Power Company Braces Itself For Carbon Costs
June 25th, 2008
Genesis Energy has sent a team to Europe to investigate sources of carbon credits to meet what will be hefty carbon liability for the company from 2010. The Huntly Power Station emits between 3m and 6m tonnes of CO2 per year, which could cost Genesis up to $150m annually in carbon charges, depending on the international price of carbon. In fact, Genesis spokesman Richard Gordon believes the power company may have the largest carbon liability of any single NZ business.
Gordon notes with the Emissions Trading Bill likely to be passed, carbon trading is about to move from theory to reality and companies will have to “hand over real cash” to buy credits. He adds the cost of carbon trading for Genesis will not just involve buying credits to offset its emissions but also the cost of employing extra staff, installing new computer software, and investment in compliance and verification procedures. Given the power company’s annual fuel bill is around $350m, carbon costs are likely to add up to 40% extra. This extra cost will have to be passed on to consumers.
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