CHAPTER 9. SHIPMENTS ANALYSIS

TABLE OF CONTENTS

**9.1 INTRODUCTION...............................................................................................................9­1** 

**9.2 SHIPMENTS**  **MODEL EQUATIONS................................................................................9­2** 

**9.2.1 Mathematical**  **Formulation of**  **the Shipments**  **Model............................................9­2**

**9.2.2 Stock**  **Events.........................................................................................................9­3**

**9.2.2.1 Replacing**  **Equipment..............................................................................9­3**

**9.2.2.2 New**  **equipment.......................................................................................9­3**

**9.3 DATA**  **INPUTS...................................................................................................................9­4**

**9.3.1 Historical**  **Shipments ............................................................................................9­4** 

**9.3.2 Historical**  **Shipped Linear**  **Feet.............................................................................9­4**

**9.3.3 Commercial**  **Grocery Display**  **Space and**  **Market Saturation**  **...............................9­5**

**9.3.3.1 Floor**  **Space**

**– New**  **Construction............................................................9­5**

**9.3.3.2 Market**  **Shipments...................................................................................9­7**

**9.3.4 Equipment**  **Utility.................................................................................................9­7**

**9.3.5 Equipment**  **Price ...................................................................................................9­7** 

**9.3.5.1 Operating**  **Costs ......................................................................................9­7** 

**9.3.5.2 Discounted**  **Costs ....................................................................................9­8** 

**9.4 RESULTS............................................................................................................................9­9** 

**9.5 REFERENCES..................................................................................................................9­10** 

LIST OF TABLES

**Table 9.3.1**  **Equipment Linear**  **Dimensions Assumed**  **for Shipments**  **Analysis........................9­6**

**Table 9.3.2**  **Percent of**  **Shipped Linear**  **Feet of**  **Commercial Refrigeration**  **Equipment............9­6**

**Table 9.4.1**  **Forecasted Shipments**  **for Commercial**  **Refrigeration Equipment,**  **2012­2042,**

**Level 1**  **(Base Case) ...............................................................................................9­9**

LIST OF FIGURES

**Figure 9.1.1**  **Flow Chart**  **Showing Inputs**  **to the**  **Shipments Model............................................9­1** 

**9­i 9­ii** CHAPTER 9. SHIPMENTS ANALYSIS

9.1 INTRODUCTION

**Commercial refrigeration**  **equipment (CRE)**  **shipments estimates**  **are a**  **necessary input**  **to**

**the national**  **energy savings**  **(NES) and**  **net present**  **value (NPV)**  **calculations and**  **the**

**manufacturer impacts**  **analysis (MIA).**  **This chapter**  **describes the**  **U.S. Department**  **of Energy** 

**(DOE)’s methodology**  **for projecting**  **annual shipments**  **and presents**  **results.**

**The Shipments**  **Model results**  **are driven**  **primarily by**  **historical shipments**  **data for**  **the**

**15 categories**  **of commercial**  **refrigeration equipment**  **under consideration.**  **The flow**  **chart**

**presented in**  **Figure 9.1.1**  **outlines the**  **structure of**  **the Shipments**  **Model.**

**The model**  **assumes that,**  **in each**  **year, the**  **existing commercial**  **refrigeration equipment** 

**stock either**  **ages by**  **one year**  **or breaks.**  **Broken equipment**  **is replaced.**  **In addition,**  **new**

**equipment can**  **be shipped**  **into new**  **commercial floor**  **space, and**  **old equipment**  **can be**  **removed**

**through demolitions**  **(not shown**  **in the**  **diagram).**

**The Shipments**  **Model is**  **in a**  **Microsoft Excel**  **spreadsheet format**  **that is**  **accessible on**  **the**

**Internet at:**  **http://www.eere.energy.gov/buildings/appliance_standards/**

**commercial_products.html.**

**Further, chapter**  **10, section**  **10.5 of**  **this Technical**  **Support Document**  **(TSD), discusses** 

**how to**  **access the**  **Shipments Model**  **spreadsheet and**  **other related**  **spreadsheets, and**  **provides**

**basic instructions**  **for using**  **them. The**  **rest of**  **this chapter**  **explains the**  **Shipments Model**  **in more** 

**detail. Section**  **9.2 presents**  **the mathematical**  **formulation of**  **the model,**  **section 9.3**  **describes the** 

**data inputs**  **to the**  **model, and**  **section 9.4**  **presents the**  **results for**  **different minimum** 

**energy­conservation standard**  **level scenarios.**  **The energy**  **conservation standards**  **for**

**commercial refrigeration**  **equipment will**  **set the**  **maximum rated**  **energy consumption**  **for all** 

**equipment within**  **an equipment**  **class. DOE**  **refers to**  **each standard**  **level considered**  **as a** 

**“candidate standard**  **level.”**

**Shipments forecasts**  **were determined**  **for all**  **of the**  **candidate standard**  **levels for**  **which**

**NES and**  **NPV are**  **required. DOE**  **is considering**  **up to**  **eight candidate**  **standard levels**  **for each**  **of**

