Department of Energy Energy Efficiency & Renewable Energy ResBoilers2012STD0047@ee.doe.gov 

# NOPR Public Meeting on Energy Conservation 

# Standards for Residential Boilers2 

# Welcome

• Introductions

• Role of the Facilitator

• Ground Rules

– One person speak at a time (raise hand to be recognized)

– Say your name for the record

– there will be a complete transcript of this meeting

– Use short, succinct statements

– keep to the point



### – Hold sidebar conversations outside the room

– Set cell phones to silent/vibrate



## • Housekeeping Items

• Agenda Review

• Opening Remarks3 

# Listening Via the Webcast

• The Department is broadcasting this meeting live over the Internet.

• DOE is providing the webcast to accommodate interested parties who are unable to attend the public meeting in person.

• The web broadcast allows interested parties to listen in, view the presentation slides, and participate in the discussion.

• All interested parties are encouraged to submit written comments after the public meeting.4 

# Purpose of the Public Meeting

• To present analytical methodologies used to evaluate standards for boilers, and characterize results for analyses to date.

• To seek input from attendees on methodologies, assumptions, data sources, and DOE’s proposed standard levels.

• To invite participants to provide summary statements and raise additional issues for discussion.



## • To describe upcoming analyses and next steps.

Interested parties who contacted DOE to request an opportunity to make an opening statement may do so

now.5 

# Request for Comment

The deadline for submitting comments is June 1, 2015

. Issue Box: DOE welcomes comments, data, and information concerning its proposed standards for residential boilers. Issues on which DOE seeks comment are highlighted in issue boxes throughout this presentation. 

## Whether invited by an issue box or not, comments are welcome on any part of DOE’s analysis.6 

# Public Meeting Agenda

1 Overview

2 Market & Technology Assessment; Screening Analysis

3 Engineering Analysis

4 Markups Analysis and Energy Use Characterization

5 Life

- Cycle Cost and Payback Period Analysis

Shipments, National Impact Analysis, RIA 6

7 Manufacturer Impact Analysis

8 Environmental Impacts; Indirect Employment

9 Closing Remarks and How to Submit Comments7 

# Regulatory Authority

• Energy Policy and Conservation Act of 1975 (EPCA), Pub. L. 94

- 163

– Established the Energy Conservation Program for Consumer Products Other Than Automobiles, which covers residential boilers.



### • National Appliance Energy Conservation Act of 1987 (NAECA), Pub. L. 100

- 12

– Amended EPCA to prescribe standards for boilers. (42 U.S.C. 6295(f)(1))

– Directed DOE to conduct two further rulemakings to determine whether to amend these standards . (42 U.S.C. 6295(f)(4)(A)

- (C))



### • Energy Independence and Security Act of 2007 (EISA 2007), Pub. L. 110

- 140

– Amended EPCA to direct DOE to review standards for covered products at least once every 6 years. (42 U.S.C. 6295(m)(1))

– Amended the energy conservation standards for boilers. (42 U.S.C. 6295(f)(3))

– Required new or amended standards promulgated after July 1, 2010 to address standby mode and off mode energy use. 

### (42 U.S.C. 6295( gg )(3))8 

### • NAECA established the initial standards for boilers. (42 U.S.C. 6295(f)(1))

• DOE published a final rule revising the energy conservation standards for boilers on November 19, 2007. 72FR 65136.

• EISA 2007 further revised the minimum AFUE requirements for residential boilers and set several design requirements for each product class. (42 U.S.C. 6295(f)(3))

– Required gas

- fired hot water, oil

- fired hot water, and electric hot water boilers manufactured after September 1, 2012 to have an automatic means for adjusting water temperature.

– Disallowed the use of constant

- burning pilot lights in gas

- fired hot water and
gas

- fired steam boilers manufactured after September 1, 2012. 

# Regulatory Authority9 

# Introduction and Overview: Current Energy Conservation Standards

Boiler Product Class AFUE (%) Design Requirements

(A) Gas

- fired hot water boiler 82 • Constant burning pilot not permitted.

• Automatic means for adjusting water temperature required (except for boilers equipped with tankless domestic water heating coils). (B) Gas

- fired steam boiler 80 • Constant burning pilot not permitted.

(C) Oil

- fired hot water boiler 84 • Automatic means for adjusting temperature required (except for boilers equipped with tankless domestic water heating coils). (D) Oil

- fired steam boiler 82 • None

(E) Electric hot water boiler None • Automatic means for adjusting temperature required (except for boilers equipped with tankless domestic water heating coils

For residentia l boilers manufactured after September 1, 2012. 

### • EISA 2007 established the current energy conservation standards for boilers, which were codified by DOE at 10 CFR 430.32(e)(2)(ii) in a technical amendment final rule published in the Federal Register . 73 FR 43611 (July 

### 28, 2008 ).10 

### EPCA directs DOE to consider to the greatest extent practicable seven factors when setting energy conservation standards. (42 U.S.C. 6295(o)(2)(B))

Factor Analysis

1. Economic impact on consumers and manufacturers Life

- cycle cost analysis Manufacturer impact analysis

2. Lifetime operating cost savings Life

- cycle cost analysis

3. Total projected energy savings National impact analysis

4. Impact on utility or performance Screening analysis Engineering analysis

5. Impact of any lessening of competition Manufacturer impact analysis

6. Need for national energy conservation National impact analysis

7. Other factors the Secretary considers relevant Environmental assessment Utility impact analysis Employment impact analysis 

# Criteria for Selecting Standard Levels11 

# Rulemaking Timeline

2013 2016 2012 2014 2015 2017 2018 2019 2020 2021

Milestone Date
Framework Document February 2013 Notice of Data Availability (NODA) February 2014 Notice of Proposed Rulemaking (NOPR) March 2015 Final Rule (projected) December 2015 Compliance Date (projected) December 202012 

# Energy Conservation Standards Rulemaking13 

# Public Meeting Agenda

1 Overview

2 Market & Technology Assessment; Screening Analysis

3 Engineering Analysis

4 Markups Analysis and Energy Use Characterization

5 Life

- Cycle Cost and Payback Period Analysis

Shipments, National Impact Analysis, RIA 6

7 Manufacturer Impact Analysis

8 Environmental Impacts; Indirect Employment

9 Closing Remarks and How to Submit Comments14 

# Market and Technology Assessment

Purpose

• Characterize the market, the boiler industry, and the measures to improve boiler efficiency.



# Method

• Identify and characterize manufacturers of residential boilers;



## • Gather historical shipments and other relevant data;

• Characterize products currently available on the market; and

• Identify technology options for improving efficiency.15 

# Market Assessment: Product Classes

Boilers

Gas

Fired

Hot Water Steam Oil

- Fired

Hot Water Steam Electric

Hot Water Steam

Key

AFUE and Standby/off Analyzed

Only Standby/off Analyzed16 

# Market Characterization

• Predominantly a replacement market.

• Gas

- fired hot water boilers 

# make up the majority of the market.

• The heat exchangers of residential boilers are 

# commonly made from the following materials:

• Cast Iron

• Copper

• Steel

• Stainless Steel

• Aluminum Gas

- Fired Hot Water Gas

- Fired Steam Oil

- Fired Hot Water Oil

- Fired Steam Electric Steam Electric Hot Water 

## 2012 Estimated Shipments17 Source: DOE Database 2013 (consists of data from AHRI and DOE directory)



### 0 20 40 60 80 100 120

82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 Cast Iron

Steel
Copper Number of Models

AFUE (%) 

# Market Characterization: Gas

- Fired Hot Water

Aluminum

Stainless Steel Baseline (82%)18 Source: DOE Database 2013 (consists of data from AHRI and DOE directory)



### 0 5 10 15 20 25 30 35 40 45

80 81 82 83 Cast Iron

Steel
Copper Number of Models

AFUE (%) 

# Market Characterization: Gas

- Fired Steam

Aluminum

Stainless Steel Baseline (80%)19 

### 0

20 40 60 80 100 120 140

84 85 86 87 88 89 90 91 92 93 Cast Iron

Steel
Copper Number of Models

AFUE (%) 

# Market Characterization: Oil

- Fired Hot Water

Aluminum

Stainless Steel Baseline (84%)

Source: DOE Database 2013 (consists of data from AHRI and DOE directory)20 

### 0

5 

### 10 15 20 25 30 35 40

82 83 84 85 86 Cast Iron

Steel
Copper Number of Models

AFUE (%) 

# Market Characterization: Oil

- Fired Steam

Aluminum

Stainless Steel Baseline (82%)

Source: DOE Database 2013 (consists of data from AHRI and DOE directory)21 

# Technology Options

• DOE identified technologies that improve the AFUE, as well as standby mode and off mode, as measured by DOE’s test procedure for residential boilers. Technology Option (AFUE) Heat Exchange r Improvements Modulating Operation
Dampers

Direct Vent
Pulse Combustion

Premix Burners

Burner Derating

Lower

- Pressure Air

- Atomized Oil

Burner Delayed

- Action Oil Pump Solenoid

Valve Electronic Ignition Technology Option (Standby /Off ) Transformer Improvements Control Relay Models with BPM Motors Switching Mode Power Supply22 

# Screening Analysis

Purpose

• Screen out technology options that DOE will not consider in the engineering analysis for residential boilers.



# Method

• 10 CFR Part 430, Subpart C, Appendix A, 4(a)(4) and 5(b) direct DOE to evaluate each technology option based on the following criteria:



## • Technological feasibility

• Practicability to manufacturer, install and service

• Impacts on product utility or availability to consumers

• Impact on health or safety23 

# Screening Analysis

• DOE screened out three technology options on the basis of potential impact on product utility or availability to consumers.

Technology Option Reason for Screening Out

Pulse Combustion Could reduce customer utility

Burner Derating Could reduce customer utility Control Relay to depower BPM motors Could reduce customer utility24 

# Public Meeting Agenda

1 Overview

2 Market & Technology Assessment; Screening Analysis

3 Engineering Analysis

4 Markups Analysis and Energy Use Characterization

5 Life

- Cycle Cost and Payback Period Analysis

Shipments, National Impact Analysis, RIA 6

7 Manufacturer Impact Analysis

8 Environmental Impacts; Indirect Employment

9 Closing Remarks and How to Submit Comments25 

# Engineering Analysis

Purpose

• Determine the relationship between manufacturer selling price and increased efficiency in both active mode and standby mode/off mode operation of boilers.



# Method

• For active mode (AFUE), DOE used an efficiency level approach and 

## reverse engineering teardowns/cost modeling.

• For standby mode and off mode, DOE used a design option approach.

• Information sources include:

• Product teardowns

• Manufacturer interviews

• Product testing

• Product literature

• DOE and AHRI product certification database26 

# Engineering Analysis (AFUE)

Physical and Catalog Teardowns/ BOMs Selection of Efficiency Levels Selection of

Units for Teardown MPCs for Units Torn Down (Physical and Catalog) Manuf. Cost Estimate

Estimated Market Share by Manufacturer Manufacturer Markup Industry Average MPCs

Industry

Average MSPs Design

Option Pathway Model Information (from MTA)27 

# Engineering Analysis

Source: Estimated Shipments

= Several teardowns at several efficiency levels; most of the resources were allocated for this class. = 0

- 2 teardowns; some of the results will be derived from other analyses and available sources. = No teardowns; all results will be derived from analyses on other product classes.

Estimated % of Shipments (2012) Analysis Level

Gas

- Fired Hot Water 66.3 Full Teardown Analysis

Gas

- Fired Steam 9.7 Full Teardown Analysis

Oil

- Fired Hot Water 18.4 Full Teardown Analysis

Oil

- Fired Steam 2.3 Alternative Analysis

Electric Hot Water 2.9 Alternative Analysis

Electric Steam 0.4 Alternative Analysis 

### • DOE focused its analysis on product classes with the highest percentage of shipments.

– DOE performed a “full teardown analysis” for several product classes, which consisted of numerous teardowns across a range of efficiency levels.

– DOE performed an “alternative analysis” for other product classes, which relied on a small number of teardowns and/or other data sources.28 

# Description of Baseline Models for Active Mode

Product Class Input

Capacity (Btu/h) Baseline

AFUE HX Material HX Design Draft Type

Gas Hot Water 100,000 82% Cast Iron/Copper Sectional, Dry

Based or Copper

- finned tube Atmospheric

Gas Steam 100,000 80% Cast Iron Sectional, Dry

Based Atmospheric

Oil Hot Water 140,000 84% Cast Iron Sectional, Wet

Based Natural

Oil Steam 140,000 82% Cast Iron Sectional, Wet

Based Natural 

## • A baseline unit is a unit that just meets current Federal energy conservation standards and provide basic consumer utility.

• DOE analyzed representative input capacities for gas

- fired units of 

## 100,000 Btu/h and for oil

- fired units of 140,000 Btu/h.29 

## • For each equipment class, DOE selected AFUE efficiency levels for analysis at:

– The baseline efficiency level.



### – Efficiency levels with the highest numbers of models available.

– Efficiency levels that represent substantial technological changes.

– The max

- tech efficiency level.

