CHAPTER 11. NATIONAL IMPACT ANALYSIS

TABLE OF CONTENTS

11.1 INTRODUCTION

............................................................................................................. ..... 1 11.2 NATIONAL ENERGY SAVINGS

........................................................................................ 2 11.2.1 NES Definition

........................................................................................................ 2 11.2.2 National Energy Savings Inputs

.............................................................................. 3 11.2.2.1 Annual Unit Energy Consumption

.......................................................... 3 11.2.2.2 Shipments

................................................................................................ 5 11.2.2.3 Equipment Stock

..................................................................................... 5 11.2.2.4 National Annual Energy Consumption

................................................... 5 11.2.2.5 Site-to-Source Conversion Factor

........................................................... 5 11.3 NET PRESENT VALUE

........................................................................................................ 6 11.3.1 Net Present Value Definition

.................................................................................. 6 11.3.2 Net Present Value Inputs

........................................................................................ 6 11.3.2.1 Total Annual Installed Cost

..................................................................... 7 11.3.2.2 Total Annual Operating Cost Savings

..................................................... 8 11.3.2.3 Discount Factor

....................................................................................... 9 11.3.2.4 Present Value of Costs

............................................................................ 9 11.3.2.5 Present Value of Savings

......................................................................... 9 11.4 NATIONAL ENERGY SAVINGS AND NET PRESENT VALUE RESULTS

................... 9 11.4.1 National Energy Savings and Net Present Value Input Summary

........................ 10 11.4.2 National Energy Savings Results

.......................................................................... 10 11.4.3 Annual Costs and Savings

.................................................................................... 11 11.4.4 Net Present Value Results

..................................................................................... 12 REFERENCE

..................................................................................................................... ............ 14

LIST OF TABLES

Table 11.2.1 Average Annual Unit Energy Consumption

............................................................ 4 Table 11.2.2 Shipment-Weighted Average Annual Unit Energy Consumption

........................... 4 Table 11.2.3 Marginal Site-to- Source Conversion Factors

........................................................... 5 Table 11.3.1 Average Total Installed Cost Per Unit

..................................................................... 7 Table 11.3.2 Shipment-Weighted Average Total Installed Cost per Unit

.................................... 7 Table 11.3.3 Average Annual Repair Cost Per Unit

..................................................................... 8 Table 11.4.1 National Energy Savings and Net Present Value Inputs

........................................ 10 Table 11.4.2 Cumulative National Energy Savings for Beverage Vending Machines (2012– 2042)

... 10 Table 11.4.3 Cumulative Net Present Value Resu lts Based on a 7-Percent Discount Rate

....... 13 Table 11.4.4 Cumulative NPV Results Ba sed on a 3-Percent Discount Rate

............................ 13

LIST OF FIGURES

Figure 11.4.1 National Annual Costs and Savings for B-L-IO Equipment Category Trial Standard Level 4

.................................................................................................... 12

i BVM_FINAL_FR_TSD_Chapter11_08-14-09.docCHAPTER 11. NATIONAL IMPACT ANALYSIS

11.1 INTRODUCTION

This chapter describes the method for estimating the magnitude and net present value to consumers of future national energy savings (NES ) from proposed trial standard levels (TSLs) for beverage vending machine equipment. Results described in this chapter include (1) national energy consumption and savings; (2) monetary va lue of energy savings to the nation resulting from new energy conservation standa rds; (3) increased total installe d costs (and associated repair and maintenance costs) to the nation because of new energy conservation standards; and (4) the net present value (NPV) of savings ( i.e. , the difference between monetary value of savings and increased total costs).

The U.S. Department of Energy (DOE) has determined both th e NPV and NES for all of the TSLs considered for the two equipment classes of beverage vending machine equipment examined. Up to seven TSLs above the baseline level are being considered for each equipment class.

DOE performed all calculations using a Microsoft Excel spreadsheet (NES spreadsheet) accessible at www1.eere.energy.gov/buildings/app liance_standards/commercial/ beverage_machines.html . Details and instructions for usi ng the spreadsheet are discussed in Appendix G of the TSD; a more detailed set of re sults is available in Appendix H of the TSD. The calculations were performed for two equipm ent classes (A and B) and up to three size categories, as described in chapter 10 of the TSD. The important features of national energy consumption of beverage vending machine equipment include:

1. shipments of each equipment category;

2. existing stock of each equipment category;

3. national average electricity consumption for each equipment category; and

4. site-to-source conversion factor to translate electricity consump tion at the site of use into the amount of electricity that must be gene rated at the power pl ant (source) and then transmitted to the site where it is consumed.

