Within day and seasonal variations of electricity and emission costs: The social costs of electricity on the margin

Abstract

Seasonality and within day variation are important characteristics of electricity supply/demand and for emissions from electricity generation. This paper investigates the social costs of using electricity at different times of the day, allowing for seasonal patterns and differences between weekdays and weekends in Sacramento, California in 2013 and 2019. The social costs of electricity use refer to a combination of the emission costs and the electricity price. Using simulations for the social costs of CO2, results show that the highest costs of using electricity occur at different hours across seasons on weekdays and weekends. As CO2 price increases, the social costs of electricity use become more volatile, but it becomes more pronounced that the low costs hours shift to daytime hours for most seasons in both years, except summer and spring 2019. This pattern helps evaluate the social impacts of using electricity and providing policy implications for electricity demand changes.