Request for Comment

Item 3-5 DOE welcomes comment on the technologies listed above.

Specifically, are there any that DOE should not consider because of their

impacts on safety, performance, or consumer utility of the product?

Item 3-6 DOE welcomes comment on whether there are other unlisted

technologies that DOE should consider as design options and what, if any,

impacts would the design options be expected to have on safety,

performance, and consumer utility.

41

 EERE-2007-BT-STD-0010 COMMENT 04.5
Steps in the Standards Rulemaking: ANOPR

Framework

Document

Engineering

Analysis

Preliminary

Manufacturer

Impact

Analysis

ANOPR

Markups for

Equipment

Price

Determination

Energy Use

Determination

NOPR

Final

Rule

Effective

Date

Life-Cycle

Cost and

Payback

Period Analysis

Shipments

Analysis

National

Impact

Analysis

42

 EERE-2007-BT-STD-0010 COMMENT 04.5
Screening Analysis

• Purpose

- Screen out technology options that DOE will not consider in the

engineering analysis for residential clothes dryers and room air

conditioners.

• Method:

- DOE will evaluate each technology option based on the following criteria:

Technological feasibility

Practicability to manufacture, install and service

Impacts on product utility or availability to consumers

Impacts on health or safety

43

 EERE-2007-BT-STD-0010 COMMENT 04.5
Id Renewable Energy

Steps in the Standards Rulemaking: ANOPR

Market &

Technology

Screening

Analysis

Framework

Document

Engineering

Analysis

Preliminary

Manufacturer

Impact

Analysis

ANOPR

Markups for

Equipment

Price

Determination

Energy Use

Determination

Final

Rule

Effective

Date

Life-Cycle

Cost and

Payback

Period Analysis

Shipments

Analysis

National

Impact

Analysis

44

 EERE-2007-BT-STD-0010 COMMENT 04.5
Engineering Analysis

• Purpose:

- To characterize the relationship between manufacturer cost and

energy efficiency.

Manufacturer Cost -

Efficiency Relationship

2

Efficiency Level

Downstream Rut

Analyse

- Ii

• Life-Cycle Cost and

Payback Period

• Manufacturer Impact

Analysis

• National Impacts

45

 EERE-2007-BT-STD-0010 COMMENT 04.5
U.. DeparhnentofEww

Energy Efficiency and Renewable Energy

Engineering Analysis Methodology

Define

Baseline

Models

ReverseEngineering

F

Data

Collection, &

Interviews

Develop

Engineering

Analysis

Curves

a Determine characteristics of common or typical models which

will serve as reference points to assess changes due to

energy conservation standards. Baseline models typically just

meet existing minimum energy conservation standards.

Perform detailed product disassembly to determine

technologies and design features associated with each

efficiency level, and the manufacturing costs associated with

them. A "green-field" model of the subject unit and factory can

be aggregated to produce industry-wide estimates.

a Collect manufacturer cost data on efficient clothes dryer and

room air conditioner designs. Conduct interviews with

manufacturers to enhance understanding of efficiency

improvements and associated costs.

a Determine manufacturing cost-efficiency curves based on

reverse-engineering and industry-supplied cost data. Qualify

cost-efficiency relationships with interview information and

publicly available data.

46

 EERE-2007-BT-STD-0010 COMMENT 04.5
:nergy Efficiency and Renewable Energy

ringing you a prosperous future where energy is clean, abundant, reliable, and affordable

Engineering Analysis

Development of Cost-Efficiency Curves

0

engineering defines

incremental

0 ReverseBaseline unit manufacturing costs

efficiencies are defined. associated with

raising efficiency to

each level above the

baseline.

BASELINE

Efficiency

© DOE reviews &

qualifies

manufacturing cost

data with additional

manufacturersupplied data points

and publiclyavailable data.

47

 EERE-2007-BT-STD-0010 COMMENT 04.5
Residential Clothes Dryer Baseline Models

tor (EF) (IblkWh)

1. Electric, Standard (4.4 cubic feet (ft3) or greater capacity) 3.01

2. Electric, Compact (120 volts (v)) (less than 4.4 ft3

capacity) 3.13

3. Electric, Compact (240 v) (less than 4.4 ft3 capacity) 2.90

4. Gas 2.67

5. Electric, Compact (240 v) (less than 4.4 ft3 capacity) N/A*

6. Electric, Combination Washer/Dryer N/A*

* DOE is unable to establish a baseline efficiency for these product classes because they cannot

be measured by the current test procedure.

