Jul 7, 2008

Being green by going blue

The SIG (Services Industriels de Genève) grossly overestimated my electricity bill, so when they measured my real consumption they started to refund me, and I guess the thing will go on for quite a while. I consumed 854 kWh in one year (I live in a 3 pièces with my girlfriend), they estimated 1876 kWh, which is probably based on the consumption of the previous environmentally-unconscious occupants of my flat. I consume blue "Vitale Bleu" electricity, which has a very low CO2 emission factor, 0.0124 (the emission factor converts kWh into CO2 emissions). This means that I contribute to the production of 10.8 kg of CO2. If I were to offset these emissions paying $36 per tonne, it would cost me $0.36. That is, nothing. Had I been on brown electricity (the SIG calls it "Initial"), with an emission factor of 0.4, I would have emitted 350.6 kg of CO2, with an implied offsetting cost of $12.6.
My blue electricity cost 219 CHF in one year. How much would I have spent hade I been on the brown? 216 CHF. I saved 3 CHF – less than the cost of a coffee – by emitting 32 times more CO2. Notice that if had consumed like the previous occupants (1876 kWh), I would have spent 470 CHF on blue and 464 CHF on brown electricity, with a saving of two coffees, and 727 more kg of CO2 in the atmosphere. And if I were to offset my emissions, I would end up paying $9 more for the brown electricity than for the blue.
The message is clear: if you are purchasing brown electricity, switch to blue! You drastically reduce your carbon footprint at basically zero cost, irrespective of how much you consume.
SIG also offer a third type of electricity, "Vitale Vert". They claim it comes from green hydro and has at least 2.5 per cent of renewable content (photovoltaic and biomass). Had I been on green electricity, my annual bill would have been 267 CHF, 47 CHF (or 21 per cent) more expensive. Unfortunately, I do not know the emission factor. Let's assume the CO2 content is proportional to the price, so that the green has an emission factor 21 per cent lower than the blue. In this case, my CO2 emissions would have been 8.58 kg (compared to 10.8 with blue). A big difference in percentage terms, but small in absolute terms due to the low baseline. However, SIG claims that choosing the green electricity "can contribute to the development of solar electricity generation, to feed a fund for ecological upgrading and encourage research in the field of new renewables". So I guess that my cost of funding research on non-hydro renewables would be 47 CHF.
Finally, the SIG offers mixed strategies for the game theorists among us: "Offre Découverte" (20 per cent green, 80 per cent blue) and "Offre Horizon" (40 per cent green, 60 per cent blue). Using the assumptions made above, with the "découverte" I would have spent 230 CHF and emitted 10.4 kg; with the "initial" I would have spent 239 CHF and emitted 9.95 kg.
In all cases, for low ranges of consumption like mine – and probably yours – the (absolute) differences between blue, green and convex combinations of the two are negligible.
Overall message: if you are on brown, switch to blue; if you are on blue, switch to green or mixed offers if you want to support R&D in renewables such as photovoltaic and biomass.
As Paul Krugman sometimes puts it, I've reported, you decide.


Pierre-Louis said...

I dont get it. Electricity in my building is set for the entire building, not just for my apartment, so how could they feed me with different electricity if I switched to blue (assuming I am now on brown)???
And also, why don't SIG just use as much clean electricity as possible, emitting the lowest CO2 possible...ok it doesnt fix the incentives in the rigth direction but if everyone is on brown by default they just use their dirty electricity and keep their clean one under potential???

cosimo said...

As a private household, you can choose your electricity here: http://www.sig-ge.ch/particuliers/electricite/choisir-mon-electricite/changer-d-energie/index.lbl. The grid obviously contains the same electricity, but the electricity put on the grid comes from various sources. The blue is mostly hydro, the brown is combined cycle gas turbine (CCGT). I am not sure, but I guess they are subject to an energy portfolio, with a fixed mandatory share of renewables. Within the portfolio, brown is the cheapest to produce, and I am sure it is the one where they have the highest profit margin. They encourage people to go blue or more because they adopt price discrimination.