Year: 2026
Type: preprint
Abstract: Accurate estimation of Marginal Emission Factors (MEFs) is critical for evaluating the decarbonization potential of low-carbon technologies and demand-side management. However, canonical methodologies, predominantly relying on linear regression and differencing techniques, fail to capture the structural non-linearities inherent in the merit order, i.e. the marginal technology setting electricity prices. Utilizing Markov switching autoregressive models with exogenous regressors (MS-ARX) and hourly US data (2019-2025), we identify distinct, mutually exclusive regimes governed by fuel-price dynamics. We find that linear models overestimate abatement potential by masking the dichotomy between a gas-driven and coal-driven marginal system. Furthermore, using robust structural break detection, we link regime instability to a specific structural shift in natural gas pricing in May 2022. Our results indicate that post-2022, the grid has transitioned into a correction phase where the coal-driven regime is less persistent but highly volatile, necessitating state-dependent policy metrics rather than static annual averages.
Source: arXiv (Cornell University)
Subfield: Electrical and Electronic Engineering
Field: Engineering
Domain: Physical Sciences
Open Access status: green
OpenAlex ID: W7133801748
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