**the 15**  **equipment classes.** 

NEMS Food Sales Bldg

Construction Forecast ARI Estimate of

Shipments (2005)

Initial Replacement

Shipments Initial Shipments to New

Construction

Initial CRE Stock

Estimated Lifetime

of CRE Stock Shipments to New

Construction

Replacement

Shipments

Total

Shipments By

Product Class % Shipments by Product

Class (2005)

CRE Stock

by Product

Class

Figure 9.1.1 Flow Chart Showing Inputs to the Shipments Model

**9­1**9.2 SHIPMENTS MODEL EQUATIONS

**The Shipments**  **Model is**  **a description**  **of commercial**  **refrigeration equipment**  **stock flows** 

**as a**  **function of**  **year and**  **age. While**  **there are**  **15 equipment**  **classes, no**  **coupling is**  **assumed**

**between them,**  **so the**  **equations describe**  **each type**  **of equipment**  **independently.**

**This section**  **begins with**  **a definition**  **of the**  **different commercial**  **refrigeration equipment** 

**stock categories.**  **DOE formulates**  **the equations**  **as updates**  **of the**  **distribution of**  **stock in**  **year** t **as**

**a function**  **of age**  a **to year**  t+1

**. Then**  **DOE presents**  **the different**  **purchase decisions**  **and, in**  **the**

**following section,**  **provides a**  **description of**  **the data**  **sources. In**  **the equations**  **below, DOE**  **first**

**converted the**  **equipment units**  **to linear**  **feet of**  **display space**  **cooled by**  **those units**  **by taking**  **the**

**national statistics**  **on sales**  **of equipment**  **and calculating**  **equipment capacity**  **per linear**  **foot of** 

**retail grocery**  **building display**  **space. DOE**  **uses this**  **calculation of**  **existing stock,**  **and the** 

**average age**  **of the**  **equipment, as**  **a basis**  **for calculating**  **replacement sales.**  **Then, DOE**  **subtracts**

**replacement sales**  **from historical**  **total sales**  **statistics to**  **calculate new**  **sales of**  **commercial**

**refrigeration equipment.**  **DOE forecasts**  **new sales**  **as a**  **function of**  **new construction**  **of retail** 

**food sales**  **space. Sales**  **of new**  **and replacement**  **equipment are**  **recorded by**  **the year**  **sold, and** 

**each annual**  **vintage is**  **depreciated over**  **the estimated**  **life of**  **the equipment.**  **Sales in**  **each year** 

**are allocated**  **to the**  **15 equipment**  **classes in**  **proportion to**  **their relative**  **historical sales.** 

9.2.1 Mathematical Formulation of the Shipments Model

**DOE uses**  **two commercial**  **refrigeration equipment**  **stock categories.**  **The category** 

U

**0** (y,a) **is the**  **stock of**  **existing units.**  **Available information**  **suggests that**  **all units**  **are assumed**  **to**

**have had**  **normal repairs**  **that do**  **not affect**  **the lifetime**  **of the**  **equipment.**

**In view**  **of industry**  **practice, available**  **information suggests**  **that the**  **lifetime of**  **a unit**  **is**

**10 years.**  **Also, available**  **information suggests**  **that the**  **initial existing**  **stock of**  **equipment has**  **an**

**average age**  **of five**  **years, based**  **on the**  **10­year lifetime**  **of a**  **unit of**  **equipment, and**  **annual**

**replacements going**  **back 10**  **years. The**  **total stock**  **of age**  a **in a**  **given year**  y **is represented**  **by**

U

**(t,a)**

**=** U 0 **(t,a)** Eq. 9.1

**and the**  **average age**  **of the**  **stock in**  **year** y **is defined**  **as**

StockAge **(t)**

**= ∑** 

**a** U **( t,**  **a) x**  **a /**  **∑(** U **( t,a))**  Eq. 9.2

**where:**

U **(** t,a **)**

**= total**  **stock of**  **age** a **in a**  **given year**  y

**,** U

**0 (**  t,a **)**

**= stock**  **of existing**  **units**

StockAge **(** t **)**

**= average**  **age of**  **stock in**  **year** y

**,**

a **= age**  **of stock,** 

t **= year.** 

**The shipments**  **of new**  **stock in**  **a given**  **year are**  Uship(t)

**. By**  **definition, the**  **age of**  **the**

**equipment is**  **zero in**  **the year**  **that it**  **is shipped,**  **so that**  Uship(t)

= U(t,0)

**.**

**9­2**9.2.2 Stock Events

**In the**  **transition from**  **year** t **to year**  t+1

**, two**  **things could**  **happen to**  **the stock**  **of**

**commercial refrigeration**  **equipment:**

• **existing equipment**  **could break**  **or be**  **removed during**  **a store**  **renovation and**  **be**

