1 | Energy Efficiency and Renewable Energy 

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Energy Conservation Standards:

Preliminary Analysis forCommercial Packaged Boilers

December 9, 2014

James Raba

Department of Building Techno

EERE‐2013‐BT‐SPkgdBoilers201

doe.gov
2

Welcome• Introductions (around the room)

• Role of the Facilitator

• “Norms”

– Speak one at a time.

– Say your name for the record – there will be a complete tra

this meeting.

– Be concise – share the ‘air‐time’.

– Keep the focus here – cell phones on silent; limit sidebar

conversations.

– Webinar participants turn phone on mute; “raise your hand

recognized to speak.
3

Purpose of the Public Meeting• To present methodologies and characterize results f

analyses to date.

• To discuss specific issues related to each analysis

• To seek input from attendees on methodologies,

assumptions and data sources.

• To describe upcoming analyses and next steps
4

Agenda

9:00 am – 9:15 am Welcome; Introductions and Agenda Review

9:15 am – 9:45 am Purpose of Public Meeting; Opening Statements; Commen

Instructions; and Regulatory Authority and Rulemaking Ov

9:45 am – 10:15 am Market and Technology Assessment and Screening Analysi10:15 am – 10:45 am Engineering Analysis10:45 am – 11:00 am Break11:00 am – 12:00 pm Markups; Energy Use Characterization and LCC and Paybac

12:00 pm– 1:00 pm Lunch (on your own)

1:00 pm – 1:30 pm LCC and Payback Period Analysis (cont.)1:30 pm – 2:15 pm National Impact Analysis2:15 pm – 2:30 pm Break2:30 pm – 2:45 pm Preliminary Manufacturer Impact Analysis

2:45 pm – 3:15 pm Next Steps

3:15 pm – 3:30 pm Closing Remarks from Interested Parties and Adjournment
5

Housekeeping Items – Listening Via the Webca• The Department of Energy is broadcasting this publ

meeting “live” over the Internet for interested part

are unable to attend in person.

• All interested parties are encouraged to submit wri

comments after the public meeting.
6

Opening Remarks

Meeting participants are invited to pro

opening remarks or statements at this t
7

Issue boxes correspond to the list of issues published at 

of the NOPR document, available at:

http://www.regulations.gov/#!docketDetail;D=EERE‐2

STD‐0030

The deadline for submitting comments is January 20, 2

Issues for Discussion

Issue Box: DOE welcomes comments, data, and information concerning its proposed test procedufor commercial packaged boilers. Whether invited by an issue box or not, comments are welcome on any part of DOE’s analysis.
8

How to Submit Comments

• In all correspondence, please include all of the follo

o Energy Conservation Standards for Commercial Package

o Docket Number: EERE‐2013‐BT‐STD‐0030

o Regulatory Identification Number (RIN): 1904‐AD01

• Contact Information

Email: PkgdBoilers2013STD0030@ee.doe.gov

Postal Mail:

Ms. Brenda Edwards

U.S. Department of Energy

Building Technologies Program

Mailstop EE‐5B1000 Independence Avenue, SW

Washington, DC 20585‐0121

Courier:

Ms. Brenda Edwards

U.S. Department of E

Building Technologie

L’Enfant Plaza, SW, Su

Washington, DC 200

Telephone: (202) 586
9

Public Meeting Slides Topics

Markups, Energy Use Characterization, LCC and Payb

Period Analysis 4

3 Engineering Analysis1 Introduction and Overview2 Market and Technology Assessment and Screening Analysis5 Shipments and National Impact Analysis6 Preliminary Manufacturer Impact Analysis7 Next Steps
10

Regulatory Authority

• Energy Policy and Conservation Act (EPCA) of 1975 (P.L. 94‐163)

– Established the Energy Conservation Program for Certain Commercial

and Industrial Equipment

• Energy Policy Act of 1992 (EPACT 1992), (P.L. 102−486) amended

EPCA to add commercial packaged boilers as a type of covered

equipment. (42 U.S.C. 6311(1)(J) and (11)(B))

• EPCA directs DOE to consider amending existing Federal energy

conservation standards for commercial packaged boilers whenever

the American Society of Heating, Refrigerating, and Air‐

Conditioning Engineers (ASHRAE) amends the efficiency levels in

Standard 90.1. (42 U.S.C. 6313(a)(6))

• Energy Independence and Security Act of 2007 (EISA 2007) (P.L. 110‐140

American Energy Manufacturing Technical Corrections Act (AEMTCA) (P

amended EPCA to require that every 6 years, the Secretary publish eithe

– A notice of the determination that standards for the product do not need to 

– A notice of proposed rulemaking including new proposed standards (42 U.S.C

• DOE last published a final rule for CPB in 2009 (74 FR 36312 (July 22, 20
11

Rulemaking Overview – Definitions

• EPCA defines “packaged boiler” as:

– “a boiler that is shipped complete with heating equipment, mechan

equipment, and automatic controls; usually shipped in one or more 

U.S.C. 6311(11)(B))

• DOE further defines commercial packaged boiler in 10 CF

– “commercial packaged boiler” as a type of packaged low pressure b

industrial equipment with a capacity, (rated maximum input) of 300

more which, to any significant extent, is distributed in commerce: (

space conditioning applications in buildings; or (2) For service wate

buildings but does not meet the definition of a ‘hot water supply b

431].

– packaged low pressure boiler is defined as “a packaged boiler that 

boiler designed to operate at or below a steam pressure of 15 psig 

square inch gauge]; or (2) A hot water boiler designed to operate a

water pressure of 160 psig and a temperature of 250 °F; or (3) A bo

designed to be capable of supplying either steam or hot water, and 

operate under the conditions in paragraphs (1) and (2) of this defin

431.82)
12

Rulemaking Overview – Current Energy Efficiency S

*Effective March 2, 2022, energy conservation standard will be

increased to a Thermal Efficiency of 79%

Equipment type Subcategory Size category (input) Efficiency level 

Hot Water Commercial

Packaged Boilers Gas‐fired ≥300,000 Btu/h and ≤2,500,000 Btu/h 80.0% ET M

Hot Water Commercial

Packaged Boilers Gas‐fired >2,500,000 Btu/h 82.0% EC M

Hot Water Commercial

Packaged Boilers Oil‐fired ≥300,000 Btu/h and ≤2,500,000 Btu/h 82.0% ET M

Hot Water Commercial

Packaged Boilers Oil‐fired >2,500,000 Btu/h 84.0% Ec M

Steam CommercialPackaged Boilers

Gas‐fired—all,except natural draft

≥300,000 Btu/h and≤2,500,000 Btu/h 79.0% ET M

Steam CommercialPackaged Boilers

Gas‐fired—all,except natural draft >2,500,000 Btu/h 79.0% ET M

Steam CommercialPackaged Boilers

Gas‐fired—naturaldraft

≥300,000 Btu/h and≤2,500,000 Btu/h 77.0% ET M

Steam CommercialPackaged Boilers

Gas‐fired—naturaldraft >2,500,000 Btu/h 77.0% ET M

Steam CommercialPackaged Boilers Oil‐fired ≥300,000 Btu/h and ≤2,500,000 Btu/h 81.0% ET MSteam CommercialPackaged Boilers Oil‐fired >2,500,000 Btu/h 81.0% ET M
13

Rulemaking Overview – Current Process

• DOE is considering revisions to the energy conservation sta

commercial packaged boilers under subpart E of 10 CFR Pa

• Notice of Public Meeting and Availability of the Framework 

Published on September 3, 2013.

– Framework Document public meeting was held October 1, 201

• Notice of Public Meeting and Availability of the Preliminary 

Support Document published on November 20, 2014.

– The standards preliminary analysis comment period ends Janu

• Preliminary analysis based on test procedure under subpar

Part 431

– DOE is conducting a rulemaking to update the existing test pro

commercial packaged boilers.

