CHAPTER 10. SHIPMENTS ANALYSIS

TABLE OF CONTENTS

**10.1 INTRODUCTION** 

**......................................................................................................... 10­1** 

**10.2 SHIPMENTS**  **MODEL EQUATIONS** 

**.......................................................................... 10­2** 

**10.2.1 Mathematical**  **Formulation of**  **the Shipments**  **Model**

**...................................... 10­2** 

**10.2.2 Stock**  **Events.................................................................................................... 10­3** 

**10.2.2.1 Replacing**  **Equipment.................................................................... 10­3** 

**10.2.2.2 New**  **Equipment**

**............................................................................ 10­3** 

**10.3 DATA**  **INPUTS**

**............................................................................................................. 10­4** 

**10.3.1 Historical**  **Shipments....................................................................................... 10­4**

**10.3.2 Historical**  **Shipped Linear**  **Feet**

**....................................................................... 10­5** 

**10.3.3 Commercial Grocery Display Space and Market Saturation.......................... 10­6** 

**10.3.3.1 Floor**  **Space**

**– New**  **Construction**

**.................................................. 10­7** 

**10.3.3.2 Market**  **Shipments**

**......................................................................... 10­7** 

**10.3.4 Equipment**  **Utility............................................................................................ 10­8** 

**10.3.5 Equipment**  **Price.............................................................................................. 10­8** 

**10.3.5.1 Operating**  **Costs............................................................................. 10­8** 

**10.3.5.2 Discounted**  **Costs**

**.......................................................................... 10­9** 

**10.4 RESULTS** 

**...................................................................................................................... 10­9** 

**REFERENCES**

**........................................................................................................................ 10­11** 

LIST OF TABLES

**Table 10.3.1**  **Estimated Distribution**  **of Linear**  **Feet of**  **CRE Shipments**  **among New**  **vs.**

**Replacement Equipment**  **and Large**  **vs. Small**  **Food Sales**  **Outlets in**  **2005....... 10­5** 

**Table 10.3.2**  **AEO 2007**  **forecast of**  **New Food**  **Sales Square**  **Footage**

**................................... 10­5** 

**Table 10.3.3**  **Equipment Linear**  **Dimensions Assumed**  **for Shipments**  **Analysis.................... 10­6**

**Table 10.3.4**  **Percent of**  **Shipped Linear**  **Feet of**  **Commercial Refrigeration**  **Equipment........ 10­7**

**Table 10.4.1**  **Forecasted Shipments**  **of New**  **and Replacement**  **Commercial Refrigeration** 

**Equipment for**  **Large and**  **Small Food**  **Sales Outlets,**  **2012­2042 (Base** 

**Case)**

**................................................................................................................ 10­10** 

**Table 10.4.2**  **Forecasted Shipments**  **for Commercial**  **Refrigeration Equipment,** 

**2012­2042, Level**  **1 (Base**  **Case)...................................................................... 10­10**

LIST OF FIGURES

**Figure 10.1.1**  **Flow Chart**  **Showing Inputs**  **to the**  **Shipments Model........................................ 10­1** 

**10­i 10­ii** CHAPTER 10. SHIPMENTS ANALYSIS

10.1 INTRODUCTION

**Commercial refrigeration**  **equipment (CRE)**  **shipments estimates**  **are a**  **necessary input**  **to**

**the national**  **energy savings**  **(NES) and**  **net present**  **value (NPV)**  **calculations and**  **the**

**manufacturer impacts**  **analysis (MIA).**  **This chapter**  **describes the**  **U.S. Department**  **of Energy** 

**(DOE)’s methodology**  **for projecting**  **annual shipments**  **and presents**  **results.**

**The Shipments**  **Model results**  **are driven**  **primarily by**  **historical shipments**  **data for**  **the**

**15 categories**  **of commercial**  **refrigeration equipment**  **under consideration.**  **The flow**  **chart**

**presented in**  **Figure 10.1.1**  **outlines the**  **structure of**  **the Shipments**  **Model.**

**The model**  **assumes that,**  **in each**  **year, the**  **existing commercial**  **refrigeration equipment** 

**stock either**  **ages by**  **one year**  **or breaks.**  **Broken equipment**  **is replaced.**  **In addition,**  **new**

**equipment can**  **be shipped**  **into new**  **commercial floor**  **space, and**  **old equipment**  **can be**  **removed**

**through demolitions**  **(not shown**  **in the**  **diagram).**

**The Shipments**  **Model is**  **in a**  **Microsoft Excel**  **spreadsheet format**  **that is**  **accessible on**  **the**

**Internet at:**  **http://www.eere.energy.gov/buildings/appliance_standards/**

**commercial_products.html.**

**Further, chapter**  **11, section**  **11.5 of**  **this Technical**  **Support Document**  **(TSD), discusses** 

**how to**  **access the**  **Shipments Model**  **spreadsheet and**  **other related**  **spreadsheets, and**  **provides**

**basic instructions**  **for using**  **them. The**  **rest of**  **this chapter**  **explains the**  **Shipments Model**  **in more** 

**detail. Section**  **10.2 presents**  **the mathematical**  **formulation of**  **the model,**  **section 10.3**  **describes**

**the data**  **inputs to**  **the model,**  **and section**  **10.4 presents**  **the results**  **for the**  **base case** 

**energy­conservation standard**  **level scenario**  **and discusses**  **the development**  **of higher**  **standard**

