Can Carbon-Aware Electric Load Shifting Reduce Emissions? An Equilibrium-Based Analysis

Abstract: An increasing number of electric loads, such as hydrogen producers or data centers, can be characterized as carbon-sensitive, meaning that they are willing to adapt the timing and/or location of their electricity usage in order to minimize carbon footprints. However, the emission reduction efforts of these carbon-sensitive loads rely on carbon intensity information such as average carbon emissions, and it is unclear whether load shifting based on these signals effectively reduces carbon emissions. To address this open question, we investigate the impact of carbon-sensitive consumers using equilibrium analysis. Specifically, we expand the commonly used equilibrium model for electricity market clearing to include carbon-sensitive consumers that adapt their consumption based on an average carbon intensity signal. This analysis represents an idealized situation for carbon-sensitive loads, where their carbon preferences are reflected directly in the market clearing, and contrasts with current practice where carbon intensity signals only become known to consumers aposteriori (i.e. after the market has already been cleared). We include both illustrative examples and larger numerical simulations, including benchmarking with other methods, to illuminate the contributions and limitations of carbon-sensitive loads in power system emission reductions.