CHAPTER 11. NATIONAL IMPACT ANALYSIS 

TABLE OF CONTENTS 

11.1 INTRODUCTION ............................................................................................................ 11-1

11.2 NATIONAL ENERGY SAVINGS .................................................................................. 11-2

11.2.1 NES Definition................................................................................................... 11-2

11.2.2 NES Inputs......................................................................................................... 11-3

11.2.2.1 Annual Unit Energy Consumption .................................................... 11-3

11.2.2.2 Shipments .......................................................................................... 11-6

11.2.2.3 Equipment Stock ............................................................................... 11-6

11.2.2.4 National Annual Energy Consumption ............................................. 11-6

11.2.2.5 Site-to-Source Conversion Factor ..................................................... 11-6

11.3 NET PRESENT VALUE.................................................................................................. 11-7

11.3.1 Net Present Value Definition.............................................................................11-7

11.3.2 NPV Inputs......................................................................................................... 11-8

11.3.2.1 Total Annual Installed Cost............................................................... 11-8

11.3.2.2 Total Annual Operating Cost Savings............................................... 11-9

11.3.2.3 Discount Factor ............................................................................... 11-10

11.3.2.4 Present Value of Costs .................................................................... 11-11

11.3.2.5 Present Value of Savings................................................................. 11-11

11.4 NES AND NPV RESULTS............................................................................................ 11-11

11.4.1 NES and NPV Input Summary ........................................................................ 11-11

11.4.2 National Energy Savings Results.....................................................................11-12

11.4.3 Annual Costs and Savings ...............................................................................11-13

11.4.4 NPV Results..................................................................................................... 11-14

REFERENCES ........................................................................................................................ 11-16

LIST OF TABLES 

Table 11.2.1 Average Annual UEC by TSL (kWh/Year)....................................................... 11-4

Table 11.2.2 Shipment-Weighted Average Annual UEC by TSL (kWh/year) ...................... 11-6

Table 11.2.3 Marginal Site-to-Source Conversion Factors..................................................... 11-7

Table 11.3.1 Average TIC per Unit by TSL (2008$).............................................................. 11-8

Table 11.3.2 Shipment-Weighted Average TIC per Unit by TSL (2008$) ............................ 11-9

Table 11.3.3 Average Annual Repair Cost per Unit (2008$) ............................................... 11-10

Table 11.4.1 NES and NPV Inputs....................................................................................... 11-12

Table 11.4.2 Cumulative NES for BVMs (2012-2042) (Quads).......................................... 11-12

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EERE-2006-STD-0125 COMMENT 46
 11-ii 

Table 11.4.3 Cumulative NPV Results Based on a 7-Percent Discount Rate 

(Billion 2008$)*............................................................................................... 11-15

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

(Billion 2008$)*............................................................................................... 11-15

LIST OF FIGURES 

Figure 11.4.1 National Annual Costs and Savings for B-L-IO Equipment category, TSL 

4........................................................................................................................ 11-14

EERE-2006-STD-0125 COMMENT 46
CHAPTER 11. NATIONAL IMPACT ANALYSIS 

11.1 INTRODUCTION 

This chapter describes the method for estimating the magnitude and net present value to 

consumers of future national energy savings (NES) from possible trial standard levels (TSLs) for 

beverage vending machine (BVM) equipment. Results described in this chapter include 

(1) national energy consumption and savings, (2) monetary value of energy savings to the nation 

resulting from new energy conservation standards, (3) increased total installed costs (and 

associated repair and maintenance costs) to the nation because of new energy conservation 

standards, and (4) the net present value (NPV) of savings (i.e., the difference between monetary 

value of savings and increased total costs). 

The U.S. Department of Energy (DOE) has determined both the NPV and NES for all of 

the TSLs considered for the two equipment classes of BVM equipment examined. Up to seven 

TSLs above the baseline level are being considered for each equipment class. 

DOE performed all calculations using a Microsoft Excelspreadsheet (the NES 

spreadsheet), which is accessible on the Internet at 

http://www1.eere.energy.gov/buildings/appliance_standards/commercial/beverage_machines.ht

ml. Details and instructions for using the spreadsheet are discussed in appendix G; a more 

detailed set of results is available in appendix H. The calculations were performed for two 

equipment classes (A and B) and three size categories, as described in chapter 10. The important 

features of national energy consumption of BVM equipment include: 

1. shipments of each equipment category 

2. existing stock of each equipment category 

3. national average electricity consumption for each equipment category 

4. site-to-source conversion factor to translate electricity consumption at the site of use into the 

amount of electricity that must be generated at the power plant (source) and then transmitted 

to the site where it is consumed. 