Chapter 10 provides a detailed description of th e shipments analysis model that DOE used to forecast future purchases of beverage vending machine equipment.

Voluntary energy efficiency programs may increase the share of energy-efficient equipment prior to the implementation date of any new energy conservation standards. At the advance notice of proposed rulemaking (ANOPR) stage, DOE received information from industry identifying and partiall y quantifying the likely impact of the ENERGY STAR Tier 1 and ENERGY STAR Tier 2 levels (see www.ener gystar.gov ) on the national mix of beverage vending machine equipment efficiencies. Consequently, DOE explicitly incorporated the impact of this market-based voluntary energy effici ency program into the shipment forecasts by efficiency level.

1 BVM_FINAL_FR_TSD_Chapter11_08-14-09.doc11.2 NATIONAL ENERGY SAVINGS

11.2.1 NES Definition

DOE calculated annual NES as the differen ce between two scenarios: a base case (without new standards) and a standards case (w ith new standards). Positive values of NES correspond to NES ( i.e. , annual national energy consumption [AEC] with standards is less than annual national energy consumption in the base case; see Eq. 11.1).

NES t = AEC base – AEC standard Eq. Error! No text of specified style in document. .1

Where:

NES t = national annual energy savings in year t , (kWh/year) AEC base = total annual energy consum ption, base case (kWh/year) AEC standard = total annual energy consumpti on under the standards case (kWh/year).

Cumulative NES ( NES cum ) is the sum over a defined time period ( t ) from the implementation of an energy conservation standard (assumed to be in 2012) forward 30 years to 2042 (from 2012–2042) of the annual NES (Eq. 11.2). Savings occur in both 2012 and 2042.

NES cum = ∑ t NES t Eq. Error! No text of specified style in document. .2

Where:

NES cum = cumulative national annual energy savings (kWh/year).

DOE calculated the AEC by multiplying the number or stock of units of beverage vending machine equipment (by vintage v and equipment category E ) by the unit energy consumption (also by vintage) as shown by equation 11.3 and 11.4.

AEC E

= (STOCK VE  UEC VE )  src_conv t Eq. Error! No text of specified style in document. .3

AEC = ∑ E AEC E Eq. Error! No text of specified style in document. .4

Where:

AEC E

= annual national energy consumption each year in quadrillion Btus (quads) in equipment category E summed over vintages V of beverage vending machine equipment stock STOCK VE , AEC = annual national energy consumption each year in quads summed over equipment categories of beverage vending machine equipment stock, NES = annual NES (quads), STOCK VE

= stock of beverage vending machine equipment (millions of units) of vintage V and equipment category E surviving in year t for which DOE calculated annual energy consumption. Vintages range from 1 year to approximately 15 years, a function of an assumed 10-year average lifetime of the beverage vending machine equipment, UEC VE = annual unit energy consumption per beve rage vending machine unit (kWh/year),

2 BVM_FINAL_FR_TSD_Chapter11_08-14-09.docsrc_convt = time-dependent conversion f actor to convert from site energy (kWh) to source energy (quads) (Btu/kWh),

V

= year in which beverage vending machine equipment was purchased as new,

E

= equipment category, and
t = year in the forecast ( e.g. , 2012–2042).

The stock of beverage vending machine equipment is dependent on annual shipments and the lifetime of the equipment. DOE believes that the shipment projections under the standards cases could be lower than those in the base- case projection because the higher installed costs would cause some customers to forego new equi pment purchases. However, based on available information, DOE did not include this effect in it s analysis. For the final rule, the total shipments projections are the same in both the base case and standards cases.

11.2.2 National Energy Savings Inputs

The inputs for the determinati on of NES are listed below:

 annual unit energy consumption (section 11.2.2.1);

 shipments (section 11.2.2.2);

 equipment stock (section 11.2.2.3);

 national annual energy consumption (section 11.2.2.4); and

 site-to-source conversio n factor (section 11.2.2.5).

