### CHAPTER 1 5. UTILITY IMPACT ANALYSIS

TABLE OF CONTENTS

15.1 INTRODUCTION ......................................................................................................... 15-1

15.2 METHODOLOGY ........................................................................................................ 15-1

15.3 UTILITY IMPACT RESULTS ..................................................................................... 15-3

15.3.1 Installed Capacity

................................ ............................................................... 15-3

15.3.2 Electricity Generation ........................................................................................ 15-9

15.3.3 Results Summary ............................................................................................. 15-15

REFERENCES ........................................................................................................................ 15-17

LIST OF TABLES

Table 15.3.1 Summary of Utility Impact Results ................................................................. 15-16

LIST OF FIGURES

Figure 15.3.1 Total Electric Capacity Reduction ..................................................................... 15-4

Figure 15.3.2 Coal Capacity Reduction ................................................................................... 15-5

Figure 15.3.3 Nuclear Capacity Reduction .............................................................................. 15-6

Figure 15.3.4 Gas Combined Cycle Capacity Reduction ......................................................... 15-7

Figure 15.3.5 Peaking Capacity Reduction .............................................................................. 15-8

Figure 15.3.6 Renewables Capacity Reduction

................................ ........................................ 15-9

Figure 15.3.7 Total Generation Reduction ............................................................................. 15-10

Figure 15.3.8 Coal Generation Reduction .............................................................................. 15-11

Figure 15.3.9 Nuclear Generation Reduction ......................................................................... 15-12

Figure 15.3.10 Gas Combined Cycle Generation Reduction ................................................... 15-13

Figure 15.3.11 Peaking Generation Reduction ........................................................................ 15-14

Figure 15.3.12 Renewables Generation Reduction .................................................................. 15-15

15 -i

### CHAPTER 15. UTILITY IMPACT ANALY SIS

15.1 INTRODUCTION

In the utility impact analysis

, the U.S. Department of Energy ( DOE ) analyze s the changes

in electric installed capacity and power generation that result for each trial standard level (TSL).

The utility impact analysis uses a variant of the DOE Energy Information Administration

(EIA)’s National Energy Modeling System (NEMS). a 

### NEMS is a public domain, multi- sectored,

partial equilibrium model of the U.S. energy sector. Each year, DOE/EIA uses NEMS to produce

an energy forecast for the United States, the Annual Energy Outlook (AEO) . DOE uses a variant

of this model, referred to as NEMS- BT, b 

### to account for selected utility impacts from energy conservation standards. DOE’s analysis consists of a comparison between model results for the

most recent AEO Reference Case and for cases in which energy use is decremented to reflect the

impact s of standards. For the analysis of standards for small, large, and very large air -cooled

commercial unitary air conditioners (CUAC) and heat pumps (CUHP), DOE used the version of

NEMS based on AEO 201 3

. 2



### NEMS -BT has a number of advantages that have led to its use in the analysis of e nergy

conservation standards:

• NEMS -BT uses a set of assumptions that are well known and fairly transparent,

due to the exposure and scrutiny each AEO receives.

• NEMS -BT is updated each year, with each edition of the AEO, to reflect changes

in energy prices , supply trends, regulations, etc.

• The comprehensiveness of NEMS- BT permits the modeling of interactions

among the various energy supply and demand sectors.

15.2 METHODOLOGY

DOE uses NEMS

- BT to estimate the marginal impacts of re duction in energy demand on

the energy supply sector. In principle, marginal values should provide a better estimate of the

actual impact of energy conservation standards . In practice, the numerical differences between

marginal and average values may turn out to be smaller than the intrinsic uncertainties in the

AEO.

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

documentation. A useful summa ry is National Energy Modeling System: An Overview

. 1

b DOE/E IA approves use of the name NEMS to describe only an official version of the model without any

modification to code or data. Because this analysis entails some minor code modifications and the model is run

under various policy scenarios that are variations on DOE/EIA assumptions, DOE refers to it by the name NEMS

BT (BT is DOE’s Building Technologies Program, under whose aegis this work has been performed).

15 -1

### NEMS uses predicted growth in demand for each end use to build up a projection of the

total electric system load growth . The system load shapes are converted internally to load

duration curves, which are then used to estimate the most cost

- effective additions to capacity.

When electricity demand deviates from the AEO reference case, in general there are three inter

related effects: the annual generation ( terawatt hours, TWh) from the stock of el ectric generating

capacity changes, the total generation capacity itself ( gigawatts

, GW) may change, and the mix

of capacity by fuel type may change. Each of these effects can vary for different types of end

use. The change in total generating capacity is sensitive to the degree to which the end- use is

peak coincident, while the capacity mix is sensitive to the hourly load shape associated with the

end use.

