GHG Calculation Methodology
US electricity is generated from three main fuels: Hydrocarbons, Nuclear and Renewables. GHG emissions during operations only arise from the combustion of hydrocarbons and this is what is of interest in calculating GHGs/unit of generation.
Power generation using hydrocarbons is undertaken in three sectors:
- Electric Power Sector – which consists of those entities whose primary business is the generation of electricity
- Industrial Sector – accounts for 30%+ of US energy consumption and includes heavy industry such as refineries, plane & car manufacturing, mining, paper mills, construction, food processing, LNG plants etc. Many entities within this sector have their own on-site generation facilities.
- Commercial Sector – includes offices, hospitals, schools, warehouses, shopping malls, hotels etc. Entities within this sector often have their own on-site generation facilities which may be run to avoid peak demand charges or because of faults on the distribution system.
The Energy Information Administration (EIA) reports annual carbon emissions – by fuel type – from the entire electricity generation industry but usually with a 12-18 month lag. However, the EIA also reports GHG emissions by fuel type, for the Electric Power Sector only, on a monthly basis with a 2-3 month lag. Using EIA data on electricity generation by fuel type across the Electric Power, Industrial and Commercial sectors; we estimated the GHG emissions from the Industrial and Commercial sectors using actual EIA data from the Electric Power Sector.
The accuracy of this estimate is relatively easy to check by comparing our estimates of system-wide emissions with the lagged EIA data for the electric power system. That comparison, over the last 18 years, shows an error which is consistently less than 0.5%. For this reason, we have assumed that our model is sufficiently accurate for the purposes of the conclusions we discuss on this page.