**scenarios. The**  **energy conservation**  **standards for**  **commercial refrigeration**  **equipment will**  **set**

**the maximum**  **rated energy**  **consumption for**  **all equipment**  **within an**  **equipment class.**  **DOE**

**refers to**  **each standard**  **level considered**  **as a**  **“candidate standard**  **level.”**

**Shipments forecasts**  **were determined**  **for all**  **of the**  **candidate standard**  **levels for**  **which**

**NES and**  **NPV are**  **required. DOE**  **is considering**  **up to**  **eight candidate**  **standard levels**  **for each**  **of**

**the 15**  **equipment classes.** 

NEMS Food Services

Bldg

Construction Forecast ARI Estimate of

Shipments (2005)

Initial Replacement

Shipments Initial Shipments to New

Construction

Initial CRE Stock

Estimated Lifetime

of CRE Stock Shipments to New

Construction

Replacement

Shipments

Total

Shipments By

Product Class % Shipments by Product

Class (2005)

CRE Stock

by Product

Class NEMS Food Services

Bldg

Construction Forecast ARI Estimate of

Shipments (2005)

Initial Replacement

Shipments Initial Shipments to New

Construction

Initial CRE Stock

Estimated Lifetime

of CRE Stock Shipments to New

Construction

Replacement

Shipments

Total

Shipments By

Product Class % Shipments by Product

Class (2005)

CRE Stock

by Product

Class

Figure 10.1.1 Flow Chart Showing Inputs to the Shipments Model

**10­1**10.2 SHIPMENTS MODEL EQUATIONS

**The Shipments**  **Model is**  **a description**  **of commercial**  **refrigeration equipment**  **stock flows** 

**as a**  **function of**  **year and**  **age. While**  **there are**  **15 equipment**  **classes, no**  **coupling is**  **assumed**

**between them,**  **so the**  **equations describe**  **each type**  **of equipment**  **independently.**

**This section**  **begins with**  **a definition**  **of the**  **different commercial**  **refrigeration equipment** 

**stock categories.**  **DOE formulates**  **the equations**  **as updates**  **of the**  **distribution of**  **stock in**  **year** t

**as a**  **function of**  **age** a **to year**  t+1

**. Then**  **DOE presents**  **the different**  **purchase decisions**  **and, in** 

**the following**  **section, provides**  **a description**  **of the**  **data sources.**  **In the**  **equations below,**  **DOE**

**first converted**  **the equipment**  **units to**  **linear feet**  **of display**  **space cooled**  **by those**  **units by**  **taking**

**the national**  **statistics on**  **sales of**  **equipment and**  **calculating equipment**  **capacity per**  **linear foot**  **of**

**retail grocery**  **building display**  **space. DOE**  **uses this**  **calculation of**  **existing stock,**  **and the** 

**average age**  **of the**  **equipment, as**  **a basis**  **for calculating**  **replacement sales.**  **Then, DOE**  **subtracts**

**replacement sales**  **from historical**  **total sales**  **statistics to**  **calculate new**  **sales of**  **commercial**

**refrigeration equipment.**  **DOE forecasts**  **new sales**  **as a**  **function of**  **new construction**  **of retail** 

**food sales**  **space. Sales**  **of new**  **and replacement**  **equipment are**  **recorded by**  **the year**  **sold, and** 

**each annual**  **vintage is**  **depreciated over**  **the estimated**  **life of**  **the equipment.**  **Sales in**  **each year** 

**are allocated**  **to the**  **15 equipment**  **classes in**  **proportion to**  **their relative**  **historical sales.** 

10.2.1 Mathematical Formulation of the Shipments Model

**DOE uses**  **two commercial**  **refrigeration equipment**  **stock categories.**  **The category** 

U

**0** (y,a) **is the**  **stock of**  **existing units.**  **Available information**  **suggests that**  **all units**  **are assumed**  **to**

**have had**  **normal repairs**  **that do**  **not affect**  **the lifetime**  **of the**  **equipment.**

**In view**  **of industry**  **practice, available**  **information suggests**  **that the**  **lifetime of**  **a unit**  **is**

**10 years**  **in large**  **food retailers**  **and about**  **15 years**  **in small**  **retailers such**  **as convenience**  **stores.**

**Also, available**  **information suggests**  **that the**  **initial existing**  **stock of**  **equipment had**  **an average** 

**age of**  **five years,**  **based on**  **the 10­year**  **lifetime of**  **a unit**  **of equipment,**  **and annual**  **replacements**

**going back**  **10 years.**  **The total**  **stock of**  **age** a **in a**  **given year**  y **is represented**  **by**

U

**(t,a)**

**=** U 0 **(t,a)** Eq. 10.1

**and the**  **average age**  **of the**  **stock in**  **year** y **is defined**  **as**

StockAge **(t)**

**= ∑** 

**a** U **( t,**  **a) x**  **a /**  **∑(** U **( t,a))**  Eq. 10.2

**where:**

U **(** t,a **)**

**= total**  **stock of**  **age** a **in a**  **given year**  y

**,** U

**0 (**  t,a **)**

**= stock**  **of existing**  **units**

StockAge **(** t **)**

**= average**  **age of**  **stock in**  **year** y

**,**

a **= age**  **of stock,** 

t **= year.** 

**The shipments**  **of new**  **stock in**  **a given**  **year are**  Uship(t)

**. By**  **definition, the**  **age of**  **the**

**equipment is**  **zero in**  **the year**  **that it**  **is shipped,**  **so that**  Uship(t)

= U(t,0)

