CHAPTER 15. 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 15.3.12Renewables Generation Reduction .................................................................. 15-15

15-i 
CHAPTER 15. UTILITY IMPACT ANALYSIS

15.1 INTRODUCTION

In the utility impact analysis, the U.S. Department of Energy (DOE) analyzes 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 

impacts 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 2013.

2

 

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

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 reduction 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 summary is National Energy Modeling System: An Overview.

1

b 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 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 NEMSBT (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 interrelated effects: the annual generation (terawatt hours, TWh) from the stock of electric 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 reductionc 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 cells, and distributed generation (natural gas) into an “other” 

category.

In general, energy conservation standards impact 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 RESULTS

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

for which 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

70000

201920242029203420392044204920542059206420692074

MW

Total

TSL 1 TSL 2 TSL 3 TSL 4

0

10000

20000

30000

40000

50000

60000

70000

201920242029203420392044204920542059206420692074

MW

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

10000

201920242029

203420392044204920542059206420692074

MW

Coal

TSL 1 TSL 2 TSL 3 TSL 4

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

201920242029203420392044204920542059206420692074

MW

Coal

TSL 1 TSL 2 TSL 3 TSL 4

15-5 
Figure 15.3.3 Nuclear Capacity Reduction

-1200

-1000

-800

-600

-400

-200

0

20192024

20292034203920442049

20542059206420692074

MW

Nuclear

TSL 1 TSL 2 TSL 3 TSL 4

-1200

-1000

-800

-600

-400

-200

0

201920242029

203420392044

204920542059

206420692074

MW

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

14000

201920242029203420392044204920542059206420692074

MW

NGCC

TSL 1 TSL 2 TSL 3 TSL 4

0

2000

4000

6000

8000

10000

12000

14000

201920242029203420392044204920542059206420692074

MW

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

45000

201920242029203420392044204920542059206420692074

MW

Peaking

TSL 1 TSL 2 TSL 3 TSL 4

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

201920242029203420392044204920542059206420692074

MW

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

4500

201920242029

203420392044204920542059206420692074

MW

Renewable

TSL 1 TSL 2 TSL 3 TSL 4

0

500

1000

1500

2000

2500

3000

3500

4000

4500

201920242029203420392044204920542059206420692074

MW

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

90000

201920242029

2034

20392044204920542059

2064

20692074

GWh

Total

TSL 1 TSL 2 TSL 3 TSL 4

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

201920242029203420392044204920542059206420692074

GWh

Total

TSL 1 TSL 2 TSL 3 TSL 4

15-10
Figure 15.3.8 Coal Generation Reduction 

0

10000

20000

30000

40000

50000

60000

201920242029

203420392044204920542059206420692074

GWh

Coal

TSL 1 TSL 2 TSL 3 TSL 4

0

10000

20000

30000

40000

50000

60000

201920242029203420392044204920542059206420692074

GWh

Coal

TSL 1 TSL 2 TSL 3 TSL 4

15-11
Figure 15.3.9 Nuclear Generation Reduction

-9000

-8000

-7000

-6000

-5000

-4000

-3000

-2000

-1000

0

20192024

20292034203920442049

20542059206420692074

GWh

Nuclear

TSL 1 TSL 2 TSL 3 TSL 4

-9000

-8000

-7000

-6000

-5000

-4000

-3000

-2000

-1000

0

201920242029203420392044204920542059206420692074

GWh

Nuclear

TSL 1 TSL 2 TSL 3 TSL 4

15-12
Figure 15.3.10 Gas Combined Cycle Generation Reduction

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

201920242029203420392044204920542059206420692074

GWh

NGCC

TSL 1 TSL 2 TSL 3 TSL 4

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

201920242029203420392044204920542059206420692074

GWh

NGCC

TSL 1 TSL 2 TSL 3 TSL 4

15-13
Figure 15.3.11 Peaking Generation Reduction

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

201920242029203420392044204920542059206420692074

GWh

Peaking

TSL 1 TSL 2 TSL 3 TSL 4

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

201920242029203420392044204920542059206420692074

GWh

Peaking

TSL 1 TSL 2 TSL 3 TSL 4

15-14
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

2500

201920242029

203420392044204920542059206420692074

GWh

Renewable

TSL 1 TSL 2 TSL 3 TSL 4

0

500

1000

1500

2000

2500

201920242029203420392044204920542059206420692074

GWh

Renewable

TSL 1 TSL 2 TSL 3 TSL 4

15-15
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

15-16
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 Information 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. 

15-17