# Technical Assistance Program
Energy Efficiency Cost-Effective Resource Assessment for Kentucky

March 8, 2012

## This work has been performed by the American Counci l for an Energy-Efficient

Economy under the Contract No. 4200000341 with Oak Ridge National Laboratory, which is managed by UT-Battelle, LLC, under Contrac t with the U.S. Department of Energy No. DE-AC05-00OR22725.



# Contact Information:

Max Neubauer, American Council for an Energy-Effici ent Economy Primary Author mailto:mneubauer@aceee.org (202) 507.4005

R. Neal Elliott, American Council for an Energy-Eff icient Economy Secondary Author rnelliott@aceee.org (202) 507.4009Energy Efficiency Cost-Effective Resource Assessmen t for KY, ACEEE



### i 

# E XECUTIVE 

# S UMMARY

As the Commonwealth of Kentucky moves forward to fu lly integrate energy efficiency into its future res ource planning, it is critical to first quantify the volu me of potential energy and economic savings availab le from energy efficiency. Conducting this assessment allow s policymakers and stakeholders to understand the degree to which demand-side resources can meet incr easing consumption and load requirements. Energy efficiency can also help reduce the strain on the C ommonwealth’s current system and delay, or even negate, the need for future investments in supply-s ide resources, such as generation facilities and transmission infrastructure. Quantifying the potent ial energy savings available also highlights the ro le energy efficiency plays in lowering customers’ util ity bills, creating jobs, and stimulating economic activity for Kentucky’s businesses. Ultimately, the goal of this process is to provide tangible evidence to stakeholders that energy efficiency is the least-co st energy resource available to spur economic development and guarantee environmental health.

This assessment is the first of three (3) documents that comprise ACEEE’s energy efficiency potential study for the Commonwealth. This report presents the resu lts from our analysis of the cost-effective energy efficiency resources available in residential, comm ercial, and industrial buildings and facilities in Kentucky. We examine the potential energy savings and costs g enerated by specific efficient technology measures, such as high-efficiency windows, water heaters, and central air conditioning units.



## Results

Table ES-1 presents a summary of the cost-effective energy efficiency potential by sector in 2030. In total, we estimate that over 21,000 gigawatt-hours (GWh) a nd 52,200 billion British thermal units (BBtu), or 19% of projected electricity and 24.5% of natural gas c onsumption in 2030, can be saved through the implementation of cost-effective energy efficiency resources. Readers should note that this assessment includes mostly existing technologies and practices , though we anticipate that new and emerging technologies and market learning will increase the availability of cost-effective energy resources by 2030. Table ES-2 presents the energy bill savings that wo uld result if all of the available cost-effective e nergy efficiency potential were captured, which amounts t o over $2.1 billion by 2030.

Table ES-1. Summary of Cost-Effective Energy Effici ency Potential by Sector, by 2030

Sector Electricity Natural Gas

GWh %* % of Sector** BBtu %* % of Sector**
Residential 7,787 7.1% 21% 12,356 5.8% 30%
Commercial 6,900 6.2% 28% 16,263 7.6% 45%
Industrial 6,411 5.8% 13% 23,629 11.1% 17%

Total 21,098 19.1 % 52,248 24.5 %

*Savings are represented as a percent of the total projected energy consumption in 2030. **Savings are represented as a percent of the proje cted energy consumption in that sector in 2030.



### Table ES-2. Energy Bill Savings by Sector, by 2030

Sector Electricity Natural Gas

GWh $/kWh* Million$ BBtu $/MMBtu* Million$ Residential 7,787 $0.086 $669.7 12,356 $12.53 $154. 8 Commercial 6,900 $0.078 $538.2 16,263 $11.38 $185.1 Industrial 6,411 $0.061 $391.1 23,629 $9.71 $229.4

Total 21,098 $1, 599 .0 52,248 $ 5 69

. 3
*Retail energy prices from DEDI 2011



## Next Steps

The next phase of the project will be to vet a list of energy efficiency policies and programs with st akeholders that can be implemented by the Commonwealth and Ken tucky utilities in order to capture the available resources identified through this assessment. It is important to understand that many market barriers exist that prevent all of the cost-effective resource pot ential savings from being captured by energy effici encyEnergy Efficiency Cost-Effective Resource Assessmen t for KY, ACEEE



### ii policies and programs. Policymakers and utilities m ust design policies and programs carefully to overc ome those barriers, ensuring that they are properly mar keted and that Kentuckians are well-educated in the potential benefits of energy efficiency.

Once stakeholders agree on a set of policies and pr ograms to be evaluated, ACEEE will conduct its maximum achievable potential analysis, also known a s the policy and program analysis, which will estim ate the level of potential that can be realistically ac hieved through this set of policies and programs. T he results from this analysis will provide a roadmap that the Commonwealth can follow to ramp-up energy savings from efficiency. The results from the policy analys is will then feed into ACEEE’s macroeconomic model to estimate the overall economic benefits, including e nergy bill savings and jobs, that can be achieved t hrough investments in energy efficiency.Energy Efficiency Cost-Effective Resource Assessmen t for KY, ACEEE



### 1 

## Introduction

As the Commonwealth of Kentucky moves forward to fu lly integrate energy efficiency into its future res ource planning, it is critical to first quantify the volu me of potential energy and economic savings availab le from energy efficiency. Conducting this assessment allow s policymakers and stakeholders to understand the degree to which demand-side resources can meet incr easing consumption and load requirements. Energy efficiency can also reduce the strain on the Common wealth’s current system and delay, or even negate, the need for future investments in supply-side reso urces, such as generation facilities and transmissi on infrastructure. Quantifying the potential energy sa vings available also highlights the role energy eff iciency plays in lowering customers’ utility bills, creatin g jobs, and stimulating economic activity for Kentu cky’s businesses. Ultimately, the goal of this process is to provide tangible evidence to stakeholders that energy efficiency is the least-cost energy resource availa ble to spur economic development and guarantee

environmental health.

This assessment is the first of three (3) documents that comprise ACEEE’s energy efficiency potential study for the Commonwealth. This report presents the resu lts from our analysis of the cost-effective energy efficiency resources available in residential, comm ercial, and industrial buildings and facilities in Kentucky.



## Methodology

This assessment is a bottom-up, measure-by-measure analysis of energy efficiency resources, meaning that we quantify the potential energy savings and c osts through 2030 generated by specific efficient technology measures over their lifetime, such as wi ndows, water heaters, and central air conditioning units.

These values are then used to determine each measur e’s overall cost-effectiveness, taking into account the current market share/penetration. The measures included in this analysis are limited to those that are currently commercially available and currently cost -effective. New efficiency measures will become available or become cost-effective in the future, h owever, and therefore there will be new opportuniti es for cost-effective energy efficiency that are not captu red in this analysis. For all measures that are dee med cost-effective, we aggregate the potential savings, grouped by end-use, to provide an estimate of the volume of statewide energy savings potential availa ble in each sector.

The volume of savings quantified in this assessment shows the maximum cost-effective energy savings potential available for utility- and state-funded e nergy efficiency policies and programs to capture. It is important to understand that many market barriers e xist that prevent all of the cost-effective resourc e potential savings identified from being captured by energy efficiency programs. The maximum achievable potential analysis, also known as the policy/progra m analysis, follows this cost-effective resource assessment and provides an estimate of the percent of the cost-effective resource potential that can b e captured through energy efficiency policies and pro grams. 1



### The results of the policy analysis — specifically t otal program costs, energy and dollar savings, and investments (customer costs and incentives) — are t hen fed into ACEEE’s Dynamic Energy Efficiency Policy Evaluation Routine (DEEPER) model, a macroeconomic model that is used to determine the impact of the energy efficiency policies and programs on a number of economic indicators, such as job creatio n and gross state product.

Individual measure assumptions, methodologies, and detailed results of the measure-by-measure analyses can be found in the appendices of this document.

1 A list of suggested energy efficiency policies and programs will be compiled by ACEEE and shared with stakeholders to give them an opportunity to weigh in on the relative politica l palatability and economic feasibility of each sug gested policy or program. Once a list has been vetted and finalized, it will serve a s the basis for the policy analysis.Energy Efficiency Cost-Effective Resource Assessmen t for KY, ACEEE



### 2 

## Results

The cost-effectiveness of more efficient technologi es, compared to a standard baseline technology, is determined from the customer’s perspective — in oth er words, a measure is deemed cost-effective if its

levelized 2 

### cost of saved energy (CSE) is less than the averag e retail energy price for a given customer class. Average CSEs for each sector are given in th e following sections. Table 1 presents a summary of energy efficiency potential by sector in 2030. In t otal, we estimate that over 21,000 gigawatt-hours ( GWh) and 52,200 billion British thermal units (BBtu), or 19% and 24.5% of projected electricity and natural gas consumption in 2030, can be saved through the imple mentation of cost-effective energy efficiency

resources. Readers should note that this assessment includes mostly existing technologies and practice s, though we anticipate that new and emerging technolo gies and market learning will increase the availabi lity of cost-effective energy resources by 2030.

Table 1. Summary of Cost-Effective Energy Efficienc y Potential by Sector, by 2030

Sector Electricity Natural Gas

GWh %* % of Sector** BBtu %* % of Sector**
Residential 7,787 7.1% 21% 12,356 5.8% 30%
Commercial 6,900 6.2% 28% 16,263 7.6% 45%
Industrial 6,411 5.8% 13% 23,629 11.1% 17%

Total 21,098 1 9

. 1 % 52,248 24.5 %

*Savings are represented as a percent of the total projected energy consumption in 2030. **Savings are represented as a percent of the proje cted energy consumption in that sector in 2030.



### Using retail electricity and natural gas price data from projections estimated by the Kentucky Departm ent of Energy Development and Independence (DEDI 2011), we can determine the magnitude of the energy bill savings arising from capturing 100% of the cos t-effective energy efficiency potential. If all of the costeffective energy efficiency potential were able to be captured, Kentucky would save over $2.1 billion on its energy bills by 2030 (see Table 2). 3



### Table 2. Energy Bill Savings by Sector, by 2030

Sector Electricity Natural Gas

GWh $/kWh * Million $ BBtu $/ MM Btu * Million $ Residential 7,787 $0.086 $669.7 12,356 $12.53 $154. 8 Commercial 6,900 $0.078 $538.2 16,263 $11.38 $185.1 Industrial 6,411 $0.061 $391.1 23,629 $9.71 $229.4

Total 21,098 $1, 599 .0 52,248 $ 569.3
*Retail energy prices from DEDI 2011



## Residential

For our analysis of energy efficiency potential for Kentucky’s residential sector, we used a residenti al building energy modeling software package, the Targ eted Retrofit Energy Analysis Tool (TREAT), to compute the average baseline Kentucky single-family home, and the potential energy savings available (PSD 2011). The baseline home was computed using a variety of housing characteristics gathered from a local utility as well as national datasets. First, we input these housing characteristics into TREAT t o model a typical home. Table 3 shows the baseline energy u se for a typical Kentucky home.

2 Levelized cost is the amount of payment necessary each year to recover the total investment over the life of the energy efficiency

measure.

3 This is a high-level estimate made from a number o f simplifying assumptions. It is based on current f uel costs, which are highly

variable over time.Energy Efficiency Cost-Effective Resource Assessmen t for KY, ACEEE



### 3 Table 3. Baseline Single-Family Home Annual Energy Use in Kentucky 4



### End-Use Average

Electricity Use (kWh) Average

Gas

Use (MMBtu)

Heating 2,190 61.2

Cooling 2,450

— Hot water 3,610 10.6

Lighting 1,490

— Appliances & electronics 8,140

— Total 17,880 71.7

We evaluated 18 efficiency measures that can be ado pted in existing single-family residential homes ba sed

on the overall cost-effectiveness of the combined m easures. An upgrade to a new measure is considered

cost-effective if its levelized cost of conserved e nergy is less than 8.6 cents per kilowatt-hour (kW h), or $12.53/MMBtu for gas, the regional residential p rices for energy (DEDI 2011); in other words, if it is cheaper to pay to save a unit of energy than to pay to use that energy. For the measures we analyzed, the average levelized cost per measure was $4.61/MMBtu for natural gas and $0.04 for electricity. Tables 4 and 5 outline the end-uses analyzed and their savin gs potential. The savings potential is based on the amount of energy that can be saved compared to the total single-family energy use in Kentucky. Because that information was not directly available for Ken tucky, we estimated it by applying the ratio of sin gle-family use to average residential use, 5 

### to Kentucky’s residential energy use. This calcula tion results in approximately 27,000 GWh for single-family homes ou t of 36,000 GWh for all residential; and 30,000 BBt u natural gas for single-family homes out of 41,000 B Btu for all residential.

Table 4. Single-Family Residential Energy Efficienc y Potential and Costs in 2030 — Electricity

End-Use Savings

(GWh) Savings

% 6 

### % End-use

savings 6 

### % of Efficiency

Potential Levelized cost

of saved energy ($/kWh saved)



### HVAC 2,965 11% 42% 38% $ 0.04

Water Heating 1,166 4% 20% 15% $ 0.03

Lighting 707 3% 20% 9% $ 0.04

Appliances 2,180 8% 18% 28% $ 0.02

Whole house 510 2% 2% 7% $ 0.09

Existing homes 

### 7,528 28% 28% 97% $ 0.04

New construction 

### 258 1% 1% 3% $ 0.03

TOTAL 

### 7,787 29% 29% 100% $ 0.04

4 The analysis only considers single-family homes du e to a lack of state-specific data on end-use consu mption by housing type. As a result, these values are slightly higher than they would be if consumption patterns from other housing types (multifamily and manufactured housing) were included. These values a re not used as an input in the TREAT model, however , and so do not influence the results in Tables 3 & 4. Rather, we apply the p ercent savings by measure from TREAT to the overall Residential Energy Consumption Survey (RECS) baseline to estimate meas ure and end-use savings.

5 We derived this ratio using housing stock data from Kentucky for single-family homes, multi-family hom es, and manufactured housing (Economy.com 2011a); multiplied by average energy usage from RECS (for the East South Central region that includes Kentucky) (EIA 2005).

6 Savings are relative to the 27,000 GWh baseline el ectricity use for single family homes.Energy Efficiency Cost-Effective Resource Assessmen t for KY, ACEEE



### 4 Table 5. Single-Family Residential Energy Efficienc y Potential and Costs in 2030 — Natural Gas

End-Use Savings

(BBtu) Savings

% 7 

### % End-use

savings 7 

### % of

Efficiency

Potential Levelized cost of

saved energy ($/MMBtu)



### HVAC 9,019 30% 35% 73% $ 4.98

Water Heating 1,292 4% 29% 10% $ 4.49

Lighting - 0% 0% 0% $ -

Appliances - 0% 0% 0% $ -

Existing buildings 

### 10,311 34% 34% 83% $ 4.92

New construction 

### 2,045 7% 7% 17% $ 3.08

TOTAL 12,356 40% 40% 100% $ 4.61

For electricity in single-family houses, we estimat ed a statewide economic potential for efficiency re sources of 7,790 GWh annually by 2030, a potential savings of 29% of baseline electricity use for single famil y homes (see Table 4). For natural gas in single-fami ly houses, we estimated a statewide economic potent ial of 12,360 BBtu annually by 2030, a potential saving s of 40% of baseline natural gas use for single fam ily homes (see Table 5).

In the residential sector, a large percentage of sa vings potential can be realized through improved ho using

shell 8 

### performance (e.g., insulation measures, duct seali ng, reduced air infiltration, and ENERGY STAR® windows) and heating, ventilating, and air conditio ning (HVAC) equipment and systems. These categories account for more approximately half of the potentia l savings.

Water heating, refrigeration, and other appliances can also contribute substantial savings potential. Measures to reduce hot water load, (such as low-flo w showerheads) and more efficient water heaters (including heat pump electric water heaters and con densing gas water heaters) can substantially contri bute to energy savings. Additional savings are garnered through more efficient water-using appliances, such as dishwashers and clothes washers. See Appendix A for a detailed methodology and specific efficiency opportunities and cost-effectiveness for residentia l buildings (see Table A-4).

7 Savings are relative to the 30,000 Btu baseline na tural gas use for single family homes.

8 Housing shell measures are those that address a ho me’s foundation, walls, floors, and roofs.Energy Efficiency Cost-Effective Resource Assessmen t for KY, ACEEE



### 5 Figure 1. Single-Family Energy Efficiency Potential in 2030 by End-Use and Fuel

Electricity Total: 7,790 GWh 29% of Projected Electricity Consumption Natural gas Total: 12,360 BBtu 40% of Projected Gas Consumption

Figure 2. Single-Family Energy Efficiency Potential in 2030 — Electricity and Natural Gas

Total: 38,930 BBtu 32% of Projected Energy Consumption in 2030 HVAC

38%

Hot

water

15% Lighting

9%Wholehouse

measures

7%

Appliances &

electronics

28% New

construction

3%

HVAC

73% Hot water

10% New

construction

17%

HVAC

49%

Hot water

14% Lighting

6% Appliances &

electronics

19% Whole-house

measures

4% New

construction

8%Energy Efficiency Cost-Effective Resource Assessmen t for KY, ACEEE



### 6 

## Commercial

Our analysis of energy efficiency potential in the commercial buildings sector is based on a proprieta ry Microsoft Excel spreadsheet model. This ACEEE buil dings model evaluates sector-wide savings relative to the basecase energy forecast and estimated comme rcial floor space in Kentucky. We use two separate models to evaluate electric and natural gas savings , accounting for the fact that the electric and nat ural gas measures are applicable to different percentages of commercial floorspace in the state.

Electricity

The potential for electricity savings through energ y efficiency for the commercial sector in Kentucky is examined through a scenario of 41 cost-effective me asures for electricity savings that would be adopte d during the 21-year period from 2010 to 2030. An upg rade to a new measure is considered cost-effective if its levelized cost of conserved energy is less than 7.8 cents/kWh saved, which is the average retail electricity price for the commercial sector in Kent ucky over the study time period (DEDI 2011). For th e sum of all measures, the estimated levelized cost is 1. 7 cents/kWh saved (see Table 6). See Appendix A for a detailed methodology and specific efficiency opport unities and cost-effectiveness for commercial build ings (see Table A-7).

Table 6. Commercial Electricity Potential and Costs by End-Use in 2030

End-Use Savings (GWh) Savings

over Reference Case (%)* % of

Efficiency

Potential Weighted

Levelized

Cost of

Saved Energy ($/kWh)

HVAC and building shell 1,700 30% 25% $ 0.030

Water heating 40 8% 1% $ 0.032

Refrigeration 420 20% 6% $ 0.017

Lighting 2,750 48% 40% $ 0.015
Office equipment 640 45% 9% $ 0.003

Appliances and other 10 0% 0% $ 0.021

Existing buildings 5,560 34% 80% $ 0.020

New buildings 1,350 17% 20% $ 0.006

Total electricity 6,900 28% 100% $ 0.017

*Percent savings are relative to forecasted consump tion for the commercial sector in 2030.



### Commercial buildings can reduce electricity consump tion by 28% through the adoption of a variety of efficiency measures. The economic potential for eff iciency resources in the commercial sector will red uce electricity use by 6,900 GWh through the period 201 0–2030.

In the commercial sector, electricity savings from efficiency resources are realized through improved HVAC equipment, controls, and building shell measures (e .g., roof insulation and new windows); improved wat er heating (e.g., heat pump water heaters); more effic ient refrigeration systems (e.g., ENERGY STAR vendi ng machines and coolers); and efficient lighting, offi ce equipment, and miscellaneous appliances. The gre atest portion of the savings, at 40%, is from improvement s to lighting systems, which include savings from m ore efficient light bulbs such as fluorescent and HID, improved lighting controls such as daylight dimming systems and occupancy sensors, and certain LED appl ications such as task lighting. Our analysis raises the baseline from which we project lighting savings at 2013 and 2020, accounting for the upcoming ligh ting

standards.

Improvements to HVAC systems and building shells ac count for the second greatest portion of the saving s, at 25%. Shell measures include roof insulation and improved windows. HVAC measures include betterEnergy Efficiency Cost-Effective Resource Assessmen t for KY, ACEEE



### 7 heating and cooling systems (e.g., high efficiency chillers and heat pumps) and better controls (e.g., dual enthalpy controls and energy management system inst allations).

