Including dynamic CO2 intensity with demand response

Hourly demand response tariffs with the intention of reducing or shifting loads during peak demand hours are being intensively discussed among policy-makers, researchers and executives of future electricity systems. Demand response rates have still low customer acceptance, apparently because the consumption habits requires stronger incentive to change than any proposed financial incentive. An hourly CO2 intensity signal could give customers an extra environmental motivation to shift or reduce loads during peak hours, as it would enable co-optimisation of electricity consumption costs and carbon emissions reductions. In this study, we calculated the hourly dynamic CO2 signal and applied the calculation to hourly electricity market data in Great Britain, Ontario and Sweden. This provided a novel understanding of the relationships between hourly electricity generation mix composition, electricity price and electricity mix CO2 intensity. Load shifts from high-price hours resulted in carbon emission reductions for electricity generation mixes where price and CO2 intensity were positively correlated. The reduction can be further improved if the shift is optimised using both price and CO2 intensity. The analysis also indicated that an hourly CO2 intensity signal can help avoid carbon emissions increases for mixes with a negative correlation between electricity price and CO2 intensity.