Spatial and temporal variations of marginal electricity generation: the case of the Finnish, Nordic, and European energy systems up to 2030

Abstract Assumptions related to energy generation often play a decisive role in abatement studies for estimating the effects of demand-side interventions. However, there can be significant geographical and temporal variation in the emission intensities of electricity generation in different regions. The aim of this article is to describe how spatial and temporal variations related to a particular energy system may affect an electricity generation unit operating on the margins. The approach takes the generation mix within interconnected electricity markets and the exchange of electricity between these markets into account. The short-term (2009–2010) and long-term (until 2030) hour-by-hour marginal electricity generation unit and marginal emission intensities are identified for electricity use, using the Finnish, Nordic and European energy systems as actual cases. The estimated marginal electricity generation technology and marginal emission intensities for electricity use differed significantly within the studied time horizon and between the studied countries and energy systems. Furthermore, due to the projected structural changes in the energy systems, i.e. changes in the fuel mix and electricity generation technologies, the carbon dioxide (CO 2 ) intensity of marginal electricity generation will decrease in the Nordic countries and in the EU in the long-term. However, the approach used for calculating the effect of change in electricity exchange on the margin increased the variability of the results considerably for some Nordic countries, such as Sweden and Norway, whose export of electricity was high and whose marginal generation mix differed significantly from the European system. Furthermore, the spatial and temporal variations of marginal electricity generation will increase in the future. This variation, combined with the interconnections between market areas for exchanging electricity in the EU will require improved understanding of the impacts of exchanged marginal electricity generation on the possible emission leakage between EU countries to better inform policy decisions.