Office equipment measures can provide another 9% of the total savings with measures including more efficient computers, printers, and copiers, etc., a s well as turning off this equipment after hours. O ffice measures have the lowest weighted levelized cost of saved energy among the sectors we examined, accounting for only three-tenths of one cent of the total levelized cost. These measures are extraordi narily

cost effective.

Water heating measures include heat pump water heat ers, and efficient clothes washers that reduce hot water demand. Refrigeration measures include improv ed commercial refrigeration systems (e.g., walk-in coolers, ice makers, and vending machines). And, as with lighting measures, we raise the baseline from which we project savings for commercial clothes was hers and room air conditioners to account to upcomi ng standards that take effect in 2013 and 2014, respec tively.

New construction measures contribute a significant portion of the overall savings potential for the commercial sector, reaching 20% of total electric s avings. We estimate that up to 50% savings can be reached cost-effectively for commercial new constru ction (NREL 2008).

Figure 1. Commercial Electric Efficiency Potential in 2030 by End-Use Total: 6,900 GWh 28% of Projected Electricity Use in 2030

Natural Gas

The potential for natural gas savings through energ y efficiency in Kentucky’s commercial building sect or is examined through a scenario of 23 cost-effective me asures for gas savings that would be adopted during the 21-year period from 2010 to 2030. An upgrade to a new measure is considered cost-effective if its levelized cost of conserved energy is less than $11 .38/MMBtu, which is the average retail natural gas price for the commercial sector in Kentucky over the stud y time period (DEDI 2011). For the sum of all measu res, the estimated levelized cost is $3.94/MMBtu saved ( see Table 7). See Appendix A for a detailed methodology and specific efficiency opportunities a nd cost-effectiveness for commercial buildings (see Table A-10). HVAC & Shell

25% New Buildings

20%

Office Equipment

9%

Refrigeration

6% Lighting

40% Water Heating

1% Appliances

and Other

<1%Energy Efficiency Cost-Effective Resource Assessmen t for KY, ACEEE



### 8 Table 7. Commercial Natural Gas Efficiency Potentia l and Costs by End-Use in 2030

End-Use Savings

(BBtu) Savings

over Reference Case (%)* % of

Efficiency

Potential Weighted

Levelized

Cost of

Saved Energy ($/MMBtu)
HVAC equipment &
controls 8,870 40% 55% $ 1.62

Building shell 715 10% 4% $ 0.30

Water heating 1,210 16% 7% $ 4.29
Cooking 701 32% 4% $ 6.38

Other 1,838 30% 11% $ 6.48

Existing buildings 13,333 58% 82% $ 4.53

New buildings 2,930 22% 18% $ 1.71

Total gas 16,263 45% 100% $ 3.94

*Percent savings are relative to forecasted consump tion for the commercial sector in 2030.



### Commercial buildings can reduce natural gas consump tion by 45% through the adoption of a variety of efficiency measures. The economic potential for eff iciency resources in the commercial sector will red uce natural gas use by over 16 trillion Btu through the period 2010–2030.

In the commercial sector, gas savings from efficien cy resources are realized through improved HVAC equipment, controls, and building shell measures (e .g., duct sealing and pipe insulation); improved wa ter heating (e.g., instantaneous water heaters); and mo re efficient cooking equipment (e.g., ENERGY STAR fryers). The majority of the savings is provided by improved HVAC measures, including heating system measures, and improved controls, which provide 55% of the total gas savings potential. Our calculation s for improved heating equipment take into account th e different types of equipment that are appropriate for different size buildings, and include furnaces, roo ftop heating units, and boilers. Improved controls include programmable thermostat and energy management syste ms. Building shell measures include roof

insulation and low-e windows.

Improved water heating also provides substantial sa vings, with 7% of the total gas savings potential. Gas condensing water heaters contribute the vast majori ty of water heating savings with over 1,000 BBtu savings potential. Building shell and cooking measu res each provide another 4% of the savings potentia l. For cooking measures, high efficiency convection ra nge/ovens and ENERGY STAR fryers provide the largest portion of the savings, while roof insulati on and low-e windows comprise the shell measures.

New construction measures contribute a sizeable por tion of the overall savings potential for the comme rcial sector as well, totaling 18% of natural gas savings . We estimate that up to 50% savings can be reached cost-effectively for commercial new construction (N REL 2008).Energy Efficiency Cost-Effective Resource Assessmen t for KY, ACEEE



### 9 Figure 4. Commercial Natural Gas Efficiency Potenti al in 2030 by End-Use
Total: 16,200 BBtu 45% of Projected Natural Gas use in 2030



## Industrial

The industrial sector is the most diverse economic sector, encompassing agriculture, mining, construct ion and manufacturing. Because energy use and efficienc y opportunities vary by individual industry (if not individual facility), it is important to develop a disaggregated forecast of industrial electricity an d natural gas consumption. Unfortunately, this energy use data is not available at the state level, so ACEEE has developed a method using state-level economic data to estimate disaggregated electricity and natural g as use. This study drew upon national industry data to develop a disaggregated forecast of economic activ ity for the sector. We then applied energy intensities derived from industry group electricity consumption data and data on the value of shipments to characterize each sub-sector’s share of the industrial sector el ectricity consumption and projected the energy use through 20 30. One issue unique to Kentucky is the Paducah Gaseous Diffusion Plant, which is run by the U.S. D epartment of Energy: it consumes about 12% of industrial electricity. Please see Appendix A for m ore details.

Figure 5 shows the largest electricity consuming in dustries in Kentucky in 2010 and their share of ele ctricity use changes by 2030. HVAC & Controls

55% New Buildings

18%

Cooking

4%

Water Heating

7% Other

11%

Shell

4%Energy Efficiency Cost-Effective Resource Assessmen t for KY, ACEEE



### 10 Figure 5. Estimated Electricity Consumption for the Largest Consuming Industries in Kentucky in

2010 and 2030

Due to changes in economic activity and energy inte nsity as discussed in Appendix A, we see some minor intra-sectoral shifts in electricity consumption (s ee Figure 5). Despite modest economic growth in the agriculture and mining sectors, their share of elec tricity use will fall by 2030. In most manufacturin g sectors, growth is offset by projected increases in energy e fficiency. Where most manufacturing sees only minor growth and thus decreasing energy use, chemical man ufacturing will experience much greater increases in economic activity and energy use. These intra-se ctoral shifts are important because they identify w here new investments are being made and where energy eff iciency opportunities are concentrated.

Figure 6 shows the largest natural gas consuming in dustries in Kentucky in 2010 and their share of electricity use changes by 2030.

Figure 6. Estimated Natural Gas Consumption for the Largest Consuming Industries in Kentucky

in 2010 and 2030Energy Efficiency Cost-Effective Resource Assessmen t for KY, ACEEE



### 11 Similar changes in economic activity and energy int ensity cause significant intra-sectoral shifts in n atural gas consumption. The chemical manufacturing will s ee substantial growth in natural gas use, due large ly to a projected increase in energy intensity. Combined with modest economic growth, the chemical industry will increase from consuming 31% of industry sector natural gas in 2010 to 42% in 2030. A similar (but more modest) increase in natural gas intensity will lead to an increase in natural gas consumption in the petroleum and coal products sector. These intra-sec toral shifts are important because they identify wh ere new investments are being made and where energy eff iciency opportunities are concentrated.

Electricity

We examined 18 electricity saving measures, nine of which were cost effective considering Kentucky's average industrial electric rate 9 

### of $0.061/kWh (DEDI 2011). These measures were app lied to an industry specific end-use electricity breakdown.

9 Average electricity rate taken from actual and pro jected rates from 2009–2030.Energy Efficiency Cost-Effective Resource Assessmen t for KY, ACEEE



### 12 Table 8 shows results for industrial energy efficie ncy potential by 2030.Energy Efficiency Cost-Effective Resource Assessmen t for KY, ACEEE



### 13 Table 8. Industrial Electric Efficiency Potential a nd Costs by End-Use in 2030

Measures Savings

Potential in 2030 (GWh) Savings

Potential in 2030 (%)* % of

Efficiency

Potential Levelized Cost

of Saved Energy ($/kWh)

Sensors & controls 168 0.3% 3% $0.014
Duct/Pipe insulation 1,409 2.9% 22% $0.052
Electric supply 1,291 2.6% 20% $0.010
Lighting 422 0.9% 7% $0.020

Motors 1,460 3.0% 23% $0.027
Compressed air 601 1.2% 9% $0.000
Pumps 833 1.7% 13% $0.008

Fans 155 0.3% 2% $0.024

Refrigeration 72 0.1% 1% $0.003

Total 6,411 13% 100% $0.023

*Percent savings are relative to forecasted consump tion for the industrial sector in 2030.



### This analysis found economic savings from these cro ss-cutting measures of 6,411 million kWh or 13% of industrial electricity use in 2030 at a levelized c ost of about $0.023/kWh saved. This analysis did no t consider process-specific efficiency measures that would be applied at the individual site level becau se available time, funding, and data did not allow thi s level of analysis. The analysis also did not coun t any savings for the Gaseous Diffusion Plant. However, b ased on experience from site assessments by the U.S

. Department of Energy (IAC 2012) and other entities, we would anticipate an additional economic savings of 5–10%, primarily at large energy-intensive manuf acturing facilities. The overall economic industria l efficiency resource opportunity is on the order of 20–25%. Therefore, the total economic potential for electricity savings in the industrial sector in 203 0 would be about 10,000 GWh.

Natural Gas

We examined 36 natural gas saving measures, 35 of w hich were cost effective considering Kentucky's average industrial natural gas rate of $9.71/MMBtu (DEDI 2011). These measures were applied to an industry specific end-use natural gas breakdown.

Table 9 shows summarized results for industrial nat ural gas efficiency potential by 2030. A full measu re list can be found in Appendix A.

Table 9. Industrial Natural Gas Efficiency Potentia l and Costs by End-Use in 2030

Measures Savings

Potential in 2030 (BBtu) Savings

Potential in 2030 (%)* % of

Efficiency

Potential Levelized Cost

of Saved Energy ($/MMBtu)
Improved boiler insulation 2,974 2.3% 13% $0.63
Steam trap maintenance 2,323 1.8% 10% $0.45

Boiler load control 1,487 1.1% 6% $0.13

Other boiler measures 3,711 2.8% 16% $0.20

HVAC measures 445 0.3% 2% $4.47
Efficient process heat burners 3,370 2.6% 14% $1.85
Process controls & management 2,848 2.2% 12% $0.51

Other process heat 6,471 4.9% 27% $5.31

Total 23,629 18.0% 100% $2.03

*Percent savings are relative to forecasted consump tion for the industrial sector in 2030.Energy Efficiency Cost-Effective Resource Assessmen t for KY, ACEEE



### 14 This analysis found economic savings from these cro ss-cutting measures of 23,629 billion Btu, or 18% o f industrial natural gas use in 2030 at a levelized c ost of about $2.03/MMBtu saved. Once again, this an alysis did not consider process-specific efficiency measur es that would be applied at the individual site lev el. As with electricity, we would anticipate an additional economic savings of 5–10%, primarily at large ener gyintensive manufacturing facilities. The overall eco nomic industrial efficiency resource opportunity is on the order of 23–28%. Therefore, the total economic pote ntial for natural gas savings in the industrial sec tor in 2030 would be about 33,500 Btu.



## Conclusion

The goal of this energy efficiency cost-effective r esource assessment is to provide Kentucky stakehold ers with a picture of the maximum economic potential fo r energy efficiency resources in the Commonwealth. This report is the first step in estimating the ove rall economic benefits that energy efficiency can c reate for the state, such as lowering customer utility bills, creating jobs, and stimulating economic growth. Th ese results will help Kentucky stakeholders determine t he degree to which they should focus their policy a nd program efforts across the various sectors. The sav ings generated by these policies and programs will

create the economic benefits described above.

In total, we estimate that around 19,000 GWh and 49 ,500 BBtu, or 17% and 23% of projected electricity and natural gas consumption, respectively, in 2030, can be saved through investments in cost-effective energy efficiency resources, such as efficient HVAC systems in residential and commercial buildings, a nd efficient motors used in industrial manufacturing p rocesses. If all of the cost-effective energy effic iency potential were able to be captured, Kentucky would save almost $2 billion on its energy bills by 2030 (see Tables 10 and 11 below). Individual measure assumpt ions, methodologies, and detailed results of the analyses can be found in the appendices of this doc ument.

Table 10. Summary of Cost-Effective Energy Efficien cy Potential by Sector, by 2030

Sector Electricity Natural Gas

GWh %* % of Sector** BBtu %* % of Sector**
Residential 7,787 7.1% 21% 12,365 5.8% 30%
Commercial 6,900 6.2% 28% 16,263 7.6% 45%
Industrial 6,411 5.8% 13% 23,629 11.1% 17%

Total 21,098 19.1% 52,248 24.5%

*Savings are represented as a percent of the total projected energy consumption in 2030. **Savings are represented as a percent of the proje cted energy consumption in that sector in 2030.



### Table 11. Energy Bill Savings by Sector, by 2030

Sector Electricity Natural Gas

GWh $/kWh* Million$ BBtu $/MMBtu* Million$ Residential 7,787 $0.086 $669.7 12,356 $12.53 $154. 8 Commercial 6,900 $0.078 $538.2 16,263 $11.38 $185.1 Industrial 6,411 $0.061 $391.1 23,629 $9.71 $229.4

Total 21,098 $1,599.0 52,248 $569.3
*Retail energy prices from DEDI 2011



### The next phase of the project will be to vet a list of energy efficiency policies and programs with st akeholders that can be implemented by the Commonwealth and Ken tucky utilities in order to capture the available resources identified through this assessment. It is important to understand that many market barriers exist that prevent all of the cost-effective resource pot ential savings from being captured by energy effici ency policies and programs. Policymakers and utilities m ust design policies and programs carefully to overc ome those barriers, ensuring that they are properly mar keted and that Kentuckians are well-educated in the potential benefits of energy efficiency.

Once stakeholders agree on a set of policies and pr ograms to be evaluated, ACEEE will conduct its maximum achievable potential analysis, also known a s the policy and program analysis, which will estim ate the level of potential that can be realistically ac hieved through this set of policies and programs. T he results from this analysis will provide a roadmap that the Commonwealth can follow to ramp-up energy savingsEnergy Efficiency Cost-Effective Resource Assessmen t for KY, ACEEE



### 15 from efficiency. The results from the policy analys is will then feed into ACEEE’s macroeconomic model to estimate the overall economic benefits, including e nergy bill savings and jobs, that can be achieved t hrough investments in energy efficiency.Energy Efficiency Cost-Effective Resource Assessmen t for KY, ACEEE



### 16 

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### 17 ____. 2009. Technical Support Document: Energy Efficiency Progr am for Consumer Products and Commercial and Industrial Equipment: Residential Di shwashers, Dehumidifiers, and Cooking Products, and Commercial Clothes Washers. http://www1.eere.energy.gov/buildings/ appliance_standards/commercial/clothes_washers_ecs_ final_rule_tsd.html . Washington, D.C.: United States Department of Energy.

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. Washington, D.C.: U.S. Environmental Protection Age ncy.

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[GAMA] Gas Appliance Manufacturers Association. 200 7. Consumers’ Directory of Certified Efficiency Ratings for Heating and Water Heating Equipment. Berkeley Heights, N.J.: Gas Appliance

Manufacturers Association.

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### 18 [IAC] U.S. Department of Energy Industrial Assessme nt Center Database. 2012. http://iac.rutgers.edu/database/ . Accessed March 5, 2012.

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for: Missouri Public Service Commission.

[LBNL] Lawrence Berkeley National Laboratory. 2003. Commercial Unitary Air Conditioner & Heat Pump: Life-Cycle Cost Analysis: Inputs and Results. http://www.eere.energy.gov/buildings/ appliance_standards/commercial/pdfs/comm_ac_lcc.pdf . Berkeley, Calif.: Lawrence Berkeley Nationl Laboratory.

Lowenberger, A., J. Mauer, A. deLaski, M. DiMascio, J. Amann, and S. Nadel. 2012. The Efficiency Boom: Cashing In on the Savings from Appliance Standards . Washington, D.C.: American Council for an Energy-Efficient Economy, and Appliance Standards A wareness Project.

Nadel, Steven. 2007. Energy Efficiency Resource Standards Around the U.S . and the World. Washington, D.C.: American Council for an Energy-Efficient Econ omy.

[Navigant] Navigant Consulting. 2002. U.S. Lighting Market Characterization – Volume 1: N ational Lighting Inventory and Energy Consumption Estimate . Washington, D.C.: U.S. Department of Energy.

____. 2008. Energy Savings Estimates of Light Emitting Diodes i n Niche Lighting Applications. Washington, D.C.: U.S. Department of Energy.

Neubauer, Max, Andrew deLaski, Marianne DiMascio, a nd Steven Nadel. 2009. Ka-Boom! The Power of Appliance Standards: Opportunities for New Federal Appliance and Equipment Standards. Appliance Standards Awareness Project and American Council for an Energy-Efficient Economy. [NGRID] National Grid. 2007. Personal Communication with Michael McAteer and Fran Boucher. January e-mail. Northborough, Mass.: National Grid.

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____. 2006. Natural Gas Energy Efficiency Resource Development Potential in New York. Albany, N.Y.: New York State Energy Research and Development Auth ority.

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____. 2004c. Analysis of Standards Options for Metal Halide Lamp s and Fixtures. Prepared by the American Council for an Energy-Efficient Economy. S an Francisco, Calif.: Pacific Gas and Electric Company.Energy Efficiency Cost-Effective Resource Assessmen t for KY, ACEEE



### 19 ____. 2005. Analysis of Standards Options for Commercial Packag ed Refrigerators, Freezers, RefrigeratorFreezers and Ice Makers. Prepared by the American Council for an Energy-Eff icient Economy. San Francisco, Calif.: Pacific Gas and Electric Company

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____. 2007. Analysis of Standards Options for Residential Refri gerators . Prepared by the American Council for an Energy-Efficient Economy, Maggie Eldridge an d Steve Nadel. San Francisco, Calif.: Pacific Gas and Electric Company.

____. 2008. Preliminary CASE Report: Analysis of Standards Opti ons for Walk-in Refrigerated Storage. Prepared by Heschong Mahone Group. San Francisco, C alif.: Pacific Gas and Electric Company.

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and M. Adelaar. 2004. Emerging Energy-Savings Technologies and Practices for the Buildings

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___. 2012. Achieving 20% Savings by 2020 in the Southwest Stat es (Forthcoming Report). Boulder, CO: Southwest Energy Efficiency Project.

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energy_vm.php . Malvern, Penn.: USA Technologies.Energy Efficiency Cost-Effective Resource Assessmen t for KY, ACEEE



### 20 

# A PPENDIX 

# A

– E NERGY 

# E FFICIENCY 

# R ESOURCE 

# A SSESSMENT



## A.1. Residential Buildings Sector

A.1.1. Overview of Approach

Our analysis of energy efficiency potential for Ken tucky’s residential electricity and natural gas sec tors considered a scenario with widespread adoption of c ost-effective energy efficiency measures during the 20-year period from 2010–2030. We analyzed 18 singl e-family measures for existing single-family homes in Kentucky. These measures are grouped by end-use (heating and cooling loads, water heating, appliances, etc.). For each measure, we estimated a verage measure lifetime, energy savings, and costs per home upon replacement of the product or retrofi tting of the measure. For a replacement-on-burnout measure, the cost is the incremental cost of the ef ficient technology compared to the baseline technol ogy. For retrofit measures, where exiting equipment is n ot being replaced, such as improved insulation and infiltration reduction, the cost is the full instal lation cost of the measure.

