Explaining our carbon intensity and fuel mix

We have a responsibility to meet the energy needs of our customers, but I believe it’s vital that we do this in a way that’s affordable, and which contributes positively to international climate change targets.

Gas is helping us achieve this - it’s more affordable than other energy sources, is the lowest carbon fossil fuel and provides flexibility for backing-up renewable energy when the wind doesn’t blow…or blows too much. With this focus, alongside our interests in low carbon nuclear and renewable energy, I’m pleased to say that we continue to have one of the lowest carbon fuel mixes among major UK energy suppliers. And with having recently come in the top 1% of reporting companies globally for action and disclosure on climate change, we are well placed to help Britain transition to a lower carbon energy future.

Carbon Intensity

So how do we measure the environmental impact of our power generation? We do this by measuring the carbon intensity* of the energy we generate. Carbon intensity can vary from year-to-year as it’s determined by our energy generation portfolio, customer demand and the cost-effectiveness of generating from one fuel type compared with another.

How did we do in 2014? The carbon intensity of our power generation declined from 200gCO2/kWh, to 154gCO2/kWh in 2014 which exceeds our long-term target of 260gCO2/kWh by 2020. Although our carbon intensity may well rise in the future depending upon the variables outlined above, we are currently reassessing our 2020 target to better reflect recent changes in our generation portfolio and now that there’s more certainty following the first UK capacity market auctions.

Our 23% reduction was largely due to the divestment of three North American gas fired power stations, while the acquisition of Bord Gáis Energy and its 445MW power station alongside the sale of Braes of Doune wind farm increased it. Compared with 2013, we saw a 35% reduction in our gas fired power generation, a 7% fall in nuclear alongside a 20% rise in renewable power generation as a result of Lincs offshore wind farm becoming fully operational.

Overall, 61% of our power generation came from low carbon sources such as wind and nuclear, up from 52% in 2013. We calculate that this has helped avoid nearly 8.4mtCO2e, which is equivalent to the annual carbon footprint of almost 1.7m UK homes.

Power Generation Table

But what is our carbon intensity when we include the power we purchase? As well as generating our own power, we also purchase it from others to meet customer demand. In the 2013/14 financial year, our total carbon intensity in the UK declined 10.6% to 339gCO2/kWh, down from 379gCO2/kWh the previous year. Our performance compares favourably to others – we have the second lowest carbon intensity among leading energy suppliers in the UK and are well below the UK average of 420gCO2/kWh. This is due to an increase in nuclear and renewable power in our overall fuel mix, together with a decrease in coal fired power in the energy we purchased.

In 2015 we’ll continue to source reliable and competitive energy supplies for our customers, responsibly. I’ll be sure to let you know when our carbon intensity target is updated later in 2015 but let me know if you have any questions in the meantime.

* The amount of carbon dioxide emitter per unit of power produced

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