To model the impact of a standard, DOE inputs a reduction to annual energy demand for

the corresponding end use in the appropriate start year. The NEMS -BT model is run with the

decremented energy demand to determine the modified build -out of capacity and total

generation. Regional effects of a standard can be accounted for by defining the energy demand

decrement as a function of census division.

The output of the NEMS- BT analysis includes the effective marginal heat rate (ratio of

the change in energy consumption in quads to the change in generation in TWh), and the

capacity reduction by plant type for a given reduction in total generation. DOE uses the site

energy savings multiplied by a transmission

- and

- distribution ( T&D ) loss factor to estimate the

reduction in generation for each TSL. The relationship between a reduction c 

### in electricity

generation (TWh ) and the reduction in capacity (GW) is estimated based on the output of

NEMS -BT model runs using the end- use specific energy demand decrement. Details on the

approach used may be found in Coughlin (2013 ). 3



### NEMS -BT provides output for the following capacity types: coal, nuclear,

combined cycle (natural gas), renewable sources, oil and natural gas steam,

combustion turbine/diesel, pumped storage, fuel cells, and distributed generation (natural gas).

DOE grouped oil and natural gas steam and combustion turbine/diesel into a “peaking” category,

and grouped pumped storage, fuel cell s, and distributed generation (natural gas) into an “other”

category.

In general, energy conservation standards i mpact primarily fossil combustion (coal,

natural gas and diesel) and renewables. Pumped storage and nuclear power are very insensitive

to small changes in demand, while fuel cells and distributed generation make up a very small

fraction (less than 1 percent) of the generation capacity base.

For the analysis of small, large, and very large air -cooled commercial unitary air

conditioners (CUAC) and heat pumps (CUHP) , DOE derived factors based on the plant types

used to supply electricity for space cooling in commercial buildings.

c These reductions are defined relative to the AEO Reference case.

15 -2

### 15.3 UTILITY IMPACT RESUL TS

This section presents results of the analysis for all of the capacity types except “Other”,

for w hich the impacts are very small.

15.3.1 Installed Capacity

The figures in this section show the changes in U.S. electricity installed capacity that

result for each TSL by major plant type for selected years. The changes have been calculated

based on factors ( megawatts ( MW ) of capacity reduction per gigawatt hours ( GWh ) of

generation reduction) estimated from a NEMS

- BT model run that simulated a decrement in

energy demand for the load shape corresponding to commercial cooling. Note that a positive

change means a reduction in capacity under a TSL.

15 -3

### Figure 15.3.1 Total Electric Capacity Reduction 0 10000 20000 30000 40000 50000 60000 70000201920242029203420392044204920542059206420692074MW 

### Total

TSL 1 TSL 2 TSL 3 TSL 4

0 10000 20000 30000 40000 50000 60000 70000201920242029203420392044204920542059206420692074MW 

### Total

TSL 1 TSL 2 TSL 3 TSL 4

15 -4

### Figure 15.3.2 Coal Capacity Reduction 0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000201920242029203420392044204920542059206420692074MW 

### Coal

TSL 1 TSL 2 TSL 3 TSL 4

0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000201920242029203420392044204920542059206420692074MW 

### Coal

TSL 1 TSL 2 TSL 3 TSL 4

15 -5

### Figure 15.3.3 Nuclear Capacity Reduction -1200 -1000

-800 -600 -400 -200 0201920242029203420392044204920542059206420692074MW 

### Nuclear

TSL 1 TSL 2 TSL 3 TSL 4

-1200 -1000

-800 -600 -400 -200 0201920242029203420392044204920542059206420692074MW 

### Nuclear

TSL 1 TSL 2 TSL 3 TSL 4

15 -6

### Figure 15.3.4 Gas Combined Cycle Capacity Reduction 0 2000 4000 6000 8000 10000 12000 14000201920242029203420392044204920542059206420692074MW 

### NGCC

TSL 1 TSL 2 TSL 3 TSL 4

0 2000 4000 6000 8000 10000 12000 14000201920242029203420392044204920542059206420692074MW 

### NGCC

TSL 1 TSL 2 TSL 3 TSL 4

15 -7

### Figure 15.3.5 Peaking Capacity Reduction 0 5000 10000 15000 20000 25000 30000 35000 40000 45000201920242029203420392044204920542059206420692074MW 

### Peaking

TSL 1 TSL 2 TSL 3 TSL 4

0 5000 10000 15000 20000 25000 30000 35000 40000 45000201920242029203420392044204920542059206420692074MW 

### Peaking

TSL 1 TSL 2 TSL 3 TSL 4

15 -8

### Figure 15.3.6 Renewables Capacity Reduction

15.3.2 Electricity Generation

The figures in this section show the annual change in electricity generation that result for

each TSL by plant type. The change by capacity type has been calculated based on shares

(percentage of generation reduction for each capacity type over total generation reduction)

estimated from a NEMS -BT model run that simulated a decrement in energy demand for the load 0 500 1000 1500 2000 2500 3000 3500 4000 4500201920242029203420392044204920542059206420692074MW 

### Renewable

TSL 1 TSL 2 TSL 3 TSL 4

0 500 1000 1500 2000 2500 3000 3500 4000 4500201920242029203420392044204920542059206420692074MW 

### Renewable

TSL 1 TSL 2 TSL 3 TSL 4

15 -9

### shape corresponding to commercial cooling. Note that a positive change means a reduction in

generation under a TSL.