Product Class AFUE Efficiency Levels (%)

Baseline EL1 EL2 EL3 EL4 EL5 Max

- Tech

Gas Hot Water 82 83 

### 84 85 90 92 96
Gas Steam 80 82



### - - - - 83
Oil Hot Water 84 85 

### 86

- - - 91
Oil Steam 82 84 

### 85

- - - 86 

# AFUE Efficiency Levels Analyzed30 

# Engineering Analysis

• DOE selected units for teardown spanning the efficiency levels within a given product class.



## • Representative input capacity for analysis was 100,000 Btu/h for gas

fired boilers and 140,000 Btu/h for oil

- fired boilers.

• DOE chose products from multiple manufacturers.

– Fabrication techniques, basic equipment design, and other factors differ 

### across manufacturers. Due to these variations, the MPCs for different manufacturers to produce similar equipment designs can vary.31 

# NOPR Teardown Analysis: Methodology

Action Description Physical Teardown DOE disassembles residential boilers into their component

parts to create a bill of materials (BOM) that is used as the basis for the cost estimate for a particular model. Catalog Teardown DOE uses published manufacturer catalogs and

supplementary component information to estimate the major differences between a product that was torn down and a one that was not. These differences are reflected in a bill of materials for a particular model, which is used to 

### generate a cost estimate for that model.
Alternative Method In addition to teardowns, DOE relied on product literature,

as well as information obtained in the hot water boiler analysis to produce the steam boiler cost curves.32 

# NOPR Teardown Analysis: Summary

Gas Hot Water Boilers

Gas Steam Boilers

Oil Hot Water Boilers

Oil Steam Boilers AFUE

= Tear

- down

= Alternative methodology = Interpolated (Linear) 82% 83% 84% 85%

80% 82%

86% 84%

82% 84% 90% 96%

91%

86% 83% 92%

85% 95%

85%33 

# Cost

- Efficiency Relationships

• DOE created cost

- efficiency curves for each major manufacturer.

• DOE combined manufacturer curves based on estimated 

## market share to develop a weighted

- average cost

- efficiency curve for each product class

.

Weighted Average
$MPC

Efficiency Level 

# Manufacturer Curves*
$MPC

Efficiency Level Manuf. #1

Manuf. #2

Manuf. #3

*Stylized graphics not based on actual data.34 

# Cost

- Efficiency Curve: Gas

- Fired Hot Water

400 600 800 1000 1200 1400 1600

82 83 84 85 90 92 96 Manufacturer Production Cost (2013$)

AFUE (%)35 700

750 800 850 900 950 1000

80 82 83 Manufacturer Production Cost (2013$)

AFUE (%) 

# Cost

- Efficiency Curve: Gas

- Fired Steam36 

# Cost

- Efficiency Curve: Oil

- Fired Hot Water

600 800 1000 1200 1400 1600 1800 2000 2200 2400

84 85 86 91 Manufacturer Production Cost (2013$)

AFUE (%)37 

# Cost

- Efficiency Curve: Oil

- Fired Steam

1000 1100 1200 1300 1400 1500 1600 1700

82 84 85 86 Manufacturer Production Cost (2013$)

AFUE (%)38 

## • Non

- condensing residential boilers may come equipped with inducer fans to supplement airflow of the combustion products in installations where it is evident that natural venting will be inadequate.

• The MPC’s shown in the preceding slides do not include the cost of the inducer fan, as inducer fans were not shown to have an impact on efficiency. The cost of the inducer fan is included in the downstream analysis.

• DOE estimated the cost difference between a boiler with induced draft 

## and one with natural draft boiler to be $94. 

# Engineering Analysis: Inducer Fan

Natural Draft Induced Draft Vent Damper Inducer Assembly
Flue Collector Flue Collector
Draft Hood Vent Connector Kit
Sensors Sensors 

### Component List for Natural Draft v. Induced Draft39 

# Engineering Analysis

Request for Comment

Issue 3

- 1 : DOE seeks comments on any issues related to the methodology, assumptions, and results for the engineering analysis for AFUE efficiency levels.

Issue 3

- 2: DOE requests further comment from interested parties on non

condensing levels above 82 percent, and the appropriateness of such levels 

## for amending such energy conservation standards.

Issue 3

- 3: DOE requests comments on all aspects of the engineering analysis.40 

# Engineering Analysis: Standby Mode/Off Mode Methodology

• DOE used a “design option” approach.

– DOE determined the baseline standby mode/off mode energy consumption for each product class by combining the most energy consumptive components within a given product class.

– No existing Federal standard for standby mode/off mode energy consumption of boilers.

– Standby mode/off mode energy consumption is not currently published my manufacturers.

– Baseline design was established based on product test data and manufacturer feedback

.



### – Design options were applied to the baseline in order of cost

- effectiveness

.

• DOE assumed identified design options could be applied to all product classes.

– DOE found similar electrical components and systems across product classes



### • DOE analyzed one set of efficiency levels that applied to both standby mode and off mode energy consumption.

– DOE assumed that there are not distinct standby mode and off mode energy consumption profiles for most boilers, as there is typically no seasonal off switch.41 

# Description of Baseline Models for Standby Mode/Off Mode

Component GHW OHW GS OS EHW ES

Transformer 4 4 4 4 4 4

ECM Burner Motor 1 n/a n/a n/a n/a n/a

Controls 2.5 2.5 2.5 2.5 2.5 2.5 Displays 4 4 4 4 4 4

Oil Burner n/a 3 n/a 3 n/a n/a
Total (watts) 11.5 13.5 10.5 13.5 10.5 10.5 

## • DOE “assembled” the most consumptive baseline components from the models tested to model the electrical system of a boiler with the maximum system standby mode and off mode power consumption.42 

## • DOE identified two design options for reducing standby mode and off mode energy consumption that passed the screening analysis:

– Low

- loss transformer (LLTX)

– Switching mode power supply 

# Engineering Analysis (Standby Mode and Off Mode)

Efficiency Level Description Standby /Off Mode Power Consumption Reduction (W) MPC Increase (2013$)

Baseline Linear power supply; Standard 40VA transformer 0 0

1 Linear power supply + LLTX 1.5 $1.00

2 Switching mode power supply 1.8 $10.47

Max

- Tech Switching mode power supply + LLTX 2.5 $11.1243 

# Engineering Analysis

Request for Comment

Issue 3

- 4: DOE requests comment on the efficiency levels analyzed for the standby mode/off mode analysis, and on the assumption that standby mode and off mode energy consumption (as defined by DOE) would be equal.44 

# Public Meeting Agenda

1 Overview

2 Market & Technology Assessment; Screening Analysis

3 Engineering Analysis

4 Markups Analysis and Energy Use Characterization

5 Life

- Cycle Cost and Payback Period Analysis

Shipments, National Impact Analysis, RIA 6

7 Manufacturer Impact Analysis

8 Environmental Impacts; Indirect Employment

9 Closing Remarks and How to Submit Comments45 

# Markups Analysis

Purpose

• Determine consumer prices based on manufacturer’s selling price (MSP) for baseline and higher

- efficiency products.

• Characterize residential boiler distribution channels.

Manufacturer Wholesaler Mechanical Contractor General

Contractor Consumer

Replacements New Construction

Input Data Source Manufacturer Markup U.S. SEC 10

- K (see engineering analysis)

. Wholesaler Markup Firm income statements from the HARDI 2012 Profit Report.

Mechanical Contractor Markup ACCA 2005 Financial Analysis report and Plumbing and HVAC Contractors sector from the US Census Bureau, 2007 Economic Census. General Contractor Markup US Census Bureau, 2007 Economic Census: Residential Building Construction sector.

Sales Tax 2013 Sales Tax Clearinghouse Data. 

## Method

• Analyze company direct costs, expenses, and profits. Manufacturer Wholesaler Mechanical Contractor Consumer

Note: Replacements includes new owners. T he national account channel is included for a fraction of boilers purchased for commercial installations.46 

# Markups Analysis

Baseline Markups

• Relate the MSP of baseline equipment to the consumer purchase price.

• DOE applied baseline markups to the MSP of the baseline efficiency level

. 

## Incremental Markups

• Relate the increase in MSP of more

- efficient products to the increase in consumer purchase price.

• Cover only expenses that vary with MSP ( e.g. , operating expenses and profit ).

− Fixed costs such as overhead and labor do not scale with increased efficiency.



### • DOE applied the incremental markups to the incremental difference in MSP at each level above the baseline. 

## Market Segments Fractions: Based on shipments analysis for 2020.

Product Class Replacement New Construction
Gas

- fired hot water boiler 90% 10% Oil

- fired hot water boiler 98% 2% Electric hot water boiler 77% 23%
Gas

- fired, Oil

- fired, and Electric steam boiler s 100% 0%

Note: DOE estimate that 7 percent of residential boiler shipments will be installed in commercial buildings.47 

## Average Markups for Market Participants (Residential Applications)

Market Participant Replacement New Construction
Baseline Incr. Baseline Incr.
Manufacturer 1.41 1.41 Wholesaler 1.36 1.10 1.36 1.10 Mechanical Contractor 1.55 1.24 1.45 1.16 General Contractor

- 1.41 1.28 Sales Tax 1.06

- Overall Markup 3.15 2.04 3.92 2.30 

# Markups Analysis

Product Class Baseline Average Markup Incremental Average Markup
Gas

- fired hot water boiler 3.27 2.07 Gas

- fired steam boiler 3.17 2.04 Oil

- fired hot water boiler 3.16 2.01 Oil

- fired steam boiler 3.15 2.02 Electric hot water boiler 3.22 2.03 Electric steam boiler 3.14 2.03



## Total Markups by Product Class48 

# Request for Comment

Issue 4

- 1: DOE requests comments on the markups methodology approach used 

### in the analysis. 

# Markups Analysis49 

# Energy Use Characterization

Purpose

• Determine annual energy consumption of residential boilers at the considered efficiency levels to find annual energy costs and savings. 

## Method

• Space Heating : B urner operating hours (BOH) multiplied by input capacity. Determined using AFUE value at each efficiency level, RECS 2009 and CBECS 2003 

### heating energy use data, and adjustment factors.

• Water Heating : Determined using AFUE value at each efficiency level, RECS 2009 and CBECS 2003 water heating energy use data, and adjustment factors.

• Electricity : D etermined using BOH and power ratings of the electrical components

.

• Standby Mode and Off Mode : Electricity use calculated based on standby mode/off mode hours and the power ratings for each technology option. 

## Model Characteristics

• All Non

- Condensing Boilers and Condensing HWOBs : Single

- Stage Controls

• All Condensing HWGBs : Modulating Controls Energy Use = Space Heating Fuel + Water Heating Fuel + Electricity Use50 

# Energy Use Characterization

Building Sample Determination

Building has a Residential Boiler if :

• Boiler is the main or secondary source of heat

• Boiler uses a heating fuel that is natural gas/LPG, electricity, or fuel oil

• Heating energy consumption greater than zero

• Heated square footage is less than 10,000

* Steam boiler sample only includes buildings built before 1970. Note: DOE calculated that 7% of boilers are installed in commercial buildings. Building has a residential boiler? Gas

- Fired Hot Water

Oil

- Fired Hot Water Gas

- Fired Steam

Oil

- Fired Steam

Electric Hot Water Out of Sample RECS 2009 Sample

Oil Yes

Boiler

Fuel Type?

Electricity

Gas

CBECS 2003 Sample Hot Water

Steam*

Hot Water

Steam*

Product Class Count # of Bldgs , million RECS 2009 Gas

- fired Hot Water Boilers 646 6.05 Gas

- fired Steam Boilers 471 4.55 Oil

- fired Hot Water Boilers 482 3.99 Oil

- fired Steam Boilers 359 3.08 Electric Hot Water Boilers 49 0.49 Electric Steam Boilers 31 0.32 Electric Steam Hot Water

Steam* No51 

## Space Heating Fuel Use

• Calculations based on proposed Federal Test Procedure for Boilers ( 2015)

Boiler Input Capacity

• Assumed to be the same for all efficiency levels.

• Based on simplified boiler sizing method using:

– Square footage, v intage, foundation type, shell characteristics, number of floors,

– Outdoor design temperature,

– E xisting AFUE (based on RECS/CBECS Boiler Age and historical shipments by efficiency), and

– O versize factor (1.7 based on ASHRAE 103

- 2007 Test Procedure).



### Burner Operating Hours

• Building Heating Load: The building heating load served by a single boiler.

• Useful Output : Includes energy delivered in the supply water, energy to the environment, and electrical losses

. Annual Fuel Use = Burner Operating Hours × Boiler Input Capacity

Burner Operating Hours = Building Heat Load Useful Output 

# Energy Use Characterization52 

## Burner Operating Hours

Building Heating Load (Served by Single Boiler)

• Q YR 

### : annual fuel consumption for heating based on RECS 2009 or CBECS 2003 ( kBtu / yr )

• AFUE

ex,adj 

### : AFUE of the existing boiler adjusted for field conditions

• Adj Factor (s) 

### : Adjustment factors to building load

– Secondary Heating Adjustment

– based on RECS 2009/CBECS 2003 data,

– Building shell efficiency in 2020

– based on AEO 2013 data,

– A verage climate conditions in 2013

– based on 10

- year NOAA HDD data,

– Heating Degree Day (HDD) trend from 2013 to 2020

– based on AEO 2013 data.