11.2.2.1 Annual Unit Energy Consumption

The annual unit energy consumption (UEC) is the site energy consumed by a beverage vending machine per year. The annual UEC is directly related to the energy efficiency of the unit. Thus, knowing the energy efficiency of a beverage vending machine determines the corresponding annual UEC. As described below, DOE determined annual forecasted shipmentweighted average beverage vending machine equi pment efficiencies that, in turn, enabled a determination of shipment-w eighted annual UEC values.

Because no published data have been found on the market shares of the various equipment classes of beverage vending machin e equipment by TSL, DOE sought industry input on the based shipment-weighted average effici ency trends for beverage vending machine equipment. Industry responses indicated that all shipments of new beverage vending machine equipment to major bottlers since 2004 meet ENER GY STAR Tier 1 levels (equal to efficiency Level 1 or TSL 1). DOE interpreted these comments to mean that about 90 percent of the current market shipments are at efficiency Level 1, and the remainder was assumed to be at efficiency Level 0. Moreover, industry respons es indicated that for major bot tlers and distributors, all new equipment in 2012 and beyond would meet ENERGY ST AR Tier 2 levels (equal to TSL 2 for equipment Class A and TSL 3 for equipment Cla ss B). This would be about 90 percent of the market. The remainder was assumed to be at TSL 1. DOE extrapolated future trends of beverage vending machine equipment efficiency both for this base-case scenario ( i.e. , without new standards) and various st andards-case scenarios ( i.e. , with new standards). The difference in equipment efficiency between the base case and standards cases was the basis for determining the reduction in annual UEC that could re sult from new energy conservation standards.

3 BVM_FINAL_FR_TSD_Chapter11_08-14-09.docTo project changes in weighted average effi ciency levels at sta ndards above baseline efficiency level 1 (ENERGY STAR Tier 1), DOE assumed that market shares above the minimum permitted efficiency level would be rea ssigned to the new minimum level. This “roll

up” scenario for the shipments is similar to what is used in the manufacturer impact analysis (chapter 13 of the (TSD). For ex ample, if the TSL 4 were imposed as the new standard in 2012 on A (Class A equipment)-L (large size)-IN (indoor) equipment category, then the market shares for TSLs 1–3 would be assigned to TSL 4, which would result in a total market share of 100 percent ( i.e. , 10 percent + 90 percent + 0 percent) from TSLs 1–3 re spectively, beginning in 2012. The market shares for TSLs 5, 6 and 7 would not be affected, since the market already has a choice of equipment at TSL 5 and above also available. It was assumed that the energy conservation standards would not a ffect the relative attractiveness of equipment with efficiencies higher than the standards.

As stated earlier, annual UEC values are tied di rectly to the efficiency of the equipment. Table 11.2.1 provides weighted-avera ge annual energy consumption values for specific TSLs for all three sizes of bot h equipment classes.

Table 11.2.1 Average Annual Unit Energy Consumption

Equipment TSL Category * kWh/yr 1 2 3 4 5 6 7 A-L-IN 2,267 2,099 1,916 1,785 1,679 1,610 1,438 A-M-IN 2,011 1,916 1,734 1,529 1,442 1,383 1,252 A-S-IN 1,924 1,734 1,551 1,442 1,361 1,307 1,186 B-L-IO 1,890 1,842 1,760 1,746 1,561 1,526 NA ** B-M-IO 1,799 1,731 1,658 1,645 1,463 1,431 NA B-S-IO 1,606 1,505 1,505 1,495 1,313 1,285 NA

* A=Class A equipment, B=Class B equipment, L=large si ze, M=medium size, S=small size, IN=indoor, IO=indoor

outdoor.
** Not applicable. There is no TSL 7 for Class B equipment.
For the annual shipment-weighted TSLs specifi ed in the base case and standards cases, DOE assigned the appropriate annual UEC values shown in Table 11.2.2. For each equipment category, the value shown for a given TSL is the efficiency-weighted average annual UEC, after taking into account the n on-availability of products at effi ciency levels below the TSL shown.

Table 11.2.2 Shipment-Weighted Average Annual Unit Energy Consumption Equipment TSL

Category kWh/yr 1 2 3 4 5 6 7 A-L-IN 2,267 2,099 1,916 1,785 1,679 1,610 1,438 A-M-IN 2,011 1,916 1,734 1,529 1,442 1,383 1,252 A-S-IN 0 0 0 0 0 0 0 B-L-IO 1,847 1,842 1,760 1,746 1,561 1,526 NA * B-M-IO 1,738 1,731 1,658 1,645 1,463 1,431 NA B-S-IO 0 0 0 0 0 0 NA

* Not applicable. There is no Class A or Class B small-size equipment shipped in the scenario.