**replaced, or** 

• **the stock**  **could simply**  **age by**  **one year.** 

**In the**  **model, early**  **replacements (i.e.,**  **existing equipment**  **that is**  **replaced before**  **it has** 

**broken) are**  **not considered,**  **and all**  **broken equipment**  **are assumed**  **to be**  **replaced. The**  **following**

**sections present**  **the equations**  **used to**  **represent each**  **possible event.** 

9.2.2.1 Replacing Equipment

**DOE determines**  **the probability**  **that commercial**  **refrigeration equipment**  **of age**  a **from**

**stock** U **0 will**  **break or**  **will be**  **replaced using**  **a known**  **function** PB **0** (a)=0.1 **(based on**  **a ten**  **year**

**life). Similarly,**  **the probability**  **that equipment**  **of age**  a **from stock**  U 1 **will break**  **is given**  **by a** 

**known function**  PB **1** (a)

**. These**  **probabilities do**  **not depend**  **on the**  **model year**  y

**. DOE**  **defines the** 

**quantities of**  **replaced equipment**  **as**

UB **(t, a)** 

**=** PB 0 **(a) x**  UB 0 **(t,a)** Eq. 9.3

**where:**

UB **0 (**  t,a **)**

**= stock**  **of existing**  **units,**

PB **0 (**  a **)**

**= probability**  **that stock**  **of existing**  **units will**  **break, or**  **will be**  **replaced,**

U

**0 (**  t,a **)**

**= stock**  **of existing**  **units,**

a **= age**  **of stock,** 

t **= year.** 

**All broken**  **or obsolete**  **units (removed**  **during store**  **renovations) are**  **assumed to**  **be**

**replaced.**

9.2.2.2 New equipment

**New commercial**  **refrigeration equipment**  **will be**  **purchased to**  **replace the** 

**units described**  **above. Available**  **information suggests**  **that the**  **purchase of**  **new equipment**  **that**

**would go**  **into new**  **buildings is**  **driven by**  **the rate**  **of construction**  **of grocery**  **floor space.** 

**By definition:** 

EFS **(t+1)**

**=** EFS **(t) +**  NFS **(t)**

**­** DFS **(t)** Eq. 9.4

**where:**

EFS(t)

**= the**  **square footage**  **of existing**  **grocery floor**  **space in**  **year** t

**,** NFS(t)

**= the**  **square footage**  **of new**  **grocery floor**  **space added**  **in year**  t

**(described in**  **section 9.3.3),** 

**9­3 DFS**  (t)

**= the**  **square footage**  **demolished in**  **year** t **(described in**  **section 9.3.3.1).** 

**The linear**  **footage of**  **units going**  **into new**  **buildings is** 

UN **(t)**

**=** UN **(t) x**  A 0 **x** NFS**(t)/** NFS **(0)** Eq. 9.5

**where:**

UN(t)

**= the**  **number of**  **units going**  **into new**  **buildings in**  **year t,** 

A **0 =**  **an overall**  **scale factor**  **which accounts**  **for the**  **number of**  **units covered**  **by the** 

**standard which**  **are not**  **used in**  **all commercial**  **building types.**  **The default**  **value**

**for** A **0 is**  **1.0, but**  **values of**  **0.5 and**  **1.5 are**  **used for**  **sensitivity testing.** 

**DOE has**  **no information**  **on the**  **variation in**  **the market**  **saturation of**  **commercial**

**refrigeration equipment**  **by building**  **type or**  **over time.**  **Therefore, in**  **the model,**  **the purchase**  **of**

**new equipment**  **is driven**  **by the**  **construction of**  **new floor**  **space and**  **that broken**  **or removed** 

**equipment is**  **replaced on**  **a one­for­one**  **basis.**

9.3 DATA INPUTS

9.3.1 Historical Shipments

**Historical shipments**  **are necessary**  **to calibrate**  **a shipments**  **model to**  **the existing**  **market.**

**DOE’s primary**  **source of**  **historical data**  **for shipments**  **of refrigeration**  **equipment is**  **a market** 

**study by**  **Freedonia, Inc.**  **1** Commercial Refrigeration Equipment to 2008. **The data**  **provided in** 

**this report**  **is aggregated**  **at a**  **high level**  **with regard**  **to equipment**  **categorization and**  **provides**

**only an**  **estimate of**  **shipments based**  **on valuation**  **data and**  **estimated prices**  **(valuation data** 

**similar to**  **the U.S.**  **census bureau**  **data shown**  **in chapter**  **3, Market**  **and Technology**  **Assessment).**

**As discussed**  **in chapter**  **3, the**  **available Census**  **Bureau data**  **showed substantial**  **variation in** 

**shipment valuations**  **between the**  **survey years,**  **indicative of**  **large variations**  **in overall**  **shipments**

