Marginal Emissions Rate vs. Average Emissions Rate
Institutions and businesses across the United States are continuing their commitments to reducing greenhouse gas emissions associated with their electricity use. To properly evaluate a given measure’s effectiveness in doing so, it is important to understand the actual impact on greenhouse gas emissions. For potential solutions that involve changes in grid electricity use, an understanding of the difference between marginal and average emissions rates and how to evaluate them is critical to determining efficacy.
The objective of this post is to provide additional information on marginal vs. average emissions rates as well as to introduce various resources that campus decision makers can use to get more information about these emissions accounting methods. There are many variables that go into a useful marginal emissions rate analysis, including the marginal fuel in a given region, the policy framework in an area, the lifecycle of the carbon-mitigation measure, etc.
What is the difference between marginal and average emissions rates?
Simply put, the marginal emissions rate is the rate at which emissions change due to adjustments in electrical load in a specific time frame (i.e when customers increase or decrease electricity use, certain power plants adjust to match that increase or decrease). Average emissions describe the carbon intensity of the grid in a defined area based on the predominant generation sources (i.e. the aggregated emissions from all of the coal, gas, solar, wind, hydroelectric etc. power plants that supply power to the area) (Holland, Kotchen, Mansur, Yates, Nov 2020). The mechanics of engaging wholesale generation resources to meet real-time electricity demand are complex and are usually based on leveraging the lowest cost resources first. More information on the supply stack is available here.
Why focus on marginal and average emissions rates?
Understanding marginal and average emissions rates can inform what carbon mitigation measures to undertake by providing insight into how the measures might influence actual grid operations and therefore emissions. Institutions will benefit from a consistent methodology by which to evaluate the carbon footprint for new technologies relative to what their footprint for electric consumption would have been without the carbon mitigating technology (Tabors et al.).
Secondly, understanding the dynamics of marginal vs. average emissions rates will assist decision makers operating onsite energy facilities with how to operate so as to minimize their carbon emissions. If, for example, an institution is operating onsite power generation, and has access to real-time grid marginal emissions data in addition to other operating criteria, they could adjust how much power they generate onsite vs import from the grid, or deploy demand shifting strategies accordingly.
For additional detail on the dynamics and evolving landscape for emissions accounting, see sources listed below.
Sources:
“Why Are Marginal CO2 Emissions Increasing for U.S. Electricity? Estimates and Implications for Climate Policy”, Stephen P. Holland, Matthew J. Kotchen, Erin T. Mansur, Andrew J. Yates, American Economic Association, November 4, 2020. WhyAreMarginalCO2EmissionsIncreasin_preview.pdf
““Methodology for Calculation of the Marginal Emission Rates from a Complex Cogeneration Facility compared with that of the co-located NY ISO Bus”, Tabors, Rudkevich, He, Kumthekar, Li, Tabors Caramanis Rudkevich and Newton Energy Group, Bland, Quist, LaPenna, Cornell University, October 2020.
Location, Location, Location: The Variable Value of Renewable Energy and Demand-side Efficiency Resources Duncan Callaway, Meredith Fowlie, and Gavin McCormick ∗ June 19, 2017
Carbon pricing in the real world, https://acee.princeton.edu/carbon-pricing/
https://www.watttime.org/marginal-emissions-methodology/
EPA E-Grid
https://pjm.com/-/media/etools/data-miner-2/marginal-emissions-primer.ashx
https://www.iso-ne.com/about/what-we-do/in-depth/how-resources-are-selected-and-prices-are-set