4 BVM_FINAL_FR_TSD_Chapter11_08-14-09.doc11.2.2.2 Shipments

DOE forecasted shipments for th e base case and all standards cases (see chapter 10 of the TSD).

11.2.2.3 Equipment Stock

The beverage vending machine stock in a give n year is the total units of beverage vending machine equipment shipped from earlier ye ars that survive in the given year. The NES spreadsheet model keeps track of the total num ber of beverage vending machine units shipped each year. For purposes of the NES and NPV anal yses, DOE assumes that retirements follow a Weibull distribution with a 10-ye ar average lifetime. Retirements for any given vintage build quickly after about year 5 to about 26 percent pe r year by year 11, then decrease rapidly to less than 1 percent per year by year 14. Retired uni ts are replaced but onl y to the extent of 190,000 units per year and only until 2042. For units shipped in 2042, no units are assumed to remain at the end of 2057.

11.2.2.4 National Annual Energy Consumption

The national annual energy consumption is the product of the annual unit energy consumption and the number of beverage vend ing machine units of each category in each vintage. This approach accounts for differences in UEC from year to year. Eq. 11.4 was used for determining the national annual energy consumpti on of beverage vending machine equipment.

In determining national annual energy consum ption, DOE initially calculated the annual energy consumption at a site ( i.e. , electricity in kWh consumed by a beverage vending machine unit). DOE then calculated primary energy c onsumption from site energy consumption by applying a conversion factor to account for losse s associated with the generation, transmission, and distribution of electricity.

11.2.2.5 Site-to-Source Conversion Factor

The site-to-source conversion f actor, which accounts for losse s in electricity generation, transmission, and distribution, is used to conve rt site energy consumption, expressed in kWh, into primary or source energy consumption, expr essed in quads. DOE used annual site-to-source conversion factors based on U.S. marginal values for the commercial sector, calculated as shown in Appendix H. As shown in Table 11.2.3, the marginal conversion factors vary over time because of projected changes in electricity gene ration sources ( i.e. , the power plant types projected to provide electric ity to the United States).

Table 11.2.3 Marginal Site-to-Source Conversion Factors
Year Site-to-Source Year Site-to-Source Year Site-to-Source Conversion Factor Conversion Factor Conversion Factor Btu/kWh Btu/kWh Btu/kWh 2012 8,715 2018 8,693 2024 8,335 2013 8,792 2019 8,783 2025 8,286 2014 9,577 2020 9,000 2026 8,088 2015 8,999 2021 8,971 2027 7,835 2016 8,889 2022 8,822 2028 7,528

5 BVM_FINAL_FR_TSD_Chapter11_08-14-09.doc2017 8,587 2023 8,472 2029 7,443 2030–2057 7,582 Source: Appendix I of the TSD.

11.3 NET PRESENT VALUE

11.3.1 Net Present Value Definition

The net present value (NPV) is the value in the present of a time series of costs and savings. The NPV is given by Eq. 11.5:

NPV = PVS – PVC Eq. Error! No text of specified style in document. .5

Where:

PVS = present value of operating cost saving s (including electricity, repair, and maintenance costs ($)), and PVC = present value of increased total in stalled costs (including equipment and installation ($)).

The PVS and PVC are determined using Eqs. 11.6 and 11.7:

PVS 

### = ∑ 

### OCS t x 

### DF t Eq. Error! No text of specified style in document. .6

PVC 

### = ∑ 

### TIC t x 

### DF t Eq. Error! No text of specified style in document. .7

Where:

OCS = total annual operating cost savings ($), TIC = total annual installed cost increases ($), DF = discount factor, and
t = year for which PVS and PVC are determined.

DOE determined the PVC for each year, from the effective date of the standard (2012) to 2057, discounted for the NOPR analysis, to 2009. The PVS was determined for each year, from the effective date of the standard (2012) to the year when the la st units purchased in 2042 retire (assumed to be in 2057). DOE calculated costs and savings as the difference between a standards case and a base case. DOE calculated a DF from the discount rate and number of years between the “present” ( i.e. , 2009, the reference year to which the su m is being discounted) and the year in which the costs and savings occur. The NPV is the sum over time of the discounted net savings.