Figure 15.3.7 Total Generation Reduction 0 10000 20000 30000 40000 50000 60000 70000 80000 90000201920242029203420392044204920542059206420692074GWh 

### Total

TSL 1 TSL 2 TSL 3 TSL 4

0 10000 20000 30000 40000 50000 60000 70000 80000 90000201920242029203420392044204920542059206420692074GWh 

### Total

TSL 1 TSL 2 TSL 3 TSL 4

15

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### Figure 15.3.8 Coal Generation Reduction 0 10000 20000 30000 40000 50000 60000201920242029203420392044204920542059206420692074GWh 

### Coal

TSL 1 TSL 2 TSL 3 TSL 4

0 10000 20000 30000 40000 50000 60000201920242029203420392044204920542059206420692074GWh 

### Coal

TSL 1 TSL 2 TSL 3 TSL 4

15

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### Figure 15.3.9 Nuclear Generation Reduction -9000 -8000 -7000 -6000 -5000 -4000 -3000 -2000 -1000 0201920242029203420392044204920542059206420692074GWh 

### Nuclear

TSL 1 TSL 2 TSL 3 TSL 4

-9000 -8000 -7000 -6000 -5000 -4000 -3000 -2000 -1000 0201920242029203420392044204920542059206420692074GWh 

### Nuclear

TSL 1 TSL 2 TSL 3 TSL 4

15

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### Figure 15.3.10 Gas Combined Cycle Generation Reduction 0 2000 4000 6000 8000 10000 12000 14000 16000 18000 20000201920242029203420392044204920542059206420692074GWh 

### NGCC

TSL 1 TSL 2 TSL 3 TSL 4

0 2000 4000 6000 8000 10000 12000 14000 16000 18000 20000201920242029203420392044204920542059206420692074GWh 

### NGCC

TSL 1 TSL 2 TSL 3 TSL 4

15

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### Figure 15.3.11 Peaking Generation Reduction 0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000201920242029203420392044204920542059206420692074GWh 

### Peaking

TSL 1 TSL 2 TSL 3 TSL 4

0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000201920242029203420392044204920542059206420692074GWh 

### Peaking

TSL 1 TSL 2 TSL 3 TSL 4

15

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### Figure 15.3.12 Renewables Generation Reduction

15.3.3 Results Summary

Table 15.3.1 presents a summary of the utility impact results estimated for small, large,

and very large air

- cooled CUACs and CUHPs

. 0 500 1000 1500 2000 2500201920242029203420392044204920542059206420692074GWh 

### Renewable

TSL 1 TSL 2 TSL 3 TSL 4

0 500 1000 1500 2000 2500201920242029203420392044204920542059206420692074GWh 

### Renewable

TSL 1 TSL 2 TSL 3 TSL 4

15

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### Table 15.3.1 Summary of Utility Impact Results

TSL

1 2 3 4

Installed Capacity Reduction (MW)

2020 293 294 694 703 986 969 1,365 1,334

2025 1,548 1,550 3,565 3,614 5,040 4,974 6,894 6,771

2030 3,492 3,465 8,397 8,489 11,759

11,570 16,094

15,741

2035 5,674 5,619 14,195

14,375 19,909

19,592 27,708

27,137

2040 8,456 8,343 23,047

23,373 32,454

31,914 46,384

45,438

Electricity Generation Reduction (GWh)

2020 706 706 1,669 1,690 2,370 2,331 3,281 3,207

2025 2,731 2,734 6,287 6,374 8,890 8,772 12,160

11,942

2030 5,003 4,965 12,030

12,162 16,847

16,575 23,058

22,551

2035 7,727 7,651 19,330

19,575 27,112

26,680 37,733

36,955

2040 10,548

10,407 28,747

29,154 40,481

39,808 57,857

56,676

15

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### REFERENCES

1. U.S. Department of Energy- Energy Information Administration, National Energy

Modeling System: An Overview , 2009. Report No. DOE/EIA-0581(2009).

< http://www.eia.gov/oiaf/aeo/overview/ >

2. Energy Informa tion Administration, Annual Energy Outlook 2013 with Projections to

2040 , 2013. Washington, DC. < http://www.eia.gov/forecasts/aeo/pdf/0383(2013).pdf >

3. Coughlin, K., H. Shen, P. Chan, B. McDevitt, and A. Sturges, Marginal Utility Sector

Impacts of Reduced Electricity Demand , 2012.

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