The UK power sector likely reduced its CO2 emissions by more than 10% this year compared to last due to less fossil fuel-based electricity generation, pointing to a drop in EU carbon allowance demand.

The energy supply sector recorded a 9.9% drop in its emissions to 101.5 million tonnes of CO2e in the first nine months of the year compared to the same period in 2014, government data published on Tuesday showed.

The annual decline is likely to be larger because while Q4 is traditionally the quarter that sees the second largest amount of CO2 emitted by the power sector, autumn and the start of winter in Britain has been unseasonably warm, suggesting demand for heat will be much lower than normal.

A comparable trend will also probably seen across much of the rest of Europe as similar weather conditions are being observed.

British coal-fired generation has dropped further this year, in large part due to the large increase in the UK’s carbon floor price that came into force earlier this year. Gas-fired generation is also down, while renewable energy is up, separate government data published on Tuesday showed.

On a temperature-adjusted basis, power sector emissions are down 12.8% on last year’s first three quarters, the data showed.

Overall, the UK’s greenhouse gas emissions fell 1.5% year-on-year to 376 mtCO2e in the first three quarters of 2015.

The decline in power sector emissions was offset by a 12.5% rise CO2 emissions from residential buildings and an 8.1% rise from public sector buildings – two sectors that for the most part are unregulated by the EU ETS.

Emissions of other greenhouse gases were flat year-on-year at 73.9 mtCO2e in the Jan-Sep period, the government data showed.

By Mike Szabo – mike@carbon-pulse.com