carbon limited

WWF and IPA published a report on Wednesday showing that the carbon reduction due to the dash for gas in the 1990’s has been wiped out by increased use of coal. Here’s the press release.

It looks to me that the government hopes nuclear and CCS will save the day. This keeps the CBI and power industries happy and is the BIG, politically safe option. Renewables will continue to receive lip service and as for demand side reduction (the cheapest of all emissions reduction measures), it will be gently encouraged but never demanded. As Tony has told us before: you can’t expect people to change their lifestyles just to fight climate change.

By the way, does this mean we can stop using the unrealistic figure of 0.422 kgCO2/kWh for grid electricity? This was based on the carbon intensity falling, not rising! Someone call the BRE.

Anyway, the main points of the report can be summarised as: 

1. Up to 1999, the overall trend in power sector emissions was downwards due to increased use of gas-fired plant.
2. Coal emissions have increased almost 50% since 1999 taking the total emissions to their highest level since 1992, before the dash for gas.
3. While policy measures such as the Renewables Obligation and Climate Change Levy may have helped limit emissions, they have not led to an overall reduction.
4. The main drivers behind the rise in coal are:

a) Coal-gas price spread – coal is cheap relative to gas and gas prices continue to rise.

b) Cost of emissions under the EU Emissions Trading Scheme are being passed on to consumers (including the cost represented by the free carbon allocations, making an estimated £1bn windfall for the power sector.

c) The price of carbon under Phase I of the EU ETS (due to run until 2008) is at an all time low of €1/tCO2. The report estimates that a price of €30/tCO2 is necessary to make coal uneconomic. The Phase II price is currently about half that.

d) Recent policy decisions have encouraged coal fired plans to retrofit ageing coal plant with sulphur scrubbers rather than scrapping them altogether. Rather than reducing CO2, scrubbers actually lead to a small increase.

5. Under current government policy, power sector emissions will continue to rise and the government will not meet its 2010 target (20% CO2 reduction on 1990 levels), even by 2020.
6. Policy in the Energy White Paper (delayed until May after the nuclear consultation fiasco) could alter the trend. Carbon capture and storage might also give coal power stations a new lease of life while reducing emissions but is several years away.