Chapter 10 provides a detailed description of the shipments analysis model that DOE 

used to forecast future purchases of BVM equipment. 

Voluntary energy efficiency programs may increase the share of energy-efficient 

equipment prior to the implementation date of any new energy conservation standards. At the 

ANOPR stage, DOE received information from industry stakeholders identifying and partially 

quantifying the likely impact of the ENERGY STAR Tier 1 and Tier 2 standards on the national 

mix of BVM equipment efficiencies. Consequently, DOE explicitly incorporated the impact of 

this market-based voluntary energy efficiency program into the shipment forecasts by efficiency 

level. 

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11.2 NATIONAL ENERGY SAVINGS 

11.2.1 NES Definition 

DOE calculated annual NES as the difference between two scenarios: a base case 

(without new standards) and a standards case (with new standards). Positive values of NES 

correspond to NES (i.e., annual national energy consumption [AEC] with standards is less than 

annual national energy consumption in the base case; see equation 11.1). 

 NESt =AECbase - AECstandard Eq. 11.1 

The variables are defined as: 

NESt National energy savings in year t. 

AECbase Total annual energy consumption, base case. 

AECstandard Total annual energy consumption under the standard. 

Cumulative NES (NEScum) is the sum over a defined time period (t) from the 

implementation of a standard (assumed to be in 2012) forward 30 years to 2042 (from 2012 to 

2042) of the annual NES (see equation 11.2). 

 NES cum = ∑t NES t Eq. 11.2

The variables are defined as: 

NEScum Cumulative national energy savings. 

DOE calculated the AEC by multiplying the number or stock of units of BVM equipment 

(by vintage v and equipment category E) by the unit energy consumption (also by vintage) as 

shown by equation 11.3 and 11.4. 

 AECE = (STOCKVE x UECVE) x src_convt Eq. 11.3 

 AEC = ∑E AECE Eq. 11.4 

For equations 10.3 and 10.4, DOE defined the following variables: 

AECE Annual national energy consumption each year in quadrillion Btus (quads) in 

equipment category E, summed over vintages V of BVM equipment stock 

STOCKVE. 

AEC Annual national energy consumption each year in quadrillion Btus (quads), 

summed over equipment categories of BVM equipment stock 

NES Annual NES (quads). 

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STOCKVE Stock of BVM equipment (millions of units) of vintage V and equipment 

category E surviving in the year t for which DOE calculated annual energy 

consumption. 

Vintages range from 1 year to approximately 15 years, a function of an assumed 10-year 

average lifetime of the BVM equipment. 

UECVE Annual unit energy consumption per BVM unit (kWh/year) 

src_convt Time-dependent conversion factor to convert from site energy (kWh) to 

source energy (quads) (Btu/kWh) 

V Year in which the BVM equipment was purchased as a new unit. 

E Equipment category. 

t Year in the forecast (e.g., 2012 to 2042). 

The stock of BVM equipment is dependent on annual shipments and the lifetime of the 

equipment. DOE believes that the shipment projections under the standards cases could be lower 

than those in the base-case projection because the higher installed costs would cause some 

customers to forego new equipment purchases. However, based on available information, DOE 

did not include this effect in its analysis. For this advance notice of proposed rulemaking 

(ANOPR) analysis, the total shipments projections are the same in both the base case and 

standards cases. 

11.2.2 NES Inputs 

The inputs for the determination of NES are listed below: 

 Annual unit energy consumption (kWh/year; section 11.2.2.1) 

 Shipments (section 11.2.2.2) 

 Equipment stock (section 11.2.2.3) 

 National annual energy consumption (section 11.2.2.4) 

 Site-to-source conversion factor (section 11.2.2.5). 

11.2.2.1 Annual Unit Energy Consumption 

The annual unit energy consumption (UEC) is the site energy consumed by a BVM unit 

per year. The annual UEC is directly related to the energy efficiency of the unit. Thus, knowing 

the energy efficiency of a BVM unit determines the corresponding annual UEC. As described 

below, DOE determined annual forecasted shipment-weighted average BVM equipment 

efficiencies that, in turn, enabled a determination of shipment-weighted annual UEC values. 