A measure is determined to be cost-effective if its levelized cost of saved energy (CSE), which discou nts

the incremental cost of a measure over its lifetime , is less than $0.086/kWh for electricity, or $12.5 3/MMBtu for natural gas, the current average residential co sts in Kentucky (DEDI 2011). Estimated levelized co sts for each efficiency measure, which assumes a discou nt rate of 5%, 10 

### are shown in Table A-4. Equation 1 shows the calculation for cost of conserved energy.

Equation 1 . CSE = PMT ((Discount Rate), (Measure Lifetime), ( Measure Cost)) / (Annual Savings per Measure)



### Existing Buildings

Existing buildings were analyzed using building mod eling software. The software package, TREAT 11 

### , was chosen for its reputation as one of the better resi dential modeling packages available. It uses a vari ety of inputs, including house characteristics, appliances , weather data, and occupancy patterns to model the expected energy use of a particular home. It also i ncludes a library of efficiency measures that can b e used to model potential efficiency improvements. TREAT w as used to establish a baseline as well as model th e effects of efficiency improvement measures on the a verage Kentucky single-family home.



### Establishing a Baseline

TREAT uses multiple house characteristics and measu res to determine annual energy use. We used approximately 100 inputs to model the baseline aver age Kentucky home. First, we gathered Kentuckyspecific data for each of the inputs, using detaile d housing characteristic information provided by a local utility. Where there was no data we used RECS data, Building America averages, or TREAT defaults to fi ll in the gaps. In several cases further calculations were needed to determine the inputs. For instance, in the case of furnace and water heater efficiency levels, where only the average age of existing equipment w ere known, an assumption was made that the minimum fede ral efficiency would account for the majority of

installations. We assume that the federal efficienc y level for the years most furnaces and water heate rs were installed would be used. Table A-1 gives the d ata collected for the various TREAT inputs (with mu ltiple values for different percentages of the population, in some cases). For inputs without values, either the default TREAT value was used, or a value had to be derived (see Table A-2).

10 The 5% discount rate is a real discount rate, whic h excludes the effects of inflation. A 5% real disc ount rate is equivalent to an 8- 9% nominal discount rate as typically used by utili ties in their analyses of cost-effectiveness. Nomin al discount rates are typically based on utility cost of capital and include allowa nce for inflation. Our assumption of a 5% real disc ount rate applies to our commercial and industrial analyses as well. We use real rates since all of our calculations are in terms of 2007$

. 11 http://www.psdconsulting.com/software/treatEnergy Efficiency Cost-Effective Resource Assessmen t for KY, ACEEE



### 21 Table A-1. Data Collected for TREAT Inputs

Treat Input Categor

ies Treat Inputs Kentucky

Value % of homes Data sourceGeneral City Louisville U.S. Census — highest population city

in KY

Stories 1 story

2 stories 71%

21% RECS 2005

# Bedrooms 3 RECS 2005

# Occupants 2.47 U.S. Census

Wall color Default

Roof color Default

Foundation type Basement Crawlspace

Concrete slab 24%

42%

34% RECS 2005

If basement, is it heated? No 66%

Attic Default

Air leakage Default

Shielding DefaultSurfaceConstruction Walls R value: 4.7 - 6.9 Duke and Building Americ a

Ceiling R value: 8.5 Duke and Building America

Ground Default

Foundation - Basement wall Default

Foundation - Crawl space DefaultWindows Glazing Single pane Double pane 45%

49% RECS 2005

Frame type Default

Size DefaultLayout Ceiling height Default

Shape of the house Default

Dimensions (s.f.) 1876 Duke

Quantity of windows on each wall 13 total per house RECS 2005

Direction house points Default

Space type Default

Is the space cooled? Yes 97% Duke

Programmable thermostat? Default

Hours per day occupied 16.5 Building AmericaExterior doors Quantity of doors on each wall 2 Assumption

Door type Default

Size Default

U-Value 0.2 Building AmericaHeating Heating type Furnace Heat pump 80%

20% Average of Duke and RECS 2005

Heating fuel Gas

Electric 80%

20% Duke (rounded)Energy Efficiency Cost-Effective Resource Assessmen t for KY, ACEEE



### 22 Capacity Determine using TREAT

Efficiency 78% Duke - average age combined with min fed efficiency in that year

Location Default

Year of heating equipment 2000 Duke

Supply temperature DefaultAir conditioning Capacity Determine using TREAT

SEER 10 SEER

6.8 HSPF Duke — average age combined with min fed efficiency in that year

Supply temperature Default

Year of cooling equipment 2001 Duke

Number of units Default

Type of unit Central AC Heat pump

Room AC 68%

20%

12% Duke & RECS 2005Fans Ventilated area 2.4 fans/home Default

Ventilation rate Default

Heat recovery effectiveness Default

Hours/day used DefaultHot Water Type of unit Storage unit Assumption

Hot water fuel Electric

Gas 64%

36% Duke and RECS 2005

Tank volume 43 gallons RECS 2005

Input Default

Supply temperature Default

Additional insulation R-Value Default

Number of units Default

Solar fraction of water heating Default

Year 2003 Duke

Thermal efficiency 0.54

0.89 Gas

Electric Duke — average age combined with

min fed efficiency in that yearHot WaterPiping Insulation R-Value Default

Total area of piping Default

Recirculating system Default % Piping running through each space DefaultHotWaterDemand Usage adjustment multiplier Default

Are dishes handwashed DefaultLighting Watts per fixture 67

38 Incandescen

t Fluorescent Navigant Lighting Characterization

Hours/day used 1.9

2.2 Incandescen

t Fluorescent Navigant Lighting Characterization

# of fixtures 37

6 Incandescen

t Fluorescent Navigant Lighting CharacterizationAppliances Refrigerator 1 Duke

Clothes Dryer 1 Duke

Clothes Washer 1 DukeEnergy Efficiency Cost-Effective Resource Assessmen t for KY, ACEEE



### 23 TVs 3 Duke

Freezer 0 Duke

Dishwasher 1 Duke

Microwave 1 Duke

Computer 1 Duke

Oven/range 1 Duke

DVD/Blu Ray 1 Duke

DVR 1 Duke

MP3/CD player 1 Duke

Gaming system 0 Duke



### After gathering and/or calculating the data, we det ermined which values to use in TREAT. Because TREAT models a single home, for inputs that had multiple values (e.g., 71% of homes are one story and 21% ar e two stories) a determination was made which value t o use. Wherever possible an average was used. However, for discrete data points (e.g., gas vs. el ectric), the majority won. This method was used for all inputs except for five. Five inputs that were deeme d most critical to baseline energy use, including foundation type, heating equipment, square footage, air conditioner type, and water heater fuel, were selected to have variable inputs. We ran the model 36 times to account for every possible combination of these five inputs, and used a weighted average of t he results to calculate the average baseline home. Table A-2 lists the inputs chosen or calculated for the T REAT baseline model.

Table A-2. TREAT Inputs

Treat Input Categories Treat InputsGeneral City Louisville

Stories 1 story

# Bedrooms 3

# Occupants 2

Wall color

Roof color

Foundation type VARIABLE

If basement, is it heated? No

Attic Default

Air leakage

Shielding DefaultSurfaceConstruction Walls R value: 4.7 - 6.9

Ceiling R value: 8.5

Ground Default

Foundation - Basement wall Default

Foundation - Crawl space DefaultWindows Glazing Double pane

Frame type Default

Size DefaultEnergy Efficiency Cost-Effective Resource Assessmen t for KY, ACEEE



### 24Layout Ceiling height Default

Shape of the house Default

Dimensions 1049

1986

3278

Quantity of windows on each wall 9 for small houses

13 for medium houses 16 for large houses

Direction house points Default

Space type Default

Is the space cooled? Yes

Programmable thermostat? Default

Hours per day occupied 16.5Exterior doors Quantity of doors on each wall 2

Door type Default

Size Default

U-Value 0.2Heating Heating type VARIABLE

Heating fuel Gas for furnace Electric for heat pump

Capacity Determine using TREAT

Efficiency 78% for furnaces

Location Default

Year of heating equipment 2000

Supply temperature DefaultAir conditioning Capacity Determine using TREAT

SEER 10 SEER

6.8 HSPF

Supply temperature Default

Year of cooling equipment 2001

Number of units 1

Type of unit VARIABLEFans Ventilated area 2.4 fans/home

Ventilation rate Default

Heat recovery effectiveness Default

Hours/day used DefaultHot Water Type of unit Storage

Hot water fuel VARIABLE

Tank volume 38 gallons for small houses 43 gallons for medium houses 47 gallons for large houses

Input Default

Supply temperature Default

Additional insulation R-Value Default

Number of units 1Energy Efficiency Cost-Effective Resource Assessmen t for KY, ACEEE



### 25 Solar fraction of water heating Default

Year 2003

Thermal efficiency 0.54 - Gas

0.89 - ElectricHot WaterPiping Insulation R-Value Default

Total area of piping Default

Recirculating system Default

% Piping running through each space DefaultHotWaterDemand Usage adjustment multiplier Default

Are dishes handwashed DefaultLighting Watts per fixture 67 W incandescent

38 W fluorescent

Hours/day used 1.9 for incandescent

2.2 for fluorescent

# of fixtures 37 incandescents

6 fluorescentsAppliances Refrigerator 1

Clothes Dryer 1

Clothes Washer 1

TVs 3

Freezer 0

Dishwasher 1

Microwave 1

Computer 1

Oven/range 1

DVD/Blu Ray 1

DVR 1

MP3/CD player 1

Gaming system 0



### TREAT takes these inputs and gives total home energ y use as well as electricity and natural gas consumption by end-use category. All of these outpu ts were collected for all 36 scenarios, and weighte d averages were calculated. Table A-3 gives the avera ge energy use of a Kentucky single-family home, per

TREAT.

Table A-3. Average Energy Use of a Single-Family Ke ntucky Home



### End-Use Average

Electricity
Use (kWh) Average

Gas Use
(MMBtu)

Heating 2,190 61.2

Cooling 2,450

—
Hot water 3,610 10.6

Lighting 1,490

— Appliances &

electronics 8,140

—

Total 17,880 71.7Energy Efficiency Cost-Effective Resource Assessmen t for KY, ACEEE



### 26 

### New Construction

We estimate savings from new construction by lookin g at three levels of efficiency in new homes: 15%, 30%, and 50% better than current energy code. In e stimating new home energy savings, we use a similar approach as building codes, which address H VAC and water heating consumption only. We

estimated % Applicable by allocating each home into one of the three bins , with 15% predominating the early years and 50% the later years. See Equation 2 for a summary of how we calculate savings in new

construction.

Equation 2. Efficiency Resource Potential in 2030 (GWh/MMBtu) = (% savings per home) x (Percent Applicable) x (Baseline energy use per single famil y home) x (Projected number of new homes)



### Efficiency Potential Analysis

For the analysis of energy efficiency improvement m easures, we used TREAT to calculate the savings against the established baseline. Measures were cho sen that were applicable to the baseline (e.g., eff icient pool pumps were not chosen since pool pumps were no t included in the baseline), and were available in the TREAT library of efficiency improvement measure s. Cost assumptions and lifetime estimates for each of the measures came from multiple sources.

One of the advantages of using modeling software is that the interaction factors between various measu res are automatically calculated. For instance, when li ghting is switched from incandescents to CFLs, the cooling load decreases and the heating load increas es. These interactions are difficult to account for without the assistance of modeling software. Because TREAT displays both the savings from individual measures and the overall savings of all the measures as a pa ckage, this phenomenon can be quantified: in many o f the scenarios, the sum of the individual measure sa vings was roughly double the actual savings of the measures as a package.

We ran these efficiency improvement models on all o f the variable scenarios. The weighted average individual measure savings were used to compute the residential efficiency potential in Kentucky.

The next step was to adjust the measure savings by the current market share of products that already m eet the efficiency criteria. We also adjusted the incre mental cost so that the cost would be split between gas and electric savings. The electric incremental cost for a measure was determined by the percentage of savings attributed to electricity (versus gas); and vice versa for determining gas incremental cost. T hese assumptions are made explicit in Tables A-4 and A-5

.

We then adjusted replacement measures with lifetime s more than 20 years to only account for the percen t turning over in 20 years, which represents the time period of the analysis.

Equation 3 shows our calculation for efficiency res ource potential, incorporating the 2 factors discus sed

above.

Equation 3 . Efficiency Resource Potential = ∑ (Annual Savings per Measure) x (Percent Turnover) x (Adjustment Factor)

To calculate the efficiency resource potential savi ngs by end-use in 2030, we present savings as a per cent of end-use energy consumption (assuming current ene rgy consumption by end-use from the baseline TREAT modeling). We then multiply the “% savings” b y projected residential energy consumption for that end-use in 2030 to estimate the total savings poten tial in that year (see Equation 3).Energy Efficiency Cost-Effective Resource Assessment for KY, ACEEE27Table A-4. Residential Single-Family Energy Efficiency Measure Characterizations - ElectricityMeasuresEnd-use categoryAdjustedsavings perhomeCost ofsavedenergy%Turnover% EndusesavingsTotalsavingsin 2030kWh $/kWh GWhAttic insulationHVAC 761.7 $ 0.01 95% 16% 1,100Infiltration reductionHVAC 75.3 $ 0.02 100% 2% 110SEER 16 ACHVAC 574.6 $ 0.08 100% 12% 870Efficient heat pumpHVAC 250.9 $ 0.05 100% 5% 380Triple-paned windowsHVAC 209.5 $ 0.04 95% 4% 300HVAC tune-upHVAC 129.8 $ 0.03 100% 3%200**HVAC measures 42% 2,960** CFLsLighting 165.2 $ (0.01) 100% 11% 250Advanced lighting (LEDs)Lighting 300.3 $ 0.06 100% 20%460**Lighting Measures 31% 710** 1 W StandbyAppliances 164.3 $ -100% 2% 250Energy Star refrigeratorAppliances 394.9 $ 0.01 100% 5% 600Energy Star clothes washerAppliances 266.3 $ 0.02 100% 3% 400Energy Star dishwasherAppliances 252.9 $ 0.01 100% 3% 380Energy Star TVAppliances 34.9 $ 0.64 100% 0% 50Second refrigerator removalAppliances 323.0 $ - 100% 4%490**Appliance Measures 18% 2,170** Low Flow ShowerheadsWater heating 306.2 $ 0.00 100% 8%460Heat pump water heaterWater heating 412.2 $ 0.06 100% 11%630**Water Heating Measures 20% 1,090**Whole-house information feedback system ALL 336.3$ 0.09 100% 2%510**Whole House Measures 2% 510** New home 15% better than code (Energy Star home) New Construction 122.7 $ 0.03 63% 0%20New home 30% better than code (Proposed Building Code) New Construction 486.9 $ 0.03 63% 2%80New home 50% better than code (Tax-credit-eligible)New Construction 1043.4 $ 0.04 63% 4%160**New Construction 6% 260** TOTAL7,700Energy Efficiency Cost-Effective Resource Assessment for KY, ACEEE28Table A-5. Residential Single-Family Energy Efficiency Measure Characterizations – Natural GasMeasuresEnd-use categoryAdjustedsavings perhomeCost ofsavedenergy%Turnover% EndusesavingsTotalsavingsin 2030MMBtu $/MMBtu BbtuAttic insulationHVAC 10.4 $ 3.71 95% 16% 4,200Infiltration reductionHVAC 1.9 $ 4.43 100% 3% 820Condensing furnaceHVAC 7.5 $ 5.95 95% 12% 3,020Triple-paned windowsHVAC 1.2 $ 12.09 95% 2% 500HVAC tune-upHVAC 1.7 $ 2.36 100% 3% 730Energy Star refrigeratorHVAC -0.6 $ - 100% -1%(250)**HVAC measures 35% 9,020** Energy Star clothes washerWater heating 0.7 $ 6.75 100% 7% 290Energy Star dishwasherWater heating 0.3 $ 2.32 100% 3% 130Efficient water heater - gasWater heating 1.2 $ 6.35 100% 11%500Low Flow ShowerheadsWater heating 0.9 $ 0.94 100% 8%370**Water Heating Measures 29% 1,290**New home 15% better than code (Energy Star home) New Construction 1.6 $ 3.08 63% 1% 150New home 30% better than code (Proposed Building Code) New Construction 6.4 $ 2.84 63% 6%600New home 50% better than code (Tax-credit-eligible)New Construction 13.8 $ 3.19 63% 12%1,290**New Construction 19% 2,040** TOTAL12,350Energy Efficiency Cost-Effective Resource Assessmen t for KY, ACEEE



### 29 

### A.1.4 Residential Sector Measure Descriptions

Infiltration Reduction

Measure Description : Application of foam and/or caulk around leakage a reas applied and tested by a professional using a blower-door.

Data Explanation : Cost ($100) from MT 2004. Useful life of 15 years from SWEEP (2002).

Attic Insulation

Measure Description : Add insulation in attic floor to R-38.

Data Explanation : Incremental cost of $0.32/sq ft from DEER databas e (CEC 2005). Useful measure life of 20 years from NYSERDA (2003).

Efficient Windows

Measure Description : Window replacements that are triple-paned, argon- filled, and e=0.1 on surface 2 or

3.

Data Explanation : Incremental cost of $1.50/sq ft. Number of window s determined by regional RECS data, and size of windows set as TREAT default, resulting in an average of 195 sq ft of fenestration.

Efficient Central AC

Measure Description : 16 SEER Central AC

Data Explanation : Incremental cost of $556 from ENERGY STAR calcula tor (EPA 2008).

Efficient Gas Furnace

Measure Description : AFUE 94%

Data Explanation : Incremental cost ($320) from ENERGY STAR calculat or (EPA 2008). Market share (32%) and measure life (18 years) from Sanchez et a l. (2007).

Efficient Heat Pump

Measure Description : HSPF 9.

Data Explanation : Incremental cost ($1000) from ENERGY STAR calcula tor. Measure life (18 years) from Sanchez et al. (2007).

HVAC Tune-up

Measure Description : Tune-up of heating and cooling eq uipment.

Data Explanation : Incremental cost ($125) from Kema (2011). Measure life (5 years) from Cadmus (2011).

Low-Flow Showerhead

Measure Description : 2.0 gallons per minute (gpm) showerhead.

Data Explanation : Cost estimate ($23) for a low-cost, basic model f rom the DEER database (CEC 2005). Measure life (10 years) from ACEEE (1994).Energy Efficiency Cost-Effective Resource Assessmen t for KY, ACEEE



### 30 Condensing Gas Water Heater

Measure Description : 54 gallon natural gas storage water heater, 0.86 EF.

Data Explanation : Incremental cost ($750) and measure life (13 year s) from Amann et al. (2007).

Efficient Electric Water Heater

Measure Description : 54 gallon electric storage water heater, 0.93 EF.

Data Explanation : Incremental cost ($90) from Amann et al. (2007). Measure life (14 years) from NYSERDA (2003). Market share (36%) estimated based on perce nt of products on the market meeting EF 0.93 in the GAMA product database (GAMA 2007).

Heat Pump Water Heater

Measure Description : 40-55 gallon heat pump water heater, 2.0 EF.

Data Explanation : Incremental cost ($814), measure life (13 years), and market share (5%) from Lowenberger et al (2012).

Compact Fluorescent Lighting

Measure Description : 22W CFL’s replacing 70% of baseline lighting that isn’t already CFL.

Data Explanation : Lamp installed base, wattage, and proportion of C FL’s from Navigant study (2008) and ACEEE estimates of market changes since the release of the Navigant report. Negative incremental cost is due to the higher initial costs for CFLs being c anceled out by the longer lifetime of CFLs.

LED Lighting

Measure Description : LED lighting replacing 30% of baseline lighting t hat isn’t already CFL.

Data Explanation : Savings and market share from SWEEP (2012). The i ncremental cost was determined from ACEEE’s analysis of market prices from common home improvement stores.

Efficient Refrigerator

Measure Description : ENERGY STAR 20-CF top-freezer refrigerator.

Data Explanation : Incremental cost ($34) and measure life (19 years ) from ACEEE analysis for PG&E/CA Title 24 (PG&E 2007). Market share (28%) from Sanch ez et al. (2007) appliance sales data.

Removal of Second Refrigerator

Measure Description:

Removal service for homes with a second refrigerat or.

Data Explanation : Average savings determined through TREAT. The inc remental cost is assumed to be zero, because utilities typically offer an incentiv e to for refrigerator removal. Market share is zero , as there are no known programs currently being run in Kentuc ky.

Efficient Clothes Washer

Measure Description : ENERGY STAR clothes washerEnergy Efficiency Cost-Effective Resource Assessmen t for KY, ACEEE



### 31 Data Explanation : Incremental cost ($167) from Sanchez et al. (2007 ). Current market share (36%) from EPA (2007).

