APPENDIX U. INTERPOLATION OF UTILITY AND ENVIRONMENTAL RESULTS

FROM NEMS-BT OUTPUT

TABLES

Table U.1 Set of Multipliers for Each Trial Standard Level ...................... U-2

FIGURES

Figure U.1 An Example of Interpolation of a Trial Standard Level: Difference in Coal

Capacity ...................................................... U-3

Figure U.2 Example of Trial Standard Level: X1 Marginal NOx Emissions .......... U-4

 EE-RM/STD-01-350 COMMENT 164

APPENDIX U. INTERPOLATION OF UTILITY AND ENVIRONMENTAL RESULTS 

FROM NEMS-BT OUTPUT 

TABLES 

Table U.1 Set of Multipliers for Each Trial Standard Level ...................... U-2 

FIGURES 

Figure U.l An Example oflnterpolation of a Trial Standard Level: Difference in Coal 

Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. U-3 

Figure U.2 Example of Trial Standard Level: Xl Marginal NOx Emissions .......... U-4 

U-i 
APPENDIX U. INTERPOLATION OF UTILITY AND ENVIRONMENTAL RESULTS

FROM NEMS-BT OUTPUT

The effects of proposed furnace and boiler energy-efficiency standards on the electricity

and natural gas industries were analyzed using a variant of U.S. DOE/EIA's National Energy

Modeling System (NEMS) called NEMS-BT, together with some exogenous calculationsa.

Because the relative size of the energy savings being implemented in NEMS-BT is too small to

be seen in the context of the whole electricity and natural gas utility sector, NEMS-BT is not

used directly. Rather, exploratory runs are conducted to estimate marginal effects, which are

then used to calculate the small effects due to each proposed trial standard level.

To run a simulation in NEMS-BT, the Residential Demand Module space heating load is

reduced annually according to the energy savings estimated by the National Energy Savings

model (see Chapter 13) for each trial standard level. These energy savings increase over time

and are distinguished by fuel type (electricity, natural gas, LPG, and oil).

The magnitude of the energy decrement that would be required for NEMS-BT to produce

stable results safely out of the range of numerical noise is greater than even the most stringent

standard under consideration. Therefore, it has been necessary, in both the utility analysis and

environmental assessment, to estimate results in the range of the standard levels effects using

interpolation. Interpolated values are derived from a series of higher decrement simulations

based on the standard levels. The actual annual savings attributed to each standard level are

compared between standard levels, and those with similar energy savings patterns over time are

grouped together. One set of simulations is run for each of the savings groups. The standard

levels for the residential furnace and boilers analysis were modeled as one grouping:

Standard Level 4: used to model Standard Levels 1, A, 2, B, and 5.

To preserve the pattern of energy savings over time for a trial standard level, savings in

each year were multiplied by the same factor. This factor varies between standards because the

magnitude of the savings changes. An appropriate set of multipliers was chosen to augment the

savings to a magnitude that produces credible results. Using professional judgement, sets of

three multipliers were selected for each of the trial standard levels as shown in Table U. 1.

Table U.1 Set of Multipliers for Trial Standard Level 4

Trial Standard Level 4 3,4,5

a For more information on NEMS, please refer to the U.S. Department of Energy, Energy Information Administration documentation.

A useful summary is National Energy Modeling System: An Overview 2003. DOE/EIA-0581(2003), March 2003. DOE/EIA

approves use of the name NEMS to describe only an official version of the model without any modification to code or data. Because

our analysis entails some minor code modifications and the model is run under policy scenarios that are variations on DOE/EIA

assumptions, the name NEMS-BT refers to the model as used here (BT is DOE's Building Technologies office, under whose aegis

this work has been performed).

U-1

 EE-RM/STD-01-350 COMMENT 164

APPENDIX U. INTERPOLATION OF UTILITY AND ENVIRONMENTAL RESULTS 

FROM NEMS-BT OUTPUT 

The effects of proposed furnace and boiler energy-efficiency standards on the electricity 

and natural gas industries were analyzed using a variant of U.S. DOE/EIA's National Energy 

Modeling System (NEMS) called NEMS-BT, together with some exogenous calculationsa

. 