Because no published data have been found on the market shares of the various 

equipment classes of BVM equipment by TSL, DOE sought industry input on the based 

shipment-weighted average efficiency trends for BVM equipment. Industry responses indicated 

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that all shipments of new BVM equipment to major bottlers since 2004 meet Energy Star Tier 1 

standards (equal to Efficiency Level 1 or TSL 1). DOE interpreted these comments to mean that 

about 90 percent of the current market shipments are at Efficiency Level 1, and the remainder 

was assumed to be at Efficiency Level 0. Moreover, industry responses indicated that for major 

bottlers and distributors, all new equipment in 2012 and beyond would meet Energy Star Tier 2 

standards (equal to TSL 2 for Equipment Class A and TSL 3 for Equipment Class B). This would 

be about 90 percent of the market. The remainder was assumed to be at TSL 1. DOE 

extrapolated future trends of BVM equipment efficiency both for this base-case scenario 

(i.e., without new standards) and various standards-case scenarios (i.e., with new standards). The 

difference in equipment efficiency between the base case and standards cases was the basis for 

determining the reduction in annual UEC that could result from new standards. 

To project changes in weighted average efficiency levels at standards above baseline 

Efficiency Level 1 (Energy Star Tier 1), DOE assumed that market shares above the minimum 

permitted efficiency level would be reassigned to the new minimum level.a

 For example, if the 

TSL 4 were imposed as the new standard in 2012 on B-L-IO equipment category, then the 

market shares for TSLs 1-3 would be assigned to TSL 4, which would result in a total market 

share of 100 percent (i.e., 10 percent + 90 percent + 0 percent) from the first three TSLs, 

beginning in 2012. The market shares for TSLs 5, 6 and 7 would not be affected, since the 

market already has a choice of equipment at TSL 5 and above also available. It was assumed that 

the standard would not affect the relative attractiveness of equipment with efficiencies higher 

than the standard. 

As stated earlier, annual UEC values are tied directly to the efficiency of the equipment. 

Table 11.2.1 provides weighted-average annual energy consumption values for specific TSLs for 

all three sizes of both equipment classes. 

Table 11.2.1 Average Annual UEC by TSL (kWh/Year)

Equipment Trial Standard Level 

Category TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6 TSL 7 

A-L-IN 2,267 2,099 1,916 1,785 1,679 1,610 1,438 

A-M-IN 2,011 1,916 1,734 1,529 1,442 1,383 1,252 

A-S-IN 1,924 1,734 1,551 1,442 1,361 1,307 1,186 

B-L-IO 1,890 1,842 1,760 1,746 1,561 1,526 NA* 

B-M-IO 1,799 1,731 1,658 1,645 1,463 1,431 NA 

B-S-IO 1,606 1,505 1,505 1,495 1,313 1,285 NA 

*NA signifies that there is no TSL 7 for the B equipment class. 

For the annual shipment-weighted TSLs specified in the base case and standards cases, 

DOE assigned the appropriate annual UEC values shown in 

 

a

 This “roll-up” scenario for the shipments is similar to what is used in the Manufacturer Impact Analysis (see 

chapter 12 of the Technical Support Document [TSD] for more details). 

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Table 11.2.2. For each equipment category, the value shown for a given TSL is the efficiencyweighted average annual UEC, after taking into account the non-availability of products at 

efficiency levels below the TSL shown. 

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Table 11.2.2 Shipment-Weighted Average Annual UEC by TSL (kWh/year)

Equipment Trial Standard Level 

Category TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6 TSL 7 

A-L-IN 2,267 2,099 1,916 1,785 1,679 1,610 1,438 

A-M-IN 2,011 1,916 1,734 1,529 1,442 1,383 1,252 

A-S-IN 0 0 0 0 0 0 0 

B-L-IO 1,847 1,842 1,760 1,746 1,561 1,526 NA* 

B-M-IO 1,738 1,731 1,658 1,645 1,463 1,431 NA 

B-S-IO 0 0 0 0 0 0 0 

*NA signifies that there is no TSL 7 for the B equipment class. There are no small units shipped in the scenario. 

