# #23.4 Energy Price Forecasts Electricity

2000 - - - High Growth - Res -+-- Reference - Res - o - High Growth - Comm Reference - Comm Low Growth - Res Low Growth - Comm

2005 2010 2015 2020 2025 2030 2035 2040 2045 Year 1 10 . 1 05
. 1.00
in 0.95 O N 0.90
L H 2 0.85 0 0.80 0 75
. 0.70 A A

A.

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 Year 

### n Energy price projections to 2030 based on EIA/AEO Reference Case n AEO High Growth and Low Growth cases can be run as a sensitivity n Electricity price forecasts to 2042 : Based on average rate of change from 2020-2030 n Natural Gas and Oil price forecasts to 2042 : Based on average rate of change from 2015-2030 

## Natural Gas -j -+- High Growth - Res

Reference - Res -A Low Growth-Res - - - High Growth -Comm - Reference - Comm -e - Low Growth - Comm



### 94

# Water and Wastewater Price Forecasts

600 -
500
400

200 --- ♦ --- Water CPI

♦- Linear Extrapolation

♦ 100 Y♦♦^♦
0 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 Year 

### n Water price projections from 1970 -2005 based on CPI national water price index (U.S. city average) n Price projections to 2042 based on average growth rate from 1970-2005 

# #23.4

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# #23.4
Other Inputs n Discount Rates ' Based on the finance cost of raising funds to purchase appliances - Financial cost of any debt incurred to purchase equipment - Opportunity cost of any equity used to purchase equipment • Residential Rates - New Housing = Average real mortgage rate = 3.2% - Replacements = Weighted-average real rate associated with various household equity (e.g., savings bonds, stocks, CDs) and debt (e.g., credit card, home equity loans) = 5.6% - Primary data source: Federal Reserve Board's Survey of Consumer Finances for the years 1989, 1992, 1995, 1998, 2001, and 2004 

### • Commercial Rates - Calculated from the weighted-average cost of capital to the firm (WACC) to obtain equity and debt financing 

### - Weighted-average real value = 5.7% for purchasers of commercial clothes washers n Equipment Lifetime ' Based on various sources including Appliance magazine and past DOE TSDs ' Lifetimes (years) - Dishwashers: Min = 7; Average = 12.3; Max = 17.6 - Dehumidifiers: Min = 5; Average = 11; Max = 17 - Cooking Products: Min = 10 (elec), 12 (gas); Average = 19; Max = 28 (elec), 26 (gas) - Microwave Ovens: Min= 7; Average = 9; Max = 10 - Commercial CW: Min = 7 (MF), 5 (Laund); Average = 11.3 (MF), 7.1 (Laund); Max = 15.5 (MF), 9.3 (Laund) 

### n Repair and Maintenance Costs • Assumed no changes with increased efficiency for all products 96

# #23.4

Repair and Maintenance Costs (Issue #11) n Primarily because it did not receive any specific data on the impacts that standards might have on repair and maintenance costs, DOE did not include any changes in repair and maintenance costs due to standards for any of the four appliance products.

DOE requests feedback on its understanding of repair and maintenance costs.

97

# #23.4

Equipment Assignment in the Base Case n LCC and PBP analysis typically analyzes standard levels relative to a baseline efficiency level n Not all consumers purchase products at baseline levels • Must account for consumers purchasing more efficient products to accurately estimate consumer economic impacts 

# n Base case efficiency distributions define the percentage of products being purchased at various efficiency levels • Consumers already purchasing products at efficiencies greater than or equal to a prospective standard level are not impacted by the standard

98

# #23.4

Equipment Assignment in the Base Case Dishwashers

Level EF Market Share Baseline 0.46 3.0% * 0.50 2.0% * 0.54 2.0% 1 0.58 43.0% * 0.60 17.0% 2 0.62 22.0% 3 0.65 8.0% 4 0.68 2.5% 5 0.72 0.2% 6 0.80 0.2% 7 1.11 0.2% 