**.**

**10­2**10.2.2 Stock Events

**In the**  **transition from**  **year** t **to year**  t+1

**, two**  **things could**  **happen to**  **the stock**  **of**

**commercial refrigeration**  **equipment:**

• **existing equipment**  **could break**  **or be**  **removed during**  **a store**  **renovation and**  **be**

**replaced, or** 

• **the stock**  **could simply**  **age by**  **one year.** 

**In the**  **model, early**  **replacements (i.e.,**  **existing equipment**  **that is**  **replaced before**  **it has** 

**broken) are**  **not considered,**  **and all**  **broken equipment**  **are assumed**  **to be**  **replaced. The**  **following**

**sections present**  **the equations**  **used to**  **represent each**  **possible event.** 

10.2.2.1 Replacing Equipment

**DOE determines**  **the probability**  **that commercial**  **refrigeration equipment**  **of age**  a **from**

**stock** U **0 will**  **break or**  **will be**  **replaced using**  **a Weibull**  **survival distribution**  **function**

PB **0** (a)=W(8,10.62) **for large**  **food sales**  **(which results**  **in a**  **ten­year average**  **lifetime, a**  **minimum**

**lifetime of**  **about seven**  **years, and**  **a maximum**  **lifetime of**  **about 13**  **years, consistent**  **with**

**industry comments).**  PB **0** (a)=W(8,16) **for small**  **food service**  **outlets, i.e.**  **convenience stores**  **with**

**and without**  **gas stations**  **(which results**  **in an**  **average lifetime**  **of 15**  **years, with**  **a minimum**  **of**

**about 9**  **years and**  **a maximum**  **of about**  **20 years,**  **again consistent**  **with industry**  **comments).**

**Similarly, the**  **probability that**  **equipment of**  **age** a **from stock**  U 1 **will break**  **is given**  **by the**  **same**

**function** PB **1** (a)

**. These**  **probabilities do**  **not depend**  **on the**  **model year**  y

**. DOE**  **defines the** 

**quantities of**  **replaced equipment**  **as**

UB **(t, a)** 

**=** PB 0 **(a) x**  UB 0 **(t,a)** Eq. 10.3

**where:**

UB **0 (**  t,a **)**

**= stock**  **of existing**  **units,**

PB **0 (**  a **)**

**= probability**  **that stock**  **of existing**  **units will**  **break, or**  **will be**  **replaced,**

U

**0 (**  t,a **)**

**= stock**  **of existing**  **units,**

a **= age**  **of stock,** 

t **= year.** 

**All broken**  **or obsolete**  **units (removed**  **during store**  **renovations) are**  **assumed to**  **be**

**replaced.**

10.2.2.2 New Equipment

**New commercial**  **refrigeration equipment**  **will be**  **purchased to**  **replace the**  **units described** 

**above. Available**  **information suggests**  **that the**  **purchase of**  **new equipment**  **that would**  **go into** 

**new buildings**  **is driven**  **by the**  **rate of**  **construction of**  **grocery floor**  **space.**

**By definition:** 

EFS **(t+1)**

**=** EFS **(t) +**  NFS **(t)**

**­** DFS**(t)** Eq. 10.4

**10­3 where:** 

EFS(t)

**= the**  **square footage**  **of existing**  **grocery floor**  **space in**  **year** t

**,** NFS(t)

**= the**  **square footage**  **of new**  **grocery floor**  **space added**  **in year**  t

**(described in**  **section 10.3.3),** 

**DFS** (t)

**= the**  **square footage**  **demolished in**  **year** t **(described in**  **section 10.3.3.1).** 

**The linear**  **footage of**  **units going**  **into new**  **buildings is** 

UN **(t)**

**=** UN **(t) x**  A 0 **x** NFS**(t)/** NFS**(0)** Eq. 10.5

**where:**

UN(t)

**= the**  **number of**  **units going**  **into new**  **buildings in**  **year t,** 

A **0 =**  **an overall**  **scale factor**  **which accounts**  **for the**  **number of**  **units covered**  **by the** 

**standard which**  **are not**  **used in**  **all commercial**  **building types.**  **The default**  **value**

**for** A **0 is**  **1.0, but**  **values of**  **0.5 and**  **1.5 are**  **used for**  **sensitivity testing.** 

**DOE has**  **no information**  **on the**  **variation in**  **the market**  **saturation of**  **commercial**

**refrigeration equipment**  **by building**  **type or**  **over time.**  **Therefore, in**  **the model,**  **the purchase**  **of**

**new equipment**  **is driven**  **by the**  **construction of**  **new floor**  **space and**  **that broken**  **or removed** 

**equipment is**  **replaced on**  **a one­for­one**  **basis.**

10.3 DATA INPUTS

10.3.1 Historical Shipments

**Historical shipments**  **are necessary**  **to calibrate**  **a shipments**  **model to**  **the existing**  **market.**

**DOE’s primary**  **source of**  **historical data**  **for shipments**  **of refrigeration**  **equipment is**  **a market** 

**study by**  **Freedonia, Inc.**  **1** Commercial Refrigeration Equipment to 2008. **The data**  **provided in** 

**this report**  **is aggregated**  **at a**  **high level**  **with regard**  **to equipment**  **categorization and**  **provides**

**only an**  **estimate of**  **shipments based**  **on valuation**  **data and**  **estimated prices**  **(valuation data** 