11.3.2 Net Present Value Inputs

The inputs to the NPV calcu lation are listed below:

 total annual installed cost (section 11.3.2.1);

 total annual operating cost savings (11.3.2.2);

 discount factor (section 11.3.2.3);

6 BVM_FINAL_FR_TSD_Chapter11_08-14-09.doc present value of costs (section 11.3.2.4); and

 present value of sa vings (section 11.3.2.5).

11.3.2.1 Total Annual Installed Cost

The increase in the total annual installed cost is equal to th e annual change in the per-unit total installed cost (TIC, difference between ba se case and standards case) multiplied by the shipments forecasted in both the base case a nd the standards case. TIC includes both the equipment cost and the installation price. DOE based average equipment costs on average manufacturer prices (see chapter 8, Life-Cycle Cost and Payback Period Analyses) multiplied by average overall markup values (chapter 8). DOE based average installation prices on nationally representative values for each equipment class and size category (chapter 8). Table 11.3.1 shows the resulting average total inst alled costs per unit for each of the beverage vending machine equipment categories that TSL analyzed.

Table 11.3.1 Average Total Installed Cost Per Unit Equipment TSL

Category 2008$ 1 2 3 4 5 6 7 A-L-IN 2,886 2,928 2,973 3,006 3,039 3,074 4,420 A-M-IN 2,674 2,684 2,746 2,794 2,827 2,861 3,982 A-S-IN 2,244 2,292 2,338 2,365 2,393 2,423 3,433 B-L-IO 2,141 2,160 2,199 2,211 2,675 3,945 NA * B-M-IO 2,069 2,092 2,131 2,144 2,607 3,730 NA B-S-IO 1,846 1,898 1,898 1,911 2,374 3,350 NA

* Not applicable. There is no TSL 7 for Class B equipment.

As discussed earlier in section 11.2.2.1, DOE developed base case and standards case energy-efficiency trends. DOE based its standards-case forecasts ( i.e. , forecasts of efficiency trends after standards take effect ) on the use of a roll-up efficien cy scenario and parallel growth trend. For both the base case and standards case energy-efficiency trends, DOE calculated annual shipment-weighted average efficiencies. Asso ciated with each a nnual shipment-weighted average efficiency value, DOE assigned a total installed cost, based on the relationship between efficiency and TIC. DOE based the relationship between efficiency and TIC for each beverage vending machine equipment category on the data in Table 11.3.1. As shown in Table 11.3.2, DOE estimated the shipment-weighted installe d cost. DOE determined forecasted average shipments-weighted TIC based on the annual shipments by TSL.

Table 11.3.2 Shipment-Weighted Average Total Installed Cost per Unit Equipment TSL

Category 2008$ 1 2 3 4 5 6 7 A-L-IN 2,886 2,928 2,973 3,006 3,039 3,074 4,420 A-M-IN 2,674 2,684 2,746 2,794 2,827 2,861 3,982 A-S-IN 0 0 0 0 0 0 0 B-L-IO 2,158 2,160 2,199 2,211 2,675 3,945 NA * B-M-IO 2,090 2,092 2,131 2,144 2,607 3,730 NA B-S-IO 0 0 0 0 0 0 NA

* Not applicable: there is no TSL 7 for Class B equipment, and there is no Cl ass A or Class B small-size equipment shipped in the scenario.

7 BVM_FINAL_FR_TSD_Chapter11_08-14-09.doc11.3.2.2 Total Annual Operating Cost Savings

The annual operating cost saving s to the nation are equal to the change in the annual operating costs ( i.e. , difference between the base case and the standards case) per unit multiplied by the shipments forecasted in both the base cas e and the standards case. The annual operating cost includes electricity, re pair, and maintenance costs.

Annual Electricity Cost Savings

. As described in chapter 8, DOE calculated annual electricity costs based on average state-level co mmercial electricity prices. To calculate annual energy cost savings for a particular equipment cat egory in a given year, DOE first calculated the annual energy costs in each forecast year at each TSL by multiplying the shipment-weighted average energy consumption at each TSL from Table 11.2.2 by the units of equipment stock in the equipment category in each year, and then multiplying the energy consumption by the salesweighted national average electric ity prices for the four business types described in chapter 8. To determine energy savings, the national energy co sts at TSL 1–7 (equipment Class A) or TSL 1–6 (equipment Class B) were then subtracted from the national energy costs at the baseline level. Because projections of the stock of beverage vending machine equipment (expressed in units shipped) are the primary driver used to esti mate future beverage vending machine equipment shipments, DOE calculated the nationa l energy cost on a per-unit basis.