• DOE is conducting a coverage determination for natural dra

See http://www1.eere.energy.gov/buildings/appliance_standa

product.aspx/productid/74
14

Rulemaking Overview – Timeline

Milestone Da

Preliminary Analysis Publication Novembe

Preliminary Analysis Public Meeting Decembe

Comment Period Ends January NOPR Publication (projected) July, Final Rule Publication (projected) July, 

2013 2014 2015 2017 2016 2018 

Energy Conservation 

Standards Timeline
15

The Energy Policy and Conservation Act (EPCA) directs D

consider seven factors when setting energy conservatio

Factor Analysis

Economic impact on consumers

and manufacturers

Life‐cycle cost anal

Manufacturer impact a

Lifetime operating cost savings Life‐cycle cost anal

Total projected energy savings National impact ana

Impact on utility or performance Screening analys

Engineering analy

Impact of any lessening of competition Manufacturer impact a

Need for national energy conservation National impact ana

Other factors the Secretary considers

relevant

Environmental assess

Utility impact analy

Employment impact a

Rulemaking Overview ‐ Analyses
16

Framework

Document

Preliminary

Analysis NOPR Final Rule Effective Date Framework Document Preliminary Analysis NOPR Final Rule Effective Date

Steps for the Standards Rulemaking: Prelimin

Activities and Analyses

Shipments 

Analysis

M

Im

Life-Cycle

Cost and 

Payback

Period

Analyses

Market & Technology Assessment

Screening 

Analysis

Engineering

Analysis

Markups to

Determine 

Product Price

Energy Use 

Characterization

Life-Cycle

Cost and 

Payback

Period

Analyses

Market & Technology Assessment

Screening 

Analysis

Engineering

Analysis

Markups to

Determine 

Product Price

Energy Use 

Characterization

Rulemaking Overview – Preliminary Analysis
17

Public Meeting Slides Topics

Markups, Energy Use Characterization, LCC and Payb

Period Analysis 4

3 Engineering Analysis1 Introduction and Overview2 Market and Technology Assessment and Screening Analysis5 Shipments and National Impact Analysis6 Preliminary Manufacturer Impact Analysis7 Next Steps
18

Rulemaking Overview ‐ Market & Technology As

Framework

Document

Preliminary

Activities NOPR Final Rule Effective Date Framework Document Preliminary Activities NOPR Final Rule Effective Date

Shipments 

Analysis

M

Im

Life-Cycle

Cost and 

Payback

Period

Analyses

Market & Technology Assessment

Screening 

Analysis

Engineering

Analysis

Markups to

Determine 

Product Price

Energy Use 

Characterization

Life-Cycle

Cost and 

Payback

Period

Analyses

Market & Technology Assessment

Screening 

Analysis

Engineering

Analysis

Markups to

Determine 

Product Price

Energy Use 

Characterization

Steps for the Standards Rulemaking: Prelimin

Activities and Analyses
19

M&TA – Purpose and Introduction

Commercial Packaged Boiler Equ

Mechanical Draft N

Small Gas‐Fired Hot Water Small Ga

Small Gas‐Fired Steam Small GaSmall Oil‐Fired Hot Water Small Oil

Small Oil‐Fired Steam Small Oil

Large Gas‐Fired Hot Water Large GaLarge Gas‐Fired Steam Large GaLarge Oil‐Fired Hot Water Large Oil

Large Oil‐Fired Steam Large Oil

† Small ≥300,000 Btu/hr and ≤2,500,

Large > 2,500,000 Btu/hr

Purpose:• Define equipment classes• Characterize the CPB

industry

• Identify existing regulatory

and voluntary energy

efficiency programs

• Gather relevant market data

• Analyze market data

• Identify technology options

for improving efficiency
20

M&TA – Scope• Covers all “packaged low pressure” boilers :

– Having input capacity greater than or equal to 300,000Btu/

– Fired using gas (natural gas or propane) or oil;

– Capable of producing hot water, steam or both; and

– That are mechanical or natural draft

• Electric CPB’s not covered under the scope of this

rulemaking

• DOE is conducting a coverage determination to clarif

authority to regulate natural draft CPBs.

• Standby and off mode energy conservation standard 

included in the scope

• Only thermal and combustion efficiency standards

• No upper limit of input capacity set for regulating CP
21

M&TA – Sample of Market Performance Data

• Small Gas‐Fired Mechanical Draft Hot Water

 76 80 84 88 92 96

 100

300 - 400

400 - 500

500 - 600

600 - 700

700 - 800

800 - 900

900 - 1000

1000 - 1100

1100 - 1200

1200 - 1300

1300 - 1400

1400 - 1500

1500 - 1600

1600 - 1700

1700 - 1800

1800 - 1900

1900 - 2000

2000 - 2100

2100 - 2200

2200 - 2300

2300 - 2400

2400 - 2500

Average Thermal Efficiency [%]

Input Rating Category [kBtu/h]

Average Thermal Efficiency Based on Input Rating

Overall thermal efficiency Condensing Boilers

6

23%

3%

Distributio

on Materia

E

Total: 728

0

306090

120150180

80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99

Number of Models

Thermal Efficiency [%]

Distribution of Boilers Based on Thermal Efficiency

Other Boilers Condensing Boilers Condensing and Modulating Boilers Modulating Boilers
22

M&TA – Technology Assessment

Gas Oil

Fan/ Blower 

(Forced Draft)

Valve

Air MD ND

Water

Cold H

Single stage or 

Modulating burner

Inducer Fan

H- - - 

Convection and Radiation

Basic operation of

Commercial Packaged

Boilers

P

Oil Pump

Water pump

Atomizer
23

M&TA – Technology Assessment

Technology Options Considered to Improve Combustion and/or Therm

Jacket Insulation Optimization

Heat Exchanger Improvements:

Condensing heat exchangerIncrease in heat exchanger surface area

Incorporation of heat exchanger surface features and internal features

Flat, wavy or louvered finned HX with or without staggered fin configuration

Burner DeratingCombustion Air Preheaters

EconomizersBlow‐down Waste Heat Recovery

Premix BurnerPulse Combustion

Low Pressure, Air Atomized Oil Burner

Integrated, High Efficiency Steam Boilers
24

Market & Technology Assessment – Issues for 

Issue #1: DOE seeks comment on its tentative decision nan upper input capacity limit for CPBIssue #2: DOE seeks comment on the appropriateness otentative decision to classify CPBs into 16 equipment cl
25

Screening Analysis

Framework

Document

Preliminary

Activities NOPR Final Rule Effective Date Framework Document Preliminary Activities NOPR Final Rule Effective Date

Steps for the Standards Rulemaking: 

Preliminary Activities and Analyses

Shipments 

Analysis

M

Im

Life-Cycle

Cost and 

Payback

Period

Analyses

Market & Technology Assessment

Screening 

Analysis

Engineering

Analysis

Markups to

Determine 

Product Price

Energy Use 

Characterization

Life-Cycle

Cost and 

Payback

Period

Analyses

Market & Technology Assessment

Screening 

Analysis

Engineering

Analysis

Markups to

Determine 

Product Price

Energy Use 

Characterization
26

Screening Analysis

• Purpose:Screen out technology options that DOE will not consider i

engineering analysis and downstream analyses for comme

packaged boilers.

• ApproachDOE evaluates each technology option based on the follow

criteria, as provided at 10 CFR Part 430, Subpart C, Append

section 4(a)(4)(i)‐(iv)

– Technological feasibility– Practicability to manufacture, install, and service

– Adverse effects on equipment utility or availability

– Adverse effects on health and safety
27

Screening Analysis – Summary of Results

• Heat exchanger improvement:

− Condensing and secondary heat

exchanger

− Outside surface enhancement:

Micro‐fin, dimples and other

surface enhancement

− Internal surface enhancement:

Turbulators, corrugation, rifling,baffles

− Improvement in fin design: Wavy or

louvered fin designs

• Premix burners

• Pulse combustion

• Low pressure, air atomized burner

Passed Screening Test

• Burner derating

Failed Screening 

• Jacket insulation optim

• Combustion air prehea• Economizers• Integrated, high efficie

boilers

• Blowdown waste heat 

Passed Test – But Not 
28

Screening Analysis – Issues for Comment

Issue #3: DOE is interested in views about the technologieconomic feasibility of the technology options which succpassed the screening analysis.
29

Public Meeting Slides Topics

Markups, Energy Use Characterization, LCC and Payb

Period Analysis 4

3 Engineering Analysis1 Introduction and Overview2 Market and Technology Assessment and Screening Analysis5 Shipments and National Impact Analysis6 Preliminary Manufacturer Impact Analysis7 Next Steps
30

Engineering Analysis

Framework

Document

Preliminary

Activities NOPR Final Rule Effective Date Framework Document Preliminary Activities NOPR Final Rule Effective Date

Steps for the Standards Rulemaking: 

Preliminary Activities and Analyses

Shipments 

Analysis

M

Im

Life-Cycle

Cost and 

Payback

Period

Analyses

Market & Technology Assessment

Screening 

Analysis

Engineering

Analysis

Markups to

Determine 

Product Price

Energy Use 

Characterization

Life-Cycle

Cost and 

Payback

Period

Analyses

Market & Technology Assessment

Screening 

Analysis

Engineering

Analysis

Markups to

Determine 

Product Price

Energy Use 

Characterization
31

Engineering Analysis – Introduction

• Purpose: Establish relationship between

equipment price and increased efficiency.

• Results are not representative of a particular

manufacturer instead represent an industryaggregate

• Results will be used for other downstream

analyses e.g., LCC analysis, Payback period

etc.

