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Life-cycle thinking and the supply of electricity: a case study in three parts
Pierre-Olivier Pineau,* CIRAIG & HEC MontrealInvestment choices in electricity supply options increasingly include environmental and social considerations, while financial aspects remain important criteria. To be consistent, however, life-cycle impact data should be used in the decision making. Furthermore, the life-cycle approach should be understood not only at the executive level, but shared within the company and with stakeholders and consumers.
The whole business analysis process and the strategic implementation of the life-cycle approach, once life-cycle assessment data are gathered, may be the most challenging part of the creation of a “life-cycle economy”. Indeed, old practices and habits have to be changed, and consumers have to accept prices reflecting more than just the traditional immediate production costs. Externalities have to be included and accounted for to make responsible production and consumption choices.
This case study deals with such business analysis and strategic implementation. It offers a detailed electricity supply context to (1) identify the most suitable indicators and approach to base electricity supply choices on; (2) conduct a multi-criteria decision-making exercise and a sensitivity analysis with realistic data; and (3) plan an implantation strategy accounting for external and internal stakeholders' positions.
The presentation covers the main elements of each of the parts of the case study, the pedagogical objectives of the case and its intended results. The target audience of the case study is graduate students with interest in management, natural resources and energy issues.
The case study was developed at the CIRAIG (Interuniversity Research Centre for the Life Cycle of Products, Processes and Services in Montreal, Canada), with support from the Canadian Hydropower Association.
* corresponding author: pierre-olivier.pineau@hec.ca