We have set ourselves the stretching target of reducing the carbon intensity of our electricity generation portfolio by 10% by 2012 against the baseline year 2005, which could see an annual reduction of more than 2.5 million tonnes of CO₂ emissions per year. Development of combined cycle gas turbines (CCGTs), clean coal technologies, and on- and offshore renewables projects could see our carbon intensity fall from its current level of around 0.7 tonnes CO₂/megawatt-hours (MWh) to less than 0.6 tonnes CO₂/MWh within the next decade. This will only be achieved in a climate that encourages investment in low carbon and if the significant regulatory and planning hurdles can be overcome.

Note that the carbon intensity figures detailed in our 2005 report included CHP. The 10% reduction target set relates only to electricity generation assets and therefore CHP has been excluded from the chart above. See Emissions of greenhouse gases for the equivalent chart this year.

Our generation portfolio remained unchanged in 2006 and, combined with favourable coal prices and reduced output from wind farms, this meant that our carbon intensity increased against 2005 by around 2.5%.

To reach our target will require some changes in the way we generate electricity. We aim to progressively replace our older coal-fired power stations with power stations that emit less CO₂. We will be closing two of our old coal-fired stations (Kingsnorth and Ironbridge) by 2015, and are looking to build new CCGT and new cleaner coal-fired power stations. We are also developing plans to construct a new IGCC coal-fired power station in Lincolnshire to help demonstrate the technology to capture and store CO₂.