### • BoilerCount = number of boilers used to fulfill the building heating load

• NumberofUnitsServed : number of housing units served by boiler

Useful Output (by Single Boiler)

• AFUE

new,adj 

### : AFUE of the new boiler adjusted for field conditions 

# Energy Use Characterization

BHL Boiler 

### = Q YR × AFUE ex , adj × Ad j Factor s BoilerCount 

### x Numb erofUnitsServed

UsefulOutput Boiler 

### = UsefulElectricHeat + Q IN 

### × AFUE new , adj53 

## Field

- Adjusted AFUE

• Adjustments applied to the AFUE of the existing and new boiler.

• Return Water Temperature (RWT) adjustment assumptions

– B ased on high and low RWT applications.

• High RWT (annual average 160 ° F ): finned

- tube convective baseboards/panel radiators ( 140

- 180 ° F)

• Low RWT (annual average 110 ° F): i n

- floor radiant tubing ( 100

- 120 ° F)

– Temperature difference between supply and return water temperature of 20 ° F



### • Automatic means adjustment assumptions

– Adjustments are applied to all equipment installed after 2012

– Single

- stage:

- 2 ° F adjustment applied to average RWT (High RWT = 158 ° F, Low RWT = 108 ° F)

– Modulating:

- 10 ° F adjustment was applied to the average Low RWT (Low RWT = 100 ° F)



### • Jacket loss adjustment assumptions

– Applied to boilers installed in non

- conditioned spaces (non

- conditioned basements, garages)

• 35 % of gas

- fired boiler installations and 53% of oil

- fired boiler installations

.

– Jacket loss factor values (0.24% for low

- mass boilers)

• 2.40% for high

- mass boilers (based on ASHRAE 103

- 2007)

• 0.24% for low

- mass boilers (assumed to be 10% that of high

- mass boilers value)

• A ssumed 75% of condensing boilers are low

- mass , and 25% of non

- condensing boilers are low

- mass. 

# Energy Use Characterization54 

## Adjustments to AFUE

• Adjustment to AFUE based on RWT application and automatic means option ( single

- stage boilers )

• Adjustment to AFUE based on RWT application ( modulating boilers )

• RWT Fraction for Condensing Installations 

# Energy Use Characterization

Low RWT (108 ° F ) High RWT w/

Automatic Means (158 ° F ) High RWT w/o

Automatic Means (160 ° F ) Non

- Condensing

- - 1.02%

- 1.07% Condensing +2.01 %

- 3.11%

- 3.16%

Low RWT High RWT ( 140 ° F) (100 ° F) (120 ° F) Condensing +3.28% As Reported

- 2.52%

Note: DOE assumed same RWT impact for thermal efficiency and AFUE Market Segments Fraction with Low RWT*
New Construction/New Owners 100% Replacements (Built After 1990) 50% Replacements (Before 1990) 10%
*Of the low RWT applications, 50% are assumed to be at 100 ° F RWT and 50% are assumed to be 120 ° F RWT.55 

## Distribution of Heating Energy Use 

# Energy Use Characterization

Equipment Class Average Heating Energy Use

from RECS 2009/CBECS 2003, MMBtu/yr (Median) Average Estimated Heating Energy Use in 2020 at Baseline, MMBtu/yr (Median)
HWGB 95.3 (72.2) 72.5 (56.3)
SGB 98.1 (78.2) 75.1 (61.4)
HWOB 98.1 (72.3) 78.5 (57.8)
SOB 99.9 (70.8) 79.3 (55.4)56 

## Water Heating Energy Consumption
Boilers Used for Water Heating

• RECS 2009 and CBECS 2003 do not report if a boiler is used for water heating, so DOE assumed that boilers are used for water heating in:

– 50 % of buildings using tank water heating and the same fuel for space and water heating.

– 100% of buildings using tankless water heating and the same fuel for space and water heating. 

### Annual Water Heating Fuel Consumption

• Ad j FactorWH : difference between AFUE and water heating efficiency; adjusting for difference between AFUE and steady

- state efficiency, jacket losses in non

- conditioned space, and tankless coil.

• Water Heating Loss ( WH loss ): assumed to be 0.5 kBtu /h for indirect tank; 0 kBtu /h for tankless coil. 

### Water Heating Load

• Q Y R
, W H : annual fuel consumption for water heating based on RECS 2009 or CBECS 2003 ( MMBtu / yr ) 

### FuelUse WH 

### = Water Heating Load

AFUE

− Ad

j FactorWH 

### × 1

− WH loss



### Q IN 

### + 8760 × WH loss 

### 1000

Water Heating Load = Q YR
, WH 

### X AFUE existing 

### − Ad j FactorWH 

# Energy Use Characterization57 

## Distribution of Water Heating Energy Use 

# Energy Use Characterization

Equipment Class Fraction of

Boilers Used for Water Heating Average Water Heating Energy

Use from RECS 2009/CBECS 2003, MMBtu/yr (Median) Average Estimated Water Heating Energy Use in 2020 at Baseline, MMBtu/yr (Median)
HWGB 40.6% 29.5 (25.9) 28.6 ( 25.2)

SGB 39.8% 28.6 (26.1) 27.3 (25.1)

HWOB 39.6% 19.7 (16.6) 19.4 (16.5)

SOB 34.9% 19.3 (16.5) 18.9 ( 16.3)58 

## Electricity Use

Active Mode

• Electricity use when the boiler is being used for space or water heating:

• BOH SH,WH : burner operating hours for space heating and water heating

• ElecPower : power of electrical components (according to test procedure)

– Accounts for the electricity use by circulating pump, draft inducer, igniter, and condensate pump.

• ElecUse Stby : energy consumption during standby

• ElecUse AC : additional cooling energy consumption during non

- heating season due to boiler operation for water heating loads (when applicable) 

### Standby Mode and Off Mode

• E lectricity use when the boiler is not in use for space or water heating :

– Power

Stby,Off : power use during standby mode and off mode Total Electrical Use = BOH SH
, WH × ElecPower + ElecUse Stby [ + ElecUse AC ]

ElecUse Standby or Off Mode = Power Stby
, Off × ( 8760

− BOH SH
, WH ) 

# Energy Use Characterization59 

## Electricity Use Assumptions

• Primary Circulating Pump: Assumed that non

- condensing and condensing units use the same pump motor type (average of 80 Watts). Did not consider pumps with higher efficiency motors.

• Induced/Forced Draft Fan: Average values derived from 2013 AHRI directory 

### :

* For two

- stage and modulating, assumed that the reduced inducer power would be 70 % of the values indicated in the table (applied to gas

- fired hot water boilers at or above 90% AFUE ).



### • Ignition: Assumed spark ignition for all products, with igniter power equal to 25W.



### • Condensate Pump ( when present ): Assumed power equal to 60W.

• Standby Mode/Off Mode: assumed 25 percent of consumers shut the boiler off during the non

- heating season. 

# Energy Use Characterization

Product Type Gas

- Fired Hot Water Boiler, (Watts) Gas

- Fired

Steam Boiler, (Watts) Oil

- Fired Hot

Water Boiler, (Watts) Oil

- Fired

Steam Boiler, (Watts)
Non

- Condensing (natural

- draft) 44 66 236 264 Non

- Condensing (induced

- draft) 153 106 180 175 Condensing* 95

- 266

-60 Product Class EL AFUE Fraction of Models with Induced/Forced Draft*

Gas

- fired Hot Water Boiler 0 82 % 22.5% 1 83 % 36.4% 2 84 % 36.4% 3 85 % 63.2% 4 90 % 100.0%
5 92 % 100.0%
6 96 % 100.0%

Gas

- fired Steam Boiler 0 80 % 0.0% 1 82 % 5.9% 2 83 % 11.1%

Oil

- fired Hot Water Boiler 0 84 % 29.7% 1 85 % 52.7% 2 86 % 64.8% 3 91 % 100.0%

Oil

- fired Steam Boiler 0 82 % 18.6% 1 84 % 18.6% 2 85 % 21.1% 3 86 % 21.1% 

## Fraction of Models with Induced/Forced Draft 

# Energy Use Characterization

* Source: Reduced boiler model set based on September 2013 AHRI certification directory, Energy Star data, CEC data, NRCAN data and Manufacturer Lit . (see Appendix 7

- D)61 Product Class EL AFUE Annual Fuel Use Annual Electricity Consumption
Total MMBtu/yr Savings

MMBtu/yr Total

kWh/yr Savings

kWh/yr

Gas

- fired Hot Water Boiler 0 82 % 84.1

- 167

- 1 83 % 83.1 1.0 175

- 8
2 84 % 82.1 2.0 174

- 7
3 85 % 81.1 3.0 191

- 25
4 90 % 75.2 8.9 279

- 113
5 92 % 73.6 10.5 275

- 108
6 96 % 70.6 13.4 266

- 99

Gas

- fired Steam Boiler 0 80 % 86.0

- 99

- 1 82 % 83.9 2.1 100 0
2 83 % 82.9 3.1 112

- 13

Oil

- fired Hot Water Boiler 0 84 % 86.2

- 268

- 1 85 % 85.2 1.0 257 10
2 86 % 84.3 2.0 251 17
3 91 % 80.1 6.2 288

- 20

Oil

- fired Steam Boiler 0 82 % 85.9

- 221

- 1 84 % 83.9 2.1 218 4
2 85 % 82.9 3.0 215 6
3 86 % 81.9 4.0 213 8 

## Average Annual Energy Consumption and Savings 

# Energy Use Characterization62 Product Class EL Design Option Annual Electricity Consumption (kWh/ yr ) Total Savings

Gas

- fired Hot Water Boiler 0 Baseline 86.1

-

1 Linear PS, Toroidal Xfmr 74.9 11.2
2 Switch Mode PS 72.7 13.5
3 SMPS, Toroidal Xfmr 67.4 7.5

Gas

- fired Steam Boiler 0 Baseline 82.3

-

1 Linear PS, Toroidal Xfmr 70.5 11.8
2 Switch Mode PS 68.2 14.1
3 SMPS, Toroidal Xfmr 62.7 7.8

Oil

- fired Hot Water Boiler 0 Baseline 105.6

-

1 Linear PS, Toroidal Xfmr 93.8 11.7
2 Switch Mode PS 91.5 14.1
3 SMPS, Toroidal Xfmr 86.0 7.8

Oil

- fired Steam Boiler 0 Baseline 105.3

-

1 Linear PS, Toroidal Xfmr 93.6 11.7
2 Switch Mode PS 91.2 14.0
3 SMPS, Toroidal Xfmr 85.8 7.8

Electric Hot Water Boiler 0 Baseline 87.0

-

1 Linear PS, Toroidal Xfmr 74.5 12.4 2 Switch Mode PS 72.1 14.9 3 SMPS, Toroidal Xfmr 66.3 5.8

Electric Steam Boiler 0 Baseline 86.2

- 1 Linear PS, Toroidal Xfmr 73.9 12.3
2 Switch Mode PS 71.4 14.8
3 SMPS, Toroidal Xfmr 65.7 5.7 

# Energy Use Characterization: Standby Mode/Off Mode63 

## Request for Comment

Issue 4

- 2: DOE requests comments on the approach of using RECS and CBECS data for determining the energy consumption of residential boilers in residential and commercial buildings.

Issue 4

- 3: DOE requests comment on the fraction of boilers that are used in commercial applications.

Issue 4

- 4: DOE’s approach seeks to account for the energy performance of residential boilers installed in the field by considering automatic means, jacket losses, and return water temperatures. DOE requests comments on the reasonableness of its assumptions regarding these factors. 

# Energy Use Characterization

Issue 4

- 5: DOE requests comment on the fraction of boilers that are used in low

- temperature vs. high

- temperature applications.64 

## Request for Comment

Issue 4

- 9: DOE invites comments and recommendations on any other 

### aspects related to DOE’s methodology for estimating the annual energy use for residential boilers. Issue 4

- 7: DOE requests comment on the fraction of boilers that require a draft inducer (by efficiency level ). 

# Energy Use Characterization

Issue 4

- 8: DOE requests comments on its estimate that 25 percent of consumers shut the boiler off during the non

- heating season, as well as any information that might support a different estimate. Issue 4

- 6: DOE requests comment on the fraction of boilers that are used for domestic water heating

.65 

# Public Meeting Agenda

1 Overview

2 Market & Technology Assessment; Screening Analysis

3 Engineering Analysis

4 Markups Analysis and Energy Use Characterization

5 Life

- Cycle Cost and Payback Period Analysis

Shipments, National Impact Analysis, RIA 6

7 Manufacturer Impact Analysis

8 Environmental Impacts; Indirect Employment

9 Closing Remarks and How to Submit Comments66 

# Life

- Cycle Cost and Payback Period Analysis

Engineering Analysis

Markups to Determine Product Price

Energy Use Characterization Baseline Manufacturer Cost

Std

- Level Manufacturer Cost

Manufacturer Markup

Distributer & Contractor Markups

Sales Tax

Energy Consumption

Energy Prices Consumer Price

Installation Cost Total

Installed Cost Incremental*

Annual Energy Cost

Repair Cost

Maintenance Cost Annual

Operating Cost Savings*

Lifetime

Discount Rate

Energy Price Trend Discounted Lifetime Operating Cost Savings* Payback Period Life

- Cycle

Cost Base Case Efficiency

* Differential between Standards Case and Base Case. 