Efficient Dishwasher

Measure Description : ENERGY STAR dishwasher

Data Explanation : Incremental cost ($30) from DOE (2007). Market sh are (15%) from Sanchez et al. (2007).

Efficient Televisions

Measure Descriptions : ENERGY STAR televisions.

Data Explanation : Incremental cost ($50) from the incremental cost of 3 televisions ($25 each); ACEEE estimate. Current market share (25%) from ENERGY ST AR 2006 appliance sales data.

One-Watt Standby for All Household Electronics

Measure Description : All new electronics devices required to have maxi mum “off” mode power level of 1

watt.

Data Explanation : New measure consumption (440 kWh) and baseline en ergy consumption (175 kWh) from Sachs et al. (2004). Current market share (34%) ass umed by averaging market shares of all ENERGY STAR home electronics equipment.

Enhanced Billing and Home Energy Reports

Measure Description : Improved information on how energy is being used in the home included on the utility bills, along with customized home energy reports.

Data Explanation : Savings (1.9% of electricity use) from SWEEP (201 2). Current market share (1%), measure life (11 years), and incremental cost ($250 ) from Eldridge et al (2009).Energy Efficiency Cost-Effective Resource Assessmen t for KY, ACEEE



### 32 

## A.2. Commercial Buildings Sector

A.2.1. Electric Analysis

To estimate the resource potential for efficiency i n commercial buildings in Kentucky, we first develo ped a disaggregate characterization of baseline electrici ty consumption in the state for current electricity use and a reference load forecast (see Table A-6 below). Hi ghly disaggregated commercial electricity consumpti on data is unfortunately not available at the state le vel. To estimate these data, we started with curren t electricity consumption for the Kentucky commercial sector (EIA 2011) and a forecast out to 2030 based on DEDI projections, and we disaggregated by end-us e using average regional data from CBECS 2003 (EIA 2006) and AEO 2011 (EIA 2011).

Table A-6. Baseline Commercial Electricity Consumpt ion by End-Use (GWh)

End-Use 2010 % 2020 % 2030 %

Heating 

### 798 4% 899 4% 880 4%

Cooling 

### 2,539 13% 2,861 13% 2,879 12%

Ventilation 

### 2,272 12% 2,559 12% 2,912 12%

HVAC subtotal 

### 5,609 29% 6,319 29% 6,671 27%

Water Heating 

### 429 2% 483 2% 509 2%

Refrigeration 

### 2,079 11% 2,342 11% 2,353 10%

Lighting 

### 5,740 30% 6,467 30% 7,015 29%

Office Equipment 

### 1,409 7% 1,588 7% 1,863 8%

Other 

### 4,102 21% 4,622 21% 6,203 25%

Total 

### 19,389 100% 21,846 100% 24,613 100%

Next, we estimated commercial square footage in Ken tucky using commercial square footage data for the East South Central census region from EIA 2011. We apportion this square footage to Kentucky based on employment data from Moody’s Economy.com (Economy.c om 2011a). We assume that the percentage of employment in the East South Central census region attributable to Kentucky is roughly equal to the percentage of commercial square floorspace attribut able to the state. By multiplying this percentage t o the total commercial square footage in the East South C entral census region we calculated 1.02 billion squ are feet of commercial floorspace in the state.



### A.2.1.1 Measure Cost-Effectiveness

We then analyzed thirty-eight efficiency measures f or existing commercial buildings and three new construction whole-building measures to examine the cost-effective energy efficiency resource potentia l. For each efficiency measure, we estimated electrici ty savings (Annual Savings per Measure) and incremental cost (Measure Cost) in a “replacement o n burnout scenario,” which assumes that the product is replaced or the measure is installed at the end of the measure’s useful life. Savings and costs are

incremental to an assumed Baseline Measure. We esti mated savings (kWh) and costs ($) on a per-unit and/or a per-square foot commercial floorspace basi s. For each measure we also assumed a Measure Lifetime, or the estimated useful life of the produ ct.

A measure is determined to be cost-effective if its levelized cost of saved energy, or cost of conserv ed energy (CCE), is less than 7.8 cents/kWh, the estim ated current average commercial cost of electricity in Kentucky (DEDI 2011). The estimated CCE for each ef ficiency measure, which assumes a discount rate of 5%, are shown in the measure descriptions below. Eq uation 1 shows the calculation for cost of conserve d

energy.

Our assumed Baseline Measure, Annual Savings per Me asure, Measure Cost, Measure Lifetime, and CCE are reported for each of the efficiency measures in the list of measure descriptions below. We group t heEnergy Efficiency Cost-Effective Resource Assessmen t for KY, ACEEE



### 33 thirty-eight efficiency measures for existing comme rcial buildings by end-use and list the three new b uilding

measures last.

Equation 1 . CCE = PMT ((Discount Rate), (Measure Lifetime), ( Measure Cost)) / (Annual Savings per Measure (kWh))



### A.2.1.2. Total Statewide Resource Potential

For each measure, we derived Annual Savings per Mea sure on a per square foot basis (kWh per square foot) for the applicable end-use. For measures that we only have savings on a per-unit or per-building basis, we first derive the percent savings and multiply by the Baseline Electricity Intensity for that end-us e. The

assumed baseline intensities for each end use are s hown in Table A-7. As an example, for a specific li ghting measure we multiply its percent savings by the base line electricity intensity (kWh per square foot) fo r the lighting end-use.

Table A-7. Commercial End-Use Baseline Electricity Intensities (kWh per s.f.)

End Use 2010

kWh/s.f.

Heating 0.67

Cooling 2.1

Ventilation 1.90

Water Heating 0.4

Cooking 0.1

Lighting 4.8

Refrigeration 1.74

Office Equipment 1.2

Other 3.3

HVAC Subtotal 4.7

Total 16.2



### To estimate the total efficiency resource potential in existing commercial buildings in Kentucky by 20 30, we first adjusted the individual measure savings by an Adjustment Factor (see Equation 2). This factor accounts for two adjustments: the technical feasibi lity of efficiency measures, called the Percent App licable (the percent of Kentucky floorspace that satisfies the basecase conditions and other technical prerequ isites such as heating fuel type and cooling equipment, et c.); and the Current Market Share, or the percent o f products that already meet the efficiency criteria. These assumptions are outlined in each of the effi ciency measure descriptions below.

Equation 2. Adjustment Factor = Percent Applicable x (1-Current Market Share)

We then adjusted total savings for interactions amo ng individual measures. For example, we adjusted HVAC equipment savings downward to account for savi ngs already realized through improved building envelope measures (insulation and windows), which r educe heating and cooling loads. Similarly, we adjusted water heating equipment savings to account for reduced water heating loads from the use of mo re efficient clothes washers. The multiplier for these adjustments is called the Interaction Factor.

Finally, we adjusted replacement measures with life times more than 11 and 21 years to only account for the percent turning over in 11 and 21 years, which represents the benchmark years of 2020 and 2030, respectively. Note that the multiplier, Percent Tur nover, is only applicable to products being replace d upon

burnout and not retrofit measures such as insulatio n. These retrofit measures therefore have 100% of measures “turning over.”Energy Efficiency Cost-Effective Resource Assessmen t for KY, ACEEE



### 34 We then calculated the resource potential for each measure in the state using Equation 3, which takes into account all of the adjustments described above. The sum of the resource potential from all measures is the overall energy efficiency resource potential in the state’s commercial buildings sector.

Equation 3. Efficiency Resource Potential in 2020 and 2030 (GWh ) = (Annual Savings per Measure (kWh per square foot)) x (Commercial floor space in Kent ucky in millions of square feet) x (Percent Applica ble) x (Interaction Factor) x (Percent Turnover)



### A.2.1.3 Efficiency Measures

Below we present the forty-one efficiency measures examined for this analysis, grouped by end-use cost s, savings (kWh) per product or square foot, Percent Applicable, Interaction Factor, Percent Tur nover, and total savings potential (GWh) in 2030. Detailed des criptions of each measure are given below, grouped by

end-use.

Building Shell Improvements

Cool Roof

Measure Description: This measure involves installing a sun-reflective c oating on the roof of a building with a flat top. This reduces air conditioning energy loads by reduc ing the solar energy absorbed by the roof.

Basecase : The baseline electricity intensity for HVAC end u ses in Kentucky (4.7 kWh/ft 2 /year) is used as the basecase.

Data Explanation: We assume 4% HVAC load savings (ACEEE 1997) off the baseline electricity intensity for HVAC end-uses in Kentucky (EIA 2006), an incremental cos t of $0.25/ft 2 (SWEEP 2002), and a 20-year average lifetime (SWEEP 2002). Percent applicable (80%) is an ACEEE estimate. Savings and cost per unit are based on a 15,000

ft 2 building (ACEEE 1997). The levelized cost is calcu lated to be 5.5 cents/kWh.

Roof Insulation

Measure Description: Fiberglass or cellulose insulation material in roof cavities will reduce heat transfer, though the type of building construction limits insulation pos sibilities. R-values describe the performance fact or for insulation

levels.

Basecase : The basecase electricity intensity for this measu re was disaggregated from the post-savings electric ity intensity and the percentage of savings.

Data Explanation: We assume 3% savings and a post-savings electricity intensity of 0.28 kWh/ft 2 /year, based on an average of four building types (ACEEE 1997). An ave rage lifetime of 25 years (CL&P 2007) and an increm ental cost of

11 cents/s.f. were also assumed. The measure is shared with gas s avings as well, so the portion of the incremental cost attributed to electric savings is 6 cents/s.f. The levelized cost is 1.7 cents/kWh.

Double Pane Low-Emissivity Windows

Measure Description:

Double-pane windows have insulating air- or gas-fi lled spaces between each pane, which resist

heat flow. Low-emissivity (low-e) glass has a special surface coating to reduce heat transfer back through the wi ndow, and a window’s R-value represents the amount of hea t transfer back through a window. Low-e windows ar e particularly useful in climates with heavy cooling loads, becaus e they can reflect anywhere from 40% to 70% of the heat that is normally transmitted through clear glass. The Solar Heat Gain Coefficient (SHGC) represents the fracti on of solar energy transferred through a window. For example, a low-e window with a 0.4 SHGC keeps out 60% of the sun’s heat.

Basecase : The basecase electricity intensity for this measu re was disaggregated from the post-savings electric ity intensity and the percent savings.

Data Explanation: Percent savings of 3% apply to whole-building elect ricity consumption (ACEEE 1997). Incremental costs assume $2 per square foot of window (SWEEP 20 02). This measure is shared with gas savings as we ll. A measure life of 25 years is from SWEEP (2002). Per cent applicable is an ACEEE estimate. The levelized cost is

calculated to be 1.1 cents/kWh.Energy Efficiency Cost-Effective Resource Assessmen t for KY, ACEEE



### 35 Heating and Cooling Measures: Equipment and Control s

Duct Testing and Sealing

Measure Description: Testing and sealing air distribution ducts saves en ergy. This measure assumes supply and return ducts will be fully sealed.

Basecase : The basecase assumes air loss of 29% of fan flow, and leakage of 15% of the system flow.

Data Explanation: Percent savings of 6% apply to whole-building elect ricity consumption (SWEEP 2002). An incremental cost of $3,375, which assumes $300 per ton, a 10 year lifetime, and 25% applicability are ACEEE

estimates. The levelized cost is calculated to be 1 .1 cents/kWh.

Primary Air-Handler Fans with Variable-Frequency Dr ive

Measure Description: Variable Frequency Drive (VFD) controls the speed o f a motor by adjusting the frequency of incoming power. By controlling the speed of a moto r, the output of the system can be matched to the r equirements of the process, thereby improving efficiency.

Basecase : The basecase unit is a 50 hp fan with 60% load fa ctor, 93% efficiency (ODP, EPAct levels) and 3653 operating hours/year (21-50 hp category from ACEEE standards savings analysis).

Data Explanation:

We assume 25% savings applies to ventilation only (ACEEE 1997), which is a conservative estimate. We estimate a $6,650 incremental cost, which assume s $125/hp for VFD and $8/hp for a better fan, and a 10-year measure life (SWEEP 2002). ACEEE estimates that th is measure can apply to 40% of systems. The leveliz ed cost is

calculated to be 3.9 cents/kWh.

High-Efficiency Unitary AC/HP

65,000 Btu – 135 Btu 135,000 Btu – 240,000 Btu

Measure Description: Unitary packaged air conditioners and heat pumps re present the heating, ventilating, and air conditioning (HVAC) equipment class with the greate st energy use in the commercial sector in the Unite d States, and are used in approximately 48 percent of the cooled floor space in the commercial sector (DOE 2004). H igh efficiency units have a greater energy efficiency ratio (EER).

Basecase : The assumed basecase unit meets the 2010 federal efficiency standard. Baseline electricity intensit y for
this end-use, 4.9 kWh/ft 2 , is the estimated HVAC consumption in commercial b uildings in Kentucky. This is data from

the West South Central census division from EIA’s c ommercial buildings survey (EIA 2006).

Data Explanation: This measure includes two size ranges; the first is 65,000 Btu to 135,000 Btu, and the second is 135,000 Btu to 240,000 Btu. The measure assumes a 12 EER unit relative to the 2010 federal standard, which ranges from about 10.4 EER to 11.2 EER, depending on the u nit type and size. The energy savings average 1,070 kWh (7.2%) for the smaller unit and 3,371 kWh (10.8%) for the larger unit. We assume a measure lifetime of 15 yea rs (LBNL 2003). Incremental costs (average $629 for 65 kBtu to135 k Btu and $1,415 for 135 kBtu to 240 kBtu) are derive d from DOE’s Technical Support Document (DOE 2004). Percent appl icable (33% for 65 kBtu to 135 kBtu and 15% for 135 kBtu to 240 kBtu), and the percent of floorspace with cooli ng from unitary equipment are also from DOE’s Techn ical Support Document (DOE 2004). The levelized cost is calculat ed to be 4–5.7 cents/kWh, depending on unit type an d size.

High-Efficiency Packaged Terminal AC/HP

Measure Description: PTACs and PTHPs are self-contained heating and air- conditioning units encased inside a sleeve specifically designed to go through the exterior bu ilding wall. The basic design of a PTAC is comprise d of a compressor, an evaporator, a condenser, a fan, and an enclosure . They are primarily used to provide space conditio ning for commercial facilities such as hotels, hospitals, ap artments, dormitories, schools, and offices. High-e fficiency units have a higher energy efficiency ratio (EER) for cooling units and coefficient of performance (COP) for heat pumps.

Basecase : Consistent with all HVAC-related measures, the ba seline electricity intensity is 4.7 kWh/ft 2 , which is the estimated HVAC consumption in commercial buildings in Kentucky. This is based on the East South Centr al region from EIA’s commercial buildings survey (EIA 2006).Energy Efficiency Cost-Effective Resource Assessmen t for KY, ACEEE



### 36 Data Explanation: We assume that high efficiency units save an averag e of 7.8%, or 226 kWh per unit, relative to a basecase, which is based on an ACEEE submission to ASHRAE using web data. The measure life is 15 year s (ANSI/ASHRAE 1999). Percent applicable is 5%, whic h is the percent of cooling floorspace from package d terminal units (ADL 2001). The levelized cost is calculated to be 3.8 cents/kWh.

Efficient Room Air Conditioner

Measure Description: An ENERGY STAR room AC must be at least a 10% impro vement over the 2000 federal standard (an average 8000 Btu unit must have a 10.8 EER).

Basecase : The assumed basecase unit is a room AC that meets 2000 federal energy standards (an average 8000 Btu unit has a 9.8 EER) and uses an average of 677 kWh per unit. Baseline electricity intensity for this e nd-use, 2.1 kWh/ft 2

, is the estimated cooling consumption in commercial buildings in Kentucky. This is based on the East S outh Central census division from EIA’s commercial buildings sur vey (EIA 2006).

Data Explanation:

We assume an ENERGY STAR room AC uses 590 kWh per year, saves 13% of basecase energy, and has an incremental cost of $35 (ENERGY STAR cal culator). We assume a measure life of 13 years (EN ERGY STAR calculator), a current market share of 52% (EP A 2007), and percent applicable assumes 8% percent of cooling floorspace uses room AC units (ADL 2001). The level ized cost is calculated to be 4.3 cents/kWh. This m easure is applicable only from 2010 through the end of 2013.

2014 Efficient Room Air Conditioner

Measure Description: A room AC with higher efficiency than the 2014 fede ral standard (an 8000 Btu unit must have a 10.9 CEER).

Basecase : The assumed basecase unit is a room A/C that meet s 2014 federal energy standards (an 8000 Btu unit must meet 10.9 CEER) and uses an average of 969 kWh per unit in commercial applications. Baseline elec tricity intensity for this end-use, 2.1 kWh/ft 2 , is the estimated cooling consumption in commercia l buildings in Kentucky. This

is based on the East South Central census division from EIA’s commercial buildings survey (EIA 2006).

Data Explanation:

We assume a moderate increase in efficiency to 11. 5 CEER, which saves 51 kWh/year, or 5% of annual energy consumption. This efficiency level ca rries an incremental cost of $28 (DOE 2011). We as sume a measure life of 13 years (ENERGY STAR calculator), a current market share of 52% (EPA 2007), and perce nt applicable assumes 8% percent of cooling floorspace uses room AC units (ADL 2001). The levelized cost is calculated to be 5.8 cents/kWh. This measure is applicable onl y from 2014 through 2030.

High-Efficiency Chiller

Measure Description:

“Chillers” are the hearts of very large air-condit ioning systems for buildings and campuses with central chilled water systems. A centrifugal chill er utilizes the vapor compression cycle to chill wa ter and reject the heat collected from the chilled water plus the heat from the compressor to a second water loop controlled b y a cooling tower.

Basecase : The basecase unit assumes 0.634 kW/ton T24 from D EER for an average 150 ton system and 1,593 nationa l average full-load operating hours from the ASHRAE 9 0.1-1999 analysis. Baseline electricity intensity for this end-use,

4.7 kWh/ft 2 , is the estimated HVAC consumption in commercial b uildings in Kentucky. This is based on the East So uth

Central census division from EIA’s commercial build ings survey (EIA 2006).

Data Explanation: We assume the new measure has 20% savings, which i s derived from estimates provided in SWEEP (2002) and ACEEE (1997). The lifetime estimate of 2 3 years is from the ASHRAE Handbook (ASHRAE 2007). Incremental costs are $9,900 and assume a 150 ton a verage unit (CEC 2005). Percent applicable (33%) as sumes percentage of cooling floorspace using chillers (AD L 2001). The levelized cost is calculated to be 2.4 cents/kWh.

Dual-Enthalpy Economizer

Measure Description: Economizers modulate the amount of outside air intr oduced into the ventilation system based on the relative temperature and humidity of the outsid e and return air. If the enthalpy, or the latent a nd sensible heat, of

the outside air is less than that of the return air when space cooling is required, then the outside a ir is allowed to reduce or eliminate the cooling requirement of the AC equi pment.Energy Efficiency Cost-Effective Resource Assessmen t for KY, ACEEE



### 37 Basecase : Baseline electricity intensity, 2.1 kWh/ft 2 , is the estimated cooling intensity in commercial buildings in Kentucky. This is based on the East South Central census division from EIA’s commercial buildings sur vey (EIA 2006).

Data Explanation: Savings per unit assume 276 kWh (20% savings) per t on for an average 11-ton unit (CL&P 2007). Average measure life is 10 years (CL&P 2007). Incre mental costs per unit are from NYSERDA (2003). Perc ent applicable is the portion of cooling square footage represented by packaged AC and HP units, and assum es that 90% of these unitary systems could benefit from economi zers (ACEEE estimate). It also assumes a 5% current market share (ACEEE estimate). The levelized cost is calculated to be 3.8 cents/kWh.

Demand-Controlled Ventilation

Measure Description: Often, HVAC systems are designed to supply ventilat ed air based on assumed occupancy levels, resulting in over-ventilation. Demand-controlled ve ntilation monitors CO 2 levels in different zones and delivers the required ventilation only when and where it is need ed.

Basecase : The basecase is standard ventilation electricity consumption for a 50,000 ft 2 office building, or about 40,000 kWh/year (Sachs et al. 2004). Baseline electricity intensity for this end-use, 1.9 kWh/ft 2 , is the estimated ventilation consumption in commercial buildings in Kentucky. T his is based on the East South Central census divis ion from EIA’s commercial buildings survey (EIA 2006).