48

 EERE-2007-BT-STD-0010 COMMENT 04.5
Room Air Conditioner Baseline Models

1. Less than 6,000 Btu/h* 9.7

2. 6,000 to 7,999 Btu/h 9.7

3. 8,000 to 13,999 Btu/h* 9.8

4. 14,000 to 19,999 Btu/h 9.7

5. 20,000 Btu/h or more* 8.5

6. Less than 6,000 Btu/h 9.0

7. 6,000 to 7,999 Btu/h 9.0

8. 8,000 to 13,999 Btu/h 8.5

9. 14,000 to 19,999 Btu/h 8.5

10. 20,000 Btu/h or more 8.5

* Product classes DOE proposes to analyze

11. Less than 20,000 Btu/h 9.0

12. 20,000 Btu/h or more 8.5

13. Less than 14,000 Btu/h 8.5

14.

Cas

15.

20,000 Btu/h or more

ement

Casement-Only

8.0

8.7

16. Casement-Slider 9.5

49

 EERE-2007-BT-STD-0010 COMMENT 04.5
Energy Efficiency and Renewable Energy

Bringing you a prosperous future M we energy dean, abundant, reliable, and at able

Request for Comment

Item 5-1 DOE welcomes input from stakeholders on whether the

above energy efficiency levels are appropriate for characterizing the

performance of baseline units.

Item 5-2 Specifically for residential clothes dryers, DOE welcomes

input on appropriate baseline unit efficiencies for vent-less clothes

dryers, assuming the DOE test procedure is revised so as to be

capable of measuring the performance of these units.

Item 5-3 DOE welcomes information regarding the specific

technological characteristics of the baseline model for each product

class, including the technologies described in the market and

technology section.

50

 EERE-2007-BT-STD-0010 COMMENT 04.5
Energy Efficiency and Renewable Energy

Bringing you a prosperous future Owe energy is dean, abundant, reliable, and affordable Analysis

Design-Option Approach for Residential Clothes Dryers

• DOE proposes to use a design-option approach for residential

clothes dryers due to the fact that data indicate minimal

variation in EF among units on the market that are currently

rated.

• Reverse-engineering will be used to identify cost and efficiency

impacts of each technology above the baseline.

• Limited testing will be conducted to establish control strategies

and design option combinations for different platforms.

• DOE will seek incremental cost data from manufacturers for

each design option, supplemented with stakeholder interviews

and publicly available data.

• Cost-efficiency curves will be generated from design

options/design option combinations used to achieve efficiency

levels.

51

 EERE-2007-BT-STD-0010 COMMENT 04.5
Efficiency-Level Approach for Room Air Conditioners

• DOE proposes to use an efficiency-level approach for room air

conditioners because data indicates a significant range of

efficiencies for most of the product classes.

• Reverse-engineering will be used to identify cost and efficiency

impacts at efficiency levels including, at minimum, baseline and

Energy Star EERs.

• Limited testing will establish the link between specific

technologies and efficiency levels.

• DOE will seek incremental cost data from manufacturers for

each efficiency level, supplemented with stakeholder interviews

and publicly available data.

• Cost-efficiency curves will be generated from incremental costs

for each efficiency level.

52

 EERE-2007-BT-STD-0010 COMMENT 04.5
Reverse-Engineering Methodology

ateirials

Fabrics

Proce

Finished

Materials

Assembly

Processes

Manufacturing

53

 EERE-2007-BT-STD-0010 COMMENT 04.5
Industry Cost Submittal

Direct material Sales & marketing

• Direct labor • Research &

• Factory overhead development

• Depreciation • Building

• Tooling/Equipment

Engineering Analysis

• Costs will be provided on a shipment-weighted, industryaggregated basis.

• Data will not be provided for product classes and/or efficiency

levels representing fewer than three manufacturers.

• DOE will request information about the depreciation method

manufacturers use to expense conversion capital. 54

 EERE-2007-BT-STD-0010 COMMENT 04.5
Request for Comment

Engineering Analysis

Item 5-4 DOE welcomes comment on the use of a design-option

approach to determine the relationship between manufacturer cost

and energy efficiency for residential clothes dryers.

Item 5-5 DOE welcomes comment on the use of an efficiency-level

approach to determine the relationship between manufacturer cost

and energy efficiency for room air conditioners.

55

 EERE-2007-BT-STD-0010 COMMENT 04.5
Efficiency Levels

• DOE will conduct the engineering analysis (and LCC and PBP

analyses) on all product classes for which it suggests efficiency

levels.