• Sources of Information:

– Product literature

– Trade association databases

– Manufacturer interviews

– List prices from manufacturers and contractors

• Life-Cycle C

Payback Pe

• National Im• Shipments • Manufactur

Analysis

Downstrea

Price Effici

Manufacturer Selling 

Price [$]

Efficie
32

Engineering Analysis – Steps

Develop

Baseline

• Define baseline efficiency for each equipm• Baselines defined based on existing energ

conservation standards

Establish

Efficiency Levels

• Identify efficiency levels between baselin

maximum (max‐tech) efficiency levels

• Selected efficiency levels are most comm

and/or capture significant technologies

Calculate

Incremental

Prices

• Incremental prices for increased efficienc

calculated from equipment price informa

• Statistical and regression modeling techn

used to infer prices if not available and ag

Generate Price

Efficiency Curves

• Industry average representation of increm

in equipment price for achieving higher e

levels
33

Engineering Analysis – Baseline Models• Baseline efficiency levels chosen that correspond to 

energy conservation standards

• Common technologies in baseline models:• Baseline Efficiencies:

80% ET

SGNDHW

82% EC

LGNDHW

82% 

SOND

77% ET

SGNDST

77% ET

LGNDST

81% 

SOND

80% ET

SGMDHW

82% EC

LGMDHW

82% ET

SOMDHW

84% EC

LOMDHW

79% ET

SGMDST

79% ET

LGMDST

81% ET

SOMDST

81% ET

LOMDST

Gas Valve – single stage Primary Heat Excha

Cast iron sectional, copper‐fi

Jacket Insulation tube, fire tube, carbo

Mechanical Draft Equipment Class Natural Draft Equipm

• ET: Thermal Efficiency and EC: Combustion Efficiency

• S: Small; L: Large• G: Gas (Natural or Propane) ; O: Oil• MD: Mechanical Draft; ND: Natural Draft;• HW: Hot Water; ST: Steam
34

Engineering Analysis – Efficiency Levels

• Efficiency levels identified based on literature review,

manufacturer interviews and technology assessment

• Condensing efficiency levels considered for small and 

mechanical draft hot water equipment classes

• “Max – Tech” efficiency levels – highest efficiency lev

commercially available

81%82%85%

SGNDHW

83%84%

LGNDHW

838587

SOND

79%80%

SGNDST

79%80%81%

LGNDST

8283

SOND

Natural Draft Equipm

83%85%87%92%95%98%

SGMDHW

84%86%94%97%

LGMDHW

83%84%87%98%

SOMDHW

86%88%97%

LOMDHW

80%81%83%

SGMDST

80%83%

LGMDST

83%84%86%

SOMDST

83%86%

LOMDST

Mechanical Draft Equipment Class

Condensing Efficiency Leve
35

Engineering Analysis – Data Collection

• DOE collected list prices from

contractors and manufacturers

• Prices are what manufacturer sells

the equipment to the first customer

for

• Prices were spread over a range of

input capacities, however analysisprices were calculated at a single

input capacity

• This is referred to as the

“representative input capacity” and isused to define a single input rating

that characterizes the entire

equipment class

E

Small

(300kBtu/h to

2,500kBtu/h)

Equipment Class

Representative In

800kBtu/h 

4%

Comparison of Pr

Mechanical Draft 
36

Engineering Analysis – Methodology• Based on the prices received, DOE has divided the

methodology into 5 sections.

Methodologies Used

General Approach

Non Con

SGMDHW an

Non Con

SOMDHW an

SGM

SOM

LGMDST and LOMDST

Condensing SGMDHW and

LGMDHW

Condensing SOMDHW and

LOMDHW

All Natural Draft Equipment

Classes
37

Engineering Analysis – General Approach Meth

• Some low efficiency boiler models had selling prices higher than h

models; possibly due to additional features that don’t contribute t

Step 1: Equipment Classes

Group boilers with prices

into equipment classes

Step 2: Efficiency Levels

Determine relevant

efficiency levels

Step 3: R

C

Pick 

represen

use regres

Step 4: Baseline Price

Determine or Calculate

using regression, prices of

boilers at baseline

efficiency levels at the rep.

capacity

Step 5: Incremental Price

For each manuf. calculate

incremental price

Inc. price at XX eff. level

= Price at XX – Baseline

Price

Step 6: 

Take 

increment

manuf. fo

Generate 

– efficien
38

Engineering Analysis – LGMDST and LOMDST

Methodology

• DOE took ratio of incremental prices of LGMDHW an

SGMDHW

• Using this ratio and SGMDST and SOMDST incremen

prices, DOE calculated prices for LGMDST and LOMD

Efficiency

Level (EL)

[%]

Incremental

Price [$]

LGMDHW (L)

Incremental

Price [$]

SGMDHW (S)

Ratio

[S/L]

82% Baseline Efficiency

83% 2,075 612 0.384% 4,343 1,271 0.3

85% 6,822 1,981 0.3

86% 9,533 2,745 0.3

87% 12,496 3,568 0.3

88% 15,736 4,454 0.3

89% 19,277 5,408 0.3

Efficiency

Level (EL) [%]

Incremental

Price [$]

SGMDST (S’)

Ave

Ratio 

79% Baseline 

80% 1,060 0

81% 2,243 0

82% 3,560 0

83% 5,025 0

84% 6,653 0

࢏

࢏

ࢎࢉࢋ࢚࢞ࢇ࢓

૚ࡸࡱୀ࢏
39

Engineering Analysis – Condensing SGMDHW 

LGMDHW Methodology

• For small and large gas‐fired hot water condensing b

used the methodology similar to corresponding non‐

models but with an added step

• DOE grouped condensing boiler prices based on mat

• Incremental price is calculated for each material type• Final price – efficiency curve is calculated by taking t

for incremental price for each efficiency level

EfficiencyLevel [%]

A[$]

B[$]

C[$]

80% X1 Y1 Z1

81% X2 Y2 Z282% X3 Y3 Z383% X4 Y4 Z4

EfficiencyLevel [%]

Mat 1. Mat 2.

80% P1=Avg.(X1,Y1) Z1

81% P2=Avg.(X2,Y2) Z282% P3=Avg.(X3,Y3) Z383% P4=Avg.(X4,Y4) Z4

EfficiencyLevel [%]80% 

81% 82% 83% 
40

Engineering Analysis – Condensing SOMDHW a

LOMDHW Methodology

Thermal Efficiency [%]

Incremental Price [$] SNC: Slope NC SC: Slope C

Thermal Effic

ࡾࡿ ૚ࡿ ൌ૛ ࡿ ࡯ࡿ ࡯ࡺࡿ ൌ ࡾࡿ ࢕࢏࢚ࢇࡾ .ࢋ࢖࢕࢒ࡿ .ࢍ࢜࡭ 

S

2:S] $ [Price Incremental

• DOE did not have sufficient price data for oil‐fired

condensing boiler models in SOMDHW and LOMDHWequipment classes.

• As a result, DOE inferred prices for condensing efficie

levels based on other equipment classes

• DOE used the ratio of slope of the incremental price 

efficiency curve of non‐condensing and condensing

efficiency levels of gas‐fired equipment class
41

Engineering Analysis – Natural Draft Equipmen

Classes Methodology

• DOE did not receive sufficient prices for natural draft equip

• DOE compared price data for similar mechanical and natur

systems to estimate the price of removing mechanical dra

components from a boiler and replacing them with natura

components (“price differential”)

• This price differential is subtracted from mechanical draft 

of appropriate equipment class to derive natural draft pric

• Natural draft boiler incremental classes are calculated by s

the price of higher efficiency boilers from baseline in each 

class

Mechanical Draft Assembly

(Inducer assembly, Sensors,

Flue Collector , Vent

Connector etc.)

Natural Draf

(Vent dam

hood, Sen

Price

Differential

Natural draft

incremental prices

Mechanical draft

incremental prices

Price

Differential
42

Engineering Analysis – Summary of MethodoloTo summarize the methodologies adopted:• Methodology was chosen based on factors such as availa

prices, number of manufacturers and type of equipment 

• If DOE is not able to calculate incremental prices directly 

available price data, other statistical methods are used

Equipment Class Type of Boiler Type of AnalysisSGMDHW

Non Condensing

“General approach” – group into equipment classes, c

rep. capacity, calculate incremental prices, take avera

efficiency curve

Condensing

Similar to non‐condensing analysis,

additional step to group prices based on material typ

calculate incremental price for each group,

take average of incremental prices for each efficiency 

LGMDHW

Non Condensing

General approach – group into equipment classes, ca

capacity, calculate incremental prices, take average, g

efficiency curve

Condensing

Similar to non‐condensing analysis,

additional step to group prices based on material typ

calculate incremental price for each group,

take average of incremental prices for each efficiency 
43

Engineering Analysis – Summary of Methodolo

Equipment Class Type of Boiler Type of AnalysisSOMDHW Non Condensing General approach – Similar to SGMDHW, non‐condens

SOMDHW Condensing

Used slope ratio between condensing and non condens

prices of SGMDHW equipment class

Used this ratio to calculate condensing boiler incremen

SOMDHW non‐condensing incremental prices

LOMDHW

Non Condensing General approach – Similar to SGMDHW, non‐condens

Condensing

Used slope ratio between condensing and non condens

prices of SGMDHW equipment class

Used this ratio to calculate condensing boiler incremen

LOMDHW non‐condensing incremental prices

SGMDST Non Condensing General approach – Similar to SGMDHW, non‐condens

LGMDST Non Condensing Used incremental price ratio between SGMDHW and LG

relationship between SGMDST and LGMDST

SOMDST Non Condensing General approach – Similar to SGMDHW, non‐condens

LOMDST Non Condensing Used incremental price ratio between SGMDHW and LG

relationship between SOMDST and LOMDST

All natural draft

equipment classes N/A

Calculated price of replacing mechanical draft compon

draft components in a boiler

Used this price differential to calculate natural draft pr

the differential from mechanical draft prices
44

Engineering Analysis – Sample Results

$0

$5,000

$10,000$15,000$20,000

79% 84% 89% 94% 99%

Incremental Prices [$]

