## NATIONAL ENERGY SAVINGS AND NET PRESENT VALUE ANALYSIS James E. McMahon (JEMcMahon@LBL.gov) Ernest Orlando Lawrence Berkeley National Laboratory 

### U.S. DOE Workshop on Standards for Commercial Unitary Air Conditioners and Heat 

### Pumps September 12, 2001 

## NATIONAL ENERGY SAVINGS AND NET PRESENT VALUE ANALYSIS James E. McMahon (JEMcMahon@LBL.gov) Ernest Orlando Lawrence Berkeley National Laboratory 

## u.s. DOE Workshop on Standards for Commercial Unitary Air Conditioners and Heat Pumps September 12,2001.11 National Energy Saving and Net Present Value Analysis: 

## Overview Energy consumption for commercial space cooling by equipment class will be calculated for a base case and standards cases The difference between base case consumption and consumption in each standards case represents energy savings Results will be reported in physical units (kwh site energy) (quadrillion Btus source energy) and economic units (dollars) for each year and cumulatively The period ofanalysis is from start date ofstandard to about 30 years later (ca. 2040)
III.G. I National Energy Saving and Net PresentValue Analysis: 

## Overview

•**~** • r. ", .'**~** .'to: ''; • Energy consumption for commercial space cooling by

.equipment class will be calculated for a base case and

standards cases • The difference between base case consumption and consumption in each standards case represents energy

. saVIngs • Results will be reportedinphysical units (kwh site energy) (quadrillion Btus source energy) and economic units (dollars) for each year and cumulatively • The period ofanalysis is from start date ofstandard to ,about 30 years later (ca. 2040)
III.O. INational Energy Saving and Net Present Value Analysis: 

## Methods for Forecasting Shipments Extrapolate from time series

- No explicit accounting for number ofbuildings, percent 

### owning equipment, changes in installed cost or operating expense 

### Forecast using accounting model

- New buildings and percent by equipment type

- Replacement as function ofequipment lifetime 

### Consider impacts ofexisting non-regulatory efforts on base case efficiencies in future years. III.G.2 National Energy'Saving andNet Present Value Analysis: 

## Methods for Forecasting Shipments
• Extrapolate from time series -' No explicit accounting for number ofbuildings, percent owning equipment, changes in installed cost or operating expense 

### . • Forecast using accounting model

- New buildings andpercentby equipment type

- Replacement as function ofequipment lifetime 

### • Consider impacts ofexisting non-regulatory

. efforts onbase case efficiencies infuture years. III.G.2National Energy Saving and Net Present Value Analysis: 

## DOE Requests Input from Stakeholders on Shipments What otherapproachesshouldthe Departmentconsiderto establishthe forecasts forbasecase andstandards cases?

What informationsources for pastshipment databy efficiency level areavailable?

Whatexistingnon-regulatoryinitiatives shouldbe consideredin the base case?

III.G.3 National Energy Saving and Net Present Value Analysis: 

## DOE Requests 

## Input from Stakeholders on Shipments

.. . ...•.. "t '-r-" ..**~~1~:;::P~.:::.·~;:;·~~:~fr··€<'~;:·** :r' 

## • What otherapproaches should the Depa.rtment consider to establish the '. forecastsfor base case andstandards cases? • What information sources forpastshipment

. data by efficiency level are available? • What existing non-regulatory initiatives should be considered in the base case?

III.G.3

### i|^ National Energy Saving and Net Present Value Analysis: 

### Consumer Economic Factors Operating Operating Expenses Depend on expenses: typically thousands of oAC or HP aEquipment capacity dollars per building * Climate * Energy prices per year * Building loads and usage 

### Purchase Pese . tPurchase Expenses Depend on 

### expenses: typically thousands of thousan *ACor HP * Equipment capacity dollars per * Location * Split or Single Package installation · New or Replacement Construction
III.G.4 National Energy Saving andNet Present Value Analysis: 

### Consumer Economic Factors
• Operating expenses: typically thousands of dollars per building peryear • Purchase expenses: typically thousands of dollars per installation Operating Expenses Depend on • AC or HP 0 Equipment capacity • Climate • Energy prices . • Building loads andusage Purchase Expenses Depend on •

AC orHP • Equipment capacity • Location • Split or Single Package • New or Replacement Construction III.GA

### National Energy Saving and Net Present Value Analysis: 

### Equipment Class Distribution Chart at right shows0 : ?-:?: ,':,' : * SplitSystems estimated equipment 1600 

### shipped tonnage from 1400 Single Packa 

### census -data(1997) 

### a> : l 

### DOE 

### Needs to ' 1200 

### 'I.G. determine shipments c 

### - 

### to building type and 

### n o . . region for national : - ' 

### . V) 400 ". 

### energy savings 

### analysis 200 AC 65-135 HP 65-135 AC 135-240 HP 135-240 III.G.5 / National Energy Saving and Net Present Value Analysis: 

### Equipment Class Distribution

• Chart at right shows 'estimated e'quipment shipped tonnage from census 'data (1997) • DOENeeds to determine shipments to buildingtype and region for national • energy savIngs analysis . . . '. .' .;',::" ).- 1800 1600 . 1400 >- ... m .. 'u- t: 1200 ," . . C'G 0< . a. f- . cu "C 1000 Ot: "C**~** 800·. Q) ::l '. a. Co 0 600· 

### .-**~**.t:fen - 4001':."..<••,••••. , 200 o • Split Systems 1m Single Package

.....

AC 65·135 HP 65-135 AC 135-240 HP 135-240 III.G.5¥':~ National Energy Saving and Net Present Value Analysis: 

## 3 

## tMethod: Net Present Value (NPV) For each year analyzed, calculate the difference in installed costs and operating costs between the base case and each standards case Discount future values to the present

- Include operating costs over lifetime ofequipment purchased 

### Sum over years to get NPV

- Ifpresent value ofsavings exceeds costs, NPV is positive.

- Ifpresent value ofcosts exceeds savings, NPV is negative.

III.G.6 National Energy Saving and Net Present Value Analysis:



## Method:Net Present Value (NPV)

••**.~.** 10·, •• ••**r.~ ~**  ., • 

### • For each,year analyzed, calculate the difference in

I 

### installed costs and operating costs between the base

case and each standards case • Discount future values to the present , - Include operating**~osts** over lifetime ofequipment purchased

• I 

### Sum over years to getNPV

- Ifpresent value ofsavings exceeds costs, NPV is positive.

- If**pres~nt** value ofcosts exceeds savings, NPV is negative.

III.G.6