11.2.2.2 Shipments 

DOE forecasted shipments for the base case and all standards cases (see chapter 10 of 

the TSD). 

11.2.2.3 Equipment Stock 

The BVM stock in a given year is the total units of BVM equipment shipped from earlier 

years that survive in the given year. The NES spreadsheet model keeps track of the total number 

of BVM units shipped each year. For purposes of the NES and NPV analyses, DOE assumes that 

retirements follow a Weibull distribution with a 10-year average lifetime. Retirements for any 

given vintage build quickly after about year 5 to about 22 percent per year by year 10, then 

decrease rapidly to less than 1 percent per year by year 14. Retired units are replaced, but only to 

the extent of 90,000 units per year and only until 2042. For units shipped in 2042, no units are 

assumed to remain at the end of 2057. 

11.2.2.4 National Annual Energy Consumption 

The national annual energy consumption is the product of the annual unit energy 

consumption and the number of BVM units of each category in each vintage. This approach 

accounts for differences in UEC from year to year. Equation 11.4 above was used for 

determining the national annual energy consumption of BVM equipment. 

In determining national annual energy consumption, DOE initially calculated the annual 

energy consumption at a site (i.e., electricity in kWh consumed by a BVM unit). DOE then 

calculated primary energy consumption from site energy consumption by applying a conversion 

factor to account for losses associated with the generation, transmission, and distribution of 

electricity. 

11.2.2.5 Site-to-Source Conversion Factor 

The site-to-source conversion factor, which accounts for losses in electricity generation, 

transmission, and distribution, is used to convert site energy consumption, expressed in kWh, 

into primary or source energy consumption, expressed in quads. DOE used annual site-to-source 

conversion factors based on U.S. marginal values for the commercial sector, calculated as shown 

in appendix H. As shown in Table 11.2.3, the marginal conversion factors vary over time 

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because of projected changes in electricity generation sources (i.e., the power plant types 

projected to provide electricity to the United States). 

Table 11.2.3 Marginal Site-to-Source Conversion Factors

Year 

Site-to-Source 

Conversion Factor 

Btu/kWh Year 

Site-to-Source 

Conversion Factor 

Btu/kWh Year 

Site-to-Source 

Conversion Factor 

Btu/kWh 

2012 9,775 2018 9,738 2024 10,137 

2013 9,623 2019 9,922 2025 10,163 

2014 9,458 2020 9,817 2026 10,046 

2015 9,304 2021 9,787 2027 9,868 

2016 9,282 2022 9,786 2028 9,686 

2017 9,492 2023 10,051 2029 9,592 

2030-2057 9,642 

Source: Appendix L of the TSD 

11.3 NET PRESENT VALUE 

11.3.1 Net Present Value Definition 

The net present value (NPV) is the value in the present of a time series of costs and 

savings. The NPV is given by equation 11.5: 

NPV = PVS – PVC Eq. 11.5

Where: 

 PVS = present value of operating cost savings (including electricity, repair, and 

maintenance costs) ($) 

 PVC = present value of increased total installed costs (including equipment and 

installation) ($). 

The PVS and PVC are determined using equations 11.6 and 11.7: 

 PVS = ∑ OCS t x DF t Eq. 11.6

 PVC =∑ TIC t x DF t Eq. 11.7

Where: 

 OCS = total annual operating cost savings ($) 

 TIC = total annual installed cost increases ($) 

 DF = discount factor 

 t = year for which PVS and PVC are determined. 

DOE determined the PVC for each year, from the effective date of the standard (2012) to 

the year 2057, discounted for the NOPR analysis, to the year 2009. The PVS was determined for 

each year, from the effective date of the standard (2012) to the year when the last units purchased 

in 2042 retire (assumed to be in 2057). DOE calculated costs and savings as the difference 

between a standards case and a base case. DOE calculated a DF from the discount rate and the 

number of years between the “present” (i.e., 2009, the reference year to which the sum is being 

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EERE-2006-STD-0125 COMMENT 46
discounted) and the year in which the costs and savings occur. The NPV is the sum over time of 

the discounted net savings. 

11.3.2 NPV Inputs 

The inputs to the NPV calculation are listed below: 

 Total Annual Installed Cost (section 11.3.2.1) 

 Total Annual Operating Cost Savings (11.3.2.2) 

 Discount Factor (section 11.3.2.3) 

 Present Value of Costs (section 11.3.2.4) 

 Present Value of Savings (section 11.3.2.5). 