**similar to**  **the U.S.**  **census bureau**  **data shown**  **in chapter**  **3, Market**  **and Technology**  **Assessment).**

**As discussed**  **in chapter**  **3, the**  **available Census**  **Bureau data**  **showed substantial**  **variation in** 

**shipment valuations**  **between the**  **survey years,**  **indicative of**  **large variations**  **in overall**  **shipments**

**of commercial**  **refrigeration equipment**  **by year.**  **The Air­Conditioning**  **and Refrigeration** 

**Institute (ARI)**  **provided DOE**  **with shipments**  **data broken**  **out by**  **specific CRE**  **equipment class** 

**for one**  **year (2005)**  **that allowed**  **DOE to**  **allocate sales**  **of equipment**  **to equipment**  **classes. This** 

**data is**  **also shown**  **in chapter**  **3.**

**Within each**  **of the**  **equipment categories,**  **the shipments**  **data must**  **be disaggregated**  **into**

**detailed equipment**  **and temperature**  **ranges for**  **the shipment**  **analysis. The**  **ARI shipment**  **ranges**

**and equipment**  **categories are**  **defined in**  **a way**  **that allowed**  **DOE to**  **disaggregate the**  **data into** 

**the 15**  **equipment classes**  **of interest.**  **For the**  **purpose of**  **the NOPR,**  **DOE has**  **used the**  **ARI data** 

**as a**  **starting estimate**  **for its**  **shipments analysis.** 

**10­4**10.3.2 Historical Shipped Linear Feet

**Historical linear**  **feet of**  **shipped units**  **depicts the**  **annual amount**  **of commercial** 

**refrigeration equipment**  **capacity shipped**  **and is**  **an alternative**  **way to**  **express shipments**  **data.**

**DOE determined**  **the linear**  **feet shipped**  **for any**  **given year**  **by multiplying**  **each unit**  **shipped by** 

**its associated**  **average length,**  **and then**  **summing all**  **the linear**  **footage values.** 

**DOE converted**  **the ARI**  **data on**  **shipped units**  **in each**  **equipment class**  **to percent**  **of total** 

**shipped linear**  **feet of**  **commercial refrigeration**  **equipment for**  **use in**  **the Shipments**  **Model. This** 

**established the**  **commercial refrigeration**  **equipment market**  **share attributed**  **to each**  **equipment**

**class. The**  **market share**  **calculation and**  **its use**  **in forecasting**  **shipments is**  **explained in** 

**section 10.3.3.1.**  **DOE calculated**  **the percent**  **of shipped**  **linear footage**  **by dividing**  **the linear** 

**footage shipped**  **for each**  **equipment class**  **by the**  **overall linear**  **footage shipped**  **for all** 

**commercial refrigeration**  **equipment covered**  **in this**  **rulemaking.**

**Table 10.3.1**  **summarizes DOE’s**  **estimated division**  **of historical**  **annual shipments**  **into**

**the new,**  **replacement and**  **large food**  **sales versus**  **small food**  **sales. Table**  **10.3.2 shows**  **the**

**forecasted square**  **footage of**  **new construction**  **used to**  **scale annual**  **new CRE**  **shipments. Square** 

**footage of**  **additions to**  **stock goes**  **up and**  **down from**  **year to**  **year. The**  **year 2009**  **value was** 

**assumed to**  **be the**  **same as**  **in 2006.** 

Table 10.3.1 Estimated Distribution of Linear Feet of CRE Shipments among New vs.

Replacement Equipment and Large vs. Small Food Sales Outlets in 2005*

Replacements New Total

Large Food Retail **69.2% 15.9%**  **85.0%**

Small Retail **12.2% 2.8%**  **15.0%**

Total **81.3% 18.7%**  **100.0%**

***** **Calculated from**  **ARI data** 

Table 10.3.2 AEO 2007 forecast of New Food Sales Square Footage

New Construction

Year (Million Square Feet)

**2009 42.9** 

**2010 43.3** 

**2015 45.8** 

**2020 47.9** 

**2025 54.1** 

**2030 57.4** 

**Annual Growth**  **Factor,**

**2030­2042 1.8%** 

**DOE used**  **the ARI**  **shipment data**  **to derive**  **shipped linear**  **footage for**  **each of**  **15 smaller** 

**equipment classes,**  **based on**  **10 possible**  **equipment families,**  **two possible**  **equipment operating** 

**modes (remote**  **condensing or**  **self­contained), and**  **three rated**  **temperature applications**  **(medium,**

**low, and**  **ice cream).**  **Table 10.3.3**  **presents the**  **typical equipment**  **class lengths**  **used for**  **the**

**conversion of**  **per unit**  **shipments to**  **linear footage**  **within each**  **equipment class.**  **The premises** 

**below include**  **data for**  **some CRE**  **equipment classes**  **which were**  **not explicitly**  **analyzed in**  **the**

**life­cycle cost**  **analysis, but**  **for which**  **shipments were**  **reported by**  **ARI, including**  **small­shipment**