Data Explanation: We assume 20% savings for this measure (Sachs et al . 2004). Energy use per unit is 32,000 kWh/year, assuming a 50,000 ft 2 building (Sachs et al. 2004). The lifetime estimat e is 15 years, and incremental costs are $3,450 (Sachs et al. 2004). The measure is appl icable to 90% of larger (60%) cooling units (Sachs et al. 2004).

The levelized cost is calculated to be 4.2 cents/kW h.

HVAC Tune-Up

Measure Description: Most HVAC technicians lack interest, training, equi pment and methods to perform quality refrigerant charge and airflow (RCA) tune-ups. Bec ause many new and existing air conditioners have im proper RCA, which reduces efficiency, there is significant pote ntial for energy savings by diagnosing and correcti ng RCA.

Basecase : The assumed basecase unit is a 4.5 ton commercial unitary AC/HP per California program experience (CPUC 2006), estimated to use 8,396 annual kWh per the unitary AC/HP measure. The base electricity in tensity for

the HVAC end-use is 4.1 kWh/ ft 2 , the average for small buildings less than 25,000 ft 2 , for which this measure is applicable.

Data Explanation:

We assume 11% percent savings from this measure ac cording to California’s DEER database (CEC 2005) and the California Refrigerant and Air Charge (RCA) program report (CPUC 2006). We assume that 60% of units have improper RCA (CPUC 2006), and therefore this measure is applicable to 60% of unitary HVAC u nits in buildings less than or equal to 25,000 ft 2 (EIA 2006; average of south and mid-Atlantic regio ns). We estimate an average measure life of 3 years, as units need to b e periodically re-tuned. We assume a cost of $158 for this measure, based on a $35/ton labor cost (CEC 2005) and an ass umed 4.5-ton unit. The levelized cost is calculated to be 6.3

cents/kWh.

Retrocommissioning

Measure Description : Commercial building performance tends to degrade over time, and many new buildings do not perform as designed, requiring periodic upgrades to restore system functions to optimal performance. Retrocommissioning (RCx) is a systematic process to optimize building performance through O&M tune-up activities and diagnostic testing to identify problems in mech anical systems, controls, and lighting. The best ca ndidates for RCx are buildings over 50,000 or 100,000 ft 2

.

Basecase : The baseline is electricity intensity for HVAC an d lighting end-uses in buildings greater than 50,00 0 ft 2 (10

kWh/ ft 2 ), which is based on data from CBECS (EIA 2006). We take the average of the East South Central census division to estimate electricity intensity in Kentu cky buildings.

Data Explanation : We assume 10% savings for HVAC and lighting end-u ses (Sachs et al. 2004) in all commercial floorspace for buildings greater than 100,000 ft 2 , and 50% of floorspace in buildings 50,000 ft 2 or greater based on data from CBECS (EIA 2006). Xcel Energy’s RCx program re sults estimate an average RCx useful life of 7 year s (Xcel Energy 2006). We assume a $0.14 cost per ft 2 (Sachs et al. 2004). The cost is shared with gas s avings from the same measure, so the actual cost for electric savings is $0.13/s.f. The levelized cost is calculated to be 2.2 cents/kWh.Energy Efficiency Cost-Effective Resource Assessmen t for KY, ACEEE



### 38 Water Heating Measures

Heat Pump Water Heater

Measure Description: A heat pump water heater uses electricity to move h eat from one place to another, rather than a

less efficient electric resistance water heater whi ch uses electricity to generate the heat directly. The heat source is

the outside air or air in the basement where the un it is located.

Basecase : The basecase is standard electric water heating, with electricity consumption of 28,310 kWh/year (de rived from energy savings and percent savings). Baseline electricity intensity for this end-use, 0.36 kWh/f t 2 , is the estimated water heating intensity in commercial buildings in Kentucky. This is based on the East South Central r egion from EIA’s commercial buildings survey.

Data Explanation: We assumed a 50% savings, based on a simple coeffic ient of performance ratio. The assumed 14,155 kWh savings, $4,067 incremental cost, and 12 year lifetime estimates are from NYSERDA (2003). Percent applicable is based on engineering estimates for NY SERDA (2003), which assumes the measure is applicab le to 70% of food service floorspace and 30% of lodging, educ ation, and health care floorspace. Percent applicab le is then multiplied by 2, since these building types are mor e energy and hot-water intensive than the average c ommercial building. The levelized cost is calculated to be 3. 2 cents/kWh.

Efficient Commercial Clothes Washer (Water Heating Portion)

Measure Description: A high-efficiency commercial clothes washer saves b oth energy and water, and as a result reduces water heating loads. For a high-efficiency clothes washer, we assume a unit with an MEF of 2. 0, which represents about 80% of products on ENERGY STAR's p roduct lists.

Basecase : The basecase unit is a clothes washer that meets DOE’s federal efficiency standard of 1.26 MEF. An average unit consumes 1,136 kWh annually for water heating, which is derived from DOE (2007). Baselin e electricity intensity for this end-use is 0.36 kWh/ft 2 /year (water heating portion only).

Data Explanation: Savings on electric water heating from this measure assume a 2.0 MEF clothes washer uses an average 431 kWh annually, for a 62% savings, which is derived from DOE's TSD (DOE 2007). We assume th e measure is applicable to the 17% of units that have electri c water heating, and assume a 20% market share of e fficient products.

The overall stock estimate is based on national sto ck data (DOE 2007) and prorated to Kentucky based o n commercial building floorspace. We assume an incremental cost for an efficient unit is $316 and an 11-year measu re life (DOE 2007). The levelized cost is calculated to be 3.2 c ents/kWh. This measure is applicable from 2010 thro ugh the end of

2012.

2013 Efficient Commercial Clothes Washer (Water Hea ting Portion)

Measure Description: A commercial clothes washer that achieves higher ef ficiency than the 2013 federal standard, with a weighted average MEF of 2.2.

Basecase : The basecase unit is a clothes washer that meets DOE’s 2014 federal efficiency standard of 1.74 MEF (weighted average of top- and front-loading models) . An average unit consumes 600 kWh annually for wat er heating, which is derived from DOE (2009). Baseline electri city intensity for this end-use is 0.36 kWh/ft 2 /year (water heating portion only).

Data Explanation: Savings on electric water heating from this measure assume a 2.2 MEF clothes washer uses an average 360 kWh annually, for a 40% savings, which is derived from DOE's TSD (DOE 2009). We assume th e measure is applicable to the 17% of units that have electri c water heating, and assume a 20% market share of e fficient products.

The overall stock estimate is based on national sto ck data (DOE 2007) and prorated to Kentucky based o n commercial building floorspace. We assume an incremental cost for an efficient unit is $63 and an 11-year measur e life (DOE 2007). The levelized cost is calculated to be 0.7 c ents/kWh. This measure is applicable only from 2013 through 2030.



### Refrigeration Measures

Efficient Walk-In Refrigerators & FreezersEnergy Efficiency Cost-Effective Resource Assessmen t for KY, ACEEE



### 39 Measure Description: Walk-in refrigerators and freezers (walk-ins) are m edium and low-temperature refrigerated spaces that can be walked into, and that are used t o maintain the temperature of pre-cooled materials (not to rapidly cool down materials from warmer temperatures). A h igh-efficiency walk-in is defined as meeting the 20 04 CEC standard for walk-ins. This includes prescriptive r equirements such as higher levels of insulation, mo tor types, and the use of automatic door-closers (Nadel et al. 2006).

Basecase : The baseline energy use for an average walk-in is 18,859 kWh/year (Nadel et al. 2006). Baseline ele ctricity intensity for this end-use, 1.74 kWh/ft 2 , is the estimated refrigeration energy intensity i n commercial buildings in Kentucky. This is based on the East South Central d ivision from EIA’s commercial buildings survey.

Data Explanation: For a high-efficiency walk-in unit, we assume 44% s avings over a baseline unit, or 8220 kWh/year, $957 incremental cost, and a 12 year measure lifeti me (Nadel et al. 2006), which are based on PG&E (20 08). We estimate percent applicable as the 18% of refrigera tion energy use attributed to walk-ins (ADL 1996) a nd estimate a 50% current market share of high-efficiency product s (ACEEE estimate). The levelized cost is calculate d to be 1.3

cents/kWh.

Efficient Reach-In Coolers & Freezers

Measure Description: This measure includes high-efficiency packaged comm ercial reach-in refrigerators and freezers with solid doors, and refrigerators with transparen t doors such as beverage merchandisers. High-effic iency units are those that meet the CEE Tier 2 performance standard , as estimated in PG&E (2005).

Basecase : We assume a baseline unit that meets the 2010 fed eral standard and uses 4,027 kWh per year. This is weighted by sales of unit type per PG&E (2004b). Ba seline electricity intensity for this end-use, 1.74 kWh/ft 2 , is the estimated refrigeration energy intensity in commerc ial buildings in Kentucky. This is based on the Eas t South Central division from EIA’s commercial buildings survey.

Data Explanation:

The savings estimate for a high-efficiency unit, 3 1% savings or 1,268 kWh per year, is a weighted average of different types of reach-ins that meet C EE’s Tier 2 performance standard (PG&E 2004a). We estimate an average lifetime of 9 years and an incremental cost of $177, both per PG&E (2004a). We estimate perce nt applicable as the percent of refrigeration energy use attribut ed to reach-ins and beverage merchandisers, or 17% (ADL 1996), and assume a 10% current market share of high-effic iency products per PG&E (2004a). The levelized cost is calculated

to be 2.0 cents/kWh.

Efficient Ice-Maker

Measure Description:

Commercial ice makers, which are used in hospitals , hotels, and food service and preservation, have energy savings potential largely in their refr igeration systems. We assume an efficient icemaker meets CEC’s Tier 2 level of energy savings, which incorporate improv ed compressors, heat exchangers, and controls, as w ell as better insulation and gaskets.

Basecase : The baseline energy use, 3,338 kWh per year, is a weighted average of different types of ice-makers that

meet the 2010 federal standard. Baseline electricit y intensity for this end-use, 1.74 kWh/ft 2 , is the estimated refrigeration energy intensity in commercial buildings in Kentuck y. This is based on the East South Central region f rom EIA’s commercial buildings survey.

Data Explanation: The 16% savings estimate for a high-efficiency unit , or 542 kWh per year, is a weighted average of different types of ice-makers that meet CEC’s tier 2 energy savings (PG&E 2004a. We estimate an average lifetime of 10 years and an incremental cost of $100, both per PG&E (2005). We estimate percent applicable as the percent of refrigeration energy use attributed to ice-makers, or 10% (ACEEE estimate), and assume a 10% current m arket share of high-efficiency products per PG&E (2004a) and AC EEE judgment. The levelized cost is calculated to b e 2.4

cents/kWh.

Efficient Built-Up Refrigeration System

Measure Description: Built-up or supermarket refrigeration systems are p rimarily made up of refrigerated display cases for holding food for self-service shopping, as well as machine room cooling technologies. More effici ent built-up systems include improved machine room technologies (evaporative condensers, mechanical sub-cooling, an d heat reclaim), high-efficiency evaporative fan motors, h ot gas defrost, liquid-suction heat exchangers, ant isweat control, and

defrost control.Energy Efficiency Cost-Effective Resource Assessmen t for KY, ACEEE



### 40 Basecase : The measure baseline is 1,600,000 kWh for a 45,00 0 ft 2 supermarket with a built-up refrigeration system. Baseline electricity intensity for this end-use, 1. 74 kWh/ft 2 , is the estimated refrigeration energy intensity i n commercial buildings in Kentucky. This is based on the East So uth Central division from EIA’s commercial building s survey.

Data Explanation: Per-unit savings of 336,000 kWh (21%) are from ADL 1996 and assume an average new 45,000 ft 2 supermarket with a 5-year payback. We estimate per cent applicable as the percent of refrigeration ene rgy use attributed to built-up refrigeration, or 33% (ADL 1 996). Incremental cost ($37,000) and lifetime (10 years) are from ADL

1996. The levelized cost is calculated to be 1.4 ce nts/kWh.

Efficient Vending Machine

Measure Description: ENERGY STAR vending machines must consume 50% less energy than standard machines. Under the Tier II ENERGY STAR level, this translate s to a maximum energy consumption of 2309 kWh/year for a 600-

can machine.

Basecase : A Tier I ENERGY STAR level vending machine is ass umed to be the basecase. On average, it uses 2,816 kWh per year (ENERGY STAR calculator for a 600 can machine). Baseline electricity intensity for this e nd-use, 1.74

kWh/ft 2 , is the estimated refrigeration energy consumption in commercial buildings in Kentucky. This is based on the

East South Central division from EIA’s commercial b uildings survey.

Data Explanation: Per unit savings of 18% (507 kWh/year) are estimate d from ASAP (2007) based on ENERGY STAR
calculator estimates. Likewise, an incremental cost of $30, and a lifetime estimate of 10 years are fr om ASAP (2007). We estimate percent applicable as the percent of re frigeration energy use attributed to built-up refri geration, or 13% (NYSERDA 2003). The levelized cost is calculated to be 0.8 cents/kWh.

Vending Miser

Measure Description: A Vending Miser is an energy control device for ref rigerated vending machines. Using an occupancy sensor, the control turns off the machine ’s lights and duty cycles the compressor based on a mbient air
temperature.

Basecase : The basecase unit is an efficient vending machine that meets the ENERGY STAR tier II level and uses 2,309 kWh per year (ENERGY STAR calculator for a 60 0 can machine). Baseline electricity intensity is for the refrigeration end-use (1.74 kWh/ ft 2 ).

Data Explanation: We assume 35% savings for this measure based on man ufacturer data (USA Technologies 2008), an incremental cost of $167 (NYSERDA 2003), and a m easure life of 10 years (NYSERDA 2003). The leveliz ed cost

is calculated to be 2.7 cents/kWh.



### Appliances

Efficient Hot Food Holding Cabinets

Measure Description: Commercial hot food holding cabinets are used in th e commercial kitchen industry primarily for keeping food at safe serving temperature, without d rying it out or further cooking it. These cabinets can also be used to keep plates warm and to transport food for cater ing events. High efficiency models differ mainly in that they are better

insulated.

Basecase : The basecase unit is an uninsulated cabinet that consumes 5,190 kWh per year. This was calculated fr om PG&E (2004b) using a simple average of three sizes of cabinets, and then weighting the average using C ASE figures

for insulated cabinets.

Data Explanation: The energy savings from an insulated holding cabine t are 1,815 kWh per year (35% savings), with an incremental cost of $453, and an estimated 15 ye ar lifetime (Neubauer et al. 2009). Percent applica ble refers to the 25% of holding cabinets that are currently uninsula ted (Neubauer et al. 2009). The levelized cost is c alculated to be

2.4 cents/kWh.

Efficient Commercial Clothes Washer (excluding hot water energy)

Measure Description: A high-efficiency commercial clothes washer saves b oth energy and water. For a high-efficiency clothes washer, we assume a unit with an MEF of 2.0 , which represent about 80% of products on ENERGY S TAR's product lists.Energy Efficiency Cost-Effective Resource Assessmen t for KY, ACEEE



### 41 Basecase : The basecase unit is a clothes washer that meets DOE’s federal efficiency standard of 1.26 MEF. An average unit consumes 1,530 kWh annually for non-wa ter heating uses, which is derived from DOE 2007.

Data Explanation: Electric savings from this measure assume a 2.0 MEF clothes washer uses an average 1,186 kWh annually, for a 22% savings, which is derived from DOE's TSD (DOE 2007). We assume the measure is app licable to the 37% of units that have electric dryer heating ( removal of moisture from clothes), and assume a 20% market share of efficient products. The overall stock estimate i s based on national stock data (DOE 2007) and prora ted to Kentucky based on commercial building floorspace. We assume an incremental cost for an efficient unit is $316 and an 11-year measure life (DOE 2007). The levelized cost is calc ulated to be 3.2 cents/kWh. This measure is applica ble from 2010 through the end of 2012.

2013 Efficient Commercial Clothes Washer (excluding hot water energy)

Measure Description: A commercial clothes washer that achieves higher ef ficiency than the 2013 federal standard, with a weighted average MEF of 2.2.

Basecase : The basecase unit is a clothes washer that meets DOE’s 2013 federal efficiency standard of 1.74 MEF (weighted average of top- and front-loading models) . An average unit consumes 1,294 kWh annually for n on-water heating uses, which is derived from DOE 2009.

Data Explanation: Electric savings from this measure assume a 2.0 MEF clothes washer uses an average 1,107 kWh annually, for a 14% savings, which is derived from DOE's TSD (DOE 2009). We assume the measure is app licable to the 37% of units that have electric dryer heating ( removal of moisture from clothes), and assume a 20% market share of efficient products. The overall stock estimate i s based on national stock data (DOE 2007) and prora ted to Kentucky based on commercial building floorspace. We assume an incremental cost for an efficient unit is $63 a nd an 11-year measure life (DOE 2007). The levelized cost is calc ulated to be 0.6 cents/kWh. This measure is applica ble only from 2013 through 2030.



### Lighting Measures

Fluorescent Lighting Improvements

Measure Description: The new measure assumes extra-efficient ballasts an d high-lumen lamps are installed with the ballast factor of new ballasts chosen to provide th e right amount of light for an application.

Basecase : Basecase watts per square foot reflects current i nstalled fixtures. This includes 84,000 kWh used an nually for fluorescent lighting per average 14,000 ft 2 commercial building (Navigant 2002). On average, fl uorescent lights are operated 9.7 hours/day. We assume 2-lamp standard T 8 fixtures and electronic ballasts as the baseline, plus a small number of existing 3-lamp T12 fixtures with magneti c ballasts that are not likely to be replaced in th e absence of programs over the time horizon.

Data Explanation: We assume a percent savings of 27%. The incremental costs are $2 extra per ballast, and $1 extra for each of 2 lamps. The percent applicable (56%) i s the fluorescent percent of total commercial light ing kWh (Navigant 2002). The levelized cost is calculated to be 0.7 c ents/kWh.Energy Efficiency Cost-Effective Resource Assessmen t for KY, ACEEE



### 42 HID Lighting Improvements

Measure Description: Metal halide lamps produce light by passing an elec tric arc through a mixture of gases. Efficiency improvements in metal halide lamps include pulse st art lamp technology, electronic ballasts, and impro ved fixtures.

Basecase : Same basecase as fluorescent lighting improvement s.

Data Explanation:

The new measure savings and costs are from a PG&E CASE study on Metal Halide Lamps & Fixtures (PG&E 2004c). Energy savings were 447 kWh per year (26%), and incremental costs were $60. Percent appl icable (12%) is the percentage of commercial electricity u se for lighting that comes from HIDs (Navigant 2002 ). The levelized

cost is calculated to be 6.3 cents/kWh.

Replace Incandescent Lamps with CFLs

Measure Description: We assume that 32% of lighting in the commercial se ctor is incandescent (Navigant 2002). The

new measure assumes that 70% of current incandescen ts are replaced with CFLs.

Basecase : The basecase is an electric load of 2.0 kWh/s.f. This represents the amount of energy used for incan descent lighting in the average commercial building, and is derived from the average number of lamps, the aver age lamp wattage, and the average annual operating time (Nav igant 2002).

Data Explanation:

Energy savings are 1.5 kWh/s.f. annually, or 72%. This equates to annual per unit savings of 223 kWh. Incremental costs include $10 in the cost of a CFL, but save $8 in labor for replacing every 4 bu lbs. ACEEE estimates that 70% of sockets are applicable for th e new measure. The levelized cost is calculated to be 0.2 cent/kWh. This measure is applicable from 2010 through the en d of 2012.

2013 Replace Incandescent Lamps with CFLs

Measure Description: We assume that 32% of lighting in the commercial se ctor is incandescent (Navigant 2002). The

new measure assumes that 70% of current incandescen ts are replaced with CFLs.

Basecase : As federal standards phase in, the basecase load for incandescent lighting falls to 1.4 kWh/s.f. Thi s represents the amount of energy used for incandesce nt lighting in the average commercial building, and is based on an interpolation of data from Navigant (2002).