### Dehumidifiers

0-35.00 pints/day 35.01-45.00 pints/day 54
.01-74.99 pints day Level EF Market Share* Level EF Market Share Level EF Market Share Baseline 1.20 27% Baseline 1.30 27% Baseline 1.50 31% 1 1.25 35% 1 1.35 35% 1 1.55 0% 2 1.30 0% 2 1.40 0% 2 1.60 57% 3 1.35 0% 3 1.45 0% 3 1.65 12% 4 1.40 38% 4 1.50 38% 4 1.70 0% 5 1.45 0% 5 1.74 0% 5 1.80 0% * Market share data unavailable. DOE used the same market shares as for the 35.01-45.00 product class. 

### 99

# #23.4

Equipment Assignment in the Base Case Cooking Products

Gas Cooktops Gas Standard Ovens Level EF Market Share Level EF Market Share Baseline 0.156 6.8% Baseline 0.0298 17.6% 1 0.399 93.2% 1 * 0.0536 82.4% 2 0.420 0% 2 0.0566 0% 3 0.0572 0% 4 0.0593 0% 5 0.0596 0% 6 0.0600 0% la* 0.0583 0% 

### Commercial Clothes Washers Level MEF WF Market Share Baseline 1.26 9.50 79.7% 1 1.42 9.50 0.0% 2 1.60 8.50 0.0% 3 1.72 8.00 0.0% 4 1.80 7.50 0.0% 5 2.00 5.50 20.3% 6 2.20 5.10 0.0% 

### n Electric coil and smooth cooktops, Electric standard and self-clean ovens, Gas self-clean ovens, and Microwave ovens assumed to have 100% of market at baseline levels

n Deduced from AHAM shipmentweighted efficiency data n Assumed bi -modal distribution at baseline and 2.00 MEF/5.50 WF efficiency levels

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# #23.4

Efficiency Distributions in the Base Case (Issue #12) n To accurately estimate the percentage of consumers that would be affected by a particular energy conservation standard level, DOE took into account the distribution of product efficiencies currently in the marketplace. n In other words, DOE conducted its LCC and PBP analyses by considering the full breadth of product efficiencies that consumers purchase under the base case (i.e., the case without new energy efficiency standards) to account for those consumers who already purchase more efficient products. n DOE developed base case efficiency distributions for each of the four appliance products based on a combination of data sources and estimates. DOE requestsfeedback on the data sources and estimates it used for developing its base case product efficiency distributions. 101

# LCC and PBP Results Example: Dishwashers, Standard-Sized

$1,180 $1,160 $1,140 $1,120 $1,100 $1,080 $1,060 $1,040 -^- LCC

PBP 32 28 24 20 16 12 8 4 $1,020 !T--^ - 0 0.45 0.55 0.65 0.75 0.85 0.95 1.05 1.15 EF 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 0.58 0.62 0.65 0.68 0.72 0.8 1.11 EF 

# #23.4

q Net Benefit q No Impact q Net Cost



### 102

# Other Issues

The Departmentseeks comments and recommendations from stakeholders on any other aspects related to the Life-Cycle Cost Analysis. 

# #23.4

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# #23.4

Energy Conservation Standards for Residential Dishwashers, Dehumidifiers , Cooking Products and

Commercial Clothes Washers ANOPR Public Meeting 

# National Impact Analysis Building Technologies Program Office of Energy Efficiency and Renewable Energy

U.S. Department of Energy December 13, 2007

# ANOPR Analyses Flow Diagram

M ANOPR ) NOPR

Market and Technology Markups for Assessment Engineering Equipment

Analysis Price Screening Determination Analysis ,



### Framework Document

Energy Use and Water Use Characterization IN= 

### Final Rule 

# #23.4

# #23.4
Purpose n Shipments Analysis • To estimate home appliance shipments over time. n National Impact Analysis • To estimate the National Energy Savings (NES) from home appliance efficiency standards at different levels. • To estimate the national economic impact on the nation (or the Net Present Value (NPV)) from home appliance efficiency standards at different levels.