**10­5**Table 10.3.3 Equipment Linear Dimensions Assumed for Shipments Analysis

Equipment

Class a Assumed

Length (ft) Basis

**VOP.RC.M 10**  **Average of**  **8 ft**  **and 12**  **ft, Manufacturer**  **Interviews**

**VOP.RC.L 10**  **Average of**  **8 ft**  **and 12**  **ft, Manufacturer**  **Interviews**

**VOP.SC. M**  **4 Baseline**  **Equipment used**  **for Engineering**  **Analysis**

**SVO.RC.M 10**  **Average of**  **8 ft**  **and 12**  **ft, Manufacturer**  **Interviews**

**SVO.SC.M 4**  **Baseline Equipment**  **Used for**  **Engineering Analysis** 

**HZO.RC.M 10**  **Average of**  **8 ft**  **and 12**  **ft, Manufacturer**  **Interviews**

**HZO.RC.L 10**  **A verage**  **of 8**  **ft and**  **12 ft,**  **Manufacturer Interviews** 

**HZO.SC.M 4**  **Baseline Equipment**  **Used for**  **Engineering Analysis** 

**HZO.SC.L 4**  **Baseline Equipment**  **Used for**  **Engineering Analysis** 

**VCT.RC.M 10**  **Average of**  **3 door**  **and 5**  **door (30"**  **per door),**  **MFG Interviews** 

**VCT.RC.L 1**  **0 Average**  **of 3**  **door and**  **5 door**  **(30" per**  **door), MFG**  **Interviews**

**VCT.SC.I 5**  **Baseline Equipment**  **Used for**  **Engineering Analysis** 

**VCS.RC.M 5**  **Engineering Estimate** 

**VCS.RC.L 5**  **Engineering Estimate** 

**VCS.RC.I 5**  **Engineering Estimate** 

**VCS.SC.I 5**  **Baseline Equipment**  **Use d**  **for Engineering**  **Analysis**

**HCT.RC.M 5**  **Engineering Estimate** 

**HCT.RC.L 5**  **Engineering Estimate** 

**HCT.RC.I 5**  **Engineering Estimate** 

**HCT.SC.I 3.4**  **Baseline Equipment**  **Used for**  **Engineering Analysis** 

**HCS.RC.M 5**  **Engineering Estimate** 

**SOC.RC.M 8**  **Average of**  **4 ft,**  **8ft, 12**  **ft, all**  **common equipment**  **lengths**

**SOC.RC.L 8**  **Average of**  **4 ft,**  **8ft, 12**  **ft all**  **common equipment**  **lengths**

***** **Equipment class**  **designations consist**  **of a**  **combination (in**  **sequential order**  **separated by**  **periods) of**  **a equipment**  **family code**  **(VOP=vertical**

**open, SVO=semivertical**  **open, HZO=horizontal**  **open, VCT=vertical**  **transparent doors,**  **VCS=vertical solid**  **doors, HCT=horizontal**  **transparent**

**doors, HCS=horizontal**  **solid doors,**  **or SOC=service**  **over counter),**  **an operating**  **mode code**  **(RC=remote condensing**  **or SC=self­contained),**  **and**

**a rating**  **temperature code**  **(M=medium temperature**  **(38°F), L=low**  **temperature (0°F),**  **or I=ice­cream**  **temperature (­15°F)).**  **For example,** 

**"VOP.RC.M refers**  **to the**  **"vertical open,**  **remote condensing,**  **medium temperature"**  **equipment class.**  **See chapter**  **3, market**  **and technology** 

**assessment, for**  **a more**  **detailed explanation**  **of the**  **equipment class**  **terminology**

**design classes**  **as well**  **as equipment**  **designed to**  **operate at**  **45°F, 20°F,**  **and 10°F**  **product**

**temperatures. DOE**  **presumed that**  **equipment designed**  **to operate**  **at these**  **latter design** 

**temperatures would**  **have similar**  **dimensions as**  **for the**  **medium, low,**  **and ice**  **cream temperature** 

**categories, respectively.**  **DOE was**  **then able**  **to estimate**  **the annual**  **linear footage**  **shipped for** 

**each of**  **the 15**  **equipment classes**  **and the**  **entire set**  **of commercial**  **refrigeration equipment.**  **Total**

**linear footage**  **shipped within**  **the 15**  **equipment classes**  **analyzed accounted**  **for 99.9**  **percent of** 

**the total**  **linear footage**  **shipped in**  **the medium,**  **low, and**  **ice cream**  **temperature categories**  **and**

**98.7 percent**  **of the**  **linear footage**  **shipped at**  **all temperatures.**  **The shipments**  **analysis relies**  **on**

**the 15**  **equipment classes**  **to represent**  **the CRE**  **market.** Error! Not a valid bookmark selfreference. **shows the**  **fraction of**  **the linear**  **footage shipped**  **by each**  **of these**  **15 equipment** 

**classes.**

10.3.3 Commercial Grocery Display Space and Market Saturation

**The amount**  **of commercial**  **floor space**  **is the**  **main driver**  **for commercial**  **refrigeration**

**equipment shipments**  **and is**  **appropriately one**  **of the**  **basic inputs**  **into the**  **Shipments Model.**  **As**

**discussed in**  **section 10.2.2,**  **the model**  **divides commercial**  **display space**  **into two**  **components:**

**display space**  **from new**  **construction floor**  **space (NFS),**  **and existing**  **display floor**  **space (EFS).** 