• DOE is required to analyze maximum technologically feasible

("max tech") efficiency levels

- In some cases, DOE defines the highest efficiency level based on

maximum available efficiency currently on the market.

- "Max available" may not correspond to "max tech" if, for example,

some design options are not yet commercially available.

- DOE will seek stakeholder input to resolve this potential discrepancy.

56

 EERE-2007-BT-STD-0010 COMMENT 04.5
Efficiency Levels for Residential Vented Clothes

Dryers

Baseline DOE Standard 3.01 3.13 2.90 2.67

1 Gap Fill* 3.10 3.23 2.98*** 2.75

2 Gap Fill* 3.16 ** 3.07*** 2.77

3 Maximum Available* 3.39 3.79 3.23*** 3.02

* Source: CEC residential clothes dryer product direct as of June 2007, except as noted.

** DOE is unable to obtain efficiency information for any models at this level, and therefore is

unable to set this value.

*** DOE estimated these values based on data contained within the NRCan electric clothes dryer

database.

57

 EERE-2007-BT-STD-0010 COMMENT 04.5
Engineering Analysis

Efficiency Levels for Room Air Conditioner

(Representative Product Classes)

Baseline DOE Standard 9.1 9.8 8.5

1 Gap Fill 10.2 10.3 9.0

2 Energy Star 10.7 10.8 9.4

3 CEE Tier 1 11.2 11.3 9.8

4 CEE Tier 2 11.6** 11.8 10.2**

5 Maximum

Available* N/A** 12.0 N/A**

* Source: Energy Star-qualified room air conditioners as of June 2007.

** The maximum available efficiency, as listed in the June 2007 Energy Star-qualified product listing, is an

EER of 11.2 for <6,000 Btu/h and 9.9 for 20,000 Btu/h or more. 58

 EERE-2007-BT-STD-0010 COMMENT 04.5
e_.Za+i:;.w.a^sxxss„Zj`.fxs.b:u,,.me^*^Z

Request for Comment

Item 5-6 DOE welcomes comment on the efficiency levels it

proposes to use for collecting incremental cost data from

manufacturers of residential clothes dryers and room air

conditioners. DOE also welcomes input from stakeholders on

appropriate maximum technologically-feasible efficiency levels.

59

 EERE-2007-BT-STD-0010 COMMENT 04.5
Proprietary Designs

• DOE will evaluate all design options that are commercially

available or present in a working prototype, including proprietary

designs and technologies.

• Proprietary designs will only be considered if they do not present

a unique path to a given efficiency level.

• The confidentiality of manufacturers will be maintained.

60

 EERE-2007-BT-STD-0010 COMMENT 04.5
Request for Comment

Item 5-7 DOE welcomes comment on whether there are proprietary

designs or technologies of which DOE should be aware for either of

the products under consideration in this rulemaking. If so, how

should DOE acquire the cost data necessary for evaluating these

designs?

61

 EERE-2007-BT-STD-0010 COMMENT 04.5
Outside Regulatory Changes

• Consider the effects on manufacturers of other regulatory

changes outside of the standards rulemaking process.

• Example: phase-out of chlorofluorocarbons (CFCs) and

hydrochlorofluorocarbons (HCFCs) in all new equipment for sale

in the U.S. by 2010

- Room air conditioners most commonly use R22, which will likely be

replaced by R-410A.

- Refrigerant changes will require design changes, and there are fewer

compatible low-capacity rotary compressors on the market.

- Research suggests an efficiency decrease of at least 5 - 7% due to

the changeover.

62

 EERE-2007-BT-STD-0010 COMMENT 04.5
Request for Comment

Item 5-8 DOE welcomes comment on whether there are additional

outside regulatory issues that it should consider in its analysis of

residential clothes dryers and room air conditioners.

63

 EERE-2007-BT-STD-0010 COMMENT 04.5
Steps in the Standards Rulemaking: ANOPR

Market &

Technology

Screening

Analysis

Framework

Document

Engineering

Analysis

Preliminary

Manufacturer

Impact

Analysis

ANOPR

Markups for

Equipment

Price

Determination

Energy Use

Determination

Final

Rule

Effective

Date

Life-Cycle

Cost and

Payback

Period Analysis

Shipments

Analysis

National

Impact

Analysis

64

 EERE-2007-BT-STD-0010 COMMENT 04.5
Energy Efficier

fringing you a prosperous fuh

Legislative Requirements

• The Manufacturer Impact Analysis (MIA) fulfills a legislative

requirement to determine if a proposed standard is economically

justified.