**of commercial**  **refrigeration equipment**  **by year.**  **The Air­Conditioning**  **and Refrigeration** 

**Institute (ARI)**  **provided DOE**  **with shipments**  **data broken**  **out by**  **specific CRE**  **equipment class** 

**for one**  **year (2005)**  **that allowed**  **DOE to**  **allocate sales**  **of equipment**  **to equipment**  **classes. This** 

**data is**  **also shown**  **in chapter**  **3.**

**Within each**  **of the**  **equipment categories,**  **the shipments**  **data must**  **be disaggregated**  **into**

**detailed equipment**  **and temperature**  **ranges for**  **the shipment**  **analysis. The**  **ARI shipment**  **ranges**

**and equipment**  **categories are**  **defined in**  **a way**  **that allowed**  **DOE to**  **disaggregate the**  **data into** 

**the 15**  **equipment classes**  **of interest.**  **For the**  **purpose of**  **the ANOPR,**  **DOE has**  **used the**  **ARI**

**data as**  **a starting**  **estimate for**  **its shipments**  **analysis.**

9.3.2 Historical Shipped Linear Feet

**Historical linear**  **feet of**  **shipped units**  **depicts the**  **annual amount**  **of commercial** 

**refrigeration equipment**  **capacity shipped**  **and is**  **an alternative**  **way to**  **express shipments**  **data.**

**DOE determined**  **the linear**  **feet shipped**  **for any**  **given year**  **by multiplying**  **each unit**  **shipped by** 

**its associated**  **average length,**  **and then**  **summing all**  **the linear**  **footage values.** 

**9­4 DOE**  **converted the**  **ARI data**  **on shipped**  **units in**  **each equipment**  **class to**  **percent of**  **total**

**shipped linear**  **feet of**  **commercial refrigeration**  **equipment for**  **use in**  **the Shipments**  **Model. This** 

**established the**  **commercial refrigeration**  **equipment market**  **share attributed**  **to each**  **equipment**

**class. The**  **market share**  **calculation and**  **its use**  **in forecasting**  **shipments is**  **explained in** 

**section 9.3.3.2.**  **DOE calculated**  **the percent**  **of shipped**  **linear footage**  **by dividing**  **the linear** 

**footage shipped**  **for each**  **equipment class**  **by the**  **overall linear**  **footage shipped**  **for all** 

**commercial refrigeration**  **equipment covered**  **in this**  **rulemaking.**

**DOE used**  **the ARI**  **shipment data**  **to derive**  **shipped linear**  **footage for**  **each of**  **15 smaller** 

**equipment classes,**  **based on**  **10 possible**  **equipment families,**  **two possible**  **equipment operating** 

**modes (remote**  **condensing or**  **self­contained), and**  **three rated**  **temperature applications**  **(medium,**

**low, and**  **ice cream).**  **Table 9.3.1**  **presents the**  **typical equipment**  **class lengths**  **used for**  **the**

**conversion of**  **per unit**  **shipments to**  **linear footage**  **within each**  **equipment class.**  **The premises** 

**below include**  **data for**  **some CRE**  **equipment classes**  **which were**  **not explicitly**  **analyzed in**  **the**

**life­cycle cost**  **analysis, but**  **for which**  **shipments were**  **reported by**  **ARI, including**  **small­shipment**

**design classes**  **as well**  **as equipment**  **designed to**  **operate at**  **45°F, 20°F,**  **and 10°F**  **product**

**temperatures. DOE**  **presumed that**  **equipment designed**  **to operate**  **at these**  **latter design** 

**temperatures would**  **have similar**  **dimensions as**  **for the**  **medium, low,**  **and ice**  **cream temperature** 

**categories, respectively.**  **DOE was**  **then able**  **to estimate**  **the annual**  **linear footage**  **shipped for** 

**each of**  **the 15**  **equipment classes**  **and the**  **entire set**  **of commercial**  **refrigeration equipment.**  **Total**

**linear footage**  **shipped within**  **the 15**  **equipment classes**  **analyzed accounted**  **for 99.9**  **percent of** 

**the total**  **linear footage**  **shipped in**  **the medium,**  **low, and**  **ice cream**  **temperature categories**  **and**

**98.7 percent**  **of the**  **linear footage**  **shipped at**  **all temperatures.**  **The shipments**  **analysis relies**  **on**

**the 15**  **equipment classes**  **to represent**  **the CRE**  **market. Table**  **9.3.2 shows**  **the fraction**  **of the** 

**linear footage**  **shipped by**  **each of**  **these 15**  **equipment classes.** 

9.3.3 Commercial Grocery Display Space and Market Saturation

**The amount**  **of commercial**  **floor space**  **is the**  **main driver**  **for commercial**  **refrigeration**

**equipment shipments**  **and is**  **appropriately one**  **of the**  **basic inputs**  **into the**  **Shipments Model.**  **As**