Data Explanation:

Energy savings are 0.9 kWh/s.f. annually, or 61%. This equates to annual per unit savings of 136 kWh. Incremental costs include $10 in the cost of a CFL, but save $8 in labor for replacing every 4 bu lbs. ACEEE estimates that 70% of sockets are applicable for th e new measure. The levelized cost is calculated to be 0.3 cent/kWh. This measure is applicable from 2013 through the en d of 2019.

2020 Replace Incandescent Lamps with CFLs

Measure Description: We assume that 32% of lighting in the commercial se ctor is incandescent (Navigant 2002). The

new measure assumes that 70% of current incandescen ts are replaced with CFLs.

Basecase : Based on expected 2020 lighting standards, the ba secase load for incandescent lighting is further re duced to 1.1 kWh/s.f. This represents the amount of energ y used for incandescent lighting in the average com mercial building, and is based on an interpolation of data from Navig ant (2002).

Data Explanation:

Energy savings are 0.5 kWh/s.f. annually, or 72%. This equates to annual per unit savings of 82 kWh. Incremental costs include $10 in the cost of a CFL, but save $8 in labor for replacing every 4 bu lbs. ACEEE estimates that 70% of sockets are applicable for th e new measure. The levelized cost is calculated to be 0.5 cent/kWh. This measure is applicable from 2020 through 2030.

Replace Incandescent Lamps with LEDs

Measure Description: The new measure assumes that 20% of current incande scents (10% low-wattage and 10% miscellaneous) are used for display lighting, and c an be replaced with LED lights.

Basecase : The basecase is 0.23 kWh/s.f. annually. This is d erived from the average wattage of quartz halogen, lowwattage, and average incandescents; the average num ber of each type of bulb in a commercial building; and the average annual operating time (Navigant 2002).Energy Efficiency Cost-Effective Resource Assessmen t for KY, ACEEE



### 43 Data Explanation:

Energy savings are 0.2 kWh/s.f. annually, or 88%, assuming LED replacement wattages as indicated by Navigant (2008). Incremental costs include $0.05 /s.f., a weighted average of the costs of each bulb , and including a $32 labor savings for replacing each bulb. The LE D prices were calculated using average efficacy and $/klm projections for 2010 (Navigant 2008). Percent appl icable assumes that 100% of these specific bulbs ar e replaceable (Navigant 2008). Between this measure and the previ ous measure (replacing incandescents with CFLs), 90 % of incandescents are assumed to be replaceable, allowi ng 10% of incandescents (for specialty applications ) to remain.

The levelized cost is calculated to be 3.7 cents/kW h.

Occupancy Sensor for Lighting

Measure Description: Installation of occupancy sensors can greatly reduc e lighting energy demands in commercial spaces, by automatically turning off lights in unoc cupied spaces.

Basecase : Same basecase as fluorescent lighting improvement s.

Data Explanation: Energy savings of 361 kWh per year (NYSERDA 2003) a ssumes 30% energy reduction in individual offices and rooms and 7.5% reduction in open spaces (ACEEE estimate). Incremental cost ($48) and lifet ime (10 years) estimates are from NYSERDA (2003). Percent applicab le (38%) is from Sachs et al. (2004). The levelized cost is

calculated to be 1.7 cents/kWh.

Daylight Dimming System

Measure Description: A daylight dimming system automatically dims electr ic lights to take advantage (or “harvest”) natural daylight.

Basecase : Same basecase as fluorescent lighting improvement s

Data Explanation:

Energy savings are estimated to be 143 kWh per ye ar, or 35% (NYSERDA 2003). Savings apply for lamps on the perimeters of buildings (25% appli cable—PIER 2003). Incremental cost ($68) and lifeti me (20 years) estimates are from NYSERDA (2003). The levelized co st is calculated to be 3.8 cents/kWh.

Outdoor Lighting—Controls

Measure Description: This measure includes a variety of lighting control technologies for exterior lights.

Basecase : No basecase data was available for this measure.

Data Explanation: We assume a savings of 174 kWh, or 20%, from lighti ng controls. Incremental costs of $43 are from DEER 2001 and assume each control on average contro ls three fixtures. Percent applicable of 30% is an ACEEE

estimate. Number of installed units is based on nat ional stock for parking and roadway from Navigant ( 2002), apportioned to Kentucky based on commercial floorsp ace. The levelized cost is calculated to be 2.5 cen ts/kWh.



### Miscellaneous

Office Equipment

Measure Description: This measure assumes a high-efficiency fax, printer , computer display, internal power supply, and a low mass copier.

Basecase : Baseline electricity use is 2886 kWh per year (NY SERDA 2003). Baseline electricity intensity for thi s enduse, 1.2 kWh/ft 2 , is the estimated office equipment energy intensit y in commercial buildings in Kentucky. This is base d

on the East South Central Division from EIA’s comme rcial buildings survey.

Data Explanation: Energy savings were 1410 kWh per year (49%), lifeti me was 5 years, and incremental costs were $20. Percent applicable is estimated to be (50%) (N YSERDA 2003). The levelized cost is calculated to b e 0.3

cents/kWh.

Turn Off Office Equipment after HoursEnergy Efficiency Cost-Effective Resource Assessmen t for KY, ACEEE



### 44 Measure Description: This measure involves turning off, or putting into a low-power state: vending machines, computers, monitors, printers and copiers.

Basecase : Baseline electricity use is 1.2 kWh/ft 2 , based on data from CBECS, LBNL, and ENERGY STAR.

Data Explanation: Energy savings were 6763 kWh per year (40%), lifeti me was 20 years, and incremental costs were $0. Percent applicable is 100%, as data for the sav ings already took into account the number of buildi ngs that already shut down equipment after hours. The levelized cost is $0/kWh



### New Buildings

Efficient New Building (15% Savings)

Measure Description: Incorporating energy efficiency into building desig n is best achieved at the time of construction. New buildings can achieve major energy savings in h eating and cooling, as well as energy-saving applia nces.

Basecase : Basecase of 15.1 kWh/ft 2 is an estimate of HVAC, water heating, and lightin g end-use electricity intensity for new buildings in Kentucky, derived from data fo r buildings built from 2000–2003 (EIA 2006).

Data Explanation: Incremental cost of $0.35 per ft 2 and measure life of 17 years are from NGRID (2007) . The cost is shared with gas savings from the same measure, so t he actual cost for electric savings is $0.18. Perce nt applicable of 18% for this new buildings measure assume that 30% and 50% new buildings savings are phased in one to two years prior to enactment of codes in the policy scenarios (30% in 2012 and 50% in 2020). The levelized cost is calculated to

be 0.7 cents/kWh.

Efficient New Building (30% Savings)

Measure Description: Incorporating energy efficiency into building desig n is best achieved at the time of construction. New buildings can achieve major energy savings in h eating and cooling, as well as energy-saving applia nces.

Basecase : Basecase of 15.1 kWh/ft 2 is an estimate of HVAC, water heating, and lightin g end-use electricity intensity for new Kentucky buildings, derived from data for b uildings built from 2000–2003 (EIA 2006).

Data Explanation: In New York, estimates show that commercial buildin gs can reach 30% beyond code at an investment of $0.70/kWh. To be conservative, we es timate $0.70/kWh by doubling the costs of a 15%-bey ond-code building. The cost is shared with gas savings from the same measure, so the actual cost for electric s avings is $0.36. Measure life of 17 years is from NGRID (2007). Perc ent applicable of 35% for 30% savings new buildings assume that 30% and 50% new buildings savings are phased in one to two years prior to enactment of codes in the po licy scenarios (30% in 2012 and 50% in 2020). The levelized cost i s calculated to be 0.7 cents/kWh.

Tax-Credit Eligible Building (50% Savings)

Measure Description: A federal tax incentive is available for new buildi ngs that are constructed to save at least 50% of the heating, cooling, ventilation, water heating, a nd interior lighting cost of a building that meets ASHRAE standard

90.1-2001.

Basecase : Basecase of 15.1 kWh/ft 2 is an estimate of HVAC, water heating, and lighting end-use electricity intensity for new buildings in Kentucky, derived from data fo r buildings built from 2000–2003 (EIA 2006).

Data Explanation: Incremental costs of $0.66 per ft 2 are derived from NREL (2008) studies on energy sav ings for medium box retail stores and supermarkets. This cos t is shared with gas savings from the same measure, so the actual cost for electric savings is $0.34. Percent applica ble is 18%, accounting only for the share of buildi ngs that call into the two types of buildings covered in the NREL studies. Measure life of 17 years is from NGRID (2007). Th e levelized cost

is calculated to be 0.4 cents/kWh.Energy Efficiency Cost-Effective Resource Assessment for KY, ACEEE45Table A-8. Commercial Building Electricity MeasureCharacterizationsMeasuresMeasureLife(Years)AnnualkWhsvgsperunit2007KentuckyStockkWhsvgspersfIncrementalcost perunitIncrementalcost per sfCost ofConservedEnergy(2010$/kWhsaved)AdjustmentFactor%TurnoverInteractionFactorSavingsin 2030(GWh)Existing BuildingsBuilding ShellCool roof20 5,500NA0.17 $ 3,750$ 0.25$ 0.0580% 100% 100% 142Roof insulation25 NANA0.28 NA$ 0.06$ 0.0235% 100% 100% 99Low-e windows25 NANA0.26 NA$ 0.04$ 0.0175% 84% 100% 171412HVACDuct testing and sealing 10 24,800NA0.53 $ 3,380NA$ 0.0225% 100% 100% 136Efficient ventilation fans & motors w VFD10 22,000NA0.47 $ 6,650NA$ 0.0440% 100% 91% 176HVAC Load-Reducing Measures Subtotal312High-effic. unitary AC & HP (65-135 kBtu)15 1,100NA0.34 $ 630NA$ 0.0633% 100% 91% 103High-effic. unitary AC & HP (135-240 kBtu)15 3,400NA0.51 $ 1,420NA$ 0.0415% 100% 91% 70Packaged Terminal HP and AC 15 230NA0.37 $ 90NA$ 0.045% 100% 91% 17Efficient room air conditioner1390NA0.27 $ 40NA$ 0.044% 38% 91% 42014 Efficient room air conditioner 13 50NA 0.11 $ 30 NA$ 0.064% 62% 91% 3High-efficiency chiller system 23 30,300NA0.94 $ 9,900NA$ 0.0233% 91% 91% 263HVAC Equipment Measures Subtotal459Dual Enthalpy Control 10 3,000NA0.43 $ 890NA$ 0.0446% 100% 80% 162Demand-Controlled Ventilation 15 8,000NA0.38 $ 3,450NA$ 0.0454% 100% 80% 169HVAC tuneup (smaller buildings) 3920NA0.45 $ 160NA$ 0.0629% 100% 80% 110Retrocommissioning 7 NANA0.98 NA$ 0.13$ 0.0210% 100% 80% 81HVAC Control Measures Subtotal522HVAC Subtotal1,294Water HeatingCommercial clothes washers 11 70031,3000.00 $ 320NA$ 0.0314% 37% 100% 12013 High efficiency commercial clothes washer11 240 31,300 0.00 $ 60NA $ 0.01 14% 63% 100% 1Heat pump water heater 12 14,200NA0.18 $ 4,070NA$ 0.0319% 100% 99% 3436RefrigerationWalk-in coolers & freezers 12 8,2000.76 $ 960NA$ 0.019% 100% 100% 70Reach-in coolers & freezers 9 1,3000.55 $ 180NA$ 0.0215% 100% 100% 87Ice-makers10 5400.28 $ 100NA$ 0.029% 100% 100% 27Energy Efficiency Cost-Effective Resource Assessment for KY, ACEEE46Supermarket (built-up) refrigeration system10 336,0000.36 $ 37,000NA$ 0.0133% 100% 100% 122Vending machines (to tier 2 ENERGY STAR level)10 5000.31 $ 30NA$ 0.0113% 100% 100% 43Vending miser10 8000.50 $ 170NA$ 0.0313% 100% 100% 69418LightingFluorescent lighting improvements 1360-1.31 $ 5NA$ 0.0156% 100% 100% 750HID lighting improvements 2 450-1.25 $ 60NA$ 0.0612% 100% 100% 153Replace incandescent lamps with CFLs 13220-1.45 $ NA $ 0.03$ 0.00 70% 31% 100% 639Replace 2013 incandescent lamps with CFLs13 140 - 0.88 $ NA $ 0.03$ 0.00 70% 54% 100% 340Replace 2020 incandescent lamps with CFLs13 80 - 0.53 $ NA $ 0.03$ 0.01 70% 15% 100% 59Replace incandescent lamps with LEDs 9160-0.21 $ 760$ 0.05$ 0.04100% 100% 100% 210Occupancy sensor for lighting 10 360-0.90 $ 50NA$ 0.0238% 100% 59% 207Daylight dimming system 20 140-1.68 $ 70NA$ 0.0425% 100% 54% 233Outdoor Lighting Controls 14 170 860,000 NA$ 40 NA $ 0.03 30% 100% 100%452,752Office EquipmentOffice equipment 5 1,400-0.58 $ 0.01$ 20$ 0.00350% 100% 100% 294Turn off office equipment after-hours 54,500NA0.44 $ -$ -$ -100% 100% 76% 344638Appliances/OtherHot Food Holding Cabinets 15 1,8008,500NA $ 450NA$ 0.0225% 100% 100% 4Commercial clothes washers 11 34031,300NA $ 320NA$ 0.0329% 37% 100% 12013 High efficiency commercial clothes washers11 190 31,300 NA 60 NA $ 0.0129% 63%100%16Existing Buildings Subtotal5,143New BuildingsEfficient new building (15% savings) 17NA-2.27 NA$ 0.18 $ 0.0118% 100% 100% 160Efficient new building (30% savings) 17NA-4.53 NA$ 0.36 $ 0.0135% 100% 100% 642Tax credit eligible building (50% svgs) 17NA-7.56 NA$ 0.34$ 0.0018% 100% 100% 5461,348TOTAL 6,491Energy Efficiency Cost-Effective Resource Assessmen t for KY, ACEEE



### 47 

### A.2.2. Natural Gas Analysis

To estimate the resource potential for efficiency i n commercial buildings in Kentucky, we first develo p a disaggregate characterization of baseline natural g as consumption in the state for current gas use and a reference load forecast (see Table A-9 below). High ly disaggregated commercial gas consumption data is unfortunately not available at the state level. To estimate these data, we start with current natural gas consumption for the Kentucky commercial sector (EIA 2008) and a forecast out to 2030 based on SERC forecasts, and we disaggregate by end-use using ave rage regional data from CBECS 2003 (EIA 2006) and AEO 2011 (EIA 2011).

Table A-9. Baseline Commercial Natural Gas Consumpt ion by End-Use (BBtu)

End-Use 2010 % 2020 % 2030 %

Heating 22,104 58% 21,565 58% 20,292 56%

Cooling 240 0.6% 234 0.6% 192 1%

HVAC subtotal 22,344 59% 21,798 59% 20,483 56%

Water Heating 7,443 20% 7,261 20% 7,435 21%

Cooking 2,186 6% 2,133 6% 2,158 6%

Other 6,123 16% 5,974 16% 6,183 17%

Total 38,096 100% 37,166 100% 36,259 100%



### Next, we estimated commercial square footage in Ken tucky using commercial square footage data for the East South Central census region from EIA 2011. We apportion this square footage to Kentucky based on employment data from Moody’s Economy.com (Economy.c om 2011a). We assume that the percentage of employment in the East South Central census region attributable to Kentucky is roughly equal to the percentage of commercial square floorspace attribut able to the state. By multiplying this percentage t o the total commercial square footage in the East South C entral census region we calculated 1.02 billion squ are feet of commercial floorspace in the state.



### A.2.2.1 Measure Cost-Effectiveness

We then analyzed twenty efficiency measures for exi sting commercial buildings and 3 new construction whole-building measures to examine the cost-effecti ve energy efficiency resource potential. For each efficiency measure, we estimated natural gas saving s (Annual Savings per Measure) and incremental cost (Measure Cost) in a “replacement on burnout scenari o,” which assumes that the product is replaced or t he

measure is installed at the end of the measure’s us eful life. Savings and costs are incremental to an assumed Baseline Measure. We estimate savings (MMBt u) and costs ($) on a per-unit and/or a per-square foot commercial floorspace basis. For each measure we also assume a Measure Lifetime, or the estimated useful life of the product.

A measure is determined to be cost-effective if its levelized cost of saved energy, or cost of conserv ed energy (CCE), is less than $11.38/MMBtu, the estima ted current average commercial cost of natural gas in Kentucky (DEDI 2011). Commercial natural gas pri ces in Kentucky dipped precipitously for the year 2 010, but are projected to rise over the period of this s tudy. For this reason, we averaged gas prices from DEDI 2011 for the years 2009 and 2011 to use as a baseli ne for cost-effectiveness. The estimated CCE for ea ch efficiency measure, which assumes a discount rate o f 5%, are shown in the measure descriptions below. Equation 1 shows the calculation for cost of conser ved energy.

Our assumed Baseline Measure, Annual Savings per Me asure, Measure Cost, Measure Lifetime, and CCE are reported for each of the efficiency measures in the list of measure descriptions below. We group t he 20 efficiency measures for existing commercial buildin gs by end-use and list the 3 new building measures last.

Equation 1 . CCE = PMT ((Discount Rate), (Measure Lifetime), ( Measure Cost)) / (Annual Savings per Measure (kWh))Energy Efficiency Cost-Effective Resource Assessmen t for KY, ACEEE



### 48 

### A.2.2.2. Total Statewide Resource Potential

For each measure, we derived Annual Savings per Mea sure on a per square foot basis (MMBtu per square foot) for the applicable end-use. For measures that we only have savings on a per-unit or per-building basis, we first derive the percent savings and multiply by the Baseline Natural Gas Intensity for that end-us e. The

assumed baseline intensities for each end use are s hown in Table A-10. As an example, for a specific HVAC measure we multiply its percent savings by the baseline gas intensity (MBtu per square foot) for the

HVAC end-use.

Table A-10. Commercial End-Use Baseline Natural Gas Intensities (MMBtu per sf.)

End Use 2010

MMBtu/s.f.

Heating 24.7

Cooling 0.3

Ventilation 0.0

Water Heating 8.3

Cooking 2.4

Other 6.8

HVAC Subtotal 25.0

Total 42.6



### To estimate the total efficiency resource potential in existing commercial buildings in Kentucky by 20 30, we first adjusted the individual measure savings by an Adjustment Factor (See Equation 2). This factor accounts for two adjustments: the technical feasibi lity of efficiency measures, called the Percent App licable (the percent of Kentucky floorspace that satisfy th e basecase conditions and other technical prerequis ites such as heating fuel type and cooling equipment, et c); and the Current Market Share, or the percent of products that already meet the efficiency criteria. These assumptions are outlined in each of the effi ciency measure descriptions below.

Equation 2. Adjustment Factor = Percent Applicable x (1-Current Market Share)

We then adjusted total savings for interactions amo ng individual measures. For example, we must adjust HVAC equipment savings downward to account for savi ngs already realized through improved building envelope measures (insulation and windows), which r educe heating and cooling loads. Similarly, we adju st water heating equipment savings to account for redu ced water heating loads from the use of more effici ent clothes washers. The multiplier for these adjustmen ts is called the Interaction Factor.

Finally, we adjust replacement measures with lifeti mes more than 11 and 21 years to only account for t he percent turning over in 11 and 21 years, which repr esents the benchmark years of 2020 and 2030, respectively. Note that the multiplier, Percent Tu rnover, is only applicable to products being replac ed upon

burnout and not retrofit measures such as insulatio n. These retrofit measures therefore have 100% of measures “turning over.”

We then calculate the resource potential for each m easure in the state using Equation 3, which takes i nto account all of the adjustments described above. Th e sum of the resource potential from all measures i s the overall energy efficiency resource potential in the state’s commercial buildings sector.



### A.2.3. Efficiency Measures

Table A-10 shows the twenty-three efficiency measur es examined for this analysis, grouped by end-use costs, savings (MBtu) per product or square foot, Percent Applicable, Interaction Factor, Percent Tur nover, and total savings potential (MMBtu) in 2030. Detail ed descriptions of each measure are given below, grouped by end-use.Energy Efficiency Cost-Effective Resource Assessmen t for KY, ACEEE



### 49 Building Shell Improvements

Roof Insulation

Measure Description: Fiberglass or cellulose insulation material in roof cavities will reduce heat transfer, though the type of building construction limits insulation pos sibilities. R-values describe the performance fact or for insulation

levels.