Thermal Efficiency [%]

Small Gas ‐ Fired Mechanical Draft Hot Water

Small Gas‐fired Hot Water, ≥ 300,000 Btu/hr and ≤ 2,500,000 Btu/hr

$0

$500

$1,000$1,500$2,000$2,500$3,000$3,500

77% 79% 81% 83% 

Incremental Prices [$]

Thermal Efficiency [%

Small Gas ‐ Fired Natural Dra

Small Gas‐fired Hot Water, ≥ 300,000 Btu/

Product Class Efficiency Level Incremental Price 

Small Gas‐fired Mechanical draft Hot Water,

≥ 300,000 Btu/hr and ≤ 2,500,000 Btu/hr

80% $0

83% $1,71085% $3,07887% $4,66592% $6,81995% $11,21198% $15,604

Small Gas‐fired Natural draft Hot Water, ≥ 

300,000 Btu/hr and ≤ 2,500,000 Btu/hr

80% $081% $529 82% $1,30785% $3,078
45

Engineering Analysis – Issues for Comment

Issue #4: DOE requests comment about the methodologcalculate incremental prices for increased efficiency for equipment class. DOE requests comment about the appropriateness of thincremental prices reported as part of the engineering achapter. DOE requests additional price-related information, espenatural draft boilers, which would further improve future for this rulemaking. 
46

Public Meeting Slides Topics

Markups, Energy Use Characterization, LCC and Payb

Period Analysis 4

3 Engineering Analysis1 Introduction and Overview2 Market and Technology Assessment and Screening Analysis5 Shipments and National Impact Analysis6 Preliminary Manufacturer Impact Analysis7 Next Steps
47

Framework

Document

Preliminary

Activities NOPR Final Rule Effective Date Framework Document Preliminary Activities NOPR Final Rule Effective Date

Steps for the Standards Rulemaking: 

Preliminary Activities and Analyses

Shipments 

Analysis

M

Im

Life-Cycle

Cost and 

Payback

Period

Analyses

Market & Technology Assessment

Screening 

Analysis

Engineering

Analysis

Markups to

Determine 

Product Price

Energy Use 

Characterization

Life-Cycle

Cost and 

Payback

Period

Analyses

Market & Technology Assessment

Screening 

Analysis

Engineering

Analysis

Markups to

Determine 

Product Price

Energy Use 

Characterization
48

Markups Analysis

Purpose: The markups analysis is used to determine the cost to the comme

of (1) baseline equipment and of (2) more efficient equipment purchased un

conservation standards.

Markups relate commercial consumer price to the manufacturer selling pric

“cost of goods sold.” DOE calculated both baseline and incremental markups

• Baseline markups relate baseline efficiency equipment MSP to direct 

• Incremental markups relate the incremental change in commercial co

the incremental change in MSP under new energy conservation stan

costs such as overhead and labor do not scale up).

Distribution Channels: The markups depend on the type of distribution ch

which products move from manufacturers to consumers

Markups were developed for the following market participants: Ma

wholesaler, mechanical contractor, and general contractor.

Sales Taxes and Wholesaler and Contractor markups were developed 

geographical areas in the analysis.
49

Input Methodology

Distribution Channels Based on stakeholder input, markups were developed for 

markets: (1) Replacements and (2) New Construction. See 

ManufacturerMarkup

Determined in engineering analysis (Ch. 5), based on U.S. 

Exchange Commission (SEC) 10‐K reports from publicly‐ow

commercial packaged boiler manufacturing companies.

Wholesaler Markup Based on firm income statements from the HARDI 2013 P

MechanicalContractor Markup

Based on ACCA 2005 Financial Analysis report and Plumbi

Contractors sector from the 2007 Economic Census.

General ContractorMarkup

Based on Commercial Building Construction sector from t

Economic Census.

Sales Tax Based on 2014 Sales Tax Clearinghouse Data.

Markups Analysis

Methodology for Commercial Packaged Boiler
50

Replacement

Distribution Channels for Commercial Packaged Boi

Markups Analysis

Manufacturer

Wholesaler/

Manufacturer’s

Representative

Mechanical

Contractor

Commercial

Consumer

Manufacturer

Wholesaler/

Manufacturer’s

Representative

Mechanical

Contractor

General

Contractor

Manufacturer National Account Commercial Consumer

Manufacturer National Account Commercial Consumer

New Construction
51

Total Markups by Equipment Class

Markups Analysis

Equipment Class Baseline Markup 

Natural Draft Gas‐Fired Hot Water Commercial Packaged Boiler

≥300,000 Btu/hr and ≤2,500,000 Btu/hr 3.04 

Natural Draft Gas‐Fired Hot Water Commercial Packaged Boiler

>2,500,000 Btu/hr 2.95 Natural Draft Oil‐Fired Hot Water Commercial Packaged Boiler

≥300,000 Btu/hr and ≤2,500,000 Btu/hr 3.24 

Natural Draft Oil‐Fired Hot Water Commercial Packaged Boiler

>2,500,000 Btu/hr 2.99 Mechanical Draft Gas‐Fired Hot Water Commercial Packaged

Boiler ≥300,000 Btu/hr and ≤2,500,000 Btu/hr 3.35 

Mechanical Draft Gas‐Fired Hot Water Commercial Packaged

Boiler >2,500,000 Btu/hr 3.31 

Mechanical Draft Oil‐Fired Hot Water Commercial Packaged

Boiler ≥300,000 Btu/hr and ≤2,500,000 Btu/hr 3.54 

Mechanical Draft Oil‐Fired Hot Water Commercial Packaged

Boiler >2,500,000 Btu/hr 3.16 
52

Request for Comment

Markups Analysis

Issue #5: DOE seeks comments about whether the consdistribution channels are appropriate for commercial paboilers.Issue #6: DOE seeks comments about the percentage oequipment being distributed through the different distrchannels, and whether the share of equipment through channel varies based on equipment class or equipment Issue #7: DOE requests comments about its proposed adeveloping estimates of future commercial packaged bprices.

Issue #8: DOE requests recent data to establish the macommercial consumer price for the parties involved witdistribution of the equipment.
53

Energy Use Characterization

Purpose: To determine the annual energy consumption ocommercial packaged boilers and to assess the energy sa

potential of increases in efficiency.

Annual energy consumption: site energy use asso

operating the equipment.

Methodology: The commercial packaged boiler annual e

equal to the sum of the energy used by the boiler for spa

water heating, and any auxiliary electrical components:

࢒ࡱ ൅ ࡴࢃࢋ࢙ࢁ࢒ࢋ࢛ࡲ	൅ ࡴࡿࢋ࢙ࢁ࢒ࢋ࢛ࡲ ൌ ࢒ࢇ࢚࢕࢚ࢋ࢙ࢁ	࢟ࢍ࢘ࢋ࢔ࡱ
54

Energy Use Characterization – Building Sample

Building Sample (CBECS and RECS) selection

criteria:

• used a boiler as the main or secondary

source of heat;

• used a heating fuel that is natural gas or

fuel oil; and

• had a heating energy consumption greater

than zero.
55

Space Heating Fuel Consumption

Energy Use Characterization
56

Space Heating Fuel Consumption

Energy Use Characterization

Annual Space Heating Fuel ConsumptionBurner Operating Hours (BOH)Building Heating Load (BHL)

௡௜ܳ ∗ ܪܱܤ ൌ ݁ݏܷ	݈݁ݑܨ	݈ܽݑ݊݊ܣ

ൌ ܪܱܤ

ܮܪܤ

ܳ௜௡ ൈ ܶܧ௔௥௧௘ௗ,௔ௗ௝

ܮܪܤ ൌ ܧܷܵܧ஻஼ா஼ௌ ∗ ܶܧ௘௫௜௦௧ ∗ ܣ݆݀௦௛௘௟௟ ∗ ܣ݆݀ு஽஽
57

• Conversion between combustion efficiency a

thermal efficiency

– Based on AHRI model directory

• Thermal efficiency varies with:

– Return water temperature

– Cycling– Part‐load

• Calculate average impact for each climate zon

on weather

Energy Use Characterization

Thermal Efficiency Adjustments
58

Water Heating Energy Consumption

Energy Use Characterization

• For buildings using gas fuel for space heating and water heating, it wa

that in 50% of these installations the boilers are also used for water he

Annual Water Heating Fuel Consumption

– ܣ݆݀ݐݏݑ݉݁݊ݐ	ܨܽܿݎ݋ݐௐு accounts for the difference between TE 

heating (WH) efficiency

Water Heating Load

‒ ࡾࢅࡽ,ࡴࢃ is equal to the annual fuel consumption for water heatin

CBECS 2003 or RECS 2009 (kBtu/yr)