**For this**  **analysis, commercial**  **square footage**  **with commercial**  **refrigerated display**  **space**

**refers to**  **both new**  **and existing**  **stock of**  **food sales**  **buildings.**

**10­6**Table 10.3.4 Percent of Shipped Linear Feet of Commercial Refrigeration Equipment

Equipment Class Percentage of Shipped Units

**Vertical Open.Remote**  **Condensing.Medium (VOP.RC.M)**  **25.9%**

**Vertical Open.Remote**  **Condensing.Low (VOP.RC.L)**  **1.3**

**Vertical Open.Self**  **Contained.Medium (VOP.SC.M)**  **1.7**

**Vertical Closed**  **Transparent.Remote Condensing.Medium**  **(VCT.RC.M) 1.9** 

**Vertical Closed**  **Transparent.Remote Condensing.Low**  **(VCT.RC.L) 25.7** 

**Vertical Closed**  **Transparent.Self Contained.**  **Ice Cream**  **(VCT.SC.I) 0.6** 

**Vertical Closed**  **Solid.Self Contained.Very**  **Low (VCS.SC.I)**  **0.2**

**Semi­Vertical Open.Remote**  **Condensing.Medium (SVO.RC.M)**  **19.8**

**Semi­Vertical Open.**  **Self Contained.Medium**  **(SVO.SC.M) 2.6** 

**Service Over**  **Counter.Remote Condensing.Medium**  **(SOC.RC.M) 5.0** 

**Horizontal Open.Remote**  **Condensing.Medium (HZO.RC.M)**  **3.1**

**Horizontal Open.Remote**  **Condensing.Low (HZO.RC.L)**  **9.5**

**Horizontal Open.Self**  **Contained.Medium (HZO.SC.M)**  **0.2**

**Horizontal Open.Self**  **Contained.Low (HZO.SC.L)**  **0.5**

**Horizontal Closed**  **Transparent.Self Contained.Ice**  **Cream (HCT.SC.I)**  **2.1**

**100.0%**

Sources: ARI and CRE framework meeting comments

10.3.3.1 Floor Space

– New Construction

**DOE took**  **the projected**  **floor space**  **construction after**  **the year**  **2003 from**  **the National** 

**Energy Modeling**  **System (NEMS)**  **projection published**  **in the**  Annual Energy Outlook 2007

**(** AEO 2007 **). 2**  AEO 2007 **lists the**  **projections for**  **years 2009,**  **2010, 2015,**  **2020, 2025**  **and 2030.** 

**For unlisted**  **years in**  **this range,**  **DOE derived**  **NFS data**  **by linear**  **interpolation of**  **the existing** 

**years. Beyond**  **2030, DOE**  **extrapolated NFS**  **from the**  **10­year trend**  **of NEMS**  **projected data** 

**between 2020**  **and 2030.** 

**The total**  **of new**  **display space**  **is the**  **estimated total**  **shipments in**  **linear feet**  **for 2006,** 

**times an**  **index of**  **new construction**  **of square**  **feet of**  **food sales**  **buildings for**  **each future**  **year,**

**divided by**  **its 2006**  **value. All**  **existing display**  **space is**  **presumed to**  **be replaced**  **when**

**demolished.**

10.3.3.2 Market Shipments

**DOE used**  **the above**  **shipments data**  **to estimate**  **the market**  **shipments in**  **year t**  **of each** 

**commercial refrigeration**  **equipment class**  **y,** MKTSHIP(t,y)

**, defined**  **in terms**  **of linear**  **feet of** 

**display space**  **occupied by**  **the new**  **and replacement**  **shipments of**  **equipment class**  **y. Because** 

**the percent**  **of shipments**  **in each**  **class is**  **relatively constant**  **over time**  **and the**  **lifetime of**  **each**

**class is**  **the same,**  **the ratio**  **of shipments**  **to a**  **class is**  **indicative of**  **the market**  **share for**  **that class,** 

MKT(y)

**. DOE**  **estimated the**  MKT(y) **for a**  **particular equipment**  **class to**  **be a**  **constant value** 

**equal to**  **the average**  **of the**  **yearly percent**  **historical shipments**  **to that**  **class. These**  **percentages**

**are reported**  **in** Error! Reference source not found.

**.**

MKTSHIP(t.y)

= MKT(y) x (UN(t) + UB(t)) Eq. 10.6

**Where:**

**10­7**MKTSHIP(t,y)

= **total market**  **shipments, in**  **linear feet**  **of display**  **space, of**  **equipment class**  **y**

**in year**  **t,**

MKT(y)

= **percentage of**  **total market**  **shipments in**  **equipment class**  **y,** UN(t)

**= total**  **shipments to**  **new buildings**  **in year**  **t,**

**UB(t)**

**= total**  **replacement shipments**  **in year**  **t.**

10.3.4 Equipment Utility

**The equipment**  **utility is**  **a measure**  **of the**  **economic value**  **of a**  **linear foot**  **of commercial** 

**refrigeration equipment**  **to the**  **customers. This**  **is the**  **value associated**  **with energy**  **savings.**

**Because there**  **are not**  **enough historical**  **data available**  **on the**  **commercial refrigeration**  **equipment**

**market to**  **develop and**  **calibrate a**  **full demand**  **and supply**  **model, economic**  **factors are**  **used to** 

**calculate annualized**  **cost and**  **calibrate market**  **shares for**  **the Shipments**  **Model and**  **are discussed** 

**below.**

10.3.5 Equipment Price

**Equipment price**  **is the**  **price paid**  **by the**  **customer for**  **a unit**  **of commercial**  **refrigeration**

**equipment. It**  **includes both**  **the purchase**  **price of**  **the equipment**  **and installation**  **costs. DOE** 

**converts the**  **equipment price**  **to a**  **price per**  **linear­foot­cooled based**  **on the**  **length of**  **the**

**equipment class.** 

**As discussed**  **in the**  **engineering analysis**  **(chapter 5)**  **and the**  **life­cycle cost**  **and payback** 