Because the relative size of the energy savings being implemented in NEMS-BT is too small to 

be seen in the context of the whole electricity and natural gas utility sector, NEMS-BT is not 

used directly. Rather, exploratory runs are conducted to estimate marginal effects, which are 

then used to calculate the small effects due to each proposed trial standard level. 

To run a simulation in NEMS-BT, the Residential Demand Module space heating load is 

reduced annually according to the energy savings estimated by the National Energy Savings 

model (see Chapter 13) for each trial standard level. These energy savings increase over time 

and are distinguished by fuel type (electricity, natural gas, LPG, and oil). 

The magnitude of the energy decrement that would be required for NEMS-BT to produce 

stable results safely out of the range of numerical noise is greater than even the most stringent 

standard under consideration. Therefore, it has been necessary, in both the utility analysis and 

environmental assessment, to estimate results in the range of the standard levels effects using 

interpolation. Interpolated values are derived from a series of higher decrement simulations 

based on the standard levels. The actual annual savings attributed to each standard level are 

compared between standard levels, and those with similar energy savings patterns over time are 

grouped together. One set of simulations is run for each of the savings groups. The standard 

levels for the residential furnace and boilers analysis were modeled as one grouping: 

Standard Level 4: used to model Standard Levels 1, A, 2, B, and 5. 

To preserve the pattern of energy savings over time for a trial standard level, savings in 

each year were multiplied by the same factor. This factor varies between standards because the 

magnitude of the savings changes. An appropriate set of multipliers was chosen to augment the 

savings to a magnitude that produces credible results. Using professional judgement, sets of 

three multipliers were selected for each of the trial standard levels as shown in Table u.I. 

Table U.l Set of Multi liers for Trial Standard Level 4 

Trial Standard Level 4 3,4,5 

a For more information on NEMS, please refer to the U.S. Department of Energy, Energy Information Administration documentation. 

A useful summary is National Energy Modeling System: An Overview 2003. DOEIEIA-0581(2003), March 2003. DOEIEIA 

approves use of the name NEMS to describe only an official version ofthe model without any modification to code or data. Because 

our analysis entails some minor code modifications and the model is run under policy scenarios that are variations on DOEIEIA 

assumptions, the name NEMS-BT refers to the model as used here (BT is DOE's Building Technologies office, under whose aegis 

this work has been performed). 

U-I 
The output for electricity generation and capacity by fuel type for each of the iterations

(e.g., 3, 4, and 5 times the standard level) was then regressed, with the y-intercept forced through

the origin, and the actual standard level forecast is interpolated along this regression line. The

linear regression is forced through the origin because a zero change must be the case with no

standard in place and because the target points of interpolation are close to the origin (i.e., at low

energy decrements).

Figure U.1 shows an example of the interpolation approach for a proposed trial standard

level X1. The magnitude of the energy savings multiplier is plotted on the x-axis against the

reduction in coal installed generating capacity for each reported year, as shown by the various

plotted lines. In general, results for the various NEMS-BT runs are reasonably stable and linear,

with the noisy behavior appearing below the first multiplier of the trial standard level savings

decrement.

The Department used the estimated reduction in total fuel generation at each trial

standard level as determined by interpolation to determine emissions savings. Wherever

possible, the environmental assessment analysis used marginal emissions rates over average

emissions rates. However, as will be discussed further in this appendix, difficulties arose with

using marginal rates in all circumstances and alternative methods needed to be used. Marginal

emissions rates incorporate both effects of the standards-the emissions saved by the reduction

in total generation and the slight change in the emissions characteristics of the whole power

sector that result from the slight change in dispatch and capacity expansion plan. The net effect

on the entire system is very small and, typically, the overall effect on emissions can be fully

attributed to the decremental generation. The annual marginal emissions rates at the trial

standard level was extrapolated from these rates (at multipliers of the trial standard level

savings) by taking a simple average.