Basecase : The basecase electricity intensity for this measu re was disaggregated from the post-savings electric ity intensity and the percentage of savings.

Data Explanation: We assume 3% savings and a post-savings gas intensi ty 24.2 Mbtu/ft 2 /year, based on HVAC natural gas intensity per EIA commercial building survey fo r East South Central region. An average lifetime of 25 years (CL&P 2007) and an incremental cost of 11 cents/ft 2 were also assumed. The measure is shared with gas s avings as well, so the portion of the incremental cost attributed to g as savings is 5 cents/s.f. The levelized cost is $4 .86/MMBtu.

Double Pane Low-Emissivity Windows

Measure Description:

Double-pane windows have insulating air- or gas-fi lled spaces between each pane, which resist

heat flow. Low-emissivity (low-e) glass has a special surface coating to reduce heat transfer back through the wi ndow, and a window’s R-value represents the amount of hea t transfer back through a window. Low-e windows ar e particularly useful in climates with heavy cooling loads, becaus e they can reflect anywhere from 40% to 70% of the heat that is normally transmitted through clear glass. The Solar Heat Gain Coefficient (SHGC) represents the fracti on of solar energy transferred through a window. For example, a low-e window with a 0.4 SHGC keeps out 60% of the sun’s heat.

Basecase : The basecase electricity intensity for this measu re was disaggregated from the post-savings electric ity intensity and the percent savings.

Data Explanation: Percent savings of 3% apply to whole-building elect ricity consumption (ACEEE 1997). Incremental costs assume $2 per window (SWEEP 2002). As with r oof insulation, this measure is shared with gas sav ings. A measure life of 25 years is from SWEEP (2002). Per cent applicable is an ACEEE estimate. The levelized cost is calculated to be $3.22/MMBtu.



### Heating and Cooling: Equipment and Controls

Boiler Tune-Up

Measure Description: A boiler tune-up should be done regularly to keep t he boiler system running at optimal efficiency.

Basecase : Same basecase as for high-efficiency main/front-e nd boilers is assumed.

Data Explanation: A boiler tune-up saves 2% of the energy of a baseli ne unit annually, or 30 MMBtu, and has an incremental cost of $250 per boiler (GDS 2005). Per cent applicable of 7% was calculated using CBECS da ta of percentage of buildings with boilers that don’t per form regular maintenance (CBECS 2003). We assume a measure life of 2 years (GDS 2005). The levelized cost is $9.04/ MMBtu.

Duct Sealing

Measure Description: Duct sealing involves sealing gaps in ductwork that allow conditioned air to escape.

Basecase : The basecase is heating and cooling energy intens ity, 25.0 MBtu/ft 2 . This is the average of data for the East South Central census division (from the EIA’s comme rcial building survey) and the AEO.

Data Explanation: This measure saves 18% (48 MMBtu) of heating and co oling energy annually, and has an incremental cost of $7,000 (Sachs et al 2004). Perc ent applicable is 49% based on the number of buildi ngs under 25,000 s.f., and the measure life is 25 years (Sach s et al 2004). The levelized cost is $10.43/MMBtu.Energy Efficiency Cost-Effective Resource Assessmen t for KY, ACEEE



### 50 Pipe Insulation

Measure Description: This measure includes insulating accessible steam o r hot water supply pipes in the boiler room.

Basecase : The basecase is standard heating energy intensity , 24.7 MBtu/ft 2 . This is the average of data for the East South Central census division (from the EIA’s comme rcial building survey) and the AEO.

Data Explanation: This measure saves 2% (5 MMBtu) of heating energy a nnually (NYSERDA 2006), and has an incremental cost of $450, based on an ACEEE estimat e of 75 feet of pipe to insulate at $6 per linear f oot of pipe (RSMeans). Percent applicable is 48%, current marke t share is 75%, and the measure life is 15 years (N YSERDA 2006). The levelized cost is $8.49/MMBtu.

High-Efficiency Rooftop Furnace Unit

Measure Description: This measure involves technologies such as condensi ng units to capture latent heat from water vapor in the flue, and modulating units which have a variable firing rate to match the output to heat load.

Basecase : The basecase is a 10 ton gas-fired condensing roo ftop packaged unit with 80% steady state efficiency . The average annual gas use is 179 MMBtu (Sachs et al. 2 004).

Data Explanation: A high efficiency rooftop unit uses 150 MMBtu/year , saves 16% of basecase energy, and has an incremental cost of $1,000 (Sachs et al. 2004). Per cent applicable is 35% based on the percent of buil dings less than 100,000 square feet multiplied by the assumption th at the following percentages of size buildings use rooftop units: 40% of buildings 1,000-5,000 s.f., 80% of buildings 5,000-25,000 s.f., and 66% of buildings 25,000-100 ,000 s.f. This assumption is based on CBECS data as well as ACEEE estimates. We assume a measure life of 15 years and 0% current market share (Sachs et al. 2004). The level ized cost is shown to be $3.42/MMBtu.

High-Efficiency Standalone Furnace

Measure Description: This measure replaces minimum-efficiency gas furnac es with condensing furnaces and/or modulating capacity (variable firing rate that matc hes the output to heat load).

Basecase : The basecase is a 80 AFUE residential furnace. Th e average annual gas use is 142 MMBtu (ENERGY STAR figure modified by a factor of 1.45 to represe nt the slightly larger average size of a small comm ercial building than a residential building).

Data Explanation: A high efficiency furnace with 90 AFUE (ENERGY STAR minimum) uses 126 MMBtu/year, saves 11% of basecase energy, and has an incremental cost of $464 (ENERGY STAR; cost and savings modified as per basecase). Percent applicable is 2% based on the pe rcent of buildings less than 5,000 square feet mult iplied by the assumption that 40% of smaller buildings use furnac es. This assumption is based on CBECS data as well as ACEEE estimates. We assume a measure life of 18 years and 35% current market share (ENERGY STAR). The leveli zed cost is shown to be $2.51/MMBtu.

High-Efficiency Boiler

Measure Description: Substitution of condensing boilers with outdoor res et or equivalent controls (including circulation pump time clocks) for basecase non-condensing boile rs without adaptive controls (just thermostats and equivalent).

Basecase : A case study of boilers with 68% efficiency was a ssumed. The average annual gas use is 1,106 MMBtu, which was modified from the original statistic (26, 267 MMBtu) to account for the difference in the cas e study building size and the average commercial building size in Ke ntucky(Sachs et al. 2004).

Data Explanation: Boilers with 90% efficiency use 832 MMBtu/year in a n average commercial building, save 50% of basecase energy (Durkin), and have an incremental c ost of $3,024 (Sachs et al. 2004). The cost reflect s the incremental cost of a high-efficiency boiler as well as the cos t of an outdoor temperature reset system. Percent a pplicable is 41% based on assumptions of percentage of buildings in each size class that use boilers and an assumption of 90% that can be easily replaced, per CBECS and ACEEE estimat es. We assume a measure life of 24 years (Sachs et al. 2004). The levelized cost is shown to be $0.88/MMBtu.Energy Efficiency Cost-Effective Resource Assessmen t for KY, ACEEE



### 51 Programmable Thermostat

Measure Description: This measure involves replacing conventional thermo stats with programmable thermostats. This measure is only appropriate to smaller buildings.

Basecase : The basecase of 29.1 MBtu/ft 2 is the standard heating and cooling intensity modi fied by the overall intensity ratio of small buildings to the average (EIA 2006, 2011).

Data Explanation: This measure saves 5% (3 MMBtu) of heating energy a nnually (RLW 2007). The measure has an incremental cost of $101 (CEC 2005) and a percent a pplicable of 7%. The percent applicable derives fro m the percentage of East South Central commercial buildin gs under 2,000 s.f. and the fact that 80% of these buildings do not have an EMS (EIA 2006). The measure life is 12 year s (GDS 2005) and the levelized cost is $5.28/MMBtu.

Demand-Controlled Ventilation

Measure Description: Often, HVAC systems are designed to supply ventilat ed air based on assumed occupancy levels, resulting in over-ventilation. Demand-controlled ve ntilation monitors CO 2 levels in different zones and delivers the required ventilation only when and where it is need ed.

Basecase : The basecase energy use is 215 MMBtu/year, or the portion of commercial gas heating attributable to ventilation (Sachs et al 2004).

Data Explanation: Demand-controlled ventilation saves 20% of the vent ilation energy a year (43 MMBtu), and has an incremental cost of $575 per zone (six zones were a ssumed as an average, for a total cost of $3,450) ( Sachs et al 2004). Percent applicable is 54%, and the measure l ife is 15 years (Sachs et al 2004). The levelized c ost is $7.75/MMBtu.

Outdoor Temperature Boiler Reset

Measure Description: Normally, boilers heat water to a fixed temperature . With an outdoor air reset system, the maximum temperature the boiler operates at is varia ble, depending on the outdoor temperature. The warm er the outdoor temperature, the lower the boiler temperatu re needs to be, saving energy over the standard fix ed (high) temperature operation of a conventional boiler.

Basecase : The basecase is standard heating energy intensity , 24.7 MBtu/ft 2 . This is the average of data for the East South Central census division (from the EIA’s comme rcial building survey) and the AEO.

Data Explanation: This measure saves 2% (5 MMBtu) of heating energy a nnually (NYSERDA 2006), and has an incremental cost of $600 (GDS 2005). Percent applic able is 5%, based on the percent of boilers not inc luded in the High Efficiency Boiler measure. The current market share is 60% (NYSERDA 2006), and the measure life i s 15 years (ACEEE 2006). The levelized cost is $11.14/MMBtu.



### Water Heating

Smart Circulation Pump Controls

Measure Description: This measure involves shutting down the DHW recircu lation pump during periods when there is little or no demand for hot water. These periods ar e determined by the controls from historical use pa tterns. This leads to savings from heat loss through piping, as well a s savings associated with the running of the pump.

Basecase : The basecase is standard water heating energy int ensity, 8.3 MBtu/ft 2 . This is the average of data for the East South Central census division (from the EIA’s commercial building survey) and the AEO.

Data Explanation: This measure saves 3% (3 MMBtu) of water heating en ergy annually, and has an incremental cost of $143 (GDS 2005). Percent applicable is 5% based on the percent of buildings with boilers that are n ot covered in the high efficiency boiler measure, and the measure life is 15 years (GDS 2005). The levelized cost is $5.34/MMBtu.

Condensing DHW Stand-Alone Tank

Measure Description: This measure involves a new high-efficiency residen tial-sized tank-type gas water heater, for smaller commercial operations.Energy Efficiency Cost-Effective Resource Assessmen t for KY, ACEEE



### 52 Basecase : The basecase is standard water heating energy int ensity, 8.3 MBtu/ft 2 . This is the average of data for the East South Central census division (from the EIA’s commercial building survey) and the AEO.

Data Explanation: This measure saves 36% (37 MMBtu) of water heating energy annually (NYSERDA 2006), and has an incremental cost of $1,100 (Sachs et al. 2004). Percent applicable is 35%, current market share is 5%, and the measure life is 15 years (NYSERDA 2006). The leveli zed cost is $3.43/MMBtu.

Indirect-Fired DHW Off Space Heating Boiler

Measure Description: DHW cylinders are heated indirectly with water from the boiler.

Basecase : The basecase is standard water heating energy int ensity, 8.3 MBtu/ft 2 . This is the average of data for the East South Central census division (from the EIA’s commercial building survey) and the AEO.

Data Explanation: This measure saves 30% (30 MMBtu) of water heating energy annually (NYSERDA 2006), and has an incremental cost of $4,000. Percent applicable i s 6%, the current market share is close to 0%, and the measure life is 25 years (NYSERDA 2006). The levelized cost is $ 11.19/MMBtu.

Instantaneous High-Modulating Water Heater

Measure Description: “Instant” or “tankless” water heaters heat water on demand. Advanced units have modulating

burners with electronic controls to maintain consta nt outlet temperature despite variations in inlet t emperature and

variable demand.

Basecase : The basecase is standard water heating energy int ensity, 8.3 MBtu/ft 2 . This is the average of data for the West South Central census division (from the EIA’s commercial building survey) and the AEO.

Data Explanation: This measure saves 21% (21 MMBtu) of water heating energy annually (NYSERDA 2006), and has an incremental cost of $650 (Sachs et al. 2004). Pe rcent applicable is 4%, the current market share is 14%, and the measure life is 15 years (NYSERDA 2006). The leveli zed cost is $3.55/MMBtu.



### Cooking

Direct Fired Convection Range/Oven

Measure Description: Convection ovens use a small fan to circulate hot a ir within the oven cavity. Circulating air can heat food more efficiently than the still air found in conventional ovens.

Basecase : A conventional range/oven uses approximately 160 MMBtu/year (Food Service Technology Center 2002).

Data Explanation: This measure saves 35% (56 MMBtu) per year per unit (GDS 2005), and has an incremental cost of $2,625 (RSMeans 2008). The measure life is 8 years and the percent applicable is 7%, which accounts fo r weighted applicability in only the commercial sectors that w ould have ovens (NYSERDA 2006). The levelized cost is $7.25/MMBtu.

High Efficiency ENERGY STAR Fryer

Measure Description: ENERGY STAR fryers can save 15-25% of the energy us ed by a conventional model. Highefficiency gas fryers utilize technology such as he at pipes, infrared burners, recirculation tubes, po wer burners, and pulse combustion.

Basecase : A conventional fryer uses 163 MMBtu per year on a verage (EPA 2007).

Data Explanation: An ENERGY STAR fryer saves 31% (51 MMBtu) per year per unit, and has an incremental cost of $3,795 (ENERGY STAR). Current market share is 11% ( EPA 2007), and the Kentucky stock data (42,000 unit s) was derived from national annual shipments (EPA 2007), measure life (12 years—ENERGY STAR), and the ratio of commercial buildings that include cooking equipment that use natural gas (CBECS). The levelized cost i s $8.48/MMBtu.Energy Efficiency Cost-Effective Resource Assessmen t for KY, ACEEE



### 53 High Efficiency ENERGY STAR Steam Cooker

Measure Description: ENERGY STAR steam cookers have better insulation to reduce heat loss, and a more efficient steam delivery system. These steamers can be up to 50% more energy-efficient than conventional steamer s.

Basecase : A conventional steamer uses 91 MMBtu per year on average (data derived from ENERGY STAR and Food Service Technology Center data).

Data Explanation: An ENERGY STAR steam cooker saves 50% (45 MMBtu) pe r year per unit (ENERGY STAR), and incremental cost is a net savings of $1,995 (CEC 20 05). Current market share is 8%, and the Kentucky s tock data (17,000 units) was derived from national annual shi pments (ENERGY STAR) , measure life (10 years—Food Service Technology Center 2002), and the ratio of commercia l buildings that include cooking equipment that use natural gas (EIA 2006). The levelized cost is a net savings of $5.63/MMBtu.

High Efficiency Griddle

Measure Description: High efficiency griddles take advantage of technolo gies such as double sided griddles, chrome finishes, snap-action thermostats, infrared burners , heat pipes, thermal fluid or steam to reduce ener gy consumption.

Basecase : A conventional griddle uses 112 MMBtu per year on average (Food Service Technology Center 2002).

Data Explanation: A high efficiency griddle saves 14% (15 MMBtu) of e nergy per year per unit (GDS 2005), and has an incremental cost of $50 (CEC 2005). Percent appl icable is 90%. The levelized cost is $0.37/MMBtu.



### Miscellaneous

Retrocommissioning

Measure Description: Retrocommissioning results in optimized energy usag e of buildings through better operations and maintenance, control calibration, and facilitie s staff training.

Basecase : The basecase is average heating, cooling, and wat er heating energy intensity, 33.3 MBtu/ft 2 . This is the average of data for the East South Central census d ivision (from the EIA’s commercial building survey) and the AEO.

Data Explanation: This measure saves 10% (34 MMBtu) of heating, cooli ng, and water heating energy (Sachs et al 2004), and has an incremental cost of $0.25 per squ are foot. This cost is shared with electric savings from the same measure, so the actual cost of gas savings is $0.12 . Percent applicable is 54%, and the measure life i s 7 years (Sachs et al 2004). The levelized cost is $6.48/MMBtu.



### New Buildings

Efficient New Building (15% Savings)

Measure Description: Incorporating energy efficiency into building desig n is best achieved at the time of construction. New buildings can achieve major energy savings in h eating and cooling, as well as energy-saving applia nces.

Basecase : The basecase is 48.4 MBtu/ft 2 per year, based on the HVAC and water heating ener gy intensities for commercial buildings built between 2000 and 2003 (E IA 2006).

Data Explanation : Incremental cost of $0.35 per ft 2 and measure life of 17 years are from NGRID (2007) . The cost is shared with electric savings from the same measure, so the actual cost for gas savings is $0.17. Perce nt applicable of 18% for this new buildings measure assume that 30% and 50% new buildings savings are phased in one to two years prior to enactment of codes in the policy scenarios (30% in 2012 and 50% in 2020). The levelized cost is calculated to be $2.07/MMBtu.

Efficient New Building (30% Savings)

Measure Description: Incorporating energy efficiency into building desig n is best achieved at the time of construction. New buildings can achieve major energy savings in h eating and cooling, as well as energy-saving applia nces.Energy Efficiency Cost-Effective Resource Assessmen t for KY, ACEEE



### 54 Basecase : The basecase is 48.4 MBtu/ft 2 per year, based on the HVAC and water heating ener gy intensities for commercial buildings built between 2000 and 2003 (E IA 2006).

Data Explanation:

In New York, estimates show that commercial buildi ngs can reach 30% beyond code at an investment of $0.70/kWh. To be conservative, we es timate $0.70/kWh by doubling the costs of a 15%-bey ond-code building. The cost is shared with electric savings from the same measure, so the actual cost for gas savings is $0.34. Measure life of 17 years is from NGRID (2007). Perc ent applicable of 35% for 30% savings new buildings assume that 30% and 50% new buildings savings are phased in one to two years prior to enactment of codes in the po licy scenarios (30% in 2012 and 50% in 2020). The levelized cost i s calculated to be $2.07/MMBtu.

Tax-Credit Eligible Building (50% Savings)

Measure Description:

A federal tax incentive is available for new build ings that are constructed to save at least 50% of the heating, cooling, ventilation, water heating, a nd interior lighting cost of a building that meets ASHRAE standard

90.1-2001.

Basecase:

Basecase of 48.4 MBtu/ft 2 is an estimate of HVAC, water heating, and lightin g end-use electricity intensity for new buildings in Kentucky, derived from data fo r buildings built from 2000–2003 (EIA 2006).

