UK utilities: low carbon intensity requires right generation mix

“Content According to recently published market share figures, British Gas has 5.65 million electricity consumers and E.ON Energy has 4.87 million, making them the UK's two largest electricity suppliers. However, when the utilities' carbon intensity per customer is taken into account, size is where the similarity ends.

According to published fuel mix figures for April 1, 2005 to March 31, 2006, E.ON UK's coal-fired generation is over 18% higher than the UK average of 35.2%, while British Gas's parent company Centrica is almost 20% lower at 15%. This would account for the large discrepancy in the 1,168kg (Centrica) and 2,119kg (E.ON UK) reported carbon emissions per customer.

The battle for green supremacy is gathering pace, with suppliers actively investing in renewable sources of energy. Indeed, RWE power is constructing a second offshore wind farm, which will assist the utility in closing the gap on Scottish and Southern Energy, the second lowest carbon-intensive utility by customer. This investment was closely followed by Centrica's acquisition of a 50% stake in an onshore wind farm, which is expected to supply 46,000 customers with green energy.

UK utilities are also racing to offer new tariffs. There are now several products available in the green energy market space, but consumers will need to be educated about the various industry terms to avoid confusion about what package they are actually signing up to receive. Deciding upon which supplier has the lowest carbon intensity is becoming easier for consumers, however, given the existence of many online carbon calculators.

With investment now finally resulting in new renewable generation builds, it is likely that every supplier will pay close attention to the carbon intensity league tables. However, unlike the UK's other major energy suppliers, Centrica contracts out a proportion of its generation to meet its customers' demands. To ensure that it keeps its position as the lowest carbon-intensive supplier by customer, the company's future energy purchase decisions will need to detract from high carbon-producing generation. (energy-business-review.com)