Figure U.2 shows an example of the extrapolation for NOX emissions rates for trial

standard level X1. In this case, marginal rates for NOX emissions are shown for each year. As is

evident in the figure, more stable results are produced at higher levels of demand decrement. At

lower decrement levels (i.e., both on the left-hand side of the figure and in years with small

standards impacts), the emissions rate is quite variable. The dashed lines show the earlier years

of the imposed standard-those in which the decrements to demand are smallest. The constant

emissions rates at higher decrement levels are therefore assumed to hold in the range of small

decrements commensurate with the various standard levels, and the implied marginal emissions

rates are used to estimate emissions reductions.

Wherever possible, the Department calculated annual marginal emissions rates for each

of the simulations in each standard level, based on the actual output from NEMS-BT.

Unfortunately, the marginal rate often proved unstable with this high-natural-gas-saving

standard, therefore requiring an alternative approach to estimating the CO2 and NO,, emissions

savings. Because of the significant natural gas savings associated with the proposed

furnace/boiler energy efficiency standards, the marginal emissions rates were largely unstable

compared with proposed energy efficiency standards dominated by electricity savings. The

U-2

 EE-RM/STD-01-350 COMMENT 164

The output for electricity generation and capacity by fuel type for each of the iterations 

(e.g., 3, 4, and 5 times the standard level) was then regressed, with the y-intercept forced through 

the origin, and the actual standard level forecast is interpolated along this regression line. The 

linear regression is forced through the origin because a zero change must be the case with no 

standard in place and because the target points of interpolation are close to the origin (i.e., at low 

energy decrements). 

Figure U.I shows an example of the interpolation approach for a proposed trial standard 

level Xl. The magnitude of the energy savings multiplier is plotted on the x-axis against the 

reduction in coal installed generating capacity for each reported year, as shown by the various 

plotted lines. In general, results for the various NEMS-BT runs are reasonably stable and linear, 

with the noisy behavior appearing below the first multiplier of the trial standard level savings 

decrement. 

The Department used the estimated reduction in total fuel generation at each trial 

standard level as determined by interpolation to determine emissions savings. Wherever 

possible, the environmental assessment analysis used marginal emissions rates over average 

emissions rates. However, as will be discussed further in this appendix, difficulties arose with 

using marginal rates in all circumstances and alternative methods needed to be used. Marginal 

emissions rates incorporate both effects of the standards-the emissions saved by the reduction 

in total generation and the slight change in the emissions characteristics of the whole power 

sector that result from the slight change in dispatch and capacity expansion plan. The net effect 

on the entire system is very small and, typically, the overall effect on emissions can be fully 

attributed to the decremental generation. The annual marginal emissions rates at the trial 

standard level was extrapolated from these rates (at multipliers of the trial standard level 

savings) by taking a simple average. 

Figure U.2 shows an example of the extrapolation for NOx emissions rates for trial 

standard level Xl. In this case, marginal rates for NOx emissions are shown for each year. As is 

evident in the figure, more stable results are produced at higher levels of demand decrement. At 

lower decrement levels (i.e., both on the left-hand side of the figure and in years with small 

standards impacts), the emissions rate is quite variable. The dashed lines show the earlier years 

of the imposed standard-those in which the decrements to demand are smallest. The constant 

emissions rates at higher decrement levels are therefore assumed to hold in the range of small 

decrements commensurate with the various standard levels, and the implied marginal emissions 

rates are used to estimate emissions reductions. 

Wherever possible, the Department calculated annual marginal emissions rates for each 

of the simulations in each standard level, based on the actual output from NEMS-BT. 

Unfortunately, the marginal rate often proved unstable with this high-natural-gas-saving 

standard, therefore requiring an alternative approach to estimating the CO2 and NOx emissions 

savings. Because of the significant natural gas savings associated with the proposed 

furnacelboiler energy efficiency standards, the marginal emissions rates were largely unstable 

compared with proposed energy efficiency standards dominated by electricity savings. The 

U-2 
instability was due to the increased natural gas generation in the power sector as a result of

significant natural gas reductions in the residential sector that make power sector natural gas use

more economically attractive. To rectify this problem, the Department estimated marginal CO2

emissions rates by fuel type (coal, natural gas, and petroleum) rather than collectively as thermal

generation to accommodate the opposing trends of each fuel. This was possible because NEMSBT tracks CO2 well and in more detail than NOR. Thus, the Department estimated CO2 emissions

reductions using marginal emissions rates calculated separately by changes in coal, natural gas,

and petroleum and then summed to estimate the overall impact from each trial standard level.