11.3.2.1 Total Annual Installed Cost 

The increase in the total annual installed cost is equal to the annual change in the per-unit 

TIC (difference between base case and standards case) multiplied by the shipments forecasted in 

both the base case and the standards case. TIC includes both the equipment cost and the 

installation price. DOE based average equipment costs on average manufacturer prices (see 

chapter 8, Life-Cycle Cost and Payback Period Analyses) multiplied by average overall markup 

values (chapter 8). DOE based average installation prices on nationally representative values for 

each equipment class and size category (chapter 8). Table 11.3.1 shows the resulting average 

total installed costs per unit for each of the BVM equipment categories that TSL analyzed. 

Table 11.3.1 Average TIC per Unit by TSL (2008$)

Equipment 

Category TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6 TSL 7 

A-L-IN $2,881 $2,923 $2,969 $3,002 $3,035 $3,070 $4,415 

A-M-IN $2,669 $2,679 $2,741 $2,790 $2,823 $2,856 $3,977 

A-S-IN $2,240 $2,287 $2,333 $2,361 $2,388 $2,418 $3,428 

B-L-IO $2,153 $2,155 $2,194 $2,207 $2,670 $3,941 NA* 

B-M-IO $2,085 $2,088 $2,127 $2,139 $2,603 $3,725 NA 

B-S-IO $1,888 $1,893 $1,893 $1,906 $2,369 $3,345 NA 

*NA signifies that there is no TSL 7 for the B equipment class. 

As discussed earlier in section 11.2.2.1, DOE developed base case and standards case 

energy-efficiency trends. DOE based its standards-case forecasts (i.e., forecasts of efficiency 

trends after standards take effect) on the use of a roll-up efficiency scenario and parallel growth 

trend. For both the base case and standards case energy-efficiency trends, DOE calculated annual 

shipment-weighted average efficiencies. Associated with each annual shipment-weighted 

average efficiency value, DOE assigned a total installed cost, based on the relationship between 

efficiency and TIC. DOE based the relationship between efficiency and TIC for each BVM 

equipment category on the data in Table 11.3.1. As shown in Table 11.3.2, DOE estimated the 

shipment-weighted installed cost. DOE determined forecasted average shipments-weighted TIC 

based on the annual shipments by TSL. 

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Table 11.3.2 Shipment-Weighted Average TIC per Unit by TSL (2008$)

Equipment 

Category TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6 TSL 7 

A-L-IN $2,881 $2,923 $2,969 $3,002 $3,035 $3,070 $4,415 

A-M-IN $2,669 $2,679 $2,741 $2,790 $2,823 $2,856 $3,977 

A-S-IN 0 0 0 0 0 0 0 

B-L-IO $2,153 $2,155 $2,194 $2,207 $2,670 $3,941 NA* 

B-M-IO $2,085 $2,088 $2,127 $2,139 $2,603 $3,725 NA 

B-S-IO 0 0 0 0 0 0 0 

*NA signifies that there is no TSL 7 for the B equipment class. There are no small-size equipment shipped in the scenario. 

11.3.2.2 Total Annual Operating Cost Savings 

The annual operating cost savings to the nation are equal to the change in the annual 

operating costs (i.e., difference between the base case and the standards case) per unit multiplied 

by the shipments forecasted in both the base case and the standards case. The annual operating 

cost includes electricity, repair, and maintenance costs. 

Annual Electricity Cost Savings. As described in chapter 8, DOE calculated annual 

electricity costs based on average state-level commercial electricity prices. To calculate annual 

energy cost savings for a particular equipment category in a given year, DOE first calculated the 

annual energy costs in each forecast year at each TSL by multiplying the shipment-weighted 

average energy consumption at each TSL from 

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Table 11.2.2 by the units of equipment stock in the equipment category in each year, and then 

multiplying the energy consumption by the sales-weighted national average electricity prices for 

the four business types described in chapter 8. To determine energy savings, the national energy 

costs at TSL 1-7 (Equipment Class A) or TSL 1-6 (Equipment Class B) were then subtracted 

from the national energy costs at the baseline level. Because projections of the stock of BVM 

equipment (expressed in units shipped) are the primary driver used to estimate future BVM 

equipment shipments, DOE calculated the national energy cost on a per-unit basis. 

