Should electricity be labelled for its CO2 content?
February 12th 2008 In the same way that white goods are labelled with an A-G energy efficiency rating and buildings will be under the Energy Performance of Buildings Directive Richard Tarboton, head of energy and carbon management at BT argues that we should not only have a CO2 label on our electricity supply but that we should be able to specify to our supplier what we want in our generation mix. "It is on fridges and crisps but not on the largest carbon purchase you make [electricity]," commented Tarboton at the recent British Energy Talk Power Conference. The system would work something like the other labelling systems in existence with renewable energy being A-rated and perhaps nuclear being B-rated, gas-fired good quality CHP being C-rated, gas D-rated and so on with coal being the worst. The mix that you specify would determine the carbon intensity of your electricity mix.
Tarboton outlined the mix of electricity that BT uses as a group and it divides into 42% renewable, 56% gas-fired CHP and 2% coal, he believes that a mix with something like this would rate the company B and works out at 184g/kWh. You may ask why should we bother with another labelling system but Tarboton believes that customers would pay more for green sourced electricity so that they could have a better rated mix. The demand and inevitable shortage of supply for A-rated electricity would push the price up and this in turn would make it proitable for more investment to be directed into generating A-rated generation. A letter suggesting this scheme has been sent to the Secretary of State and Tarboton is interested in generating support for the idea. His point is that capital markets are fast and democracy isn't. And if people are prepared to pay then the markets will supply. There is a similarity with Fair Trade goods in that they cost more but people are prepared to pay it for ethical reasons. Only slightly tongue in cheek, Tarboton can see a day when a labelling snobbery occurs, 'Oh really, you've only got a D-rated supply?'!
Although there exists a renewable obligation for suppliers the premium is not enough to drive generators beyond their statutory obligations. This is the market push towards green generation, Tarboton contends that labelling will be the consumer pull.
Do you think there is merit in the idea, can it work when electricity companies are forced to go to the spot market to make up short falls in generation, how can the whole thing be easily verified and validated? Do you think that such a system would create the necessary price differential to stimulate the construction of renewable generation? Send your thoughts to us by email..
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