**discussed in**  **section 9.2.2,**  **the model**  **divides commercial**  **display space**  **into two**  **components:**

**display space**  **from new**  **construction floor**  **space (NFS),**  **and existing**  **display floor**  **space (EFS).** 

**For this**  **analysis, commercial**  **square footage**  **with commercial**  **refrigerated display**  **space**

**refers to**  **both new**  **and existing**  **stock of**  **food sales**  **buildings.**

9.3.3.1 Floor Space

– New Construction

**DOE took**  **the projected**  **floor space**  **construction after**  **the year**  **2003 from**  **the National** 

**Energy Modeling**  **System (NEMS)**  **projection published**  **in the**  Annual Energy Outlook 2006

**(** AEO 2006 **). 2**  AEO 2006 **lists the**  **projections for**  **years 2005,**  **2010, 2015,**  **2020, 2025**  **and 2030.** 

**For unlisted**  **years in**  **this range,**  **DOE derived**  **NFS data**  **by linear**  **interpolation of**  **the existing** 

**years. Beyond**  **2030, DOE**  **extrapolated NFS**  **from the**  **10­year trend**  **of NEMS**  **projected data** 

**between 2020**  **and 2030.** 

**The total**  **of new**  **display space**  **is the**  **estimated total**  **shipments in**  **linear feet**  **for 2006,** 

**times an**  **index of**  **new construction**  **of square**  **feet of**  **food sales**  **buildings for**  **each future**  **year,**

**9­5 divided**  **by its**  **2006 value.**  **All existing**  **display space**  **is presumed**  **to be**  **replaced when** 

**demolished.**

Table 9.3.1 Equipment Linear Dimensions Assumed for Shipments Analysis

Equipment Assumed

Class a Length (ft) Basis

**VOP.RC.M 10**  **Average of**  **8 ft**  **and 12**  **ft, Manufacturer**  **Interviews**

**VOP.RC.L 10**  **Average of**  **8 ft**  **and 12**  **ft, Manufacturer**  **Interviews**

**VOP.SC.M 4**  **Baseline Equipment**  **used for**  **Engineering Analysis** 

**SVO.RC.M 10**  **Average of**  **8 ft**  **and 12**  **ft, Manufacturer**  **Interviews**

**SVO.SC.M 4**  **Baseline Equipment**  **Used for**  **Engineering Analysis** 

**HZO.RC.M 10**  **Average of**  **8 ft**  **and 12**  **ft, Manufacturer**  **Interviews**

**HZO.RC.L 10**  **Average of**  **8 ft**  **and 12**  **ft, Manufacturer**  **Interviews**

**HZO.SC.M 4**  **Baseline Equipment**  **Used for**  **En gineering**  **Analysis**

**HZO.SC.L 4**  **Baseline Equipment**  **Used for**  **Engineering Analysis** 

**VCT.RC.M 10**  **Average of**  **3 door**  **and 5**  **door (30"**  **per door),**  **MFG Interviews** 

**VCT.RC.L 10**  **Average of**  **3 door**  **and 5**  **door (30"**  **per door),**  **MFG Interviews** 

**VCT.SC.I 5**  **Baseline Equipment**  **Used for**  **Engineering Analysis** 

**VCS.RC.M 5**  **Engineering Estimate** 

**VCS.RC.L 5**  **Engineering Estimate** 

**VCS.RC.I 5**  **Engineering Estimate** 

**VCS.SC.I 5**  **Baseline Equipment**  **Used for**  **Engineering Analysis** 

**HCT.RC.M 5**  **Engineering Estimate** 

**HCT.RC.L 5**  **Engineering Estimate** 

**HCT.RC.I 5**  **Engineering Estimate** 

**HCT.SC.I 3.4**  **Baseline Equipment**  **Used for**  **Engineering Analysis** 

**HCS.RC.M 5**  **Engineering Estimate** 

**SOC.RC.M 8**  **Average of**  **4 ft,**  **8ft, 12**  **ft, all**  **common equipment**  **lengths**

**SOC.RC.L 8**  **Average of**  **4 ft,**  **8ft, 12**  **ft all**  **common equip**  **ment lengths** 

***** **Equipment class**  **designations consist**  **of a**  **combination (in**  **sequential order**  **separated by**  **periods) of**  **a equipment**  **family code**  **(VOP=vertical**

**open, SVO=semivertical**  **open, HZO=horizontal**  **open, VCT=vertical**  **transparent doors,**  **VCS=vertical solid**  **doors, HCT=horizontal**  **transparent**

**doors, HCS=horizontal**  **solid doors,**  **or SOC=service**  **over counter),**  **an operating**  **mode code**  **(RC=remote condensing**  **or SC=self­contained),**  **and**

**a rating**  **temperature code**  **(M=medium temperature (38°F),**  **L=low temperature**  **(0°F), or**  **I=ice­cream temperature (­15°F)).**  **For example,** 