- EPCA provides 7 factors to evaluate in determining whether an

efficiency standard is justified. Two factors are addressed in the MIA:

• Economic impact of standards on manufacturers

• Impacts of any lessening of competition in the industry

- MIA format changes described in the 2006 report to Congress, at:

http://www.eere.energy.gov/buildings/appliance_standards/2006_schedule_setting.html

• DOE will collect, evaluate, and report preliminary MIA data in the

ANOPR, if manufacturers can supply the requisite information

• Preliminary data include: anticipated conversion capital

expenditures by efficiency level and anticipated direct employment

impacts

65

 EERE-2007-BT-STD-0010 COMMENT 04.5
Methodology

• The MIA consists of three main phases. In the ANOPR, the

preliminary MIA focuses on Phase 1

ANOPR

Phase 1 Phase 2 Phase 3

* Government Regulatory Impact Model (GRIM)

NOPR

66

 EERE-2007-BT-STD-0010 COMMENT 04.5
pact Analysis

Preliminary Manufacturer Impact Analysis

• Purpose:

- Provide initial discussion on any potential impacts of energy

conservation standards on manufacturers of residential clothes

dryers and room air conditioners.

- Provide an opportunity to verify DOE market information and

engineering design options.

67

 EERE-2007-BT-STD-0010 COMMENT 04.5
U.S. Deprbmnt Of Energy

Energy Efficiency and Renewable Energy

Bringing you a prosperous future where energy is clean abundant reliable and affordable

Preliminary Manufacturer pact Analysis

Methodology: Phase 1

• Consists of the industry profile and preliminary manufacturer

impact analysis interviews

Industry Profi

Evaluate current and past industry

structure and market

characteristics

Produce an industry profile report

with aggregated findings and

characteristics

Identify critical issues that require

special consideration in the MIA,

for example:

Types or groups of manufacturers

Access to technology

Potential regulatory scenarios

Preliminary MIA Intervie

Occurs during the engineering

analysis

Topics include:

Shipment projections

Conversion costs

Product mix and profitability

Market shares and industry

consolidation

Cumulative regulatory burden

68

 EERE-2007-BT-STD-0010 COMMENT 04.5
Steps in the Standards Rulemaking: ANOPR

Market & Markups for

Technology Engineering Equipment

Screening Analysis Price

Determination

Analysis

Energy Use

Determination

Preliminary

Manufacturer

Impact

Analysis

Life-Cycle

Cost and

Payback

Period Analysis

Shipments

Analysis

National

Impact

Analysis

69

 EERE-2007-BT-STD-0010 COMMENT 04.5
arkups for Equipment Price Determination

Markups for Equipment Price Determination

• DOE uses markups to convert manufacturer costs from the

engineering analysis into consumer retail prices.

• DOE needs retail prices for the life-cycle cost and payback period

analysis.

• DOE must characterize distribution channels for each product.

- DOE understands that over 93% percent of consumer products are

distributed from manufacturers directly to retailers.

• DOE develops markups for each party involved in product

distribution.

• SEC 10-K reports provide data for calculating manufacturer markups.

• U.S. Census Bureau provides data for calculating retailer markups.

• DOE may collect retail price data for validation purposes.

• DOE will investigate the variability of retail prices.

70

 EERE-2007-BT-STD-0010 COMMENT 04.5
Request for Comment

Item 7-1 DOE welcomes suggestions and comments concerning its

proposed approach for developing estimates of future retail prices.

71

 EERE-2007-BT-STD-0010 COMMENT 04.5
Steps in the Standards Rulemaking: ANOPR

Market &

Technology

Screening

Analysis

Framework

Document

Engineering

Analysis

Preliminary

Manufacturer

Impact

Analysis

ANOPR

Markups for

Equipment

Price

Determination

Energy Use

Determination

Final \ Effective

Rule Date

Life-Cycle

Cost and

Payback

Period Analysis

Shipments

Analysis

National

Impact

Analysis

72

 EERE-2007-BT-STD-0010 COMMENT 04.5
Energy Use Determination

• Purpose:

- Develop annual energy use data for the life-cycle cost and payback period

analyses to calculate annual operating costs.

• Method:

- Develop household samples for each product from DOE-EIA's Residential

Energy Consumption Survey (RECS).