ൌ ࡴࢃࢋ࢙ࢁ࢒ࢋ࢛ࡲ

ࡸࡴࢃ

ࡴࢃ࢘࢕࢚ࢉࢇࡲ࢐ࢊ࡭ െ ࡱࢀ

ܹܮܪ ൌ ܳ௒ோ,ௐு ൈ ሺܶܧ௘௫െ	ܣ݆݀ி௔௖௧௢௥ௐுሻ
59

Electricity Consumption

Energy Use Characterization

Boiler Electricity Consumption accounts for the electricity use by ci

pump, draft inducer, igniter, and auxiliary equipment such as conde

AdjBOH = adjustment factor that takes into account part‐load operat

condensing units only)

ElecPower = power of electrical components required during boiler

operation, (kW)

ElecBOHWH = hours boiler provides water heating only

StdbyPower = total standby power of the equipment

StdbyHrs = standby hours, taking into account water heating opera

summer

࢒ࢇ࢚࢕࢚ࢋ࢙ࢁࢉࢋ࢒ࡱ

ࡱ ൈ ࡴࢃࡴࡻ࡮ࢉࢋ࢒ࡱ ൅ ࢘ࢋ࢝࢕ࡼࢉࢋ࢒ࡱ ൈ ࡴࡻ࡮࢐ࢊ࡭ ൈ ࡴࡿࡴࡻ࡮ ൌ

࢘ࢋ࢝࢕ࡼ࢟࢈ࢊ࢚ࡿ ൈ ࢙࢘ࡴ࢟࢈ࢊ࢚ࡿ൅
60

Average Annual Energy Consumption

EL Design Option Fuel Use MMBtu/yr 

Natural Draft Gas‐Fired Hot Water Commercial Packaged Boiler ≥300,000 Btu/hr and ≤2,500,000 Btu/

0 80% TE ‐ Baseline 830 

1 81% TE 820 

2 82% TE 810 3 85% TE ‐ Max Tech 781 

Natural Draft Gas‐Fired Hot Water Commercial Packaged Boiler >2,500,000 Btu/hr

0 82% CE ‐ Baseline 3826 

1 83% CE 3772 2 84% CE ‐ Max Tech 3719 

Mechanical Draft Gas‐Fired Hot Water Commercial Packaged Boiler ≥300,000 Btu/hr and ≤2,500,000 B

0 80% TE ‐ Baseline 939 

1 83% TE 904 2 85% TE 882 3 87% TE 861 4 92% TE 824 5 95% TE 797 6 98% TE ‐ Max Tech 772 

Mechanical Draft Gas‐Fired Hot Water Commercial Packaged Boiler >2,500,000 Btu/hr

0 82% CE ‐ Baseline 3699 

1 84% CE 3596 2 86% CE 3499 3 94% CE 3182 4 97% CE ‐ Max Tech 3069 

Energy Use Characterization
61

Energy Use Characterization

Request for Comment

Issue #9: DOE seeks data on representative annuaprofiles of return water temperature, supply water temperature, and boiler percent loading.Issue #10: DOE seeks data on what return water temperatures boilers are tested at under the test conditions prescribed by the DOE test procedure.Issue #11: DOE seeks input on data sources that ican use to characterize the variability in annual energy consumption for commercial packaged boilers. DOE is particularly interested in field monitoring studies and data.
62

Energy Use Characterization

Request for Comment

Issue #12: DOE requests data about typical boiler sizing 

● How often are multiple boilers are installed, instead 

boiler, to meet the building heating load?

● How are the number of boilers determined for a part

of building installation?

Issue #13: DOE seeks input about how boilers are controparticularly in multiple-boiler installations.Issue #14: DOE seeks historical shipment-weighted compackaged boiler efficiency data and/or shipment data by bins. DOE is primarily interested in data during the last 1capture the impact of the most current technologies on tmarket.
63

Energy Use Characterization

Request for Comment

Issue #15: DOE requests input about the electricituse by commercial boilers that is in addition to thfuel energy use, and that should be included in thenergy use analysis.Issue #16: DOE seeks input on what fractions of hwater commercial packaged boilers are used both space heating and water heating.
64

Purpose: LCC analysis uses life-cycle cost (LCC) and payba

(PBP) to determine the economic impact of bo

standards on commercial consumers.

Methodology:• Life‐Cycle Cost (LCC) is used to determine total comm

consumer cost over the life of a product.

• Payback Period (PBP) determines the amount of tim

consumers to recover the purchase price of more en

efficient equipment through reduced operating cost

• The analysis uses the Crystal Ball® add‐on for MS Ex

model the uncertainty and variability of inputs usin

Carlo approach and probability distributions

LCC and Payback Period Analyses
65

Development of LCC and PBP Inputs

LCC and Payback Period Analyses

EngineeringAnalysisMarkups to

DetermineProduct Price

Energy Use

Characterization

Baseline

Manufacturer Cost

Std‐Level

Manufacturer Cost

Manufacturer

Markup

Distributer &

Contractor

Markups

Sales Tax

Energy

Consumption

Marginal Energy

Prices

Consumer

Price

Installation

Cost

Total

Installed Cost

Annual

Energy Cost

Repair

Cost

Maintenance

Cost

Annual

Operating Expense

Lifetime

Discount

Rate

Energy Price Trend

Lifetime O

Expe

Payb

Per
66

LCC and Payback Period Analyses

Installation Costs

Installation Costs represent the labor and material costnecessary to install the appliance.

Key Components of installation cost model:

• Basic installation costs• Venting• Condensate removal for condensing boilers

Sources:

• 2013 RS Means (Mechanical Cost Data)

• Manufacturer literature

• Information from experts
67

Basic installation costs include:

• Placing and setting up boiler

• Connecting gas piping

• Connecting water piping

• Permit and removal/disposal fees

LCC and Payback Period Analyses

Basic Installation Costs
68

Boiler technology type

– Non‐condensing: typically Category I venting

• Considerations: High‐temperature flue gas, which heats the i

vent above the dew point to ensure that water vapor in the f

not condense

• Replacements: Reline unlined chimney, resize existing vent, r

vent, or replace vent

• Material: Type B (natural draft) or stainless steel (mechanical 

– Condensing: Category IV venting

• Considerations: Water vapor in flue condenses, so the flue m

corrosion

• Replacements: Reuse existing stainless steel vent or replace v

• Material: Plastic (≤ 6” diameter) or stainless steel (> 6” diame

• Combustion air direct vent

Cost factors: installation type, assumed existing venting 

in replacement boiler installations, and new vent mater

LCC and Payback Period Analyses

Venting
69

• Condensate pipe: Excess condensate must be deposited in a d

• Condensate pump: If a drain is not near the boiler, then the co

must be pumped to a remote drain.

• Condensate neutralizer: Neutralizes condensate before pourin

• Additional electrical outlet: Some installations with a condens

also require an additional electricity outlet.

LCC and Payback Period Analyses

Condensing Boilers: Condensate Remov

Installation Cost

Description Criteria Frequency 

crit

Pipe All installations 10Pump All installations 2Neutralizer All installations 12Electrical Outlet

(additional)

Fraction of installations requiring a

pump

5
70

LCC and Payback Period Analyses

Request for Comment

Issue #22: DOE seeks input on how often plastic versus stainless steel venting is installed for condensing boilers.

Issue #23: DOE seeks input on how often boilers have direct venting, for both condensing and noncondensing boilers.Issue #24: DOE seeks input on the fraction of stainless steel venting in existing boiler installatioby efficiency.

Issue #21: DOE requests data on the fractions of installations that would entail significant additionainstallation expenses.
71

LCC and Payback Period Analyses

Request for Comment

Issue #26: DOE seeks data on how often “common venting” occurs in multiple-boiler installations; anwhether commercial water heaters are commonly vented with commercial boilers.Issue #25: DOE seeks input on where boilers are typically located within different types of buildings and where the vents typically terminate. DOE is interested whether this changes by geographic region or boiler type.
72

Repair and Maintenance

LCC and Payback Period Analyses

• Maintenance Cost: Routine cost to the consumer of maintaining equipment.

• Maintenance Frequency:

• Steam boilers and oil‐fired boilers: based on RS Means

• Gas‐fired hot water boilers: based on CBECS/RECS survey data

• Labor Hours/Cost: Based on 2013 RS Means Facility Repair and Maintenance

• Separate for steam vs hot water and small vs large.

• Material Cost: Based on 2013 RS Means. Condensate neutralizer for condens

• Assumes maintenance cost is the same within each equipment class. Assume

cost for condensing boilers is higher.