**"VOP.RC.M refers**  **to the**  **"vertical open,**  **remote condensing,**  **medium temperature"**  **equipment class.**  **See chapter**  **3, market**  **and technology** 

**assessment, for**  **a more**  **detailed explanation**  **of the**  **equipment class**  **terminology**

Table 9.3.2 Percent of Shipped Linear Feet of Commercial Refrigeration Equipment

Equipment Class Percentage of Shipped Units

**Vertical Open.Remote**  **Condensing.Medium (VOP.RC.M)**  **26.2%**

**Vertical Open.Remote**  **Condensing.Low (VOP.RC.L)**  **0.0***

**Vertical Open.Self**  **Contained.Medium (VOP.SC.M)**  **1.8**

**Vertical Closed**  **Transparent.Remote Condensing.Medium**  **(VCT.RC.M) 1.9** 

**Vertical Closed**  **Transparent.Remote Condensing.Low**  **(VCT.RC.L) 26.1** 

**Vertical Closed**  **Transparent.Self Contained.**  **Ice Cream**  **(VCT.SC.I) 0.6** 

**Vertical Closed**  **Solid.Self Contained.Very**  **Low (VCS.SC.I)**  **0.2**

**Semi­Vertical Open.Remote**  **Condensing.Medium (SVO.RC.M)**  **20.0**

**Semi­Vertical Open.**  **Self Contained.Medium**  **(SVO.SC.M) 2.6** 

**Service Over**  **Counter.Remote Condensing.Medium**  **(SOC.RC.M) 5.0** 

**Horizontal Open.Remote**  **Condensing.Medium (HZO.RC.M)**  **3.1**

**Horizontal Open.Remote**  **Condensing.Low (HZO.RC.L)**  **9.7**

**Horizontal Open.Self**  **Contained.Medium (HZO.SC.M)**  **0.2**

**Horizontal Open.Self**  **Contained.Low (HZO.SC.L)**  **0.5**

**Horizontal Closed**  **Transparent.Self Contained.Ice**  **Cream (HCT.SC.I)**  **2.1**

**100.0%**

***** **Estimated shipments**  **of this**  **class were**  **zero. The**  **industry requested**  **that this**  **equipment class**  **be included**  **in the**  **rulemaking**

Sources: ARI and CRE framework meeting comments

**9­6**9.3.3.2 Market Shipments

**DOE used**  **the above**  **shipments data**  **to estimate**  **the market**  **shipments in**  **year t**  **of each** 

**commercial refrigeration**  **equipment equipment**  **class y,**  MKTSHIP(t,y)

**, defined**  **in terms**  **of linear** 

**feet of**  **display space**  **occupied by**  **the new**  **and replacement**  **shipments of**  **equipment class**  **y.**

**Because the**  **percent of**  **shipments in**  **each class**  **is relatively**  **constant over**  **time and**  **the lifetime**  **of**

**each class**  **is the**  **same, the**  **ratio of**  **shipments to**  **a class**  **is indicative**  **of the**  **market share**  **for that** 

**class,** MKT(y)

**. DOE**  **estimated the**  MKT(y) **for a**  **particular equipment**  **class to**  **be a**  **constant**

**value equal**  **to the**  **average of**  **the yearly**  **percent historical**  **shipments to**  **that class.**  **These**

**percentages are**  **reported in**  **Table 9.3.1.** 

MKTSHIP(t.y)

= MKT(y) x (UN(t) + UB(t)) Eq. 9.6

**where:**

MKTSHIP(t,y)

= **total market**  **shipments, in**  **linear feet**  **of display**  **space, of**  **equipment class**  **y**

**in year**  **t,**

MKT(y)

= **percentage of**  **total market**  **shipments in**  **equipment class**  **y,** UN(t)

**= total**  **shipments to**  **new buildings**  **in year**  **t,**

**UB(t)**

**= total**  **replacement shipments**  **in year**  **t.**

9.3.4 Equipment Utility

**The equipment**  **utility is**  **a measure**  **of the**  **economic value**  **of a**  **linear foot**  **of commercial** 

**refrigeration equipment**  **to the**  **customers. This**  **is the**  **value associated**  **with energy**  **savings.**

**Because there**  **are not**  **enough historical**  **data available**  **on the**  **commercial refrigeration**  **equipment**

**market to**  **develop and**  **calibrate a**  **full demand**  **and supply**  **model, economic**  **factors are**  **used to** 

**calculate annualized**  **cost and**  **calibrate market**  **shares for**  **the Shipments**  **Model and**  **are discussed** 

**below.**

9.3.5 Equipment Price

**Equipment price**  **is the**  **price paid**  **by the**  **customer for**  **a unit**  **of commercial**  **refrigeration**

**equipment. It**  **includes both**  **the purchase**  **price of**  **the equipment**  **and installation**  **costs. DOE** 