106

# #23.4

liz 

# National Impact Analysis Process

LCC Analysis Results and Other Inputs Shipments Model National National Energy Economic Savings Impacts , 

### National Energy Savings (Quads) National Net Present Value (2006 US $, billion)



## n National energy savings calculated for period from 2012-2042 (30 years) n NPV calculated for products shipped over the period from 2012-2042 107

# #23.4

ANOPR Issues for Public Comment n Commercial Clothes Washer Shipments Forecasts (Issue #13) n Base Case and Standards Case Forecasted Efficiencies (Issue #14) n Dehumidifier Cost and Efficiency Relationships (Issue #15)

108Appliance Stock

New Building Appliance Saturation Replacement Shipments

New Construction Shipments

Shipments to Exist Bldg Stock

Early Retirement I J- Rate (Calibration Variable)

Rate of Non-

"t (Calibration Variable) wlo Appliance

Units not Replaced Total Shipments

Total Shipments by Class, 

# #23.4

109

# #23.4 Shipments Model Inputs Input 

# .. .- . Replacements Appliance Lifetime From Life-Cycle Cost Analysis 

### New Construction Shipments Dishwashers and Cooking Products Forecasted New Housing U.S. DOE-EIA, 2007 Annual Energy Outlook, New Housing Completions New Housing Saturations U.S. DOE-EIA, 1993, 1997, 2001 Residential Energy Consumption Survey Commercial Clothes Washers Forecasted New Construction U.S. DOE-EIA, 2007 Annual Energy Outlook, Multi-Family Completions New Building Saturations Consortium for Energy Efficiency, 1998 Commercial Family-Sized Washers: An Initiative Description of the Consortium for Energy Efficiency 

### Historical Shipments Dishwashers, Dehumidifiers, Cooking Products AHAM Data Submittal, AHAM Fact Book, Appliance magazine Commercial Clothes Washers
, AHAM Data Submittal, Appliance magazine, U.S Bureau of Economic Analysis' Quantity Index data 

### Shipments by Product Class Dehumidifiers, Cooking Products AHAM Data Submittal 

### 110

# #23.4

Commercial Clothes Washer Base Case Shipments Results

0.40T0.35 - 0.30 Historical Shipments

-Total Shipments Retired Units Replacement Shipments

0.10 ----------------------------- 0.05 0.00 1985 1995 2005 2015 2025 2035 Year


### n To calibrate Shipments Model , retired units (units not replaced) start in 1999 and end in 2013 n Shipment forecasted to increase as shipments are tied to new multi-family starts 111

# #23.4

Commercial Clothes Washer Shipments Forecasts (Issue #13) n Based on historical data, commercial clothes washer shipments dropped significantly between 1998 and 2005. n Because DOE tied forecasted shipments to the growth in new multifamily construction, DOE forecasted a continued increase in clothes washer shipments over the analysis period (Le., 2012-2042). n However, due to the dramatic drop in shipments seen in the historical data, DOE is uncertain as to whether shipments will continue to increase. DOE requests feedback on its basisfor estimated commercial clothes washer shipments.

112

# #23.4

Purchase Price and Operating Cost Impacts n Shipments impacts due to purchase price and operating cost changes are accounted for when forecasting standards case shipments n Shipments Model used Relative Price (RP) elasticity to estimate the impacts from purchase price (PP) and the present value of operating cost (PVOC

) changes RP = 

# PP+PVOC Income 

## n Purchase price effects dominate but mitigated by household income n Based on historical shipments, retail price, efficiency, and income data for home appliances, RP elasticity = -0.34 • 10% increase in RP results in a 3.4% drop in shipments • Consumers become less sensitive to initial changes in purchase price - Based on economic literature, RP elasticity drops 65% in ten years

113