water and description	Number and description	2	5	There have been two incidents of oil spills into waterways. The extent of these is uncertain, but one of the discharges was potentially larger, in connection with Hans. There has also been a release of 2 kg of FS6 gas.
Hafslund Oslo Celsio
Number of violations of license conditions and description	Number and description	253	-	Klemetsrud line 1: 1 excess discharge of HCl 24 hours and 1 SO2 24 hours. Klemetsrud line 2: 6 days and 4 half hours CO, 2 half hours SO2, 1 day NH3. Klemetsrud line 3: 5 excess emissions of CO half an hour. Klemetsrud discharge to drain: 6 weekly mixed samples Cd above limit value, 2 weekly mixed samples Zn and 1 weekly mixed sample Hg. Haraldrud commercial waste boiler: 194 excess CO emissions per hour, mainly in the weeks after the summer audit. 4 days and 25 half hours of HCl and 1 day of dust.
NOx emissions*	kg	351,578	335,440
SOx emissions	kg	27,450	-	This includes the waste boilers Klemetsrud L1, L2 and L3 and Haraldrud industrial waste boiler

*The comparative figure for NOx emissions has been updated. In 2022, the quantity was reported as tonnes instead of kg.