# LCC and Payback Period Analysis Flowchart67 

# Life

- Cycle Cost and Payback Period Analysis

Purpose

• Provide an economic evaluation from the residential consumer’s perspective.

• Life

- Cycle Cost (LCC) is the total consumer cost over the life of the equipment.

• Payback Period (PBP) is the time required to recover the increased purchase price of more energy

- efficient equipment through reduced operating costs.


## Method

• Use consumer samples developed in the energy use analysis

.



### • Analysis models the uncertainty and variability of inputs using Monte Carlo approach and probability distributions using Excel ® with Crystal Ball

. ®

PBP = ∆ Total Installed Cost ∆ First Year Operating Cost

LCC = Total Installed Cost + Lifetime Operating Cost

LCC Savings = LCC Std 

### − LCC

Base68 Input Purpose/Definition Methodology

Product Price and Trends Manufacturing cost multiplied by

markups and sales tax. Manufacturing cost : from engineering analysis. Markups and sales taxes : from markups analysis. Future price trend : historical PPI data

. Installation Costs Labor and materials necessary to

install appliance. Higher costs for condensing boiler installations, which have additional condensate withdrawal and venting requirements.

Maintenance Routine cost to the consumer for

boiler maintenance. Based on maintenance frequency and labor hours and cost.

Repair Cost of replacing or repairing failed

components in the boiler. Repair cost is based on failure year, warranty period, labor hours and cost, and material cost. Marginal Energy Prices D evelop average marginal monthly

prices. Multiplied most current average annual energy prices by monthly price factors and marginal price factors by geographical area

. Energy Price Trends Project future energy prices. Multiply marginal energy prices by the projected annual energy price trends for the corresponding Census division.

Discount Rates Determine the present value of

lifetime operating expenses. Derived from various types of debt and equity using the Federal Reserve Board’s Survey of Consumer Finances.

Lifetime Age when the product is retired

from service. Based on national survey data (RECS 2009) and manufacturer shipment data (AHRI).

Base

- Case Efficiencies Project market share of products at

each efficiency level in the absence of standards. Based on historical market share data (shipment data) and models information (AHRI directory). 

# Life

- Cycle Cost and Payback Period Analysis

LCC Methodology Summary69 

# Life

- Cycle Cost and Payback Period Analysis

Consumer Product Price = Manufacturing Cost × Markups × Sales Tax

• Manufacturing costs derived from en gineering analysis.



### • Markups and Sales Taxes determined from the m arkups analysis.

• Consumer product prices determined for each considered efficiency level.

• Product price trend based on historical PPI data

− Default price trend: constant.

− Sensitivity analysis considered alternative price trends (decreasing and increasing).



# Consumer Product Price70 

# Life

- Cycle Cost and Payback Period Analysis

Purpose: represent the labor and material costs necessary to install the product.



# Installation Costs

Sources

• 2013 RS Means (Residential Cost Data & Mechanical Cost Data)

• DOE’s 2007 Furnace and Boiler Final Rule

• DOE’s 2011 Furnace Direct Final Rule

• Manufacturer literature Installation Location of Boiler

Orphaned Water Heater (Replacement) New PVC Venting Basic Installation Costs Chimney Relining (Replacement)

Metal Vent Modification (Replacement)

Venting Installation Costs

Condensate Withdrawal Install. Costs Individual

Household Installation Cost Non

- Condensing Boiler

Condensing Boiler • Trip charge (replacement only)

• Removing old boiler (replacement only)

• Placing and setting up boiler

• Circulating Pump

• Gas/oil piping

• Water piping

• Electrical hookup for thermostat

• Permit and removal/disposal fees

New Metal Vent (New Construction)

Combustion Air Direct Vent

Concealing Vent Pipe (Replacement) • Condensate Pipe

• Drip Pan

• Condensate Pump

• Heat Tape

• Electric Outlet Stainless Steel Venting71 

# Life

- Cycle Cost and Payback Period Analysis

Installation Location Determination Assumptions

Note: All boilers installed in commercial buildings were assumed to be in “other” indoor locations. Has Basement? RECS 2009 House Sample

1) Conditioned

Basement Yes

Basement Finished?

2) Un

- Conditioned Basement No Yes

4 ) Other (Indoor) No No

3 ) Garage

Has Garage?

Yes Installation Location Gas Boilers Oil Boilers
Basement (Conditioned) 35% 40%
Basement (Unconditioned) 27% 49%

Garage 8% 4%

Other Indoor Locations 30% 7%72 

# Life

- Cycle Cost and Payback Period Analysis

Basic Installation Cost Components (applicable to all installations):

• Trip charge (replacement only)

• Removing old boiler (replacement only)

• Placing and setting up boiler

• Circulating Pump

• Gas/oil piping

• Water piping

• Electrical hookup for thermostat

• Permit and removal/disposal fees



### Cost factors : G eographic location of household/building (for labor and material adjustments), installation location; installation type (replacement or new construction; residential or new owner)



# Basic Installation Costs

Product Class Average Basic Installation Costs (2013$) Gas

- Fired Hot Water Boilers $2,741 Gas

- Fired Steam Boilers $2,917 Oil

- Fired Hot Water Boilers $2,818 Oil

- Fired Steam Boilers $2,89473 

# Life

- Cycle Cost and Payback Period Analysis

Venting Installation Costs

Sources

• 2013 RS Means (Residential Cost Data & Mechanical Cost Data)

• DOE’s 2007 Furnace and Boiler Final Rule

• DOE’s 2011 Furnace Direct Final Rule

• Manufacturer literature Orphaned Water Heater (Replacement) New PVC Venting Chimney Relining (Replacement)

Metal Vent Modification (Replacement)

Venting Installation Costs Non

- Condensing Boiler

Condensing Boiler

New Metal Vent (New Construction)

Combustion Air Direct Vent

Concealing Vent Pipe (Replacement) Stainless Steel Venting

Cost factors: Installation location; installation

type (replacement or new construction); vent material type (metal, stainless steel, or plastic); chimney type; direct vent (two

- pipe or concentric).74 

# Life

- Cycle Cost and Payback Period Analysis
Venting Length

Horizontal Distance RECS 2009/CBECS 2003 Data

Vent Size X 1.5 Distance from Furnace to Roof Floor Height

Number of Floors Above Boiler Vertical Length = Floor Height X # of Floors Above Boiler + Floor Height

– 4 ft + 3 ft distance above roof + Cathedral ceiling height for attic installations

Cathedral Ceiling High Ceiling

Applied to attic installations only NAHB Floor Height Data

Number of Floors

Horizontal Length Horizontal Distance Vertical Distance

Avg Wall to Horizontal Vent Length Ratio Install. Location Square Footage

Assumed square box (average between diagonal and side lengths) Average Wall Length 3 feet + Floor

Height (if basement or crawl space) 1) Basement of Crawl Space = # of Floors 2) Garage and 1⁄2 Indoor = # of Floors

– 1 3) Attic and 1⁄2 Indoor = 075 

### Installation Cost Considerations

• The vent sizes range from 2” to 6” depending on the input capacity of the boiler.



### • Masonry chimney requires relining if:

– Household has a chimney; and

– Boiler was installed or building built before 1995 (based on the National Fuel Gas Code ).



### • Venting resizing and vent connectors might be required if:

– Chimney does not need to be relined and

– Household has an existing natural draft boiler or last boiler replacement before 2020

• Sources: RECS 2009

– boiler age vintage, with historical shipments existing AFUE from AHRI data



### • Stainless Steal Venting

– Assumed to be half the fraction of models with a induced/forced draft fan: 

# Life

- Cycle Cost and Payback Period Analysis

Venting in Replacement Cases: Non

- Condensing to Non

- Condensing

AFUE HWGB SGB HWOB SOB 82% 11% 3% NA 9% 83% 18% 6% NA NA 84% 18% NA 15% 9% 85% 32% NA 26% 11% 86% NA NA 32% 11%76 

### Installation Cost Considerations

• Replacing metal vent with PVC flue vent:

– DOE assumed that 75% of installations would install a 2 ” polyvinyl chloride (PVC ), p olypropylene (PP)
, or chlorinated polyvinyl chloride (CPVC) vent instead of a 3 ” vent. DOE also assumed that 75% of installations would install a PVC or PP vent compared to 25% installing a CPVC vent.

– Boiler location; House ceiling height and number of floors

– Boiler distance from wall or roof, vertical or horizontal vent

– Wall type, which determines the cost of penetrating the wall

– Vent terminations accounted for in vertical and horizontal installations



### • Combustion air vent for direct

- vent installations:

– Vent length (same as flue pipe length).

– Vent installation fraction, which depends on the installation location.



### • Concealing vents in indoor installations:

– Assumed half of the indoor horizontally

- vented installations would require vent pipe concealing.



### • Orphaned water heaters:

– Some installations need to re

- line the chimney and/or resize venting when a condensing boiler replaces an existing non

- condensing gas boiler that is commonly vented with a gas water heater. 

# Life

- Cycle Cost and Payback Period Analysis

Venting in Replacement Cases: Non

- Condensing to Condensing77 

# Life

- Cycle Cost and Payback Period Analysis

Replacement Venting Installation Cost Fractions for Boilers

Existing Boiler Replacement Boiler Installation Requirement Frequency

Chimney installed before 1990 80+% AFUE Relining unlined chimneys 100%

Natural Draft 80+% AFUE Installing New Vent Connectors (Converting from single

- wall to Type B double

- wall) 75%

Natural Draft 80+% AFUE Resizing Vent System 10%

Non

- Condensing 80+% AFUE Stainless Steel Venting Varies with efficiency level
Non

- Condensing to Condensing Boilers Installations
Existing Non

Condensing Boiler Replacement Installation Requirement Frequency of Applying Requirements

Natural Draft Condensing Convert Water Heater from single wall to B Type vent Connector 100%

Natural Draft Condensing Resizing Orphaned Water Heater Chimney or upgrading Metal Vent 40%

Natural Draft Condensing Reline all unlined chimneys for Orphaned Water Heater 100%

Fan Assisted Condensing Resizing Orphaned Water Heater Chimney or upgrading Metal Vent 20% Non

- Condensing to Non

- Condensing Boilers Installations78 

# Life

- Cycle Cost and Payback Period Analysis

Replacement Venting Installation Cost for Boilers

Non

- Condensing to Non

- Condensing Hot Water Gas Boilers Installations

Product Class EL Vent Resizing Vent

Connector Chimney

Relining New

Stainless Steel Vent

Installation Fraction 82% AFUE

- Baseline 0.3% 2.2% 5.7% 11.0%

83% AFUE

- Increased HX Area 0.2% 2.1% 5.2% 17.9% 84% AFUE

- Increased HX Area 0.2% 2.1% 5.2% 17.9% 85% AFUE

- Increased HX Area 0.2% 1.8% 4.3% 30.8%

Average Cost (2013$) 82% AFUE

- Baseline $1,495 $277 $1,596 $533

83% AFUE

- Increased HX Area $1,505 $278 $1,601 $529 84% AFUE

- Increased HX Area $1,505 $278 $1,601 $529 85% AFUE

- Increased HX Area $1,433 $279 $1,586 $529

Product Class EL Total Average Venting Cost (2013$)

Hot Water Gas Boilers 82% AFUE

- Baseline $159

83% AFUE

- Increased HX Area $187 84% AFUE

- Increased HX Area $187 85% AFUE

- Increased HX Area $23879 

# Life

- Cycle Cost and Payback Period Analysis

Replacement Venting Installation Cost for Boilers

Non

- Condensing to Condensing Boilers Installations

Installation Cost Components Gas

- Fired Hot Water Boilers Oil

- Fired Hot Water Boilers

Fraction of Installations Average

Cost (2013$) Fraction of

Installations Average

Cost (2013$) Flue Vent (Plastic) 100% $431 100% $437 Combustion Vent 58% $322 54% $357 Concealing Vent 15% $424 9% $434 Chimney Relining for Orphaned Water Heater 2.4% $840 1.0% $883
Vent Resizing for Orphaned Water Heater 0.6% $784 0.2% $918 Vent Connector for Orphaned Water Heater 3.5% $132 1.8% $139
Weighted Average Installation Cost $776 $72980 

## Installation Cost Considerations

• Non

- condensing boilers:

– N ew flue vent ( metal vent, including a fraction of stainless steel vent ).



## • Condensing gas boilers:

– N ew flue vent (PVC),

– C ombustion air vent for direct vent installations ( PVC),

– accounting for a commonly vented water heater.



## • Condensing boiler venting cost for installations with orphaned water heaters added half of the venting system installation cost of the orphaned water heater. 