Annual Repair Costs

. DOE based average annual repa ir costs on the value of the beverage vending machine equipment (chapter 8) . Table 11.3.3 shows the average per-unit repair costs for the equipment categories of beverage vending machine equipment. The NES spreadsheet has the capability to allow repair co sts to differ by the price of the beverage vending machine equipment and, therefore, by TSL. For the purposes of this NOPR analysis, DOE assumed that the repair costs would increase fo r each equipment category as the manufacturer’s price increases (Table 11.3.3).

Table 11.3.3 Average Annual Repair Cost Per Unit

Equipment TSL

Category 2008$ 1 2 3 4 5 6 7 A-L-IN 131 133 135 137 138 140 205 A-M-IN 132 133 136 139 140 142 201 A-S-IN 132 135 138 140 141 143 207 B-L-IO 131 132 135 136 166 250 NA * B-M-IO 131 133 135 136 168 245 NA B-S-IO 131 135 135 136 172 248 NA

* Not applicable. There is no TSL 7 for Class B equipment.

Annual Maintenance Costs

. DOE was unable to locate a ny data on annual preventive maintenance cost (chapter 8, section 8.2.3.4), but annual maintenance is believed to be a relatively straightforward process. A weight ed average annual va lue of $146 per unit was assigned to all equipment because the maintenan ce procedures are the same for all sizes and TSLs of beverage vending machines.

8 BVM_FINAL_FR_TSD_Chapter11_08-14-09.doc11.3.2.3 Discount Factor

DOE determined present value of monetary valu es in future years using the DF, which is described by Eq. 11.8:



### DF = 1/(1+r) ( y - yp ) Eq. Error! No text of specified style in document. .8

Where:

r = discount rate (%),
y = year of the monetary value, and
yp = year in which the present value is being determined.

DOE estimated national impacts with 3- and 7- percent real discount rates as the average real rate of return on private in vestment in the U.S. economy. Th ese discount rates are used in accordance with Office of Management and Budget (OMB) guidance to Federal agencies on the development of regulatory analysis (OMB Circ ular A-4, September 17, 2003), and section E, Identifying and Measuring Benefits and Costs, therein. DOE defined the present year as 2009.

11.3.2.4 Present Value of Costs

The present value of increased installed costs is the annual installed cost increase in each year ( i.e. , the difference between the standards case a nd base case), discounted to the present, and then summed for the time period over which DOE is considering the in stallation of beverage vending machine equipment ( i.e. , from the effective date of the standards (2012) to 2042).

The increase in TIC refers to both equipment co st and installation cost associated with the higher energy efficiency of beverage vending machine units purchased in the standards case compared to the base case. DOE calculated annual installed costs as the difference in TIC for new equipment purchased each year, multiplied by the number of shipments in the standards case.

11.3.2.5 Present Value of Savings

The present value of operatin g cost savings is the annual operati ng cost savings ( i.e. , the difference between the base case and standards case) discounted to 2009 and then summed over the period from the effective da te (2012) to the time when the last unit installed in 2042 is retired from service (2057). Savi ngs are decreases in operating costs (including electr icity, repair, and maintenance) associated with the higher energy efficiency of beverage vending machine units purchased in the standards case compared to the base case. Tota l annual operating cost savings equals the savings per unit multiplie d by the number of units of each vintage surviving in a particular year. Equipment consumes energy over its entire lifetime, and for units purchased in 2042, the present value of savings includes energy consumed until the unit is retire d from service (2057).

11.4 NATIONAL ENERGY SA VINGS AND NET PRES ENT VALUE RESULTS

The NES spreadsheet model provides estimat es of the NES and NPV for various TSLs. The inputs to the NES spreadsheet are presen ted above in sections 11.2.2 (NES Inputs) and 11.3.2 (NPV Inputs).

9 BVM_FINAL_FR_TSD_Chapter11_08-14-09.doc11.4.1 National Energy Savings and Net Present Value Input Summary

Table 11.4.1 summarizes the inputs to the NES spreadsheet model. For each input, a brief description of the da ta source is given.

