Case Study Analysis of Vattenfall Hydro and Wind Power

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Case study analysis:

Suitable cases for our research would be companies that were engaged in large projects which affect external stakeholders and who, most importantly, work actively with stakeholder analysis. Large projects were chosen since they were more likely to have many external stakeholders. Cases that fulfill these criterias were suitable for our research. We started to search for appropriate cases in the energy sector since it is an industry that consists of big companies that are involved in projects with many external stakeholders such as the building of power plants. After researching the different actors in the industry we found that Vattenfall, one of Sweden’s largest energy providers was suitable as a case company. Vattenfall has many external stakeholders, they invest a lot in new projects around the world; everything from building wind power farms to investing in nuclear power, and they work actively with stakeholder analysis according to their sustainability report and webpage.

  1. Vattenfall Hydropower:

  1. Approach to external stakeholder analysis in projects by Vattenfall:

Stakeholder analysis in hydropower projects is of great importance and its significance has increased in recent years. During the establishment of hydropower in Sweden not much attention was given to external stakeholders’ and this gave Vattenfall a rather bad reputation in the project areas affected. Consequently Vattenfall Hydropower now has extensive external stakeholder interactions prior to and during Hydropower projects. The responsibility for stakeholder analysis is mainly the project manager’s. However when it comes to large-scale projects the communication officer assumes the biggest responsibility. In order to have a somewhat standardized method of communication with stakeholders, a handbook was developed in cooperation with an external dialogue expert. The handbook is designed to serve as guidelines for project managers rather than as strict rules. Vattenfall Hydropower works proactively with their external stakeholders and stresses the importance of having a strong dialogue with entities affected by a project. Stakeholder analysis is described as a highly complicated process where the size and scope of a project will have considerable impact on how external stakeholders are identified and prioritized.

Most often interaction with external stakeholders includes information meetings with key stakeholders as well as sending out information. Neighbors and different associations are invited to information meetings, to create a dialogue, see how these stakeholders are affected, and enhance decision-making. One example of Vattenfall’s broad stakeholder approach is exemplified by a project in Vilhelmina where Vattenfall wanted to rebuild and expand the Hydropower plant. Prior to project start, Vattenfall created reference groups consisting of participants from the municipality, political parties, tourism, environmental groups, fishermen etc. All interested stakeholders were invited to participate in discussions with experts from Vattenfall. Whether to conduct the project or not was to be decided by a vote, which ultimately turned out not to support expansion. Hence, even though Vattenfall conducted broad proactive stakeholder interactions, they were not able to go through with the project.

  1. Identification process :

The process for identifying external project stakeholders can be described by asking the question: Who is affected by the project? Everyone that is affected is a stakeholder and should be regarded as such. In some projects new stakeholders can also be identified during the ongoing project. The primary external stakeholders that are usually identified during new hydro projects are: politicians, authorities, property owners, media, general public, interest groups, energy companies, and other channels, for example, information officers at authorities. An example mentioned where Vattenfall Hydropower responded to the demands of a stakeholder group consisting of the general public was when the building of a new hydroplant weakened the ice at a lake which was frequently trafficked by snowmobiles. Since these stakeholders were highly affected by the hydropower project, Vattenfall chose to build new paths for snowmobiles in other areas. Driver of snowmobiles was not a stakeholder group that was considered in the first identification phase.

  1. Prioritization :

Vattenfall Hydropower always has dialogue with authorities such as county administrative boards (länsstyrelsen), the environmental court (miljödomstolen), and the legal, financial, and administrative service agency (kammarkollegiet) in order to gain approval for their projects. Because of this, authorities always have the highest priority and Vattenfall Hydropower is dependent on receiving a permit before it can move forward with a project.

Furthermore, dialogue is always conducted with other identified stakeholders, and support from key stakeholders is most often necessary in order for a project to be successful. Because of scarce resources it is impossible to meet the demands of all stakeholders. However, Vattenfall Hydropower aims at having at least a dialogue with all stakeholder groups even though they may not give in to demands. External stakeholders are mainly prioritized by asking the question: How much are they affected by the project? The groups most affected by a particular project are given higher priority. Also, depending on how much the stakeholder is affected, Vattenfall will contribute with a proportional amount. For example, Vattenfall Hydropower helped the municipality with various recreational projects as compensation for heavy traffic during the project.

  1. Vattenfall Windpower
  1. Approach to external stakeholder analysis in projects :

Vattenfall Windpower works actively with external stakeholders, both before and during different projects and external stakeholders play a major role in project success. This can be explained by the fact that Vattenfall Windpower often needs external stakeholders’ approval in order to acquire permission to build wind farms. The proactive stakeholder approach is hence a must in projects that Vattenfall wind power is engaged in. At Vattenfall Windpower the project communicator has the initial responsibility for identifying and prioritizing stakeholders. Later in the project phase the project communicator’s work with stakeholders is transferred to the project leader, who ultimately has the responsibility for which external stakeholders are identified and accorded priority. Before each project Vattenfall Windpower uses a project model which every project leader follows during the whole project. The model is a process-based project framework and is designed to efficiently control and manage development projects. One step in the model clearly states when it is time to carry out a comprehensive external stakeholder analysis. This means that in all projects conducted at Vattenfall Windpower external stakeholder analysis is carried out.

  1. Identification process :

Before a project, an environmental analysis is made in which the people in charge identify such things as; have there been earlier projects here? What is the municipality’s attitude toward projects like this? Who are the ―neighbors and what is their attitude? In this way Vattenfall identifies which of the external stakeholders that will feel affected if the project proceeds. However, if the project continues to evolve, an even deeper analysis is carried out; all stakeholders are then identified and divided into groups and subgroups, for instance, the general public, media, county councils, authorities, NGOs, and internal stakeholders. Much of the information about different stakeholders is collected from the municipality as the municipality often has a rather comprehensive view of which local stakeholders may require special attention. In addition to this, Vattenfall Windpower also has a pre-prepared list of stakeholders, which is used to ensure that no important stakeholder is forgotten. Vattenfall Windpower has about 130 active projects around the world and these projects are very similar to each other. Consequently, the identification of external stakeholders becomes easier because the same kind of stakeholders are often involved in these projects.

  1. Prioritization :

Prioritization among the external stakeholders identified is based on past experiences and common sense. This is because the same stakeholders are often identified in Vattenfall Windpower projects, hence past experience and common sense turned out to be a rather fast and simple way to prioritize these stakeholders. Two stakeholders that almost always have high priority are the municipality and county council, since permits are often required from these stakeholders before a project can proceed. The three most important attributes identified were power, proximity and contribution.