Emissions Factor Calculation

One of the most touted benefits of renewable energy projects is that they reduce carbon emissions by displacing dirty electricity. Have you ever wondered how this emissions figure is calculated? Normally it is done by multiplying the total MWh produced by a given electricity system by a number called an emissions factor. The following is a summary of a methodological tool to calculate the emissions factor as developed by the UNFCCC. It is meant to acquaint you with the process and introduce you to the rigor of such calculations.

The process of calculating a grid’s emissions factor can be divided into four primary steps. The first is determining the relevant grid components, followed by calculating what is called the grid’s Operating Margin (OM), then finding the grid’s Build Margin (BM), and finally calculating the Combined Margin (CM) by taking a weighted average of the OM and BM. Typically, the CM is the number of most interest as it is used to determine how much emissions are released into the atmosphere by a given electrical grid to produce one MWh of electricity.

Step 1: Determining relevant grid components

The electricity running through a project’s electricity grid (the grid to which the project is physically connected) can be categorized one of two ways: either it was produced by the project’s electricity grid (EG) or it was produced and transferred via long range transmission lines from another electricity grid (EG_import).

The power plants that produce electricity under both scenarios are used in the calculations. So it is important to identify all the grids that transmit EG_import as they will be used to calculate the grid of interest’s OM.

Step 2: Calculate the grid’s Operating Margin

Four different methods can be used as to calculate the OM: simple, adjusted, dispatch, and average.

Simple OM

Simple OM can only be used in grids where the must-run/low-cost facilities produce less than 50% of generated capacity. Low-cost facilities are defined as facilities with low marginal generation costs. Must-run facilities are those that operate independent of seasonal or daily load variations. The premise of this method is to consider only facilities that are not low-cost/must-run. Then to determine the OM one takes the average yearly emissions of each relevant facility and divides that by the facility’s annual MWh production. The specific equation is as follows:

EF_{y, OMsimple} = (FC_j,i * NCV_j,i * EF_CO2)/EG_annual

Where FC is the total amount of fuel type i consumed by facility j in a year. The Net Calorific Value (NCV) is the amount of energy contained in fuel type i and EF_CO2 is the amount of CO₂ released into the atmosphere per unit energy.

This equation is iterated across all fuel types i used by facility j, and then across all j facilities connected to grid y.

Adjusted OM

Adjusted OM (OM_adjusted), unlike OM_simple, takes into account the low-cost/must-run facilitates of a grid. Calculating the OM_adjusted is similar to OM_simple except for the introduction of a constant λ_y. The purpose for this constant is to create a weighted average between facilities that are run only during times of high demand and low-cost/must-run facilities. The OM_adjusted is calculated as follows:

OM_adjusted = [(1-λ_y) * OM_simple] + [λ_y * OM_{low-cost/must-run facilities}]

Dispatch OM

This method calculates the OM by monitoring facilities that are actually dispatched every hour a grid is on the margin (or in a time of peak demand) during a given year. This approach requires annual monitoring data and must be recalculated every year the renewable energy project is accredited. The equation to calculate OM_dispatch is fairly simple. It first calculates the hourly emissions released by a given facility operating on the margin, adds all the hourly numbers together, and finally divides the resulting number by the total amount of electricity produced by that facility in a given year. The equation for OM_dispatch is:

OM_dispatch = [EG_{per hour} * EF_hourly] \ EG_annual

Where EG_{per hour} is the electricity generated in an hour of on the margin operation. EG_annual is the annual electricity production of a given facility. The hourly emissions factor (EF_hourly) is specially calculated for every operational hour.

Average OM

Average OM (OM_average) is calculated just like OM_simple, but also includes all low-cost/must-run facilities on the grid. OM_average can be applied to all renewable energy projects whereas OM_simple, as you may recall, can only be applied to electrical grids where low-cost/must-run facilities compose less than 50% of a grid’s electrical production.

Step 3: Calculate the grid’s Build Margin (BM)

A grid’s BM is the generation-weighted average emissions factor for all electricity generated in the most recent year for which data is available. It is calculated by the following equation:

BM = (EG_i * EF_i) / EG_annual

Where EG_i is the electricity generated by power plant i in a given year, EF_i is the emissions factor of plant i, and EG_annual is the annual generation of the grid. The equation is iterated across all plants on a given electrical grid. EF_i is to be calculated by the equation used in OM_simple.

Step 4: Calculate the grid´s Combined Margin (CM)

The CM is a weighted average of a grid’s OM and BM. The equation is:

CM = (W_OM * OM) + (W_BM * BM)

W_OM and W_BM are coefficients that govern how much weight each respective margin carries. These coefficients vary across different projects and crediting periods, but their sum must always equal to one.

View the full technical documentation.