Annual Repair Costs. DOE based average annual repair costs on the value of the BVM 

equipment (see chapter 8). Table 11.3.3 shows the average per-unit repair costs for the 

equipment categories of BVM equipment. The NES spreadsheet has the capability to allow 

repair costs to differ by the price of the BVM equipment and, therefore, by TSL. For the 

purposes of this NOPR analysis, DOE assumed that the repair costs would increase for each 

equipment category as the manufacturer’s price increases, as shown in Table 11.3.3. 

Table 11.3.3 Average Annual Repair Cost per Unit (2008$)

Equipment 

Category TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6 TSL 7 

A-L-IN $123 $125 $127 $129 $130 $132 $193 

A-M-IN $124 $125 $128 $131 $132 $134 $190 

A-S-IN $124 $127 $130 $132 $133 $135 $195 

B-L-IO $123 $125 $127 $128 $157 $236 NA* 

B-M-IO $124 $125 $128 $128 $158 $231 NA 

B-S-IO $124 $128 $128 $128 $162 $233 NA 

*NA signifies that there is no TSL 7 for the B equipment class. 

Annual Maintenance Costs. DOE was unable to locate any data on annual preventive 

maintenance cost (see chapter 8, section 8.2.3.4), but annual maintenance is believed to be a 

relatively straightforward process. A weighted average annual value of $164 per unit was 

assigned to all equipment because the maintenance procedures are the same for all sizes and 

TSLs of BVMs. 

11.3.2.3 Discount Factor 

DOE determined present value of monetary values in future years using the DF, which is 

described by Eq. 11.8: 

 DF = 1/(1+r)(y - yp) Eq. 11.8

Where: 

 r = discount rate 

 y = year of the monetary value 

 yp = year in which the present value is being determined. 

DOE estimated national impacts with a 3- and 7-percent real discount rates as the average 

real rate of return on private investment in the U.S. economy. These discount rates are used in 

accordance with the Office of Management and Budget’s (OMB) guidance to federal agencies on 

the development of regulatory analysis (OMB Circular A-4, September 17, 2003), and section E, 

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“Identifying and Measuring Benefits and Costs,” therein. DOE defined the present year as 2009 

for the NOPR analysis. 

11.3.2.4 Present Value of Costs 

The present value of increased installed costs is the annual installed cost increase in each 

year (i.e., the difference between the standards case and base case), discounted to the present, 

and then summed for the time period over which DOE is considering the installation of BVM 

equipment (i.e., from the effective date of standards [2012] to 2042). 

The increase in TIC refers to both equipment cost and installation cost associated with the 

higher energy efficiency of BVM units purchased in the standards case compared to the base 

case. DOE calculated annual installed costs as the difference in TIC for new equipment 

purchased each year, multiplied by the number of shipments in the standards case. 

11.3.2.5 Present Value of Savings 

The present value of operating cost savings is the annual operating cost savings (i.e., the 

difference between the base case and standards case) discounted to 2009 and then summed over 

the period from the effective date (2012) to the time when the last unit installed in 2042 is retired 

from service (2057). Savings are decreases in operating costs (including electricity, repair, and 

maintenance) associated with the higher energy efficiency of BVM units purchased in the 

standards case compared to the base case. Total annual operating cost savings equals the savings 

per unit multiplied by the number of units of each vintage surviving in a particular year. 

Equipment consumes energy over its entire lifetime, and for units purchased in 2042, the present 

value of savings includes energy consumed until the unit is retired from service (2057). 

11.4 NES AND NPV RESULTS 

The NES spreadsheet model provides estimates of the NES and NPV for various TSLs. 

The inputs to the NES spreadsheet are presented above in sections 11.2.2 (NES Inputs) and 

11.3.2 (NPV Inputs). 

11.4.1 NES and NPV Input Summary 

Table 11.4.1 summarizes the inputs to the NES spreadsheet model. For each input, a brief 

description of the data source is given. 

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Table 11.4.1 NES and NPV Inputs

Input Data Description 

Shipments Annual shipments from shipments model (see chapter 10). 