Table 11.4.1 National Energy Savings and Net Present Value Inputs Input Data Description Shipments Effective Date of Standard Base-Case Efficiencies

Beverage Vending Machine ShipmentWeighted TSLs Annual UEC

TIC per Unit

Repair Cost per Unit

Maintenance Cost per Unit Escalation of Electricity Prices

Electricity Site-to-Source Conversi on

Discount Rate Present Year Annual shipments from shipments model (TSD chapter 10). 2012 Annual shipment-weighted efficiencies based on historical beverage vending machine weighted-efficiency values. Standards case annual shipment-weighted market shares remain constant for base case and each TSL. Annual weighted-average values are a function of TSL. (Established from the Engineering Analysis, TSD chapter 5). Annual weighted-average values are a function of TSL. (Established from the life-cycle cost analysis, TSD chapter 8). Annual weighted-average values increase with manufacturer’s cost level. (Established from the life-cycl e cost analysis, TSD chapter 8). Annual weighted-average value equals $146 by assumption. April 2009 update to the 2009 EIA Annual Energy Outlook forecasts (to 2030) and extrapolation for be yond 2030 (see the life-cycle cost analysis, TSD chapter 8). Conversion varies yearly and is generated by DOE-EIA’s NEMS * program (a time series conversion factor; includes electric generation, transmission, and distribution losses). 3 and 7 percent real. Future costs are discounted to 2009.

* TSD chapter 14, Utility Impact Analysis, and TSD chapte r 16, Environmental Assessment, provide more detail on NEMS.

11.4.2 National Energy Savings Results
This section provides NES results for each TS L considered for the equipment categories of beverage vending machines analyzed. Resu lts are cumulative to 2042 and are shown asprimary energy savings in quads. Inputs to the NES spreadsheet model are based on weightedaverage values, yielding results that are discrete po int values rather than a distribution of values as in the LCC analysis.
Table 11.4.2 shows the NES results for the TSLs analyzed for each equipment category of beverage vending machines. DOE based all the results on electricity price forecasts from the AEO2009 Reference Case. 1

Table 11.4.2 Cumulative National Energy Savi ngs for Beverage Vending Machines (2012– 2042)

Equipment TSL

Category quad 1 2 3 4 5 6 7 A-L-IN 0.001 0.013 0.026 0.035 0.042 0.047 0.058 A-M-IN 0.005 0.019 0.044 0.073 0.085 0.093 0.111 A-S-IN 0.000 0.000 0.000 0.000 0.000 0.000 0.000 B-L-IO 0.001 0.001 0.007 0.008 0.021 0.023 NA * B-M-IO 0.002 0.003 0.013 0.015 0.040 0.045 NA

10 BVM_FINAL_FR_TSD_Chapter11_08-14-09.docB-S-IO 0.000 0.000 0.000 0.000 0.000 0.000 NA

* Not applicable: there is no TSL 7 for Class B equipment, and there is no Cl ass A or Class B small-size equipment shipped in the scenario.

11.4.3 Annual Costs and Savings

As a prelude to providing the NPVs for each TSL in each equipment category, this section presents the annual equipment cost (or TIC) increases and annual operating cost savings at the national level.

Figure 11.4.1 shows the changes over time of the non-discount ed annual equipment price increases and the non-discounted op erating cost savings at the TS L 4 for B-L-IO equipment. The total net annual impact is the discounted va lue of the difference between annual equipment purchases and annual operating co sts at a 7-percent di scount rate. Appendix H shows comparable figures for other TSLs and other equipment categories. Each figure also shows the net annual impact, which is the difference between the sa vings and costs for each year. The annual equipment price change is the increase in equipment price for equipment purchased each year during 2012–2042. The annual operating savings is th e savings in operating costs for equipment purchased and that have not been retired fo r each year from 2012–2057. DOE determined the annual costs and savings presented in each figure based on the April 2009 update to the AEO2009 Reference Case. The NPV is the difference between the cumulative annual discounted savings and the cumulative annual discounted costs.

11 BVM_FINAL_FR_TSD_Chapter11_08-14-09.docTrial Standard Level TSL 4 Efficiency Level
Level 5

Net Savings

2012 2016 2020 2024 20282032 2036 2040 2044 2048 20522056 2060
Year

Undiscounted Total Annual Operating Savings Undiscounted Annual Equipment Purchase Savings Discounted Total Net Annual Impact -0.0020 -0.0015 -0.0010 -0.0005 0.0000 0.0005 0.0010 0.0015 0.0020 0.0025 0.0030Billion 2008$

Figure 11.4.1 National Annual Costs and Savi ngs for B-L-IO Equipment Category Trial Standard Level 4

Figure 11.4.1 initially shows sm aller annual operating cost savings compared to the increased equipment price costs (s hown on the figure as negative pu rchase savings). For all years through 2042, operating cost savings increase with time, as more equipment that meets the TSL comprises the beverage vending machine stock.