# Life

- Cycle Cost and Payback Period Analysis
Venting in New Construction/New Owner Installations81 

# Life

- Cycle Cost and Payback Period Analysis

New Construction/New Owner Venting Installation Cost Fractions for Boilers

Condensing Boilers Installations Non

- Condensing Boilers Installations

Installation Cost Components Gas

- Fired Hot Water Boilers Oil

- Fired Hot Water Boilers Fraction Average Cost Fraction Average Cost Flue Vent 100% $394 100% $374 Combustion Vent 60% $290 52% $300 Concealing Vent 16% $378 5.5% $393 Orphaned Water Heater 20% $446 11% $491 Total $717 $606 Product Class EL Metal Vent System Stainless Steel Total

Fraction Average

Cost Fraction Average

Cost Average

Cost

Gas

- Fired Hot Water Boilers 82% AFUE

- Baseline 89% $1,731 11% $544 $1,600

83% AFUE

- Increased HX Area 83% $1,732 17% $541 $1,532 84% AFUE

- Increased HX Area 83% $1,732 17% $541 $1,532 85% AFUE

- Increased HX Area 70% $1,735 30% $541 $1,375

Oil

- Fired Hot Water Boilers 84% AFUE

- Baseline 85% $2,259 15% $805 $2,041

85% AFUE

- Increased HX Area 74% $2,152 26% $784 $1,796 86% AFUE

- Increased HX Area 68% $2,161 32% $776 $1,71882 Installation

Location of Boiler Condensate Pipe Condensate Removal Costs

Condensate Pump Has No Central AC

Electrical Outlet Condensate Neutralizer

Applied 50% of the time Applied 25% of the time = 1.5 ft pipe applicable to all installations Applied 12.5% of the time 

# Condensate Withdrawal Methodology 

# Life

- Cycle Cost and Payback Period Analysis83 

# Life

- Cycle Cost and Payback Period Analysis

Condensing Boiler: Condensate Removal

Installation Cost Description Description Criteria

Condensate Pipe Deposit condensate down drain. 100% of installations
Condensate Pump If a drain is not near the furnace, then the

condensate must be pumped to a remote drain. 25% of replacement installations without CAC
Condensate Neutralizer Neutralizes condensate before disposal. 12.5% of installations

Electrical Outlet (additional) Required for some installations to operate

condensate pump or heat tape. 50% of installations requiring a condensate pump

Installation Cost Components Gas

- Fired Hot Water Boilers Oil

- Fired Hot Water Boilers
Fraction of Installations Average Cost Fraction of Installations Average Cost

Condensate Pipe 100% $19 100% $18 Condensate Pump* 18% $268 23% $266 Condensate Neutralizer 12.5% $117 12.5% $116 Electrical Connection* 9% $181 11% $178

Total $98 $113 Condensate Removal Installation Costs (2013$)

* Replacements only.84 

# Life

- Cycle Cost and Payback Period Analysis

Average Total Installed Cost Results

Product Class Efficiency Level Consumer Price (2013$) Installation

Cost (2013$) Total

Installed Cost (2013$) Incremental

Cost (2013$)

Gas

- Fired Hot Water Boiler 82% AFUE

- Baseline $2,103 $3,301 $5,405

-

83% AFUE

- Increased HX Area $2,145 $3,302 $5,447 $42 84% AFUE

- Increased HX Area $2,159 $3,302 $5,461 $56 85% AFUE

- Increased HX Area $2,289 $3,295 $5,585 $180 90% AFUE

- Condensing Baseline $2,889 $3,599 $6,488 $1,083 92% AFUE

- Increased HX Area $3,168 $3,599 $6,768 $1,363 96% AFUE

- Max Tech $3,923 $3,599 $7,523 $2,118 Gas

- Fired Steam Boiler 80% AFUE

- Baseline $2,532 $3,037 $5,569

-

82% AFUE

- Increased HX Area $2,571 $3,050 $5,621 $52 83% AFUE

- Max Tech $2,867 $3,061 $5,928 $359

Oil

- Fired Hot Water Boiler 84% AFUE

- Baseline $4,020 $3,069 $7,089

-

85% AFUE

- Increased HX Area $4,211 $3,121 $7,332 $243 86% AFUE

- Increased HX Area $4,380 $3,147 $7,527 $438 91% AFUE

- Condensing (Max Tech) $5,893 $3,662 $9,555 $2,466

Oil

- Fired Steam Boiler 82% AFUE

- Baseline $4,054 $3,074 $7,128

-

84% AFUE

- Increased HX Area $4,348 $3,074 $7,422 $294 85% AFUE

- Increased HX Area $4,499 $3,081 $7,579 $451 86% AFUE

- Max Tech $4,792 $3,081 $7,873 $74585 

### Purpose: Develop average marginal monthly prices for each household/building. Methodology: Multiply most current regional average annual energy prices by monthly price factors, marginal price factors, and household/building price factors.

• 2012 average annual energy prices by geographical area based on:

‒ Electricity : EIA’s 2012 Form 826 data

‒ Natural Gas : EIA’s 2012 Natural Gas Navigator monthly

‒ Oil and LPG : EIA’s 2012 State Energy Consumption, Price, and Expenditures Estimates

• Monthly energy price factors by geographical area based on:

‒ Electricity : EIA’s 1990

- 2012 Form 826 monthly data

‒ Natural Gas : EIA’s 1989

- 2012 Natural Gas Navigator monthly data

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

- 2009 historical data

• Marginal energy price factors for electricity and natural gas by geographical area based on:

• EIA’s 2003

- 2012 monthly data (Form 826 for electricity and Natural Gas Navigator)

• Household/building energy price factors based on RECS 2009 and CBECS 2003 billing data. 

# Life

- Cycle Cost and Payback Period Analysis

Energy Prices86 

### Methodology : 2012 average monthly marginal energy prices for each household are multiplied by projected annual energy price trends for the corresponding Census Division

• 2020

- 2040 trends based on EIA’s AEO 2013 by Census Division

• After 2040 trends based on Federal Energy Management Program (FEMP) guidelines 

# Life

- Cycle Cost and Payback Period Analysis

Energy Price Trends

National Residential Energy Price Forecasts87 

# Life

- Cycle Cost and Payback Period Analysis

Repair and Maintenance

Repair Cost: Cost of replacing or repairing components in the boiler that have failed.

– Primary Sources: 2013 RS Means Data and product costs from engineering analysis

– Cost assumptions, component lifetime, and repair rates:

Maintenance Cost: Labor and materials required to maintain product.

– Costs: Based on 2013 RS Means Data

– Maintenance Frequency : Based on RECS 2009 and CBECS 2003 (together with Decision 

### Analysts 2008 American Home Comfort Study)

– Accounted for additional maintenance costs associated with condensing designs

• C ondensate withdrawal system and condensate neutralizer.

• Impacts of low

- sulfur fuel oil regulations on frequency of secondary heat exchanger cleaning.

– 61% of oil

- fired boilers would be impacted by low

- sulfur fuel oil regulations by 2020 based on EIA data. Repair Description Average Lifetime Repair

Rates Bare Material

Cost (2013 $) Total Labor

Hours Other* (for Non

- Condensing Boiler) 12.2 50% $50.00 2.5 Other* (for Condensing Boilers) $75.00 3.0 Mechanical Vent 15.0 25% $50.00 2.0 Induced/Forced Draft Blower $100.00 3.5 * Ignition , Controls, Gas Valve, Automatic Means88 

# Life

- Cycle Cost and Payback Period Analysis

Repair and Maintenance Results

Equipment Class Efficiency Level Repair Cost (2013$) Maintenance Cost (2013$)

Annualized Incremental Annualized Incremental

Gas

- Fired Hot Water Boiler 82% AFUE

- Baseline $7.87

- $83

-

83% AFUE

- Increased HX Area $8.11 $0.24 $83 $0
84% AFUE

- Increased HX Area $8.11 $0.24 $83 $0
85% AFUE

- Increased HX Area $8.55 $0.68 $83 $0
90% AFUE

- Condensing Baseline $10.59 $2.71 $86 $3
92% AFUE

- Increased HX Area $10.59 $2.71 $86 $3
96% AFUE

- Max Tech $10.59 $2.71 $86 $3

Gas

- Fired Steam Boiler 80% AFUE

- Baseline $7.56

- $81

-

82% AFUE

- Increased HX Area $7.65 $0.08 $81 $0
83% AFUE

- Max Tech $7.74 $0.18 $81 $0

Oil

- Fired Hot Water Boiler 84% AFUE

- Baseline $7.83

- $128

-

85% AFUE

- Increased HX Area $8.23 $0.39 $128 $0
86% AFUE

- Increased HX Area $8.41 $0.58 $128 $0
91% AFUE

- Condensing $10.38 $2.55 $139 $11

Oil

- Fired Steam Boiler 82% AFUE

- Baseline $7.82

- $130

-

84% AFUE

- Increased HX Area $7.82 $0.00 $130 $0
85% AFUE

- Increased HX Area $7.85 $0.04 $130 $0
86% AFUE

- Max Tech $7.85 $0.04 $130 $089 

## Definition : Age when the residential boiler is retired from service. 

## Methodology : Lifetime distribution calculated using national survey data (multiple


### years of RECS and American Housing Survey (AHS)) and shipment data (see Ch. 9).

• Reference: J D. Lutz, et al ., “Using National Survey Data to estimate lifetimes of residential appliances. HVAC&R Research” (Oct. 3, 2011). 

## Results : Mean lifetime: 25 years; same lifetime for all product classes, design options. 

# Life

- Cycle Cost and Payback Period Analysis

Lifetime90 

### Purpose : Used to determine the present value of lifetime operating expenses.
Method:



### • Residential: Derived from various types of debt and equity using the Federal Reserve Board’s Survey of Consumer Finances (1995

- 2010)

.

• Commercial: Calculated as the weighted average cost of capital (WACC), using the Capital Asset Pricing Model (CAPM) for different economic sectors . ( Damodaran Online)


### Results: Overall average = 4.49 

# Life

- Cycle Cost and Payback Period Analysis

Discount Rates

Residential Installations

- Income Group Mean

Discount Rate (%) 1 4.85 2 5.12 3 4.75 4 4.04 5 3.80 6 3.57 Commercial Installations

– Economic Sectors Mean

Discount Rate (%) Standard

Deviation (%) Retail 4.30 2.09 Property owners 5.16 1.30 Medical services 4.19 1.86 Industrial 4.95 2.18 Lodging 5.88 2.28 Food Service 4.84 2.60 Offices 5.40 1.85 State/Local Govt /Edu 2.46 2.15 Federal Government 3.30 1.36 Other 4.35 1.6491 

### Purpose : Reflects the projected market share of products at different efficiency levels in the base case (in the absence of standards ).

• Not all consumers purchase products at current minimum standard. Consumers already purchasing products at efficiencies greater than or equal to a prospective standard level are not impacted by the standard. 

### Methodology : Based on boiler certification directories and shipments data.

• Develop historical distribution by efficiency level and product class for 2013 based on:

• AHRI and Energy Star shipments data from 2003

- 2012 (see appendix 8

- H)

• Estimated historical s hipments ( see chapter 9)

• AHRI, CEC, Energy Star, and NRCAN boiler certification directories (see appendix 7

- D)

• Assumed new ENERGY STAR® performance criteria* will increase condensing market shares:

• 32% in 2013 to 46% in 2020 for HWGBs; and 4 % in 2013 to 8 % in 2020 for HWOBs

• For gas

- fired hot water boilers, accounted for regional differences.

• For standby mode/off mode standards, assumed 50% at EL 0 and 50% at EL 3.

* New performance criteria (October 1, 2014): 90

- percent AFUE for gas

- fired boilers and 87

- percent AFUE for oil

- fired boilers

. 