- Use RECS data along with Engineering Analysis data to develop annual

energy use

73

 EERE-2007-BT-STD-0010 COMMENT 04.5
Energy Use Determination Approach

• Clothes Dryers

Annual Usage

per household

(cycles/year)

from RECS

EF by

efficiency level

from

Engineering

Analysis

Per household

Annual

Energy Use

by efficiency

10..01

• Room Air Conditioners

Annual Energy Use

per household

(kWh/year)

from RECS

EER per household

(deduced from

`equipment age')

from RECS

Cooling Capacity

per household

(Btulhr)

(deduced from

`cooled square

footage')

from RECS

Annual

Usage per

Household

(hours/yr)

Per household

Annual

Energy Use

by efficiency

level

EER&

Cooling Capacity

by efficiency level

from Eng. Analysis

74

 EERE-2007-BT-STD-0010 COMMENT 04.5
Request for Comment

Item 6-1 DOE seeks stakeholder input on the approaches presented

for estimating the typical annual energy consumption of residential

clothes dryers and room air conditioners. Specifically, DOE is

interested in stakeholder input on using RECS as the primary source

of information for establishing annual energy use.

75

 EERE-2007-BT-STD-0010 COMMENT 04.5
Steps in the Standards Rulemaking: ANOPR

Market &

Technology

Screening

Analysis

Engineering

Analysis

Preliminary

Manufacturer

Impact

Analysis

Markups for

Equipment

Price

Determination

Energy Use

Determination

Life-Cycle

Cost and

Payback

Period Analysis

Shipments

Analysis

National

Impact

Analysis

76

 EERE-2007-BT-STD-0010 COMMENT 04.5
:fe-Cycle Cost and Payback Period Analys;

Life-Cycle Cost and Payback Period Analysis

• Purpose:

- Assess the net life-cycle cost (LCC) impacts of differing efficiency levels

on the consumer.

• Method:

- LCC equals consumer price plus the sum of annual operating costs

(including repair and maintenance costs) discounted to a particular base

year.

- Economic evaluation from the consumer perspective.

- Analysis Implemented in an Excel® spreadsheet.

- Results are expressed as LCC difference (baseline minus standard level).

- Simple Payback (years) is also calculated and reported in this analysis.

77

 EERE-2007-BT-STD-0010 COMMENT 04.5
Approach

• Monte Carlo simulation analysis to be used.

- Characterize the variability and uncertainty associated with the inputs

using probability distributions.

- RECS household samples will be used to characterize the variability in

annual energy use and energy prices.

- Probability distributions will be used to characterize the uncertainty in

other operating cost inputs (e.g., discount rates , equipment lifetimes) and

manufacturing costs.

• One LCC and PBP analysis result per product class.

- Clothes dryers: Intend to analyze all six product classes.

- Room air conditioners: Intend to analyze three product classes.

• Without reverse cycle and with louvered sides, Less than 6,000 Btu/h

• Without reverse cycle and with louvered sides, 8,000 to 13,999 Btu/h

• Without reverse cycle and with louvered sides, 20,000 Btu/h or more

• Develop base case efficiency distributions to avoid overstating the

benefits from increasing product efficiency.

78

 EERE-2007-BT-STD-0010 COMMENT 04.5
Base Case Efficiency Distributions

• Avoids overstating the benefits from increasing product efficiency.

- Market share data (or base case efficiency distributions) show the percentage of

consumers already purchasing efficient products.

- Requesting market share data for specific efficiency bins.

Clothes Dryers

i

oil

3.01-3.09 3.13-3.19 2.90-2.96 2.67-2.74

3.10-3.19 3.20-3.29 2.97-3.0 22.75-2.84

3.20-3.29 3.30-3.39 3.07-3.17 2.85-2.94

I

> >3.39 >3.17

Room Air Conditioners

9.7-10.0 9.8-10.0 8.5-8.9

10.1-10.5 10.1-10.5 9.0-9.4

10.6-11.0 10.6-11.0 9.5-9.9

> 11.0 > 11.0 > 9.9 79

 EERE-2007-BT-STD-0010 COMMENT 04.5
Request for Comment

Item 8-1 DOE seeks stakeholder input on the planned

approach of using Monte Carlo simulation and probability

distributions to conduct the LCC and PBP analysis.

sJ

Item 8-2 DOE requests data from stakeholders to

characterize the current mix of residential clothes dryer and

room air conditioner efficiencies in the market.

80

 EERE-2007-BT-STD-0010 COMMENT 04.5