• Repair Cost: Cost of replacing or repairing components in the boiler that have fa

• Labor Hours/Cost: Based on 2013 RS Means Facility Repair and Maintenance

• Material Cost: Based on engineering analysis and RS Means

Component failure rate

Repair Description Mean Failure Year 

Ignition, Controls 7.0 

Vent Damper or Power Vent Blower 15.0 

Heat Exchanger 20.0 
73

LCC and Payback Period Analyses

Request for Comment

Issue #19: DOE seeks input on how often boiler maintis performed by on-site staff versus external contractspecifically for hot water boilers versus steam boilers small boilers versus large boilersIssue #20: DOE seeks input as to how often, in the evheat exchanger failure, the heat exchanger alone is reversus the entire boiler being replaced. DOE is interesknowing whether this varies with equipment class or with condensing versus non-condensing boilers.Issue #18: DOE requests comment on frequency and maintenance, major repair issues, repair frequency, arepair costs for commercial packaged boilers that meminimum efficiency standards, as well as for higherefficiency boilers
74

Lifetime

LCC and Payback Period Analyses

• Definition: Age when the commercial boiler is retired from serv

• Methodology: Used published studies and typical appliance life

characteristics to calculate the distribution of lifetimes

• Lifetime assumed 24.8 years presented as a distribution (source 

Appendix 8‐F)
75

LCC and Payback Period Analyses

Request for Comment

Issue #28: DOE seeks data to predict boiler lifetimeparticularly for non-condensing versus condensinboilersIssue #27: DOE requests comments about the methodology used to determine equipment lifetimefor commercial packaged boilers
76

Energy Prices

LCC and Payback Period Analyses

• Purpose: Develop average marginal monthly prices by geographical area

• Methodology: Most‐current average annual energy prices by monthly p

and marginal price factors.

• 2012 average annual energy prices by geographical area based on

‒ Electricity Prices: EIA’s 2013 Form 826 data‒ Natural Gas: EIA’s 2013 Natural Gas Navigator monthly‒ Oil: EIA’s 2012 State Energy Consumption, Price, and Expendi

Estimates (SEDS)

• Monthly energy price factors by geographical area based on:

‒ Electricity Prices: EIA’s 1993‐2012 Form 826 monthly data

‒ Natural Gas: EIA’s 1993‐2012 Natural Gas Navigator monthly d

‒ Oil and LPG: EIA’s 2009 Short‐Term Energy Outlook 1995‐2009 

• Marginal energy price factors for electricity and natural gas by ge

areas based on EIA data.
77

Energy Price Trends

LCC and Payback Period Analyses

Example: Projected Commercial National Natural Gas Price

• Methodology: 2012 average monthly marginal energy prices by geog

multiplied to projected annual energy price trends for the correspon

division– 2019 ‐ 2040 trends based on EIA’s AEO 2014 by census division

– After 2040 trends based on Federal Energy Management Progra

guidelines

5.007.009.00

11.0013.0015.00

2010 2020 2030 2040

2012$/MMBtu
78

Discount Rates: Commercial

LCC and Payback Period Analyses• Definition: Used to determine the present value of lifetime operating e

piece of equipment is retired from service.

• Methodology: Calculated as the weighted average cost of capital (WACC

Capital Asset Pricing Model (CAPM) for different economic sectors.

• Primary data sources: Damodaran Online database of company debt an

financing

Request for Comment

Issue #29: DOE seeks comment about its planned approach for estimating discount rates for commercconsumers.
79

Base Case Efficiency Distribution

LCC and Payback Period Analyses

Definition: Base case product efficiency assignment reflects the pr

market share of products at different efficiency levels.

• Not all consumers purchase products at current minimum 

• LCC analysis recognizes that consumers already purchasin

efficiencies greater than or equal to a prospective standar

not impacted by the standard.

Methodology: Projected commercial boiler efficiency market share in 

product class based on the share of models in each product class from tre

certification directory from 2007 to 2014.
80

Request for Comment

LCC and Payback Period Analyses

Issue #30: DOE requests data on the efficiency distribution and likelihood and degree of improvement in efficiency of commerciboilers in the next 5 to 10 years, as a result of market forces or itrends (in the absence of amended energy conservation standarIssue #17: DOE requests data to characterize the current distribucommercial packaged boiler efficiencies in the market.
81

LCC and PBP Analysis Results

LCC and Payback Period Analyses

Example: Gas‐Fired Small Hot Water Boilers, Mechanical D

Efficiency

Level TE

Average Costs

2013$ 

S

Installed Cost 

($)

First Year’s

Operating

Cost

($)

Lifetime

Operating

Cost

($)

LCC

($)

0 80% 32,003 11,261 190,176 222,180 

1 83% 35,530 10,907 184,115 219,646 2 85% 38,353 10,685 180,326 218,680 3 87% 41,626 10,474 176,721 218,348 4 92% 45,983 10,161 171,255 217,239 

5 95% 55,044 9,887 166,576 221,621 (6 98% 64,104 9,631 162,202 226,307 (
82

Public Meeting Agenda

Markups, Energy Use Characterization, LCC and Payb

Period Analysis 4

3 Engineering Analysis1 Introduction and Overview2 Market and Technology Assessment and Screening Analysis5 Shipments and National Impact Analysis6 Preliminary Manufacturer Impact Analysis7 Next Steps
83

Framework

Document

Preliminary

Activities NOPR Final Rule Effective Date Framework Document Preliminary Activities NOPR Final Rule Effective Date

Steps for the Standards Rulemaking: 

Preliminary Activities and Analy

Shipments 

Analysis

M

Im

Life-Cycle

Cost and 

Payback

Period

Analyses

Market & Technology Assessment

Screening 

Analysis

Engineering

Analysis

Markups to

Determine 

Product Price

Energy Use 

Characterization
84

• Shipments Analysis:

– Estimates commercial boiler shipments ov

analysis period.

• National Impact Analysis:

– Estimates the National Energy Savings (NE

national economic impact on commercial 

consumers (or the Net Present Value (NPV

commercial boiler energy conservation sta

at different efficiency levels.

Purpose

National Impact Analysis
85

Approach

Shipments Analysis

Purpose: Forecast the commercial boilers that would be expecte

shipped between 2019 and 2048, both with and without energy c

standards.

Methodology of Shipments Projections:• New constructions: New building construction projections mu

new construction market saturations.

• Replacements: Equipment retirement functions (equipment lif

applied to equipment stock. Equipment stock is generated wit

shipments. Demolished units are deducted from required repl

• New Owners: Existing buildings that acquire boilers for the firs

Includes consumers switching between boiler product classes.

Accounted for impact of standards on shipments using 

elasticities.
86

Shipments Model Inputs

Shipments Analysis

Input Definition/SourceHistorical Annual

Shipments

•Historical shipments of commercial packaged boilers i

in the 2009 commercial packaged boiler final rule (use

boiler shipments to extrapolate commercial boiler shi

•AHRI model data for commercial packaged boilers fro

RetirementFunction

Based on lifetime distribution

Shipments to New

Construction

New construction market saturations multiplied by pro

buildings• Saturations from CBECS 2003 and RECS 2009

•U.S. Census historical building starts data and EIA’s AE

projections

New Owners and

Product Switching

Product class switching based on trends in AHRI databa

Price Elasticity Based on appliance shipments and household economi

period (1980‐2002). See Appendix 9‐A.
87

0.0000.0050.0100.0150.0200.0250.0300.0350.0400.0450.050

1960 1970 1980 1990 2000 2010 2020 2030 2040

Shipments (million)

Shipments Analysis

Historical and Projected Base Case Shipments by Equipme

Historical Projected
88

Shipments Analysis

Request for Comment

Issue #31: DOE requests input on the shipments projection methodology.Issue #32: DOE invites comments about the selecof appropriate economic drivers and sources of dfor historical shipments and shipment-breakdownby equipment class.Issue #33: DOE seeks historical commercial packaged boiler shipments data, disaggregated bequipment class and efficiency level if available.Issue #34: DOE seeks input on the potential impacamended standards on commercial packaged boishipments.
89

National Impact AnalysisPurpose: Estimate the national impacts of energy conservation sta

commercial boilers shipped between 2019 and 2048

• National Energy Savings (NES): Primary energy savings• Net Present Value (NPV): Difference between the present val

energy expenditures and the present value of annual equipme

expenditures.

Methodology

• For each product class in each standards case:

1. Calculate per‐unit cost increase and per‐unit energy savin

standard.

2. Calculate number of units (stock) in use and energy savin

from 2019 to 2048.

3. Combine the above to determine NES and NPV.
90

National Energy Savings

National Impact AnalysisInput Method/AssumptionsAnnual Energy Consumption per

Unit (UEC)

Derived per‐unit annual energy consumption as a function 

efficiency from Energy Use Analysis for each equipment cl

Shipments Projected shipments for each equipment class under the b

standards cases.

Equipment Stock Determined the yearly stock using annual shipments and t

equipment class.

National Annual Energy

Consumption

Annual energy consumption is the product of the UEC and 

stock.

Rebound Effect No rebound effect was assumed in the analysis.

Site‐to‐Source Conversion Factor Used for converting site energy consumption into primary 

consumption (from EIA’s AEO 2014/NEMS).

Full Fuel Cycle Calculated FFC energy savings using a NEMS‐based method

2014/NEMS).