# Life

- Cycle Cost and Payback Period Analysis

Base

- Case Efficiency Distribution92 

# Life

- Cycle Cost and Payback Period Analysis

Historical and Projected Condensing Market Share

from 2000

- 205093 Product Class EL Design Option 2013 Market Share 2020 Market Share

Gas

- fired Hot Water Boiler 0 82% AFUE

– Baseline 25.7% 20.6%

1 83% AFUE

– Increased HX Area 13.4% 10.7%

2 84% AFUE

– Increased HX Area 15.2% 12.1%

3 85% AFUE

– Increased HX Area 13.4% 10.8%

4 90% AFUE

– Condensing Baseline 11.5% 16.3%

5 92% AFUE

– Increased HX Area 15.8% 22.3%

6 96% AFUE

– Max Tech 5.1% 7.2%

Gas

- fired Steam Boiler 0 80% AFUE

– Baseline 13.9% 13.9%

1 82% AFUE

– Increased HX Area 75.3% 75.3%
2 83% AFUE

– Max Tech 10.8% 10.8%

Oil

- fired Hot Water Boiler 0 84% AFUE

– Baseline 19.4% 18.6%

1 85% AFUE

– Increased HX Area 33.3% 31.9%

2 86% AFUE

– Increased HX Area 43.3% 41.5%

3 91% AFUE

– Max Tech 4.0% 8.1%

Oil

- fired Steam Boiler 0 82% AFUE

– Baseline 28.8% 28.8%

1 84% AFUE

– Increased HX Area 34.2% 34.2%

2 85% AFUE

– Increased HX Area 27.4% 27.4%

3 86% AFUE

– Max Tech 9.7% 9.7% 

# Life

- Cycle Cost and Payback Period Analysis

2013 and 2020 Base

- Case Efficiency Distributions94 

# Life

- Cycle Cost and Payback Period Analysis

2008

- 2012 and 2020 Condensing Market Share by Census Division for Gas

- Fired Hot Water Boilers

ID Census Division Fraction of Condensing Gas

- fired Hot Water Boiler Shipments (2008

- 2012) Projected 2020 Fraction of Condensing Gas

- fired Hot Water Boiler Shipments 1 New England 41.3% 65.9% 2 Middle Atlantic 15.0% 23.9% 3 East North Central 36.1% 57.7% 4 West North Central 44.4% 71.0% 5 South Atlantic 27.7% 44.2% 6 East South Central 38.2% 61.1% 7 West South Central 56.2% 89.8% 8 Mountain 61.5% 98.3% 9 Pacific 64.0% 100.0% United States 28.6% 45.8%95 

## Example: Gas

- Fired Hot Water Boilers 

# Life

- Cycle Cost and Payback Period Analysis

LCC and PBP Analysis Results

EL AFUE Life

- Cycle Cost (2013$) Life

- Cycle Cost Savings Median Payback Period (years) Average Installed Cost Average

Lifetime Operating Cost Average

LCC Average

Savings (2013$) % Households with

Net Cost No Impact Net

Benefit
0 82% $5,405 $22,047 $27,452 NA 0% 100% 0% NA

1 83% $5,447 $21,837 $27,284 $35 4% 79% 18% 1.6

2 84% $5,461 $21,616 $27,077 $100 3% 68% 29% 1.6

3 85% $5,585 $21,431 $27,016 $123 13% 57% 30% 7.7

4 90% $6,488 $20,387 $26,875 $142 31% 46% 23% 21.6

5 92% $6,768 $20,022 $26,790 $201 38% 29% 33% 18.8

6 96% $7,523 $19,338 $26,860 $134 57% 7% 36% 22.196 

### Purpose : Evaluate impacts on customers who may be disproportionately affected by a proposed national energy conservation standard.

• DOE evaluated LCC and Payback Period impacts on low

- income households* and 

### households occupied by senior citizens only (senior

- only households ).

* In this LCC analysis, all households pay the full cost of more

- efficient boilers and fully benefit from lower energy bills. However, most low

- income households are tenants who benefit from lower energy bills, but rent increases may not fully cover higher equipment cost. Overall , tenants are probably better off than suggested by LCC results. 

# Life

- Cycle Cost and Payback Period Analysis

Consumer Subgroup Analysis

Product Class Efficiency

Level Average LCC Savings Median Payback Period 2013$ Years Low

- Income Senior All Low

- Income Senior All

Gas

- Fired Hot Water Boiler 1 $24 $27 $35 1.5 1.8 1.6

2 $79 $76 $100 1.5 1.9 1.6 3 $82 $73 $123 9.1 9.9 7.7 4

- $146

- $44 $142 30.1 23.9 21.6 5

- $128

- $34 $201 22.3 20.6 18.8 6

- $294

- $202 $134 23.7 24.5 22.1 Gas

- Fired Steam Boiler 1 $53 $50 $61 1.3 1.7 1.3

2 $180 $160 $250 11.1 13.0 11.6

Oil

- Fired Hot Water Boiler 1 $25 $58 $72 9.8 7.9 8.3

2 $103 $234 $257 10.9 6.3 7.6 3

- $1,019 $75 $273 47.5 19.8 21.4

Oil

- Fired Steam Boiler 1 $120 $8 $259 9.5 1.0 6.3

2 $227 $9 $506 10.1 1.0 6.7 3 $247 $13 $723 15.7 1.0 10.597 

### Issue 4

- 12: DOE requests comments on the approach and data sources

used for assessing changes in installation costs for more

- efficient residential boilers. 

# Life

- Cycle Cost and Payback Period Analysis

Request for Comment

Issue 4

- 10: DOE requests comment on the reasonableness of its assumption apply a constant trend to the manufacturer selling price of residential boilers, as well as any information that would support the use of alternative assumptions.

Issue 4

- 11: DOE requests data that would allow for use of different price trend projections for condensing and non

- condensing boilers.

Issue 4

- 13: DOE requests comment on the fraction of boilers that use polypropylene, PVC, or chlorinated polyvinyl chloride (CPVC) venting.

Issue 4

- 14: DOE requests comment on the fraction of boilers that require stainless steel venting (by efficiency level ).98 

### Issue 4

- 18 : DOE requests comment on its projections of the market

share of high

- efficiency (condensing) boilers in 2020 in the absence of amended energy conservation standards, as well as the long

- term market penetration of higher

- efficiency residential boilers. 

### Issue 4

- 17: DOE requests comments on the methodology for estimating discount rates for consumers of residential boilers.

Issue 4

- 20 : DOE invites comments and recommendations on any other aspects related to the Life

- Cycle Cost and Payback Period analysis. 

# Life

- Cycle Cost and Payback Period Analysis

Request for Comment

Issue 4

- 19: DOE requests comment on the fraction of boilers at each standby mode/off mode efficiency level. Issue 4

- 16: DOE requests comments on the approach used to determine the lifetimes for residential boilers. Issue 4

- 15: DOE requests comments on the methodology and data sources used for assessing changes in maintenance and repair costs for

more

- efficient residential boilers.99 

# Public Meeting Agenda

1 Overview

2 Market & Technology Assessment; Screening Analysis

3 Engineering Analysis

4 Markups Analysis and Energy Use Characterization

5 Life

- Cycle Cost and Payback Period Analysis

Shipments, National Impact Analysis, RIA 6

7 Manufacturer Impact Analysis

8 Environmental Impacts; Indirect Employment

9 Closing Remarks and How to Submit Comments100 

# Shipments and National Impact Analyses

Framework Document Preliminary

Activities NOPR Final Rule Effective

Date 

## Steps for the Standards Rulemaking: Preliminary Activities and Analyses

Shipments

Analysis

Preliminary Manufacturer Impact Analysis Life

- Cycle Cost and Payback Period Analyses National Impact

Analyses Market & Technology Assessment Screening

Analysis Engineering

Analysis Markups to

Determine Product Price

Energy Use Characterization101 

# Shipments Analysis
Purpose

• Forecast the residential boilers that would be expected to be shipped between 2020 and 2049 with and without energy conservation standards in order to calculate the national impacts of potential amended energy conservation standards on energy use, NPV, and future manufacturer cash flows

. 

## Method

• Shipment Projections : Estimate the number of residential boilers shipped annually by product class and market segment:

‒ New Construction : New construction projections multiplied by new construction market saturations. Determined using new building construction projections and historical market shares.

‒ New Owners* : Difference between total historical shipments and modeled new construction and replacement shipments.

‒ Replacements : Survival function applied to product stock. Historical shipments used to generate product stock (demolished units removed from stock). Survival function based on product lifetime.



### • Impact of Standards : Accounted for impact on shipments using price elasticities

.

− Consumer purchase decisions influenced by purchase price and operating cost.

− Some consumers may choose to repair rather than replace residential boiler

.

* Existing buildings that acquire a boiler for the first time and also includes switching between different boiler product classes.102 New Construction Average Boiler Saturation in New Construction New Housing Starts

Annual Shipments

Residential Boiler Retirement Function Total Shipments New Owners Differential between Historic vs. Modeled Shipment Data

Switching*

Replacement Shipments

* Switching to other residential boiler product classes (such as oil

- to gas

- fired boilers or hot water to steam boilers). ** Based on year

- to

- year changes to projected housing stock. 

# Shipments Analysis

Shipments Analysis Flowchart

Demolitions**103 

# Shipments Analysis

Shipments Model Inputs

Input Description/Source Housing Starts/ Commercial Building SqFt • U.S. Census historical housing starts data up to 2012

• EIA’s AEO 2013 historical data and projections

New Construction Saturations • Historical saturations from Characteristics of New Housing data from U.S. Census Bureau, RECS 2009, and CBECS 2003

Shipments to New Owners (Including Adjustment for Product Switching) • Used 2008

- 2012 historical shipments and shipments model estimates. New owners derived as the difference between historical shipments and modeled new construction and replacement shipments.

• Most new owners are assumed to be switching between product classes

• For HWGB, assumed that a fraction of new owners are new boiler installations in existing buildings that did not have a boiler previously.

Historical Annual Shipments • Appliance Magazine 1960

- 2008 shipments for gas and oil boilers

• AHRI 1970

- 2012 shipments (some years by product class)

• The above historical shipments data adjusted to disaggregate between product classes; exclude fraction of commercial boiler shipments; include all boiler types; and include all residential boiler manufacturers.

Retirement Function • Assumed to have the form of a cumulative Weibull distribution based on lifetime distribution (avg. 25 yrs ) for all boilers within scope. (see Ch.8). Fraction of Shipments to Commercial Applications • 7% of residential boiler shipments assumed to be installed in commercial applications ( derived from EIA RECS 2009 and CBECS 2003 data)104 

# Shipments Analysis

Historical Shipments Flowchart

Cast Iron Residential Hot Water Cast

- Iron Boiler Fraction

Residential Steam Boiler Fraction Total Shipments High Efficiency (Condensing) Annual AHRI/Appliance Magazine Shipments

Steam Boilers Hot Water Boilers

Coil and Tube Type Non

- AHRI Shipments Fraction

Steel

2003

- 2012 AHRI Shipments Submittal

Energy Star Data Reduced Boiler Model Data Set105 

### • DOE adjusted Appliance Magazine and AHRI historical shipments ( Ship Total 

### ) as follows:

– Cast

- Iron shipments ( Ship Total * Frac Res,HW or Steam )

• Disaggregated shipments by product class*

– Other boiler types shipments ( Ship OtherTypes )

• Steel boiler shipments

– Estimated to be 0.1 % of HWGB shipments ( based on 1993 AHRI shipment data)

– Steel HWOB shipments*:

» From 1960 to 2002, estimated by subtracting cast

- iron HWOB from total HWOB shipments

» From 2003 to 2009, provided by AHRI

» From 2010 to 2012, estimated by using a linear trend of 2003 to 2009 data

• Coil and t ube type shipments for HWGBs

– From 1960 to 2002, estimated to be 7.2% of HWGB shipments (based on 2003

- 2007 AHRI data)

– From 2003 to 2012
, coil and tube type shipments provided by AHRI

• High

- efficiency (condensing) boiler shipments

– For HWGB from 2005 to 2012, shipments data provided by AHRI

– For HWOBs and all other years for HWGB, based on historical efficiency data



### – Non

- AHRI manufacturer shipments ( AdjFactor Non

- AHRI 

### )

• Estimated to be 13.3% of HWGB and 26.5% of HWOB shipments in 2013

* Excluding commercial boiler shipments (assumed to be boilers with output capacity above 250 kBtu /h) 

# Shipments Analysis

Derivation of Historical Shipments106 

### Historical and Projected Base

- Case Shipments for Residential Boilers by Product Class, 1960

- 2049 

# Shipments Analysis107 

### Total Projected Shipments of Residential Gas

- Fired Hot Water Boilers in the Base Case and Each Standards Case, 2020

- 2049 

# Shipments Analysis108 

### Issue 5

- 1 : DOE requests comments on the methodology and data

sources used for projecting shipments of residential boilers in the 

### absence of amended energy conservation standards. 

# Shipments Analysis

Request for Comment

Issue 5

- 3 : DOE welcomes comment on its approach for accounting for the impact of standards on shipments using price elasticities to estimate the fraction of consumers choosing to repair rather than replace. 

### Issue 5

- 2 : DOE requests comment on the potential impacts of fuel and equipment switching on product shipments with and without amended standards.109 

# National Impact Analyses

Purpose

• Estimate national impacts of energy conservation standards for residential boilers shipped between 2020 and 2049.

– National Energy Savings (NES): Primary and Full

- Fuel

- Cycle (FFC) energy savings.

– Net Present Value (NPV) : Difference between the present value of annual operating cost savings and the present value of annual total installed cost increase. 

## Methodology

• For each product class and standard cases :
1. Calculate per

- unit energy savings, per

- unit total installed cost increase, and per

unit operating cost savings

. 2. Calculate number of units (stock) in use installed from 2020 to 2049 .



### 3. Combine the above to determine NES and NPV.110 

# National Impact Analyses

* Over lifetime of products shipped from 2020

- 2049. Note : Energy Consumption accounts for heating load trends from AEO 2013

. Standards

- Case Energy Consumption accounts for the rebound effect.



