Expert Opinion on Environmental BiologyISSN: 2325-9655

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Main problem with market based methods for reporting purchased electricity, e.g. environmental labelled electricity, and a proposed solution to that problem

In the old, physical, way of regarding the Product Electricity; as being similar to water flowing in pipes, the statement “All power mixes on the grid!” held true. However, from a market and consumer power point of view, from an economic view of the product that we purchase (i.e. the Product Electricity), that statement is false. [ ] The Product Electricity which is audited; Production vs Consumption, does not mix with any other Product Electricity. Only the Products Electricity which are not audited does mix. The anonymous agents who are the carriers of the purchased Product Electricity, i.e. the kWh:s, are mixed. The product itself (the Product Electricity) is not mixed. [ ] This new perspective is not intuitively easy to understand, especially not for electrical engineers or anyone working in the power sector. Nevertheless, it is the correct way to understand the new situation with deregulated power markets offering different “colours” of power, i.e. Products Electricity with different environmental loads. In this new situation the new perspective on the Product Electricity shows that there exists a possible choice of not consuming any coal power. However, the market based methods for reporting purchased electricity do have shortcomings and this article proposes a concrete solution to the most apparent problem; that it is possible to buy only the Guarantee of Origin (GO), separate from the Product Electricity itself. The fact that transactions like that are both allowed and correct (in theory) they do not increase the acceptance, nor the understanding of how it is actually possible to not purchase and consume any coal power. Furthermore, the ongoing important scientific discussion about consumer power on the power markets is hindered.

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