This report extends the analysis described in Council’s “Interim Wholesale Power Price Forecast.” One of the benefits of conservation is that it avoids CO2 emissions. The benefit it provides depends on what generating resources would be replaced and how much CO2 they produce. This requires understanding what generating resources are on the margin; that is, the generation that could be displaced by the conservation. In the Northwest, the average marginal CO2production is substantially higher than the average CO2 production from all electricity generation. This is because hydroelectricity and wind, which have low operating costs and no CO2 emissions are brought on-line before coal-fired or natural gas-fired generating units. Because only the marginal plants would be displaced by conservation, it would not be proper to use the average of CO2 emissions from all power generation to estimate the CO2 saved through conservation. This paper evaluates what resources are on the margin in every hour and what the CO2 reduction would be as a result of conservation. The paper also provides estimates of the total annual CO2 production of the Northwest power system assuming different combinations of future natural gas prices and CO2 emissions costs.