For NOR, however, emissions tracking is more rudimentary so the Department assumed average

emissions rates for this pollutant because marginal rates were too unstable. Total emissions

savings in each year are the product of the annual marginal/average emissions rate and the

reduction in generation (by fuel or collectively) for that year (as calculated by the interpolation

method described above).

No Std. Lvl. 6x Std. Lvl. X1 8x Std. Lvl. X1 lOx Std. Lvl. X1

..

1 2 - - -- 3 4 5 6 7

- .8, _ e -.... 9_-_-_ . °.'.°a

-4

-6

U

-8

2000

2005

10

_...,-.._._. 2010

2015

2020

2005 Regression

I2

--"2010 Regression

- - 2015 Regression

- - 2020 Regression

-14

Savings Multiplier

Figure U.1 An Example of Interpolation of a Trial Standard Level: Difference

in Coal Capacity

 EE-RM/STD-01-350 COMMENT 164

instability was due to the increased natural gas generation in the power sector as a result of 

significant natural gas reductions in the residential sector that make power sector natural gas use 

more economically attractive. To rectify this problem, the Department estimated marginal CO2 

emissions rates by fuel type (coal, natural gas, and petroleum) rather than collectively as thermal 

generation to accommodate the opposing trends of each fuel. This was possible because NEMSBT tracks CO2 well and in more detail than NOx ' Thus, the Department estimated CO2 emissions 

reductions using marginal emissions rates calculated separately by changes in coal, natural gas, 

and petroleum and then summed to estimate the overall impact from each trial standard level. 

For NOx, however, emissions tracking is more rudimentary so the Department assumed average 

emissions rates for this pollutant because marginal rates were too unstable. Total emissions 

savings in each year are the product of the annual marginal/average emissions rate and the 

reduction in generation (by fuel or collectively) for that year (as calculated by the interpolation 

method described above). 

No SId Lvi 6x SId. Lvi Xl 8x SId. Lvi XI l Ox SId Lvi. XI 

o '.,.-...:...-- '_ " ... , ..::. .. ::...,: ... ~ . .. _ .... , . , ' t , •• ~ - ~ ~. ~ • • • , ... ~ .. .. ... .. . ", •• •• ~.'<' .. ,, __ ~ _ _ ~ ... -.. ~J..~ ,_J_I~ :. ;..!!."l...,,: 't...a ... ~ .. ___ _ _ "' • • ,..fII 

<". I ":2- -- _ L . _ __ ._ 7 ~ 9 I 

--:-- - - ------~~---------- ----

-, 

--

.-.. 

------

~ 

- '-~----- ----~ 

""It 

.... ' .... 

. .... ...... 

- 14 L.:::.:==::::::::!::=:::.... ______________________ ...J 

Savings Multiplier 

Figure U.l An Example ofInterpolation of a Trial Standard Level: Difference 

in Coal Capacity 

U-3 
-10

Std. LA. Xl 6x Std. Lvl. Xl 8x Std. Lvl. X 1

Savings Multiplier

Figure U.2 Example of Trial Standard Level: X1 Marginal NOx Emissions

 EE-RM/STD-01-350 COMMENT 164

-!-------_ .- - ---- - --- - --- ---- -_._------- - _._- - --- II •. 

4 , •• 

. , ......... ,. -/------- ---- - - - ---------

" , .. 

.. ." 

-10~---------~~---------------------------------------------__; 

Std. LvI. Xl 6xStd. LvI. X l 8xStd. Lvi. Xl 

S.';ngs Multiplier 

Figure U.2 Example of Trial Standard Level: Xl Marginal NOx Emissions 

U-4