Table 1 – Calculation of average carbon intensity (for Base Case – see below)
To understand why we need to the concept of the marginal generator. In reality as electricity is saved the reduction in generation is not spread across each generator. The reduction occurs in one plant – the marginal generator. Let’s run through an example.
The wholesale mechanism operating in most electricity markets will reduce output on the most expensive plant, not reduce the output of all plants equally.
Figure 1 & 2 – The effect of saving 1 GW of electricity. Note that the generation from wind is unchanged.
Table 2 – The daily results for the Base Case & Case 1 (you can download the model below)
|Base Case||Case 1||Saving|
If we were to use the average grid carbon intensity (0.456 tC/MWh) we calculate a daily carbon saving of only 21,480 tC.
You might be asking – how do we know what the marginal generator will be? It’s likely to be the most expensive generator at that time (it may not be if the plant needs to be kept on for technical reasons). As renewables are characterized by low marginal costs they are the unlikely to be pushed off the grid.
Luckily high marginal cost generators like open cycle gas turbines are usually also carbon intense – so your saved electricity is likely doing valuable work – and potentially more than you previously thought!