1. Carbon dioxide created by major power generation methods

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There are several ways to generate electricity, but not all generation methods are created equal. Most everyone understands that the methods which rely on fossil fuels are bigger polluters than those that use renewable energy sources. In the first step of our process to determine the carbon footprint of one kilowatt-hour, we'll examine the carbon footprint of one kilowatt-hour produced by each generation method.

Determining the carbon footprint of a single generation method isn't an exact science. Numbers can vary widely depending upon how much of a generation method's life cycle is included in the analysis. For instance, if you're trying to estimate how much CO2 is generated by one kilowatt-hour from a nuclear reactor, do you include the CO2 released when the reactor dome's concrete was produced and the emissions of the trucks transporting the concrete as well as the nuclear fuel and waste? Do you include the petroleum products used inside the reactor? As you can see, it isn't an exact science. With that in mind, we figured it made the most sense to collect as many life-cycle analyses as we could find and average the numbers.

PS - If you know of an analysis we've missed, drop us a line.

2. Major energy companies in the US

to top | previous step: 1. Carbon dioxide created by major power generation methods | next step: 3. Power generation mix for major US energy companies

Now that we have an idea how much CO2 is released when you produce one kilowatt-hour using different generation methods, let's see if we can't figure out what generation methods are used to produce electricity in the United States. To do that, we'll select the top utility companies within the US to represent the industry, and we'll examine their generation method mix to see how many kilowatt-hours they produce using coal-fired plants versus wind power versus solar power, so on and so forth.

There are a couple of different ways to determine the major energy companies in the US. We used market share data since it was readily available and reliable. Sales volume data might be better information but more difficult to come by. According to S&P's 2007 Electric Utilities Industry Survey (S&P Industry Survey, Electric Utilities, Justin McCann, August 9, 2007), here are the top 10 electric utility companies in the US by 2006 operating revenue.

3. Power generation mix for major US energy companies

to top | previous step: 2. Major energy companies in the US | next step: 4. Average CO2 produced per kilowatt-hour from major US energy companies

So we have a basket of major energy companies which we'll use to represent the whole industry. Those 10 companies own nearly 40% of the market, and as a result, they would control any industry-wide averages anyway. Now let's see which generation methods they use to create their electricity.

Most companies list the megawatt capacity and fuel source of their generation plants somewhere on their corporate website or in their 10-k. We took a little time and collected that information for the top 10 energy companies in the US.

The numbers aren't exact. In some instances, a single plant could use multiple types of fuel depending on fuel price and availability. In that case, we evenly divided the capacity between fuels. For example, if a 500 megawatt facility could run on either fuel oil or natural gas, we put 250 megawatts into the oil column and 250 megawatts into the natural gas column. In addition, some generating facilities were shared among multiple owners. In those cases, care was taken not to double count capacity among the big ten, but no adjustments were made for partial ownership.

In addition, these figures are for capacity and not necessarily for production. As fuel prices fluctuate, a company with excess capacity might switch production from its oil-fired plants to its nuclear power plants to minimize costs. As a result, while oil might represent 50% of a company's power production capacity, on any given day, it might only represent 10% of the power sold that day as the company shifts production to other plants. We can't really adjust for the differences between capacity and production. However, it's as close as we can get, and if we assume energy companies are operating fairly close to capacity in the United States, our numbers are fairly accurate.

4. Average CO2 produced per kilowatt-hour from major US energy companies

to top | previous step: 3. Power generation mix for major US energy companies | next step: 5. On average, one kilowatt-hour in the US produces about 1 pound of CO2

So now we know the power generation mix for each of the top 10 utility companies. If we put that together with our estimates of how much carbon dioxide is created when you make one kilowatt-hour using each generation method, we can estimate how much CO2 is produced by one kilowatt-hour from each utility company (in geek speak, we'll calculate a weighted average).

If you purchase your power from one of the companies listed, this is a good place to stop. A company's single number will be more accurate than the industry average we calculate in the next step. In our case study, we'll see that Babcock purchases power from Duke Energy. We plugged 1.23 pounds of CO2 per kilowatt-hour into our model and ran with it.

5. Average pounds of CO2 per kilowatt-hour

to top | previous step: 4. Average CO2 produced per kilowatt-hour from major US energy companies | next step: Case study

Now we know on average how much CO2 is created by one kilowatt-hour from each major utility company. We can put that together with the market share of each company to calculate how much CO2 is produced by one kilowatt-hour in the United States on average (in geek speak, another weighted average).

There you have it. To the best of our ability, on average...

one kilowatt-hour purchased in the United States creates a little over 1 pound of carbon dioxide.