**period analysis**  **(chapter 8),**  **equipment prices**  **in this**  **analysis are**  **a function**  **of energy** 

**consumption level).**  **DOE based**  **equipment price**  **projections on**  **energy consumption**  **level, but** 

**did not**  **develop estimates**  **of market**  **trends in**  **efficiency. DOE**  **developed a**  **mix of**  **energy**

**consumption levels**  **for the**  **base case**  **(i.e., the**  **case without**  **new energy**  **conservation standards)** 

**and for**  **each candidate**  **standard level**  **envisioned. The**  **efficiency mixes**  **are discussed**  **in detail**  **in**

**chapter 11,**  **section 11.2.2.1.** 

10.3.5.1 Operating Costs

**Operating costs**  **consist of**  **maintenance costs,**  **repair costs,**  **and energy**  **costs.**

Maintenance and Repair Costs. **Each unit**  **of commercial**  **refrigeration equipment**  **incurs**

**yearly routine**  **maintenance and**  **standard repair**  **costs. DOE**  **converted these**  **costs to**  **a cost**  **per**

**unit and**  **per linear**  **foot of**  **cooling capacity**  **for each**  **equipment class.**  **Because DOE**  **has very** 

**little information**  **on either**  **current or**  **potential maintenance**  **costs, an**  **assumption was**  **entered**

**into the**  **NOPR analysis**  **of $156/year/**  **unit (2006$)**  **for basic**  **maintenance from**  R S Means Cost

Works

**, to**  **which is**  **added a**  **figure for**  **lighting maintenance,**  **which varies**  **with the**  **amount of** 

**efficient LED**  **lighting added**  **(see chapter**  **8, section**  **8.2.3.4) Whereas**  **basic maintenance**  **cost is** 

**assumed independent**  **of refrigeration**  **equipment class**  **and energy**  **efficiency, repair**  **costs are** 

**potentially a**  **function of**  **both (see**  **chapter 8,**  **section 8.2.3.3).**  **Thus, both**  **projections for** 

**maintenance costs**  **and repair**  **costs are**  **projected to**  **increase with**  **increasing energy­efficiency** 

**standards levels.**  **Both maintenance**  **and repair**  **costs are**  **discussed in**  **detail in**  **chapter 11,** 

**section 11.3.2.2.** 

**10­8**Energy Costs. **The annual**  **energy costs**  **for a**  **single CRE**  **unit depend**  **on the**  **annual**

**energy use**  **per linear**  **foot given**  **the energy**  **consumption level**  **of the**  **unit (energy**  **use intensity**  **or**

**EUI), and**  **the price**  **of electricity.**  **The determination**  **of the**  **EUI for**  **an individual**  **CRE unit**  **is**

**discussed in**  **chapter 6**  **and 7,**  **and the**  **development of**  **electricity prices**  **is discussed**  **in the** 

**life­cycle cost**  **and payback**  **period analysis**  **(chapter 8,**  **section 8.2.3.1).**  **Coupling the**  **EUI with** 

**electricity price**  **data enables**  **DOE to**  **derive the**  **annual per**  **unit energy**  **cost for**  **each energy** 

**consumption level.**  **Chapter 8**  **discusses how**  **the EUI**  **data are**  **combined with**  **the electricity**  **price**

**data to**  **derive annual**  **electricity costs.** 

**Available information**  **suggests that**  **the average**  **annual energy**  **costs for**  **any given**  **year**

**change as**  **the average**  **efficiency of**  **the shipped**  **units improves.**  **In any**  **given year,**  **there is**  **a**

**distribution of**  **energy consumption**  **levels for**  **shipped equipment**  **and the**  **Shipments Model**  **uses**

**the shipment­weighted**  **average efficiency**  **for that**  **given year.**  **DOE based**  **its projections**  **of**

**annual energy**  **cost for**  **each equipment**  **class on**  **the mix**  **of energy**  **consumption levels**  **projected**

**within that**  **class, the**  **total shipments**  **for the**  **equipment class**  **and future**  **electricity prices.**  **DOE**

**developed a**  **mix of**  **energy consumption**  **levels representative**  **of the**  **base case**  **(i.e., the**  **case**

**without new**  **efficiency standards)**  **and for**  **each candidate**  **standard level.**  **As noted**  **earlier, the** 

**mix of**  **energy consumption**  **levels within**  **each equipment**  **class is**  **discussed in**  **detail in** 

**chapter 11,**  **section 11.2.2.1.**  **The impact**  **of the**  **mix of**  **energy consumption**  **levels on**  **the average** 

**per unit**  **energy costs**  **for shipments**  **within an**  **equipment class**  **is discussed**  **in detail**  **in chapter**  **11,**

**section 11.2.2.1**  **also.**

**The mix**  **of energy**  **consumption levels**  **allow for**  **the determination**  **of projected**  **annual**

**energy costs**  **in 2007**  **dollars as**  **a function**  **of candidate**  **standard level.**  **To factor**  **in the**  **impact of** 

**future electricity**  **prices, DOE**  **used electricity**  **price projections**  **from the**  AEO 2007 **to**

**appropriately scale**  **the above**  **projected energy**  **costs (for**  **scaling purposes,**  **the scaling**  **factor for** 