National Energy Savings: Difference in annual energy savings (UEC equipment stock) between base case and each standards case and 

over the analysis period.
91

National Impact Analysis

Net Present Value

Input Method/AssumptionsTotal Installed Cost Per Unit Function of product efficiency

Annual Per‐unit Savings In

Operation Cost

Includes costs for energy, repair, and maintenance.

Shipments Annual shipment of boilers by equipment classes

Equipment Stock Depends on shipments and lifetime

Total Annual Increases In

Installed Cost

Increase attributable to standard, calculated by vintage

Total Annual Operating Cost Calculated by vintage

Discount Factor Used 3% and 7% national discount rates to determine present 

monetary values

• Net Present Value: Difference between the present value of ene

savings and the present value of total installed cost increase.

• Present value of costs: Difference in installed cost between base c

standards case discounted to the present and summed over the a

• Present value of savings: Difference in operating cost savings betw

case and each standards case from 2019 to the time when the last 
92

• Efficiency Trend in 2019 (Assumed a “roll‐up” scenario to esta

efficiency distribution):

– Product efficiencies in the base case that did not meet the 

under consideration would “roll up” to meet the new stand

– All efficiency shares in the base case that were above the s

under consideration would not be affected.

• Efficiency Trend After 2019:

– Condensing boilers are projected to increase linearly, based 

in AHRI database by product class

– Shares of condensing efficiency levels are kept within the s

proportional relationships as in 2019

– Shares of non‐condensing efficiency levels are kept within t

proportional relationships as in 2019

National Impact Analysis

Projected Efficiency Trends
93

National Impact Analysis

Projected Condensing Boiler Market Share Tren

0%

10%20%30%40%50%60%70%80%90%

100%

2019 2024 2029 2034 2039 2044 2049

Condensing market share 
94

• DOE has published a Notice of Policy (NOP) stating it

intention to incorporate full‐fuel‐cycle (FFC) metrics 

cost‐benefit analysis. 76 FR 51282 (Aug. 18, 2011).

• Methodology is based on the calculation of a FFC mu

or conversion factor, for each of the primary fuels us

product.

• For this preliminary analysis, DOE calculated FFC ene

savings using a NEMS‐based methodology (described appendix 10B).

• Primary NES and the FFC energy savings for the cons

efficiency levels reported (see Ch.10)

Full Fuel Cycle Analysis

National Impact Analysis
95

National Impact Analysis

Primary National Energy Savings Results (quad

Product Class Efficiency Leve

1234

Natural Draft Gas‐Fired Hot Water Boiler ≥300,000

Btu/hr and ≤2,500,000 Btu/hr 0.001 0.004 0.026 NA 

Natural Draft Gas‐Fired Hot Water Boiler

>2,500,000 Btu/hr 0.010 0.023 NA NA Natural Draft Oil‐Fired Hot Water Boiler ≥300,000Btu/hr and ≤2,500,000 Btu/hr 0.001 0.003 0.005 NA 

Natural Draft Oil‐Fired Hot Water Boiler

>2,500,000 Btu/hr 0.005 0.012 NA NA Mechanical Draft Gas‐Fired Hot Water Boiler

≥300,000 Btu/hr and ≤2,500,000 Btu/hr 0.023 0.052 0.105 0.207 

Mechanical Draft Gas‐Fired Hot Water Boiler>2,500,000 Btu/hr 0.039 0.145 0.570 0.875 Mechanical Draft Oil‐Fired Hot Water Boiler≥300,000 Btu/hr and ≤2,500,000 Btu/hr 0.006 0.017 0.059 0.201 

Mechanical Draft Oil‐Fired Hot Water Boiler>2,500,000 Btu/hr 0.011 0.037 0.136 NA 
96

National Impact Analysis

Full‐Fuel‐Cycle National Energy Savings Results (q

Product Class Efficiency Leve

1234

Natural Draft Gas‐Fired Hot Water Boiler ≥300,000

Btu/hr and ≤2,500,000 Btu/hr 0.001 0.005 0.029 NA 

Natural Draft Gas‐Fired Hot Water Boiler

>2,500,000 Btu/hr 0.011 0.025 NA NA Natural Draft Oil‐Fired Hot Water Boiler ≥300,000Btu/hr and ≤2,500,000 Btu/hr 0.001 0.004 0.006 NA 

Natural Draft Oil‐Fired Hot Water Boiler

>2,500,000 Btu/hr 0.006 0.014 NA NA Mechanical Draft Gas‐Fired Hot Water Boiler

≥300,000 Btu/hr and ≤2,500,000 Btu/hr 0.025 0.058 0.117 0.230 

Mechanical Draft Gas‐Fired Hot Water Boiler>2,500,000 Btu/hr 0.044 0.161 0.634 0.975 Mechanical Draft Oil‐Fired Hot Water Boiler≥300,000 Btu/hr and ≤2,500,000 Btu/hr 0.007 0.020 0.069 0.235 

Mechanical Draft Oil‐Fired Hot Water Boiler>2,500,000 Btu/hr 0.013 0.044 0.159 NA 
97

Discounted at 3% (billion 2013$)

National Impact Analysis

Net Present Value Results

Product Class 3% Efficiency Leve

1234

Natural Draft Gas‐Fired Hot Water Boiler ≥300,000

Btu/hr and ≤2,500,000 Btu/hr 0.004 0.011 0.072 NA 

Natural Draft Gas‐Fired Hot Water Boiler

>2,500,000 Btu/hr 0.036 0.079 NA NA Natural Draft Oil‐Fired Hot Water Boiler ≥300,000Btu/hr and ≤2,500,000 Btu/hr 0.009 0.025 0.054 NA 

Natural Draft Oil‐Fired Hot Water Boiler

>2,500,000 Btu/hr 0.057 0.144 NA NA Mechanical Draft Gas‐Fired Hot Water Boiler≥300,000 Btu/hr and ≤2,500,000 Btu/hr 0.047 0.088 0.129 0.203 

Mechanical Draft Gas‐Fired Hot Water Boiler

>2,500,000 Btu/hr 0.087 0.267 0.523 1.268 

Mechanical Draft Oil‐Fired Hot Water Boiler

≥300,000 Btu/hr and ≤2,500,000 Btu/hr 0.052 0.148 0.487 0.323 

Mechanical Draft Oil‐Fired Hot Water Boiler>2,500,000 Btu/hr 0.105 0.406 0.650 NA 
98

Discounted at 7% (billion 2013$)

National Impact Analysis

Net Present Value Results

Product Class 7% Efficiency Leve

1234

Natural Draft Gas‐Fired Hot Water Boiler ≥300,000

Btu/hr and ≤2,500,000 Btu/hr 0.001 0.003 0.019 NA 

Natural Draft Gas‐Fired Hot Water Boiler

>2,500,000 Btu/hr 0.014 0.030 NA NA Natural Draft Oil‐Fired Hot Water Boiler ≥300,000Btu/hr and ≤2,500,000 Btu/hr 0.003 0.007 0.016 NA 

Natural Draft Oil‐Fired Hot Water Boiler

>2,500,000 Btu/hr 0.022 0.055 NA NA Mechanical Draft Gas‐Fired Hot Water Boiler≥300,000 Btu/hr and ≤2,500,000 Btu/hr 0.007 0.006 (0.016) (0.046

Mechanical Draft Gas‐Fired Hot Water Boiler>2,500,000 Btu/hr 0.017 0.034 (0.132) 0.035 

Mechanical Draft Oil‐Fired Hot Water Boiler≥300,000 Btu/hr and ≤2,500,000 Btu/hr 0.013 0.037 0.117 (0.315

Mechanical Draft Oil‐Fired Hot Water Boiler>2,500,000 Btu/hr 0.031 0.131 0.025 NA 
99

Public Meeting Agenda

Markups, Energy Use Characterization, LCC and Payb

Period Analysis 4

3 Engineering Analysis1 Introduction and Overview2 Market and Technology Assessment and Screening Analysis5 Shipments and National Impact Analysis6 Preliminary Manufacturer Impact Analysis7 Next Steps
100

Framework

Document

Preliminary

Activities NOPR Final Rule Effective Date Framework Document Preliminary Activities NOPR Final Rule Effective Date

Steps for the Standards Rulemaking: Prelim

Activities and Analyses

Shipments 

Analysis

M

Im

Life-Cycle

Cost and 

Payback

Period

Analyses

Market & Technology Assessment

Screening 

Analysis

Engineering

Analysis

Markups to

Determine 

Product Price

Energy Use 

Characterization
101

Preliminary MIA• Purpose

– The manufacturer impact analysis (MIA) identifies the impa

energy conservation standards on manufacturers.

• Phase 1

– DOE creates an industry profile to characterize the industry 

identify important issues that require consideration.

• Phase 2

– DOE prepares an industry cash‐flow model and an interview

questionnaire to guide subsequent discussions.