Effective Date of Standard 2012 

Base-Case Efficiencies Annual shipment-weighted efficiencies based on historical BVM 

weighted-efficiency values 

BVM shipment-weighted TSLs Standards case annual shipment-weighted market shares remain 

constant for base case and each TSL 

Annual UEC Annual weighted-average values are a function of TSL. (Established 

from the Engineering Analysis, chapter 5). 

TIC per Unit Annual weighted-average values are a function of TSL. (Established 

from the life-cycle cost analysis, chapter 8). 

Repair Cost per Unit Annual weighted-average values increase with manufacturer’s cost 

level. (Established from the life-cycle cost analysis, chapter 8). 

Maintenance Cost per Unit Annual weighted-average value equals $164 by assumption. 

Escalation of Electricity Prices 2009 EIA Annual Energy Outlook forecasts (to 2030) and extrapolation 

for beyond 2030 (see the life-cycle cost analysis, chapter 8). 

Electricity Site-to-Source Conversion Conversion varies yearly and is generated by DOE-EIA’s NEMS* 

program (a time series conversion factor; includes electric generation, 

transmission, and distribution losses). 

Discount Rate 3 and 7 percent real. 

Present Year Future costs are discounted to 2008. 

* Sources: Chapter 14 on the utility impact analysis and chapter 16 on the environmental assessment provide more detail on 

NEMS. 

11.4.2 National Energy Savings Results 

This section provides NES results for each TSL considered for the equipment categories 

of BVMs analyzed. Results are cumulative to 2042 and are shown as primary energy savings in 

quads. Inputs to the NES spreadsheet model are based on weighted-average values, yielding 

results that are discrete point values, rather than a distribution of values as in the life-cycle cost 

(LCC) analysis. 

Table 11.4.2 shows the NES results for the TSLs analyzed for each equipment category 

of BVMs. DOE based all the results on electricity price forecasts from the AEO2009 Reference 

Case.1

 

Table 11.4.2 Cumulative NES for BVMs (2012-2042) (Quads)

Equipment Trial Standard Level 

Category TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6 TSL 7 

A-L-IN 0.001 0.006 0.012 0.017 0.020 0.022 0.028 

A-M-IN 0.004 0.013 0.031 0.051 0.060 0.066 0.079 

A-S-IN 0.000 0.000 0.000 0.000 0.000 0.000 0.000 

B-L-IO 0.000 0.000 0.003 0.003 0.008 0.009 NA* 

B-M-IO 0.001 0.002 0.007 0.009 0.023 0.026 NA 

B-S-IO 0.000 0.000 0.000 0.000 0.000 0.000 NA 

*NA signifies that there is no TSL 7 for the B equipment class. There are no small units shipped in the scenario. 

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EERE-2006-STD-0125 COMMENT 46
11.4.3 Annual Costs and Savings 

As a prelude to providing the NPVs for each TSL in each equipment category, this 

section presents the annual equipment cost (or TIC) increases and annual operating cost savings 

at the national level. 

Figure 11.4.1 shows the changes over time of the non-discounted annual equipment price 

increases and the non-discounted operating cost savings at the TSL 4 for B-L-IO equipment. The 

total net annual impact is the discounted value of the difference between annual equipment 

purchases and annual operating costs at a 7-percent discount rate. Appendix H shows comparable 

figures for other TSLs and other equipment categories. Each figure also shows the net annual 

impact, which is the difference between the savings and costs for each year. The annual 

equipment price change is the increase in equipment price for equipment purchased each year 

during 2012–2042. The annual operating savings is the savings in operating costs for equipment 

purchased, and that have not been retired, for each year over the time period 2012-2057. DOE 

determined the annual costs and savings presented in each figure based on the AEO2009 

Reference Case. The NPV is the difference between the cumulative annual discounted savings 

and the cumulative annual discounted costs. 

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EERE-2006-STD-0125 COMMENT 46
Trial Standard Level

TSL 4

Efficiency Level

Level 5

Net Savings

-0.0008

-0.0006

-0.0004

-0.0002

0.0000

0.0002

0.0004

0.0006

0.0008

0.0010

2012

2016

2020

2024

2028

2032

2036

2040

2044

2048

2052

2056

2060

Year

Billion 2008$

Undiscounted Total Annual Operating Savings

Undiscounted Annual Equipment Purchase Savings

Discounted Total Net Annual Impact

Figure 11.4.1 National Annual Costs and Savings for B-L-IO Equipment Category TSL 4

Figure 11.4.1 initially shows smaller annual operating cost savings compared to the 

increased equipment price costs (shown on the figure as negative purchase savings). For all years 

through 2042, operating cost savings increase with time, as more equipment that meets the trial 

standard comprises the BVM stock. 