**the year**  **2007 equals**  **1.0).**

10.3.5.2 Discounted Costs

**When a**  **decision is**  **made to**  **purchase commercial**  **refrigeration equipment,**  **an**

**energy­conscious purchasing**  **agent will**  **consider the**  **total lifetime**  **cost of**  **the equipment.** 

**Typically, these**  **lifetime costs**  **are discounted**  **to represent**  **the present**  **value of**  **these costs.**  **DOE**

**discounted the**  **total operating**  **costs (i.e.,**  **maintenance, repair,**  **and energy**  **costs) over**  **the full** 

**lifetime of**  **the equipment.**  **Commercial refrigeration**  **equipment lifetimes**  **range from**  **one to**  **as**

**many as**  **20 years,**  **but based**  **on discussions**  **with industry,**  **the typical**  **value is**  **10 years**  **in large** 

**food retailers**  **and 15**  **years in**  **small retailers,**  **usually based**  **on the**  **fact that**  **large grocery**  **stores**

**are either**  **renovated or**  **the refrigeration**  **equipment is**  **replaced for**  **aesthetic reasons**  **at about**  **10­**

**year intervals,**  **but that**  **small food**  **retailers usually**  **try to**  **make their**  **equipment last**  **longer and** 

**update less**  **frequently (see**  **chapter 8**  **for further**  **details).**

10.4 RESULTS

**Table 10.4.1**  **shows the**  **shipments forecast**  **for the**  **commercial refrigeration**  **equipment**

**classes for**  **the base**  **case energy**  **consumption level**  **(or Level**  **1) divided**  **into new**  **and**

**replacement units**  **for large**  **and small**  **food sales**  **outlets. Table**  **10.4.2 shows**  **total shipments**  **by**

**equipment type.** 

**10­9**Table 10.4.1 Forecasted Shipments of New and Replacement Commercial Refrigeration

Equipment for Large and Small Food Sales Outlets, 2012­2042 (Base Case)

Division 2012 Thousands of Linear Feet Shipped by Year and Equipment Class

2015 2020 2025 2030 2035 2040 2042 Cumulative

New Large

New Small

Replacement Large

Replacement Small

Total **246**

**43**

**1,265**

**188**

**1,742 251**  **262 296**  **314 343**  **376 390**  **9,471**

**44 46**  **52 55**  **61 66**  **69 1,671** 

**1,195 1,243**  **1,264 1,360**  **1,447 1,599**  **1,661 41,858** 

**192 188**  **179 188**  **198 204**  **211 5,941** 

**1,682 1,739**  **1,791 1,918**  **2,049 2,245**  **2,330 58,941** 

Table 10.4.2 Forecasted Shipments for Commercial Refrigeration Equipment, 2012­2042,

Level 1 (Base Case)

Equipment

Class 2012 Thousands of Linear Feet Shipped by Year and Equipment Class

2015 2020 2025 2030 2035 2040 2042 Cumulative

VOP.RC.M **451 436**  **451 464**  **497 531**  **582 604**  **15,270**

VOP.RC.L **23 22**  **23 23**  **25 27**  **29 30**  **763**

VOP.SC.M **30 29**  **30 31**  **33 36**  **39 41**  **1,027**

VCT.RC.M **32 31**  **32 33**  **35 38**  **42 43**  **1,091**

VCT.RC.L **448 433**  **448 461**  **494 527**  **578 600**  **15,167**

VCT.SC.I **11 11**  **11 11**  **12 13**  **14 15**  **374**

VCS.SC.I **3 3**  **3 3**  **3 3**  **4 4**  **93**

SVO.RC.M **344 332**  **344 354**  **379 405**  **444 460**  **11,647**

SVO.SC.M **45 44**  **45 47**  **50 53**  **59 61**  **1,537**

SOC.RC.M **87 84**  **87 89**  **96 102**  **112 116**  **2,936**

HZO.RC.M **53 51**  **53 54**  **58 62**  **68 71**  **1,790**

HZO.RC.L **166 161**  **166 171**  **183 196**  **214 222**  **5,627**

HZO.SC.M **4 4**  **4 4**  **4 5**  **5 5**  **132**

HZO.SC.L **8 8**  **8 8**  **9 10**  **10 11**  **274**

HCT.SC.I **36 35**  **36 37**  **39 42**  **46 48**  **1,214**

**As equipment**  **purchase price**  **increases with**  **lower energy**  **consumption levels,**  **a drop**  **in**

**shipments could**  **be expected**  **relative to**  **the base**  **case. Although**  **there is**  **a provision**  **in the** 

**spreadsheet for**  **a change**  **in shipments**  **as the**  **efficiency level**  **increases (or**  **energy consumption** 

**level decreases),**  **DOE has**  **no information**  **with which**  **to calibrate**  **such a**  **relationship. Therefore,** 

**for the**  **NOPR analysis,**  **DOE presumes**  **that the**  **shipments do**  **not change**  **in response**  **to candidate** 

**standard levels.** 

**10­10**REFERENCES

**1. Freedonia.**  **2004. Commercial**  **Refrigeration Equipment**  **to 2008.**  **Study 1849.**  **Freedonia**

**Group, Inc,**  **Cleveland, Ohio,**  **October 2004,**  **204 pp.**  **available at** 

**http://www.freedoniagroup.com/Commercial­Refrigeration­Equipment.html**

**2. EIA**  **(Energy Information**  **Administration). 2007.**  **Annual Energy**  **Outlook 2007.**  **DOE/EIA**

**0383(2007). U.S.**  **Department of**  **Energy, Energy**  **Information Administration,**  **Washington**

**D.C.**

**10­11**