“Time-Shifting Effect” of Batteries under the Location-Based Method

Emissions Reduction through Increasing the Emission Avoidance Factor

As the penetration of renewable energy accelerates, the value of electricity is increasingly defined not only by how much is generated, but by when it is generated and consumed. In this evolving context, batteries are no longer merely assets for balancing or arbitrage; they are emerging as mechanisms that transfer value across time.

While the concept of “time-shifting” under market-based approaches—such as hourly matching—is now relatively well understood among practitioners, the equivalent effect under the location-based method remains less clearly articulated. In particular, the role of batteries in enhancing emissions outcomes through the concept of the emission avoidance factor has not yet been sufficiently explored.

This note therefore focuses specifically on the location-based perspective and provides a structured explanation of the “time-shifting effect” of batteries in this framework.

What is the Emission Avoidance Factor?

The emission avoidance factor represents the amount of CO₂ emissions that are avoided when renewable electricity is injected into the grid. Conceptually, it reflects the marginal displacement of fossil-based generation.

When an additional unit of renewable electricity (e.g., 1 kWh) is supplied to the grid, it reduces the need for thermal generation at that moment. The emissions that would have been produced by that displaced generation constitute the avoided emissions.

A key point is that this factor is inherently time-dependent.

• During daytime hours, when solar generation is abundant, the grid’s carbon intensity is already relatively low. Additional renewable supply therefore displaces relatively low-emission generation, resulting in a lower emission avoidance factor.
• During evening or nighttime hours, when renewable output declines and thermal generation dominates, the grid’s carbon intensity rises. In these periods, renewable injection displaces higher-emission generation, leading to a higher emission avoidance factor.

In this sense, the grid carbon intensity at a given moment can be interpreted as a proxy for the scarcity value of clean energy at that time. When zero-emission renewable electricity is introduced, the prevailing grid carbon intensity effectively defines the magnitude of emissions avoided.

It should be noted, however, that there is an ongoing methodological discussion regarding whether average emission factors or marginal emission factors should be used. From a theoretical standpoint, marginal emission factors more accurately capture the actual displacement effect, and thus may be preferable for precise accounting.

Batteries as a Mechanism for Shifting the Emission Avoidance Factor

This is where the role of batteries becomes critical.

Batteries enable the temporal relocation of renewable energy—from periods of low scarcity to periods of high scarcity.

Consider the following simplified example:

• Daytime grid carbon intensity: 0.3 kg-CO₂/kWh
• Nighttime grid carbon intensity: 0.6 kg-CO₂/kWh

During the day, renewable energy is plentiful, and its incremental contribution yields a relatively modest emissions avoidance of 0.3 kg-CO₂ per kWh. However, during the night, when renewables are scarce, the same unit of renewable electricity would avoid 0.6 kg-CO₂ per kWh.

By charging a battery during the day and discharging it at night, the system effectively shifts renewable energy from a low-impact period to a high-impact period. As a result, the emission avoidance factor associated with that energy increases from 0.3 to 0.6 kg-CO₂/kWh.

The incremental benefit can be expressed as:

• Increase in emission avoidance factor = 0.6 − 0.3 = 0.3 kg-CO₂/kWh

Importantly, this does not mean that the battery changes the intrinsic emissions of the electricity itself. Rather, it changes when the emissions are avoided, thereby increasing the overall impact of renewable deployment.

Implications for Corporate Emissions Accounting

This mechanism has direct implications for large electricity consumers subject to Scope 2 reporting obligations.

Under a location-based methodology with temporal granularity, emissions are calculated as:

• Emissions = Σ (time-specific grid emission factor × electricity consumption at that time)

In this framework, reducing consumption during high-carbon periods—or substituting it with stored low-carbon electricity—directly lowers total reported emissions.

For example, in an on-site configuration combining solar PV and battery storage:

• Renewable electricity is generated and stored during the day
• The stored electricity is consumed at night
• High-carbon grid electricity is avoided during peak emission periods

In this case, the battery does more than simply store energy—it amplifies the emissions reduction effect by aligning consumption with periods of higher marginal impact.

Batteries as “Time-Shifting Devices” for Emission Avoidance

From a location-based perspective, batteries can be understood as devices that shift not only energy, but emission avoidance potential across time.

• They capture renewable energy when its marginal value is low
• They deploy it when its marginal value is high
• They thereby increase the effectiveness of each unit of clean electricity

In this sense, batteries function as “time-shifting devices” for emission avoidance.

Concluding Remarks

As temporal granularity becomes embedded in carbon accounting frameworks, the role of batteries will extend beyond traditional market functions. Their ability to enhance the timing of emissions reductions positions them as critical infrastructure for decarbonization.

While much of the current discourse focuses on market-based mechanisms such as hourly matching, the location-based dimension—particularly through the lens of emission avoidance factors—offers an equally important, yet underexplored, pathway for value creation.

Understanding this second dimension of the “time-shifting effect” is essential for accurately assessing the full contribution of battery storage in a decarbonizing power system.