• Phase 3

– DOE interviews manufacturers and assesses the impacts of 

both quantitatively (using the Government Regulatory Imp

and qualitatively (impacts on competition, manufacturing c

direct employment, and regulatory burden).
102

Preliminary MIA: Key Issues• Testing Burden

– Amended standards and an altered test procedure could re

manufacturers to retest all models, which could strain lab 

and be financially burdensome.

– Testing is costly and logistically challenging because of the 

most equipment and the fact that many CPBs are custom

manufactured.

• Not Many American Companies Produce Condensing He

Exchangers for Gas‐Fired Hot Water Equipment

– Many companies in the US currently produce condensing e

however most condensing heat exchangers are sourced fro

European or Asian companies.

– A standard level that necessitated condensing technology c

require manufacturers to decide whether to continue to so

exchangers, or develop their own production capacity, whic

require investments in product development and new capi

equipment.
103

Preliminary MIA: Key Issues• Small Business Concerns

– DOE has preliminarily identified 21 small business CPB man

– Small business manufacturers may have fewer resources (e

engineering, testing, capital) to adapt to amended standard

to larger competitors.
104

Issues for Comment

Issue #32: DOE considers the impacts on certain manusubgroups that have different cost structures or operatdifferent regulatory frameworks in the NOPR stage. DOrequests feedback on subgroups to analyze and/or characteristics appropriate for subgroup analysis.

Issue #33: DOE requests comment about its identificatissues, and requests data and information which would evaluating the potential impact of energy efficiency stamanufacturers.

Issue #31: DOE conducts a regulatory flexibility analysexamines the impact on small entities and considers always of reducing negative impacts in the NOPR stage. invites comments and information about small businesmanufacture CPBs and should be first be consulted beNOPR is published.
105

Public Meeting Agenda

Markups, Energy Use Characterization, LCC and Payb

Period Analysis 4

3 Engineering Analysis1 Introduction and Overview2 Market and Technology Assessment and Screening Analysis5 Shipments and National Impact Analysis6 Preliminary Manufacturer Impact Analysis7 Next Steps
106

Framework

Document

Preliminary

Activities NOPR Final Rule Effective Date Framework Document Preliminary Activities NOPR Final Rule Effective Date

Next Steps in the Standards Rulemaking: N

Revise Preliminary Analyses

Consumer 

Subgroup 

Analysis

Manufacturer 

Impact 

Analysis

Emissions 

Impact 

Analysis

Utility Impact 

Analysis

Employment 

Impact 

Analysis

Revise Preliminary Analyses

Consumer 

Subgroup 

Analysis

Manufacturer 

Impact 

Analysis

Emissions 

Impact 

Analysis

Utility Impact 

Analysis

Employment 

Impact 

Analysis
107

• Purpose:

– To develop a list of potential amended standard levels from which i

weighed and a proposed standard level is selected.

• Each trial standard level consists of a set of efficiency levels covering al

and may vary between product classes.

• NOPR analyses assess impacts for trial standard levels (not efficiency le

product class).

• Method:

– Trial standard levels are assembled from the equipment classes and 

levels identified in the preliminary analyses.

• Trial standard levels cover a range of efficiencies and can include:

– Most energy efficient level (max‐tech);

– Efficiency level with the lowest life‐cycle cost;

– Efficiency level with a payback period of three years or less;

– Efficiency levels with noteworthy technologies; and

– Efficiency levels that fill in large gaps.

Trial Standard Levels

Selection of Trial Standard Levels

ISSUE 34: DOE requests feedback on the criteria it shofor basing the selection of Trial Standard Levels.
108

Revise Preliminary Analyses

Consumer 

Subgroup 

Analysis

Manufacturer 

Impact 

Analysis

Emissions 

Impact 

Analysis

Utility Impact 

Analysis

Employment 

Impact 

Analysis

Revise Preliminary Analyses

Consumer 

Subgroup 

Analysis

Manufacturer 

Impact 

Analysis

Emissions 

Impact 

Analysis

Utility Impact 

Analysis

Employment 

Impact 

Analysis

Framework

Document

Preliminary

Activities NOPR Final Rule Effective Date Framework Document Preliminary Activities NOPR Final Rule Effective Date

Next Steps in the Standards Rulemaking: NOP
109

• Purpose:

– Analyze the economic impacts of standards on commercial 

including subgroups who may be disproportionately impac

compared with the general user population.

• Method:

– Refine the LCC analysis to examine the impacts for defined 

Consumer Subgroup Analysis

Overview

ISSUE 35: DOE requests input as to which consumer subgroups, if any, it should consider when developing standards for commercial packaged boilers.
110

Framework

Document

Preliminary

Activities NOPR Final Rule Effective Date Framework Document Preliminary Activities NOPR Final Rule Effective Date

Next Steps in the Standards Rulemaking: NO

Revise Preliminary Analyses

Consumer 

Subgroup 

Analysis

Manufacturer 

Impact 

Analysis

Emissions 

Impact 

Analysis

Utility Impact 

Analysis

Employment 

Impact 

Analysis

Revise Preliminary Analyses

Consumer 

Subgroup 

Analysis

Manufacturer 

Impact 

Analysis

Emissions 

Impact 

Analysis

Utility Impact 

Analysis

Employment 

Impact 

Analysis
111

• Purpose:

– Estimate emissions impacts from amended energy conservation sta

commercial packaged boilers, including changes in full‐fuel cycle (F

• Method:

– DOE will base the emission factors for FFC on EIA’s AEO, supplemen

from other sources.

– DOE estimates the reduction in power sector and site combustion e

carbon dioxide (CO2), nitrogen oxides (NOX), sulfur dioxide (SO2), m

methane (CH4) and nitrous oxide (N2O) from potential energy conse

standards for the considered equipment.

• Monetization:

– DOE considers the estimated monetary benefits likely to result from 

emissions of CO2 from the energy efficiency standards levels

– To estimate benefits from CO2, DOE uses the Social Cost of Carbon 

developed by an interagency process.

Emissions Impact Analysis

Overview
112

Emission Analysis and Emissions Monetization

Issue #36: DOE seeks input on its plans to use NEMS-BT to conduct the emissions analysis for the products covered by this rulemaking.Issue #37: Are there any other emissions factorthe DOE should consider in this rulemaking?Issue #38: Are there other approaches to the emissions analysis that the DOE should conside

Request for Comment
113

• Purpose: Assess the overall impacts on domestic energy suppli

would result from the imposition of standards.

• Method:

– Uses national energy savings results.

– Uses the Energy Information Administration’s National Ene

Modeling System (NEMS) tailored for DOE’s Building Techn

Program (NEMS‐BT).

• Output:

– Change in energy sales and price by region.

– Change in the mix of electricity generation.

– Change in new capacity construction.

Utility Impact Analysis

Overview

Issue #39: DOE seeks input on its plans to use NEMS-BT to conduct the utility impact analysis.
114

• Purpose: To report net jobs created or eliminated nationally a

consequence of new energy conservation standards.

• Method:

– Uses the ImSET tool, a spreadsheet model of the U.S. eco

focuses on 188 sectors most relevant to building energy u

– Changes in product and energy expenditures taken from t

– Estimates the national employment and income effects of 

saving appliances.

– Direct employment impacts taken from the MIA.

• Output: Change in employment by sector as a consequence o

standards.

Indirect Employment Impact Analysis

Overview

Issue #40: DOE requests comment about its planned approach for assessing national indirecemployment impacts.
115

• Purpose:

– To investigate the national impacts due to non‐regulatory alternati

with mandatory energy conservation standards.

– The non‐regulatory alternatives that may be considered:

• No new regulatory action; early replacement; prescriptive stan

consumer tax credits; manufacturer tax credits; consumer reb

efficiency targets; bulk government procurement.

• Method:

– Modify NES spreadsheet model to consider non‐regulatory scenari

– Non‐regulatory scenarios increase overall appliance efficiency and 

by modifying the base case efficiency trend.

– NPV calculated for non‐regulatory alternatives in the same way as 

standard.

– Each non‐regulatory scenario will decrease national appliance ope

increase appliance equipment prices.

• Output:

– National Energy Savings and Net Present Value of the non‐regulato

Regulatory Impact Analysis

Overview
116

Issue #41: In general, DOE requests any additionacomments and invites questions from interested parties about the Department of Energy’s CommerPackaged Boilers Energy Conservation Standards Rulemaking.

Final Comments and Questions
117

How to Submit Comments• In all correspondence, please include all of the follo

o Energy Conservation Standards for Commercial Packago Docket Number: EERE‐2013‐BT‐STD‐0030

o Regulatory Identification Number (RIN): 1904‐AD01

• Contact Information

Email: PkgdBoilers2013STD0030@ee.doe.gov

Postal Mail:

Ms. Brenda Edwards

U.S. Department of Energy

Building Technologies Program

Mailstop EE‐5B

1000 Independence Avenue, S.W.

Washington, DC 20585‐0121

Comment period ends January 20, 2015

Courier:

Ms. Brenda Edwards

U.S. Department of E

Building Technologie

L’Enfant Plaza, S.W., 

Washington, DC 200

Telephone: (202) 586