11.4.4 NPV Results 

The following section provides NPV results for the TSLs considered for the equipment 

categories of BVMs. Results are cumulative and are shown as the discounted value of these 

savings in dollar terms. The inputs to the NES spreadsheet model are based on weighted-average 

values, yielding results that are discrete point values rather than a distribution of values as in the 

LCC analysis. The present value of increased TICs is the TIC increase (i.e., the difference 

between the standards case and base case), discounted to 2009, and then summed over the time 

period in which DOE evaluates the impact of standards (i.e., from the effective date of standards 

[2012] to 2057). 

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EERE-2006-STD-0125 COMMENT 46
Savings are decreases in operating costs (including electricity, repair, and maintenance) 

associated with the higher energy efficiency of BVMs purchased in the standards case compared 

to the base case. Total operating cost savings are the savings per unit multiplied by the number of 

units of each vintage (i.e., the year of manufacture) surviving in a particular year. BVMs 

consume energy and must be maintained over their entire lifetime. For units purchased in 2042, 

the operating cost includes energy consumed and maintenance and repair costs incurred until the 

last unit is retired from service in 2057. 

Table 11.4.3 shows the NPV results for the TSLs considered for BVMs based upon a 

7 percent discount rate. DOE based all results on electricity price forecasts from the AEO2009 

Reference Case. Detailed results showing the breakdown of the NPV into national equipment 

costs and national operating costs are provided in appendix H. 

Table 11.4.3 Cumulative NPV Results Based on a 7-Percent Discount Rate (Billion 2008$)*

Equipment Trial Standard Level 

Category TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6 TSL 7 

A-L-IN $0.001 $0.009 $0.018 $0.024 $0.028 $0.028 ($0.203) 

A-M-IN $0.007 $0.028 $0.044 $0.074 $0.080 $0.077 ($0.516) 

A-S-IN $0.000 $0.000 $0.000 $0.000 $0.000 $0.000 $0.000 

B-L-IO $0.001 $0.001 $0.000 ($0.001) ($0.062) ($0.268) NA* 

B-M-IO $0.002 $0.002 ($0.001) ($0.004) ($0.193) ($0.745) NA 

B-S-IO $0.000 $0.000 $0.000 $0.000 $0.000 $0.000 NA 

*Values in parentheses indicate negative NPV. 

 NA signifies that there is no TSL 7 for the B equipment class. There are no small-size equipment shipped in the scenario. 

Table 11.4.4 provides the NPV results based on the 3-percent discount rate and electricity 

price forecasts from the AEO2009 Reference Case. As with the NPV results based upon a 

7 percent discount rate, detailed results showing the breakdown of the NPV into national 

equipment costs and national operating costs based upon a 3 percent discount rate are provided 

in appendix H. 

Table 11.4.4 Cumulative NPV Results based on a 3-Percent Discount Rate (Billion 2008$)*

Equipment Trial Standard Level 

Category TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6 TSL 7 

A-L-IN $0.003 $0.022 $0.043 $0.058 $0.067 $0.069 ($0.341) 

A-M-IN $0.017 $0.062 $0.106 $0.177 $0.195 $0.195 ($0.868) 

A-S-IN $0.000 $0.000 $0.000 $0.000 $0.000 $0.000 $0.000 

B-L-IO $0.001 $0.002 $0.003 $0.002 ($0.108) ($0.482) NA* 

B-M-IO $0.004 $0.005 $0.004 ($0.000) ($0.334) ($1.340) NA 

B-S-IO $0.000 $0.000 $0.000 $0.000 $0.000 $0.000 NA 

* Values in parentheses indicate negative NPVs. 

 NA signifies that there is no TSL 7 for the B equipment class. There are no small-size equipment shipped in the scenario. 

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 11-16 

REFERENCES 

1 Energy Information Administration (EIA). Annual Energy Outlook 2009. EIA, Washington, 

D.C., DOE/EIA-0554, Early Release. 

EERE-2006-STD-0125 COMMENT 46