Coal consumption by British electricity generating companies was up almost 25% in the last quarter of 2006, compared with the same period a year earlier.  The industry’s use of gas was down by 12%.  Both these movements are in the wrong direction for the environment, because coal-based power produces more carbon emissions than does gas-based power.

Here are the energy statistics from the UK DTI, and here’s the report on them from the FT.

Of couse, the point of having a market in carbon emissions, is to still achieve lower emissions across the economy overall, even when emissions increase in a particular industry sector.  The problem here arises because the electricity sector is a major source of emissions, and because the price of permits to emit is currently very low.   With low prices emitters have little financial incentive to restrain their emissions.  The low prices are indicative of an over-supply of permissions relative to expected demand, something that can only be fixed with tougher caps.

Technorati Tags: Coal, electricity, gas, carbon emissions, market in carbon emissions, caps

This entry was posted on January 8th, 2007 at 00:15 (GMT) and is filed under Alternative Energy, Industry Reports . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.