Data Explanation:

Incremental costs of $0.66 per ft 2 are derived from NREL (2008) studies on energy sav ings for medium box retail stores and supermarkets. This cos t is shared with electric savings from the same mea sure, so the actual cost for gas savings is $0.32. Percent appli cable is 18%, accounting only for the share of buil dings that call into the two types of buildings covered in the NREL stud ies. Measure life of 17 years is from NGRID (2007). The levelized cost is calculated to be $1.17/MMBtu.Energy Efficiency Cost-Effective Resource Assessment for KY, ACEEE55Table A-11. Commercial Natural Gas Measure CharacterizationsMeasuresMeasureLife(Years)AnnualMMBtusvgsperunit2007Kentucky StockMBtusvgspers.f.Incremental costper unitIncremental costper s.f.Cost ofConservedEnergy(2010$/MMBtu saved)Adjustment Factor%TurnoverInteractionFactorSavings in2030(BBtu)Existing BuildingsBuilding ShellRoof insulation 25 8 NA0.78$ - 0.05 4.86 35% 84% 100% 234,929Low-e windows 25 8 NA0.75$ - 0.03 3.22 75% 84% 100% 480,366715,295HVACBoiler tune-up 215NA1.44 $ 250$ -$ 9.047% 100% 100% 102,993Duct sealing 2548NA4.61 $ 7,000$ 1$ 10.4349% 84% 100% 1,944,801Pipe insulation - heating 155NA0.49 $ 450$ -$ 8.4912% 100% 100% 60,614Load-Reducing Measures Subtotal2,108,408High Efficiency rooftop furnace unit 1528NA2.73 $ 1,000$ -$ 3.4235% 100% 84% 818,763High efficiency standalone furnace 1816NA1.53 $ 464$ -$ 2.511% 100% 84% 17,027High efficiency main/front-end boiler 24184NA17.83 $ 2,229$ -$ 0.8837% 88% 84% 4,981,615HVAC Equipment Measures Subtotal5,817,405Programmable thermostat 122NA1.45 $ 101$ -$ 5.287% 100% 39% 41,084Demand-controlled ventilation 1543NA4.15 $ 3,450$ -$ 7.7554% 100% 39% 899,015Outdoor temperature boiler reset 155NA0.49 $ 590$ -$ 11.142% 100% 39% 3,808HVAC Control Measures Subtotal943,907HVAC Subtotal8,869,720Water HeatingCirculation pump time clock 1530.25 $ 143$ - $ 5.345% 100% 100% 11,736Control Measures Subtotal11,736Condensing DHW stand-alone tank 1531NA2.99 $ 1,100$ -$ 3.4333% 100% 100% 1,007,290Indirect-fired DHW off space heatingboiler25252.45 $ 4,000$ -$ 11.196% 84% 100% 130,991Tankless high-modulating water heater 15181.71 $ 650$ -$ 3.553% 100% 100% 59,903Equipment Measures Subtotal1,198,185Water Heating Subtotal1,209,920CookingDirect fired convection range/oven 856104,000 0.00 $ 2,625$ -$ 7.257% 100% 100% 390,725High efficiency ENERGY STAR fryer 125142,0000.00 $ 3,795$ -$ 8.4811% 100% 100% 233,178High efficiency ENERGY STAR steamcooker 104517,0000.00 $ (1,955) $ -$ (5.63) 8% 100% 100% 62,206High efficiency griddle 121519,000 0.00 $ 50$ -$ 0.375% 100% 100% 14,493Energy Efficiency Cost-Effective Resource Assessment for KY, ACEEE56700,601MiscellaneousRetrocommissioning 734 NA3.33 $ -$ 0.12$ 6.4854% 100% 100% 1,837,8221,837,822Existing Buildings Subtotal13,333,360New BuildingsEfficient new building (15% savings) 17NANA7.25 NA$ 0.17 $ 2.0718% 100% 100% 348,796Efficient new building (30% savings) 17NANA14.51 NA$ 0.34$ 2.0735% 100% 100% 1,395,183Tax credit eligible building (50% svgs)17NANA24.18 NA$ 0.32$ 1.1718% 100% 100% 1,185,9052,929,884TOTAL6,263,243Energy Efficiency Cost-Effective Resource Assessmen t for KY, ACEEE



### 57 

## A.3. Industrial Buildings Sector

A.3.1. Overview of Approach

According to 2006 Manufacturing Energy Consumption Survey (MECS) (EIA 2009 12 

### ), the South region (which includes Kentucky) industrial energy use is broken down as follows: electricity (15%), natural gas (34%), fuel oil (3%), coal & coke (5%), and other ( 43%). Therefore, this analysis focused on the elect ricity and natural gas savings potential. It was accomplis hed in several steps. First, the industrial market in Kentucky was characterized at a disaggregated level and energy consumption for key end-uses was estimated. Then cost effective energy-saving measur es were selected based on the projected average retail industrial electricity and natural gas price s. The economic potential savings for these measure s was estimated by applying the efficiency measures to en d-use energy consumption. The following sections described the process for estimating the savings po tential in Kentucky.



### A.3.2. Market Characterization and Estimation of Ba se Year Electricity Consumption

The industrial sector is made up of a diverse group of economic entities spanning agriculture, mining, construction and manufacturing. Significant divers ity exists within most of these industry sub-sector s, with the greatest diversity within manufacturing. The va rious product categories within manufacturing are classified using the North American Industrial Clas sification System (NAICS) (Census 2007). 13



### Comprehensive, highly-disaggregated electricity or natural gas data for the industrial sector is not a vailable at the state level. To estimate the electricity and natural gas consumption, this study drew upon a nu mber of resources, all using the NAICS system and a cons istent sample methodology. Fortunately, a conjuncti on of the various economic censuses for each state all ows us to use a common base-year of 2007.

We then used national industry energy intensities d erived from industry group electricity and natural gas consumption data reported in the 2010 Annual Energy Outlook (AEO) (EIA 2010) and value of shipments data reported in the 2007 Annual Survey of Manufact uring (ASM) (Census 2007) to apportion industrial energy consumption. These intensities were then app lied to the value of shipments data for the manufacturing energy groups (three-digit NAICS) in Kentucky. These energy consumption estimates were

then used to estimate the share of the industrial s ector electricity and natural gas consumption for e ach

sub-sector.

Paducah Gaseous Diffusions Plant

The Department of Energy operates a Gaseous Diffusi on plant in West Paducah, Kentucky, which enriches uranium for power generation. However, no value of shipments data (or estimates of energy intensity) e xists for this one-of-a-kind plant. Based on conversation s with staff at the Kentucky Department for Energy Development and Independence, we estimate that this plant consumes a significant portion of the nearby TVA Shawnee power plant (ORISPL 1379),which generat ed about 8,500 GWh in 2010 (EPA 2011 14 

### ). We assume that about two-thirds of the electricity gen erated by this plant powers the Gaseous Diffusion p lant, accounting for 12% of total industrial electricity consumption. We further assume that the future elec tricity use will remain at 12%. While the plant is schedule d for shutdown in 2012, there are efforts underway to extend the plant’s life. If you have any additional information on the energ y use and future of the Paducah Gaseous Diffusion plant, please respond wit h comments.

12 http://205.254.135.24/emeu/mecs/mecs2006/2006tables .html

13 The industry sector is comprised of four sub-secto rs: Manufacturing, Mining, Agriculture, and Constru ction. Each sub-sector is further broken down into individual industry groups , reflecting the many different definitions for the term ‘industrial.’

14 http://www.epa.gov/airmarkets/images/CoalUnitCharac teristics2010.pdfEnergy Efficiency Cost-Effective Resource Assessmen t for KY, ACEEE



### 58 Preparation of Baseline Industrial Electricity and Natural Gas Forecast

As is the case for state-level energy consumption d ata, no state-by-state disaggregated electricity or natural gas consumption forecasts are publicly available. S everal alternate data sources were used to calculat e estimated energy consumption growth rates for each state and sub-sector. We made the assumption that energy consumption will be a function of gross stat e value of shipments (VOS). Electricity and natura l gas consumption, however, will not grow at the same rat e as value of shipments. This is because in genera l, energy intensity (energy consumed per value of outp ut) decreases with time.

Because state-level disaggregated economic growth p rojections are not publicly available, data was use d from Moody’s Economy.com. The average growth rate f or specific industrial-subsectors was estimated based on Economy.com’s estimates of gross state pro duct (Economy.com 2011c). We used this estimated industrial energy consumption distribution to appor tion the EIA estimate (2010) of industrial energy consumption.

The industry sector is comprised of four sub-sector s: Manufacturing, Mining, Agriculture, and Construc tion. The manufacturing sector is broken down into 21 sub sectors, defined by three digit NAICS codes. In ord er to most closely match available data from the ASM a nd AEO, three subsectors were further broken down to four digit NAICS codes: chemical manufacturing, nonmetallic mineral product manufacturing, and primary metal manufacturing. Table A-12 below shows the estimated electrical and natural gas consumption for all these subsectors in Kentucky in 2010.Energy Efficiency Cost-Effective Resource Assessmen t for KY, ACEEE



### 59 Table A-12. 2010 Electricity & Natural Gas Consumpt ion by Industry in Kentucky



### A.3.3. Market Characterization Results

In 2010, Kentucky’s industrial sector consumed 45,3 32 GWh of electricity and 121,566 billion Btus of n atural gas. Within the manufacturing sector, the chemical, primary metal, petroleum & coal, and non-metallic mineral products manufacturing industries are the l argest consumers of energy, accounting for 65% of electricity consumption and 75% of natural gas.

Industrial Electricity End Uses

In order to determine the electricity savings for a ny technology, the fraction of the electricity to w hich the technology is applicable must be determined. Much o f the energy consumed by industry is directly invol ved in processes required to produce various products. Electricity accounts for about a third of the prima ry energy used by industries (EIA 2010). Electricity i s used for many purposes, the most important being to run motors, provide lighting, provide heating, and drive electrochemical processes. (GWh) (%) (BBtu) (%)

Agriculture 11 663 1% 605 0%
Mining 21 1,890 4% 7,407 6%

Construction 23 482 1% 1,555 1%
Food mfg 311 1,164 3% 3,991 3% Beverage & tobacco product mfg 312 460 1% 1,577 1%

Textile mills 313 56 0% 108 0% Textile product mills 314 56 0% 108 0% Apparel mfg 315 56 0% 108 0% Leather & allied product mfg 316 0 0% 0 0%
Wood product mfg 321 479 1% 350 0% Paper mfg 322 1,633 4% 5,042 4% Printing & related support activities 323 323 1% 618 1%
Petroleum & coal products mfg 324 1,366 3% 14,293 12% Chemical mfg 325 7,200 16% 37,771 31% Pharmaceutical & medicine mfg 3254 128 0% 672 1%
All other chemical products -3253,3255- 7,072 16% 37,09 9 31% Plastics & rubber products mfg 326 1,364 3% 1,244 1%
Nonmetallic mineral product mfg 327 2,021 4% 13,264 11% Glass & glass product mfg 3272 567 1% 2,949 2% Cement & concrete product mfg 3273 1,113 2% 8,542 7%
Other minerals 3271,3274- 341 1% 1,773 1%
Primary metal mfg 331 15,108 33% 26,046 21% Iron & steel mills & ferroalloy mfg 3311 4,450 10% 13, 194 11% Steel product mfg from purchased steel 3312 520 1% 1,5 43 1%
Alumina and Aluminum 3313 8,161 18% 8,338 7%
Nonferrous Metals, except Aluminum 3314 1,485 3% 1,517 1 %

Foundries 3315 491 1% 1,454 1% Fabricated metal product mfg 332 1,007 2% 1,676 1%
Machinery mfg 333 519 1% 613 1% Computer & electronic product mfg 334 319 1% 263 0%
Electrical equipment, appliance, & component mfg 335 433 1% 594 0% Transportation equipment mfg 336 2,849 6% 3,770 3%
Furniture & related product mfg 337 114 0% 218 0%
Miscellaneous mfg 339 181 0% 346 0%
Gaseous Diffusion Plant x 5,588 12% x x

Total Industrial Sector 45,332 100% 121,566 100% NAICS Code Industry Electricity Natural GasEnergy Efficiency Cost-Effective Resource Assessmen t for KY, ACEEE



### 60 While detailed end-use data is only available for e ach manufacturing sub-sector and group through the MECS survey (EIA 2009), motor systems are estimated to consume 60% of the industrial electricity (Xenergy 2002). The fraction of total electricity a ttributed to motors is presented in Figure A-1.

Figure A-1. Percent of Total Electricity Consumptio n by Motor Systems

Source: XENERGY (2002)



### Motors are used for many diverse applications from fluid applications (pumps, fans, and air and refrig eration compressors), to materials handling and processing (conveyors, machine tools and other processing equipment). The distribution of these motor uses va ries significantly by industry, with material proce ssing being the largest consumer in the sector. Figure A- 2 shows the total weighted average of end-use elect ricity consumption in Kentucky with a breakdown of motors use in the state. 0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Chemical mfg Petroleum & coal products mfg Computer &

electronic product mfg Food mfg Transportation equipment mfg Fabricated metal

product mfg Nonmetallic

mineral product mfg Primary metal

mfgEnergy Efficiency Cost-Effective Resource Assessmen t for KY, ACEEE



### 61 Figure A-2. Weighted Average of Industrial End-Uses with Breakdown of Industrial Motor System

End-Uses

As discussed above, motors make up the majority of industrial electricity use. Electricity use for pro cess heating is also significant, mostly due to the larg e amount of primary metals manufacturing, particula r aluminum. (Note: this excludes end-use consumption at the Gaseous Diffusion Plant.)

Industrial Natural Gas End Uses

A similar methodology was used to determine industr ial natural gas end use. The MECS survey (EIA 2010) provided both end use categories and nationwide con sumption by industry, which was then applied to the actual industry mix in Kentucky. The results are sh own below in Figure A-3.

Figure A-3. Weighted Average of Total Industrial Na tural Gas End-Uses in Kentucky

Direct process heating is responsible for nearly ha lf of natural gas use in Kentucky, followed by boil ers, which account for close to 50%.Energy Efficiency Cost-Effective Resource Assessmen t for KY, ACEEE



### 62 

### A.3.4. Overview of Efficiency Measures Analyzed

The first step in our technology assessment was to collect limited information on a broad “universe” o f potential technologies. Our key sources of informat ion included the DOE, Office of Industrial Technolo gies; the Center for the Analysis and Dissemination of De monstrated Energy Technologies (CADDET); Lawrence Berkeley National Laboratory (LBNL) and American Co uncil for an Energy-Efficient Economy reports; information from NYSERDA; and Itron. We did not col lect any primary data on technology performance.

Oftentimes, no one source provided all of the infor mation we sought for our assessment (energy use, energy savings compared to average current technolo gy, investment cost, operating cost savings, lifeti me, etc.). We therefore made our best effort to combine readily available information along with expert ju dgment where necessary.

We sought to identify technologies that could have a large potential impact in terms of saving energy. These may be technologies that are specific to one proces s or one industry sector, or so-called “cross-cutti ng” technologies that are applicable to a variety of se ctors. In estimating energy savings, we first ident ified the specific energy savings of each technology by compa ring the energy used by the efficient technology to the energy required by current processes. Our second st ep was to “scale up” this savings estimate to see h ow much energy savings—for industry overall—this techn ology would achieve. For the most part, we derived specific energy savings information from the variou s technology assessment studies noted above.

In scaling up the technology-specific energy saving s, we relied on our general knowledge of the variou s industrial processes to which this technology could be applied. We also took into account structural limitations to the penetration of the technology. A dditionally, we recognized that market penetration, in the absence of significant policy support, can take tim e given the slowness of stock turnover in many indu strial

facilities.

Electricity Measures

We identified 13 measures that were cost effective at the average projected industrial electricity rat es in Kentucky of $0.061/kWh (see Table B-12). The cost a nd performance of these measures has been developed over the past decade by ACEEE from resear ch into the individual measures and review of past project performance. The costs of many of these mea sures has increased in recent years as a result of significant increases in key commodity costs such a s copper, steel and aluminum, as well as overall manufacturing costs due to energy prices and market pressures. The estimates presented in Table B-12 represent ACEEE’s most current estimates. We presen t the full normalized installed measure cost (i.e., the full cost required to install a measure per unit of saved energy) as well as the levelized cost (i.e., the annual

cost of the measure amortized over the life of the measure).Energy Efficiency Cost-Effective Resource Assessmen t for KY, ACEEE



### 63 Table A-13. Cost and Performance of Industrial Elec tricity Measures

Measure Measure

Life Cost of Saved Energy Annual Savings for

End-Use Installed

cost/kWh Levelized

cost/kWh
Sensors & Controls 15 $0.145 $0.014 3% Duct/Pipe insulation 20 $0.653 $0.052 20% Electric supply 15 $0.104 $0.010 3% Lighting 15 $0.212 $0.020 23%
Advanced efficient motors 25 $0.491 $0.035 6% Motor management 5 $0.079 $0.018 1%
Lubricants 1 $0.000 $0.000 3% Motor system optimization 15 $0.097 $0.009 1% Compressed air manage 1 $0.000 $0.000 17% Compressed air –advanced 15 $0.001 $0.000 4% Pumps 15 $0.083 $0.008 20%
Fans 15 $0.249 $0.024 6% Refrigeration 15 $0.034 $0.003 10%

In addition, we estimated the average normalized co st of industrial energy efficiency investments to b e $0.23/kWh saved. This estimate was arrived at by es timating the sum of the annual incremental savings for each measure in each industry based on end-use energy distribution and dividing the corresponding total investment required.

Natural Gas Measures

We identified 35 measures that were cost effective at the average projected industrial natural gas rat e in Kentucky of $9.71/MMBtu (see Table B-13). The cost and performance of these measures were taken from a 2006 Itron report. We present the full normalized installed measure cost (i.e., the full cost requir ed to install a measure per unit of saved energy) as well as the levelized cost (i.e., the annual cost of th e measure amortized over the life of the measure).Energy Efficiency Cost-Effective Resource Assessmen t for KY, ACEEE



### 64 Table A-14. Cost and Performance of Industrial Natu ral Gas Measures

Measure Measure

Life Installed

Cost ($/MMBtu Saved) Levelized

Cost ($/MMBtu Saved) Annual

Savings for

End-Use

Boiler Measures Improved process control 15 $1.23 $0.12 3%

Maintain boilers 2 $0.02 $0.01 10%
Flue gas heat recovery/economizer 15 $3.48 $0.34 2%
Blowdown steam heat recovery 15 $3.06 $0.29 1%
Upgrade burner efficiency 20 $2.50 $0.20 1%

Water treatment 10 $0.63 $0.08 1%

Load control 15 $1.36 $0.13 4%
Improved insulation 15 $6.55 $0.63 8%
Steam trap maintenance 2 $0.84 $0.45 13%
Automatic steam trap monitoring 15 $3.41 $0.33 5%
Leak repair 2 $0.22 $0.12 4%

Condensate return 15 $9.57 $0.92 10%

HVAC Measures Improve ceiling insulation 20 $85.70 $6.88 24%
Install HE(95%) cond. furnace/boiler 20 $37.88 $3.0 4 18% Stack heat exchanger 20 $18.41 $1.48 5%

Duct insulation 20 $3.52 $0.28 2%

EMS install 20 $31.79 $2.55 10%
EMS optimization 5 $0.30 $0.07 1%

Process Heat Measures Process Controls & Management 8 $3.33 $0.51 5%
Heat Recovery 20 $92.06 $7.39 20%

Efficient burners 10 $14.27 $1.85 18%
Process integration 15 $87.04 $8.39 17%
Efficient drying 20 $61.55 $4.94 17%

Closed hood 15 $34.82 $3.35 5%
Extended nip press 20 $92.59 $7.43 16%
Improved separation processes 20 $26.30 $2.11 10%
Flare gas controls and recovery 15 $87.04 $8.39 50%
Fouling control 5 $1.77 $0.41 7%

Efficient furnaces 20 $13.89 $1.11 6%
Oxyfuel 20 $63.13 $5.07 20%
Batch cullet preheating 15 $27.85 $2.68 16%

Preventative maintenance 5 $0.30 $0.07 2%

Combustion controls 8 $5.32 $0.82 8%
Optimize furnace operations 10 $9.52 $1.23 10%

Insulation/reduce heat losses 15 $29.79 $2.87 5%

We estimated the average normalized cost of industr ial energy efficiency investments to be $2.03/MMBtu saved. This estimate was arrived at by estimating t he sum of the annual incremental savings for each measure in each industry based on end-use energy di stribution and dividing the corresponding total investment required.Energy Efficiency Cost-Effective Resource Assessmen t for KY, ACEEE



### 65 

### A.3.5. Potential for Energy Savings

In Kentucky, a diverse set of efficiency measures w ill provide electricity savings for industry. The a pplication

of these measures contributes to total economic ele ctric savings potential of 15%. These savings are distributed as presented in Figure A-4.

Figure A-4. Fraction of Electricity Savings Potenti al by Measure

The total natural gas savings potential for the Ken tucky is about 18%. These savings are distributed a s presented in Figure A-5.

Figure A-5. Fraction of Natural Gas Savings Potenti al by Measure

In addition, this analysis did not consider process -specific efficiency measures that would be applied at the

individual site level because available data does n ot allow this level of analysis. However, based on experience from site assessments by DOE and other e ntities, we would anticipate an additional economic savings of 5-10%, primarily at large energy intensi ve manufacturing facilities. Therefore, the overall economic industrial efficiency resource opportunity for electricity and natural gas is on the order of 20-25% and 23%-28%, respectively.