## National Energy Savings

Standards

- Case Cumulative Energy Use* Base

- Case Annual Energy Consumption Shipments Analysis

Base

- Case Cumulative Energy Use*

National Energy Savings Site to Primary/FFC Energy Conversion Standards

- Case Annual Energy Consumption

Standards

- Case Projection Base

- Case Projection111 

# National Impact Analyses

Net Present Value

Standards

- Case Projection Base

- Case Projection

Cumulative Total Installed Cost Increase* Energy Cost

Net Present Value Discount Rate Cumulative Operating Cost Savings* Shipments Analysis

Maintenance and Repair Cost Total Installed

Cost Energy Cost Maintenance and Repair Cost Total Installed

Cost

* Over lifetime of products shipped from 2020

- 2049. Note: Energy Cost accounts for heating load and energy price t rends from AEO 2013

. Total Installed Cost accounts for equipment price trends from PPI data.112 Input Description Shipments Projected shipments for each product class under the base case and all standards cases.

Product Stock Determined yearly stock using annual shipments and lifetime for each product class.

Base and Standards Cases Efficiency Distributions Developed a distribution of efficiencies in the base case for 2020 from LCC analysis results. For the base case, assumes growth in condensing boilers market share. In each standards case, “roll

- up” scenario is used to establish the efficiency distribution. Annual Unit Energy Consumption Function of product efficiency for each product class from LCC analysis results. Takes into account heating load trends from 2020

- 2049. ( AEO 2013 )

Rebound Effect Applied 15% to NES based on various sources.

Site

- to

- Power Plant Conversion Factor Converts site energy into primary (power plant) energy consumption. ( AEO 2013 )

Full

- Fuel

- Cycle Account for energy used for resource extraction and distribution losses. (based on AEO 2013 )

Total Installed Cost Per Unit Function of product efficiency for each product class based on LCC analysis. Calculated by vintage. Takes into account equipment price trends from 2020

- 2049. (PPI data)

Total Operating Cost Per Unit Includes costs for energy, maintenance , and repair derived as a function of product efficiency for each product class from LCC analysis. Calculated by vintage. Takes into account heating load and energy price trends. ( AEO 2013 )

Discount Rate Used to determine present value of future monetary values. 7% and 3% real from OMB’s Regulatory Analysis Guideline (OMB Circular A

- 4)

. 

# National Impact Analyses

National Impact Analyses (NIA) Inputs113 

## • Base

- Case Distribution from 2020 to 2049:

– LCC analysis outputs the 2020 distribution values by product class, market segments 

### (replacements/new owners, new construction), and residential/commercial applications

– Assumed ENERGY STAR® performance criteria* will increase condensing market shares:

• 46% in 2020 to 65% in 2049 for HWGBs

• 8% in 2020 to 16% in 2049 for HWOBs



### – Estimated that the market shares of condensing gas

- fired and oil

- fired steam boilers would be negligible during analysis period.

– For standby mode and off mode analysis, DOE estimated that the market shares by EL would remain constant over the period of analysis for all product classes.



## • Standards

- Cases Distribution from 2020 to 2049 :

– P roducts below the standard under consideration would “roll up” to meet the new standard level. Products at or above the standard under would not be affected

.

* New performance criteria ( October 1, 2014): 90

- percent AFUE for gas

- fired boilers and 87

- percent AFUE for oil

- fired boilers. 

# National Impact Analyses

Base

- Case and Standards

- Cases Efficiency Distributions114 

# National Impact Analyses

Condensing Market Share Trends from 2020

- 2049

(without a mended standards)

Projection of Base Case Market Share for Condensing Gas

- Fired Hot Water Residential Boilers, 2020

- 2049 Projection of Base Case Market Share for Condensing Oil

- Fired Hot Water Residential Boilers, 2020

- 2049115 

# National Impact Analyses

Projected Market Share by Efficiency Level from 2020

- 2049

( w ithout amended s tandards)

Projection of Base Case Market Share for Gas

- Fired Hot Water Residential Boilers, 2020

- 2049 Projection of Base Case Market Share for Oil

- Fired Hot Water Residential Boilers, 2020

- 2049116 Product Class Efficiency Level Market Share (percent)
Base Case Trial Standard Level (TSL )

1 2 3 4 5

Gas

- fired Hot Water Boiler 0 82% AFUE

- Baseline 21.2

1 83% AFUE

- Increased HX Area 10.6 31.8
2 84% AFUE

- Increased HX Area 11.6 11.6 43.4
3 85% AFUE

- Increased HX Area 10.4 10.4 10.4 53.9
4 90% AFUE

- Condensing Baseline 16.7 16.7 16.7 16.7
5 92% AFUE

- Increased HX Area 22.4 22.4 22.4 22.4 93.0
6 96% AFUE

- Max Tech 7.0 7.0 7.0 7.0 7.0 100.0

Gas

- fired Steam Boiler 0 80% AFUE

- Baseline 14.2

1 82% AFUE

- Increased HX Area 74.9 89.1 89.1 89.1 89.1
2 83% AFUE

- Max Tech 10.9 10.9 10.9 10.9 10.9 100.0

Oil

- fired Hot Water Boiler 0 84% AFUE

- Baseline 19.0

1 85% AFUE

- Increased HX Area 31.5 50.5
2 86% AFUE

- Increased HX Area 41.5 41.5 92.0 92.0
3 91% AFUE

- Condensing (Max Tech) 8.0 8.0 8.0 8.0 100.0 100.0

Oil

- fired Steam Boiler 0 82% AFUE

- Baseline 29.4

1 84% AFUE

- Increased HX Area 33.2 62.6
2 85% AFUE

- Increased HX Area 27.7 27.7
3 86% AFUE

- Max Tech 9.7 9.7 100.0 100.0 100.0 100.0 

# National Impact Analyses

Efficiency Distributions for the Base Case and Standards Cases in Residential Applications in 2020117 Product Class

Gas

- fired Hot Water Boiler 83% 84% 85% 92% 96%

Gas

- fired Steam Boiler 82% 82% 82% 82% 83%
Oil

- fired Hot Water Boiler 85% 86% 86% 91% 91%
Oil

- fired Steam Boiler 84% 86% 86% 86% 86% 

# National Impact Analyses

Trial Standard Levels (TSLs)

– AFUE Standards

TSL3 is Proposed TSL



### TSL Selection Criteria for each product class:

• TSL 5: Max

- tech efficiency levels

• TSL 4: Yields maximum NES with an NPV greater than zero at 7% discount rate

• TSL 3: Yields maximum NPV at 7% discount rate and for which the percentage of LCC winners is higher than the percentage of LCC losers

• TSL 2: Consists of intermediate efficiency levels

• TSL 1: Consists of the most common efficiency levels in the current market118 Product Class

Gas

- fired Hot Water Boiler 10.0 9.7 9.0
Gas

- fired Steam Boiler 9.0 8.7 8.0
Oil

- fired Hot Water Boiler 12.0 11.7 11.0
Oil

- fired Steam Boiler 12.0 11.7 11.0
Electric Hot Water Boiler 9.0 8.7 8.0
Electric Steam Boiler 9.0 8.7 8.0 

# National Impact Analyses

TSL3 is Proposed TSL 

## Trial Standard Levels (TSLs)

– Standby Mode and Off Mode

TSL Selection Criteria for each product class:

• TSL 3: Switching mode power supply with low

- loss transformer

• TSL 2: Switching mode power supply

• TSL 1: Low

- loss transformer119 

# National Impact Analyses

AFUE Primary National Energy Savings Results (quads)

Product Class Trial Standard Levels
1 2 3 4 5

Gas

- fired Hot Water Boiler 0.030 0.076 0.134 0.735 1.231

Gas

- fired Steam Boiler 0.006 0.006 0.006 0.006 0.023

Oil

- fired Hot Water Boiler 0.012 0.043 0.043 0.274 0.274

Oil

- fired Steam Boiler 0.003 0.009 0.009 0.009 0.009

Total 0.051 0.134 0.192 1.024 1.537

Product Class Trial Standard Levels
1 2 3 4 5

Gas

- fired Hot Water Boiler 0.033 0.084 0.148 0.812 1.357

Gas

- fired Steam Boiler 0.006 0.006 0.006 0.006 0.025

Oil

- fired Hot Water Boiler 0.014 0.050 0.050 0.321 0.321

Oil

- fired Steam Boiler 0.003 0.011 0.011 0.011 0.011

Total 0.057 0.151 0.215 1.150 1.714 

## AFUE Fuel

- Fuel

- Cycle National Energy Savings Results (quads)120 

# National Impact Analyses
Standby Mode/Off Mode Primary National Energy Savings Results (quads)

Standby Mode/Off Mode Fuel

- Fuel

- Cycle National Energy Savings Results (quads)

Product Class Trial Standard Levels
1 2 3
Gas

- fired Hot Water Boiler 0.0199 0.0238 0.0331
Gas

- fired Steam Boiler 0.0023 0.0027 0.0027 Oil

- fired Hot Water Boiler 0.0071 0.0071 0.0071 Oil

- fired Steam Boiler 0.0005 0.0005 0.0005 Hot Water Electric Boiler 0.0006 0.0006 0.0006 Steam Electric Boiler 0.0001 0.0001 0.0001 Total 0.0304 0.0348 0.0441

Product Class Trial Standard Levels
1 2 3
Gas

- fired Hot Water Boiler 0.0202 0.0242 0.0336
Gas

- fired Steam Boiler 0.0023 0.0028 0.0028 Oil

- fired Hot Water Boiler 0.0072 0.0072 0.0072 Oil

- fired Steam Boiler 0.0005 0.0005 0.0005 Hot Water Electric Boiler 0.0006 0.0006 0.0006 Steam Electric Boiler 0.0001 0.0001 0.0001 Total 0.0309 0.0354 0.0448121 

# National Impact Analyses

AFUE Net Present Value Results
Discounted at 3 and 7 Percent (billion 2013$)

Product Class, 3% discount rate Trial Standard Levels 1 2 3 4 5
Gas

- fired Hot Water Boiler 0.173 0.482 0.649 1.860 2.330

Gas

- fired Steam Boiler 0.035 0.035 0.035 0.035 0.011
Oil

- fired Hot Water Boiler 0.130 0.493 0.493 1.419 1.419
Oil

- fired Steam Boiler 0.035 0.107 0.107 0.107 0.107
Total 0.373 1.116 1.284 3.420 3.866

Product Class, 7% discount rate Trial Standard Levels
1 2 3 4 5
Gas

- fired Hot Water Boiler 0.053 0.155 0.176 0.121

- 0.238
Gas

- fired Steam Boiler 0.011 0.011 0.011 0.011

- 0.019 Oil

- fired Hot Water Boiler 0.035 0.139 0.139 0.024 0.024 Oil

- fired Steam Boiler 0.011 0.031 0.031 0.031 0.031 Total 0.110 0.337 0.358 0.187

- 0.202122 

# National Impact Analyses

Standby Mode/Off Mode Net Present Value Results

Discounted at 3 and 7 Percent (billion 2013$)
Product Class, 3% discount rate Trial Standard Levels 1 2 3
Gas

- fired Hot Water Boiler 0.253 0.215 0.331 Gas

- fired Steam Boiler 0.031 0.027 0.027 Oil

- fired Hot Water Boiler 0.104 0.074 0.071 Oil

- fired Steam Boiler 0.008 0.006 0.006 Hot Water Electric Boiler 0.006 0.003 0.003 Steam Electric Boiler 0.001 0.000 0.000 Total 0.401 0.326 0.438

Product Class, 7% discount rate Trial Standard Levels 1 2 3
Gas

- fired Hot Water Boiler 0.104 0.080 0.128 Gas

- fired Steam Boiler 0.013 0.010 0.010 Oil

- fired Hot Water Boiler 0.044 0.028 0.026 Oil

- fired Steam Boiler 0.003 0.002 0.002 Hot Water Electric Boiler 0.002 0.001 0.001 Steam Electric Boiler 0.000 0.000 0.000 Total 0.167 0.122 0.167123 

## Request for Comment

Issue 5

- 4 : DOE requests comment on the reasonableness of the value (15%) DOE used to characterize the anticipated rebound effect 

### associated with amended energy conservation standards for residential boilers.

Issue 5

- 5 : DOE invites comments and recommendations from interested parties on any aspect relating to National Impact Analysis. 

# National Impact Analyses124 

# Purpose

• Investigate national impacts of non

- regulatory alternatives to mandatory amended energy conservation standards. 

# Method

• Used modified NIA spreadsheet to evaluate non

- regulatory alternatives to proposed standards:



# Output: NES and NPV for non

- regulatory alternatives. 

# Results: N o alternative was found to be as beneficial as the proposed energy conservation standards. (See chapter 17 of the TSD for methodology and results.) 

# Regulatory Impact Analysis

• No New Regulatory Action • Manufacturer Tax Credits

• Consumer Rebates • Voluntary Energy Efficiency Targets

• Consumer Tax Credits • Bulk Government Purchases125 

# Public Meeting Agenda

1 Overview

2 Market & Technology Assessment; Screening Analysis

3 Engineering Analysis

4 Markups Analysis and Energy Use Characterization

5 Life

- Cycle Cost and Payback Period Analysis

Shipments, National Impact Analysis, RIA 6

7 Manufacturer Impact Analysis

8 Environmental Impacts; Indirect Employment

9 Closing Remarks and How to Submit Comments126 

# Manufacturer Impact Analysis: Overview

Purpose

• Assess the impacts of amended energy conservation standards on manufacturers.