**converts the**  **equipment price**  **to a**  **price per**  **linear­foot­cooled based**  **on the**  **length of**  **the**

**equipment class.** 

**As discussed**  **in the**  **engineering analysis**  **(chapter 5)**  **and the**  **life­cycle cost**  **and payback** 

**period analysis**  **(chapter 8),**  **equipment prices**  **in this**  **analysis are**  **a function**  **of energy** 

**consumption level).**  **DOE based**  **equipment price**  **projections on**  **energy consumption**  **level, but** 

**did not**  **develop estimates**  **of market**  **trends in**  **efficiency. DOE**  **developed a**  **mix of**  **energy**

**consumption levels**  **for the**  **base case**  **(i.e., the**  **case without**  **new energy**  **conservation standards)** 

**and for**  **each candidate**  **standard level**  **envisioned. The**  **efficiency mixes**  **are discussed**  **in detail**  **in**

**chapter 10,**  **section 10.2.2.1.** 

9.3.5.1 Operating Costs

**Operating costs**  **consist of**  **maintenance costs,**  **repair costs,**  **and energy**  **costs.**

**9­7**Maintenance and Repair Costs. **Each unit**  **of commercial**  **refrigeration equipment**  **incurs**

**yearly routine**  **maintenance and**  **standard repair**  **costs. DOE**  **converted these**  **costs to**  **a cost**  **per**

**unit and**  **per linear**  **foot of**  **cooling capacity**  **for each**  **equipment class.**  **Because DOE**  **has very** 

**little information**  **on either**  **current or**  **potential maintenance**  **costs, a**  **placeholder assumption**  **was**

**entered into**  **the analysis**  **of $200/year/**  **unit (2006$)**  **for maintenance.**  **Whereas maintenance**  **cost**

**is assumed**  **independent of**  **refrigeration equipment**  **class and**  **energy efficiency,**  **repair costs**  **are**

**potentially a**  **function of**  **both. Thus,**  **projections for**  **maintenance costs**  **remain constant**  **both in** 

**the base**  **and energy**  **efficiency standards**  **cases. However,**  **repair costs**  **are projected**  **to increase** 

**with increasing**  **energy­efficiency standards**  **levels. Both**  **maintenance and**  **repair costs**  **are**

**discussed in**  **detail in**  **chapter 10,**  **section 10.3.2.2.** 

Energy Costs. **The annual**  **energy costs**  **for a**  **single CRE**  **unit depend**  **on the**  **annual**

**energy use**  **per linear**  **foot given**  **the energy**  **consumption level**  **of the**  **unit (energy**  **use intensity**  **or**

**EUI), and**  **the price**  **of electricity.**  **The determination**  **of the**  **EUI for**  **an individual**  **CRE unit**  **is**

**discussed in**  **chapter 6**  **and 7,**  **and the**  **development of**  **electricity prices**  **is discussed**  **in the** 

**life­cycle cost**  **and payback**  **period analysis**  **(chapter 8,**  **section 8.2.3.1).**  **Coupling the**  **EUI with** 

**electricity price**  **data enables**  **DOE to**  **derive the**  **annual per**  **unit energy**  **cost for**  **each energy** 

**consumption level.**  **Chapter 8**  **discusses how**  **the EUI**  **data are**  **combined with**  **the electricity**  **price**

**data to**  **derive annual**  **electricity costs.** 

**Available information**  **suggests that**  **the average**  **annual energy**  **costs for**  **any given**  **year**

**change as**  **the average**  **efficiency of**  **the shipped**  **units improves.**  **In any**  **given year,**  **there is**  **a**

**distribution of**  **energy consumption**  **levels for**  **shipped equipment**  **and the**  **Shipments Model**  **uses**

**the shipment­weighted**  **average efficiency**  **for that**  **given year.**  **DOE based**  **its projections**  **of**

**annual energy**  **cost for**  **each equipment**  **class on**  **the mix**  **of energy**  **consumption levels**  **projected**

**within that**  **class, the**  **total shipments**  **for the**  **equipment class**  **and future**  **electricity prices.**  **DOE**

**developed a**  **mix of**  **energy consumption**  **levels representative**  **of the**  **base case**  **(i.e., the**  **case**

**without new**  **efficiency standards)**  **and for**  **each candidate**  **standard level.**  **As noted**  **earlier, the** 

**mix of**  **energy consumption**  **levels within**  **each equipment**  **class is**  **discussed in**  **detail in**  **chapter**

**10, section**  **10.2.2.1. The**  **impact of**  **the mix**  **of energy**  **consumption levels**  **on the**  **average per**  **unit**

**energy costs**  **for shipments**  **within an**  **equipment class**  **is discussed**  **in detail**  **in chapter**  **10,**

**section 10.2.2.1**  **also.**

**The mix**  **of energy**  **consumption levels**  **allow for**  **the determination**  **of projected**  **annual**

**energy costs**  **in 2006**  **dollars as**  **a function**  **of candidate**  **standard level.**  **To factor**  **in the**  **impact of** 