11.4.4 Net Present Value Results

The following section provides NPV results fo r the TSLs considered for the equipment categories of beverage vending machines. Re sults are cumulative and are shown as the discounted value of these savings in dollar term s. The inputs to the NES spreadsheet model are based on weighted-average values, yielding results that are discrete point values rather than a distribution of values as in th e LCC analysis. The present value of increased TICs is the TIC increase ( i.e. , the difference between th e standards case and base case), discounted to 2009, and then summed over the time period in which DOE evaluates the imp act of standards ( i.e. , from the effective date of the standards (2012) to 2057).

Savings are decreases in operati ng costs (including electricit y, repair, and maintenance) associated with the higher energy efficiency of beverage vending machines purchased in the standards case compared to the base case. Tota l operating cost savings are the savings per unit

12 BVM_FINAL_FR_TSD_Chapter11_08-14-09.docmultiplied by the number of units of each vintage ( i.e. , the year of manufac ture) surviving in a particular year. Beverage vending machines cons ume energy and must be maintained over their entire lifetime. For units purchased in 2042, th e operating cost includes energy consumed and maintenance and repair costs incurred until the last unit is retired from service in 2057.

Table 11.4.3 shows the NPV results for the TSLs considered for beverage vending machines based upon a 7 percent discount rate. DOE based all results on electricity price forecasts from the AEO2009 Reference Case. Detailed results showing the breakdown of the NPV into national equipment costs and nationa l operating costs are provided in Appendix H.

Table 11.4.3 Cumulative Net Present Value Results Based on a 7-Percent Discount Rate

Equipment TSL

Category billion 2008$ 1 2 3 4 5 6 7 A-L-IN 0.003 0.022 0.042 0.057 0.065 0.065 (0.530) * A-M-IN 0.012 0.046 0.070 0.118 0.126 0.120 (0.918) A-S-IN 0.000 0.000 0.000 0.000 0.000 0.000 0.000 B-L-IO 0.002 0.002 0.000 (0.003) (0.201) (0.851) NA ** B-M-IO 0.003 0.004 (0.004) (0.011) (0.420) (1.601) NA B-S-IO 0.000 0.000 0.000 0.000 0.000 0.000 NA

* Values in parentheses indicate negative NPV.
** Not applicable: there is no TSL 7 for Class B equipm ent, and there is no Class A or Class B small-size equipment shipped in the scenario.
Table 11.4.4 provides the NPV results based on th e 3-percent discount rate and electricity price forecasts from the AEO2009 Reference Case. As with the NPV results based on a 7-percent discount rate, detailed results s howing the breakdown of the NPV into national equipment costs and national operating costs based on a 3-percent discount rate are provided in Appendix H of the TSD.

Table 11.4.4 Cumulative NPV Results Based on a 3-Percent Discount Rate

Equipment TSL

Category billion 2008$ 1 2 3 4 5 6 7 A-L-IN 0.007 0.051 0.100 0.135 0.157 0.161 (0.904) * A-M-IN 0.027 0.101 0.168 0.281 0.307 0.304 (1.562) A-S-IN 0.000 0.000 0.000 0.000 0.000 0.000 0.000 B-L-IO 0.004 0.004 0.007 0.001 (0.349) (1.536) NA ** B-M-IO 0.007 0.009 0.004 (0.007) (0.734) (2.892) NA B-S-IO 0.000 0.000 0.000 0.000 0.000 0.000 NA

* Values in parentheses indicate negative NPV.
** Not applicable: there is no TSL 7 for Class B equipm ent, and there is no Class A or Class B small-size equipment shipped in the scenario.

13 BVM_FINAL_FR_TSD_Chapter11_08-14-09.docREFERENCE

1. U.S. Department of Energy–Energy Informa tion Administration. An Updated Annual Energy Outlook 2009 Reference Case Reflecting Provi sions of the American Recovery and Reinvestment Act and Recent Changes in th e Economic Outlook. . EIA, Washington, D.C., SR/OIAF/2009-03.

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