• Identify and estimate the impacts on manufacturer subgroups that may be more severely affected than the industry as a whole.

• Examine the direct employment, manufacturing capacity, and cumulative regulatory impacts on the industry.



## Method

• Analyze industry cash flow and industry net present value (INPV) through use of the Government Regulatory Impact Model (GRIM); and

• Interview manufacturers to refine inputs to the GRIM, develop subgroup analyses, and address quantitative issues.127 

# Manufacturer Impact Analysis: Methodology

Phase 1

• DOE creates an industry profile to characterize the market and identify important issues that require further investigation.



## Phase 2

• DOE prepares an industry cash

- flow model and an interview questionnaire to guide subsequent discussions with manufacturers.



## Phase 3

• DOE conducts interviews with manufacturers and assesses the impacts of standards both quantitatively (using the GRIM) and qualitatively (impacts on employment, competition, manufacturing capacity, and regulatory burden).

• DOE also evaluates subgroups of manufacturers that may be disproportionately 

### impacted by standards or that may not be accurately represented by the average cost assumptions used to develop the industry cash

- flow analysis.128 

### • The potential for a condensing standard to disrupt the replacement market.

• The impact of condensing efficiency levels on manufacturing jobs and profitability.

• The ability of condensing boilers to perform as rated in real

- world installations and meet heating distribution needs.

• The potential changes in durability and reliability of higher

- efficiency condensing boilers relative to lower

- efficiency products. 

# Manufacturer Impact Analysis: Key Issues129 

# Manufacturer Impact Analysis: Methodology

Industry Cash

- Flow Model

• Upstream Inputs

• Market and Technology Assessment

• Engineering Analysis

• Shipments Analysis

• MIA Inputs

• Markup Scenarios

• Conversion Cost Scenarios130 

### • DOE modeled two markup scenarios to capture a range of potential financial impacts on the industry:



### – Preservation of Gross Margin Percentage Markup Scenario

• Manufacturers pass through all additional costs to their consumers and maintain a gross margin percentage in the standards case.

– Preservation of Operating Profit Markup Scenario

• Manufacturers maintain the same total operating profit in absolute dollars in the standards case as in the base case, despite a higher level of investment. 

# Manufacturer Impact Analysis: Markup Scenarios131 

### • Capital Conversion Costs

– One

- time investments in plant, property, and equipment

– $0.90 million for the industry at TSL 3 for AFUE standards

– Approximately $.03 million per manufacturer for AFUE standards

• Product Conversion Costs

– One

- time investments in R&D, testing, marketing materials, non

- equipment 

### investments

– $3.38 million for the industry at TSL 3 for AFUE standards

– Approximately $0.09 million per manufacturer for AFUE standards 

# Manufacturer Impact Analysis: Conversion Costs132 

# Manufacturer Impact Analysis: Results

Base Case TSL 1 TSL 2 TSL 3 TSL 4 TSL 5
INPV (2013$ 

### millions) 380.96 379.17


### to 380.91 378.31



### to 383.35 372.97



### to 381.73 284.75



### to 369.87 241.69



### to 380.46 Change in INPV (%)

- (0.47)
to (0.01) (0.70)

to 0.63 (2.10)

to 0.20 (25.25)

to (2.91) (36.56)

to (0.13)


### Total Conversion Costs (2013$ millions) 

### - 1.32 2.59 4.28 85.16 105.00 

# INPV Results for AFUE S tandards

Note: Parentheses indicate negative values.133 

# Manufacturer Impact Analysis: Small Business Impacts

• DOE identified 13 companies meeting the SBA definition of a small business that are covered by this rulemaking

• 9 are manufacturers



### • 4 are private labelers

Conversion Costs (2013$ millions) Conversion

Costs as a % of Revenue over 

### conversion period Conversion

Costs as a % of EBIT Over 

### Conversion Period % of Products

Requiring Redesign at TSL 3

Average small manufacturer $0.11 0.6% 7.6% 48%

Average large 

### manufacturer $0.12 0.1% 1.2% 50%134 

# Manufacturer Impact Analysis: Results

Base Case TSL 1 TSL 2 TSL 3
INPV (2013$ 

### millions) 380.96 380.77


### to 380.88 379.94



### to 381.16 379.88



### to 381.17 Change in INPV (%) - (0.05)
to (0.02) (0.27)

to 0.05 (0.28)

to 0.06
Total Conversion Costs (2013$ millions) - 0.21 0.21 0.21 

# INPV Results for Standby Mode/Off Mode Standards

Note: Parentheses indicate negative values.135 

## Request for Comment

Issue 7

- 1 : DOE seeks comment on the number of small manufacturers, on the potential impacts of amended energy conservation standards on those small manufacturers, and the severity of those impacts.

Issue 7

- 2 : DOE seeks comment on the potential impact of amended standards on the industry, on the need for conversion investments, on the key drivers of those conversion investments, and on changes in 

### manufacturer pricing and markups due to amended standards. 

# Manufacturer Impact Analysis

Issue 7

- 3 : DOE invites comment and recommendations from interested parities on any aspect of the Manufacturer Impact Analysis.136 

# Public Meeting Agenda

1 Overview

2 Market & Technology Assessment; Screening Analysis

3 Engineering Analysis

4 Markups Analysis and Energy Use Characterization

5 Life

- Cycle Cost and Payback Period Analysis

Shipments, National Impact Analysis, RIA 6

7 Manufacturer Impact Analysis

8 Environmental Impacts; Indirect Employment

9 Closing Remarks and How to Submit Comments137 

# Emissions Impact Analysis

Purpose

• Estimate emission impacts resulting from amended standards.

− Full Fuel Cycle (FFC) emissions include power plant , site combustion, and upstream emissions. 

# Method

• Marginal power plant emission factors for carbon dioxide (CO 2 

### ), nitrogen oxides ( NO X 

### ), sulfur dioxide (SO 2 

### ), and mercury (Hg) estimated using the output from AEO 2013 reference and standard cases.

• Site combustion emissions for CO 2 

### , NO X 

### , SO 2 

### , methane (CH 4 

### ), and nitrous oxide (N 2 

### O)



### are estimated using emissions intensity factors published by Environmental Protection Agency ( EPA). 1,2



### • The FFC upstream emissions are estimated based on the methodology developed by Coughlin (2013 ). 3 

### The upstream emissions include both emissions from fuel combustion during extraction, processing, and transportation of fuel, and “fugitive” 

### emissions (direct leakage to the atmosphere) of CH 4 

### and CO 2 

### . 

# Results

• See Ch. 13 of the TSD.

1 : EPA. Compilation of Air Pollutant Emission Factors. 1998 2: EPA. Emission Factors for Greenhouse Gas Inventories. 2015 3: Coughlin, K., “Projections of Full

- Fuel

- Cycle Energy and Emissions Metrics” (2013).138 

# Emissions Impact Analysis

Results: Cumulative Emissions Reduction (Total FFC Emissions )

Note: Negative values indicate an increase in emissions. * CO 2 eq is the quantity of CO 2 that would have the same global warming potential (GWP).

Emissions AFUE Trial Standard Levels 1 2 3 4 5 CO 2 (million metric tons) 3.45 9.43 12.9 70.2 100 NO X (thousand tons) 0.130 0.751 0.312 0.555 1.07 SO 2 (thousand tons) 8.50 23.0 32.1 176 250 Hg (thousand tons) 0.000 0.000

- 0.001

- 0.005

- 0.004 N 2 O (thousand tons) 0.028 0.100 0.097 0.529 0.602 N 2 O (thousand tons of CO 2 eq*) 7.35 26.4 25.7 140 160 CH 4 (thousand tons) 28.6 66.5 110 585 940 CH 4 (thousand tons of CO 2 eq*) 800 1,863 3,084 16,381 26,325

Emissions Standby/Off Mode Trial Standard Level s 1 2 3 CO 2 (million metric tons) 1.42 1.62 2.05 NO X (thousand tons) 1.51 1.73 2.19 SO 2 (thousand tons) 1.32 1.51 1.91 Hg (thousand tons) 0.002 0.003 0.004 N 2 O (thousand tons) 0.041 0.047 0.060 N 2 O (thousand tons of CO 2 eq*) 11.0 12.6 15.9 CH 4 (thousand tons) 8.11 9.29 11.8 CH 4 (thousand tons of CO 2 eq*) 227 260 329139 

## Request for Comment

Issue 8

- 1 : DOE requests comment on the approach for conducting the 

### emissions analysis for residential boilers. 

# Emissions Impact Analysis140 

# Monetization of Emission Reductions
Purpose

• Estimate the monetary benefit of reduced emissions resulting from the proposed
energy conservation standard. 

# Methodology

• Used the most current Social Cost of Carbon (SCC) values developed through interagency reviews.

– SCC is intended to be a monetary measure of the incremental damage resulting from greenhouse gas (GHG) emissions, including but not limited to agricultural productivity loss, human health effects, property damage from rising sea levels, and changes in the ecosystem.



### • Interagency estimates 1 

### of the potential global benefits resulting from reduced CO 2 

### emissions in 2015 are $12.0, $40.5, $62.4, and $119 per metric ton (2013$).

• DOE also monetized NO X 

### emissions reductions resulting from amended standards. 2

− Estimates of monetary value range from $476 to $4,893 per short ton.

− DOE calculated monetary benefits using a medium value of $2,684 per short ton

.



### • DOE is still evaluating appropriate values to monetize avoided SO 2 

### and Hg emissions. 

# Results

• See Ch

. 14 of the TSD

.

1 : Interagency Working Group, 2010 and 2013 2: OMB report to Congress, 2006141 

# Monetization of Emission Reductions

Results: V alue of Emissions Reduction (Total FFC Emissions)

Note : Range of the value of CO 2 reductions is based on estimates of the global benefit of reduced CO 2 emissions

.

Emissions AFUE Trial Standard Levels 1 2 3 4 5

CO 2 ( 2013$ billion ) 0.020 to 0.30 0.054 to 0.84 0.074 to 1.14 0.404 to 6.22 0.573 to 8.86 NO X – 3% discount rate ( 2013$ million ) 9.4 25.5 35.5 196 275 NO X – 7 % discount rate ( 2013$ million ) 3.58 9.73 13.5 75.6 105

Emissions Standby/Off Mode Trial Standard Level s 1 2 3

CO 2 ( 2013$ billion ) 0.008 to 0.124 0.009 to

0.142 0.012 to

0.180 NO X – 3% discount rate ( 2013$ million ) 1.44 1.65 2.08 NO X – 7 % discount rate ( 2013$ million ) 0.56 0.64 0.80142 

## Request for Comment

Issue 8

- 2 : DOE requests comment on DOE’s approach for estimating 

### monetary benefits associated with emissions reductions. 

# Monetization of Emission Reductions143 

# Utility Impact Analysis

Purpose

• Assess impacts on electric installed capacity and generation resulting from the adoption of potential energy conservation standards

. 

# Method

• Modeled energy savings impacts from TSLs using NEMS

- BT to generate forecasts that deviate from the AEO reference case. 

# Output

• Changes in total electricity generation.

• Changes in primary fuel ( e.g. , coal, natural gas) consumption

• Changes to the mix of electricity generation by fuel type.

• Changes to total installed capacity. 

# Results: See chapter 15 of the TSD.144 

# Indirect Employment Impact Analysis

Purpose

• Assess the overall impact on indirect* national employment from the proposed energy conservation standard that results from shifting consumer expenditures among goods and services and changing product and energy costs

. 

# Methodology

• Used the Impact of Sector Energy Technologies (ImSET) model to evaluate indirect employment impacts.



### • Changes in national product and energy expenditures from the NIA are entered as inputs into ImSET

. 

# Results

• Net labor market impacts will be small over time due to the small magnitude of the 

### short

- term effects . (See chapter 16 of the TSD.)

* Direct national employment impacts are discussed in the Manufacturer Impact Analysis (MIA).145 

# Public Meeting Agenda

1 Overview

2 Market & Technology Assessment; Screening Analysis

3 Engineering Analysis

4 Markups Analysis and Energy Use Characterization

5 Life

- Cycle Cost and Payback Period Analysis

Shipments, National Impact Analysis, RIA 6

7 Manufacturer Impact Analysis

8 Environmental Impacts; Indirect Employment

9 Closing Remarks and How to Submit Comments146 

# Closing Remarks

Meeting participants are invited to provide closing remarks at this time.147 

# How to Submit Comments

• In all correspondence, please refer to the rulemaking by:

– Energy Conservation Standards for Boilers

– Docket Number: EE

- 2012

– BT

– STD

– 0047



## – Regulatory Identification Number (RIN ): 1904

- AC88



## • Email: ResBoilers2012STD0047@ee.doe.gov



# Postal Mail: Ms. Brenda Edwards U.S. Department of Energy Building Technologies Office Mailstop EE

- 5B 1000 Independence Avenue, S.W. Washington, DC 20585

- 0121 

# Courier: Ms. Brenda Edwards U.S. Department of Energy Building Technologies Office L’Enfant Plaza, S.W., Suite 600 Washington, DC 20024 Telephone: (202) 586

- 2945



## • Comment period closes June 1 , 2015 at 11:59 PM EDT