**future electricity**  **prices, DOE**  **used electricity**  **price projections**  **from the**  AEO 2006 **to**

**appropriately scale**  **the above**  **projected energy**  **costs (for**  **scaling purposes,**  **the scaling**  **factor for** 

**the year**  **2006 equals**  **1.0).**

9.3.5.2 Discounted Costs

**When a**  **decision is**  **made to**  **purchase commercial**  **refrigeration equipment,**  **an**

**energy­conscious purchasing**  **agent will**  **consider the**  **total lifetime**  **cost of**  **the equipment.** 

**Typically, these**  **lifetime costs**  **are discounted**  **to represent**  **the present**  **value of**  **these costs.**  **DOE**

**discounted the**  **total operating**  **costs (i.e.,**  **maintenance, repair,**  **and energy**  **costs) over**  **the full** 

**lifetime of**  **the equipment.**  **Commercial refrigeration**  **equipment lifetimes**  **range from**  **one to**  **as**

**many as**  **20 years,**  **but based**  **on discussions**  **with industry,**  **the typical**  **value is**  **10 years,**  **usually**

**9­8 based**  **on the**  **fact that**  **grocery stores**  **are either**  **renovated or**  **the refrigeration**  **equipment is** 

**replaced for**  **aesthetic reasons**  **at about**  **10­year intervals**  **(see chapter**  **8 for**  **further details).** 

9.4 RESULTS

**Table 9.4.1**  **shows the**  **shipments forecast**  **for the**  **commercial refrigeration**  **equipment**

**classes for**  **the base**  **case energy**  **consumption level**  **(or Level**  **1). As**  **equipment purchase**  **price**

**increases with**  **lower energy**  **consumption levels,**  **a drop**  **in shipments**  **could be**  **expected relative** 

**to the**  **base case.**  **Although there**  **is a**  **provision in**  **the spreadsheet**  **for a**  **change in**  **shipments as** 

**the efficiency**  **level increases**  **(or energy**  **consumption level**  **decreases), DOE**  **has no**  **information**

**with which**  **to calibrate**  **such a**  **relationship. Therefore,**  **for the**  **ANOPR analysis,**  **DOE presumes** 

**that the**  **shipments do**  **not change**  **in response**  **to candidate**  **standard levels.** 

Table 9.4.1 Forecasted Shipments for Commercial Refrigeration Equipment, 2012­2042,

Level 1 (Base Case)

Equipment Thousands of Linear Feet Shipped by Year and Equipment Class

Class 2012 2015 2020 2025 2030 2035 2040 2042 Cumulative

VOP.RC.M **423 446**  **490 538**  **591 649**  **714 742**  **17574**

VOP.RC.L * **0 0**  **0 0**  **0 0**  **0 0**  **0**

VOP.SC.M **28 30**  **33 36**  **40 44**  **48 50**  **1182**

VCT.RC.M **30 32**  **35 38**  **42 46**  **51 53**  **1255**

VCT.RC.L **420 443**  **487 535**  **587 645**  **709 737**  **17456**

VCT.SC.I **10 11**  **12 13**  **14 16**  **17 18**  **430**

VCS.SC.I **3 3**  **3 3**  **4 4**  **4 5**  **107**

SVO.RC.M **323 340**  **374 411**  **451 495**  **545 566**  **13405**

SVO.SC.M **43 45**  **49 54**  **59 65**  **72 75**  **1769**

SOC.RC.M **81 86**  **94 104**  **114 125**  **137 143**  **3379**

HZO.RC.M **50 52**  **57 63**  **69 76**  **84 87**  **2060**

HZO.RC.L **156 164**  **181 198**  **218 239**  **263 273**  **6476**

HZO.SC.M **4 4**  **4 5**  **5 6**  **6 6**  **152**

HZO.SC.L **8 8**  **9 10**  **11 12**  **13 13**  **315**

HCT.SC.I **34 35**  **39 43**  **47 52**  **57 59**  **1397**

***** **Estimated shipments**  **of this**  **class were**  **zero. The**  **industry requested**  **that this**  **equipment class**  **be included**  **in the**  **rulemaking**

**9­9**REFERENCES

**1 Freedonia.**  **2004. Commercial**  **Refrigeration Equipment**  **to 2008.**  **Study 1849.**  **Freedonia**

**Group, Inc,**  **Cleveland, Ohio,**  **October 2004,**  **204 pp.**  **available at** 

**http://www.freedoniagroup.com/Commercial­Refrigeration­Equipment.html**

**2 EIA**  **(Energy Information**  **Administration). 2006.**  **Annual Energy**  **Outlook 2006.**  **DOE/EIA**

**0383(2006). U.S.**  **Department of**  **Energy, Energy**  **Information Administration,**  **Washington**

**D.C.**

**9­10**