CHAPTER 1 1. UTILITY IMPACT ANALYSIS

TABLE OF CONTENTS

11.1 INTRODUCTION ......................................................................................................... 11-1

11.2 METHODOLOGY ........................................................................................................ 11-2

11.3 UTILITY IMPACT RESULTS ..................................................................................... 11-4

11.3.1 Small Three

- Phase Air -Cooled Air Conditioners and Heat Pumps <65,000

Btu/h ....................................................................................................................... 11-4

11.3.1.1 Installed Capacity .................................................................................... 11-4

11.3.1.2 Electricity Generation .............................................................................. 11-7

11.3.1.1 Results Summary ................................................................................... 11-11

11.3.2 Water

- Source Heat Pumps ................................................................................... 11-11

11.3.2.1 Installed Capacity .................................................................................. 11-11

11.3.2.2 Electricity Generation ............................................................................ 11-15

11.3.2.3 Results Summary ................................................................................... 11-17

LIST OF TABLES

Table 11.3.1 Small Commercial Air -Cooled Air Conditioners and Heat Pumps:

Summary of Utility Impact Results ................................................................. 11-11

Table 11.3.2 Water

- Source Heat Pumps: Summary of Utility Impact Results ..................... 11-18

LIST OF FIGURES

Small Commercial Air -Cooled Air Conditioners and Heat Pumps: Total Figure 11.3.1

Electric Capacity Reduction ........................................................................... 11-4

Small Commercial Air -Cooled Air Conditioners and Heat Pumps: Coal Figure 11.3.2

Capacity Reduction ......................................................................................... 11-5

Small Commercial Air -Cooled Air Conditioners and Heat Pumps: Figure 11.3.3

Nuclear Capacity Reduction ........................................................................... 11-5

Small Commercial Air -Cooled Air Conditioners and Heat Pumps: Gas Figure 11.3.4

Combined Cycle Capacity Reduction ............................................................. 11-6

Small Commercial Air -Cooled Air Conditioners and Heat Pumps: Figure 11.3.5

Peaking Capacity Reduction ........................................................................... 11-6

Small Commercial Air -Cooled Air Conditioners and Heat Pumps: Figure 11.3.6

Renewables Capacity Reduction

................................ ..................................... 11-7

Small Commercial Air -Cooled Air Conditioners and Heat Pumps: Total Figure 11.3.7

Generation Reduction ..................................................................................... 11-8

Small Commercial Air -Cooled Air Conditioners and Heat Pumps: Coal Figure 11.3.8

Generation Reduction ..................................................................................... 11-8

Small Commercial Air -Cooled Air Conditioners and Heat Pumps: Figure 11.3.9

Nuclear Generation Reduction ........................................................................ 11-9

Small Commercial Air -Cooled Air Conditioners and Heat Pumps: Gas Figure 11.3.10

Combined Cycle Generation Reduction ......................................................... 11-9

11 -iSmall Commercial Air -Cooled Air Conditioners and Heat Pumps: Oil Figure 11.3.11

Generation Reduction ................................................................................... 11-10

Small Commercial Air -Cooled Air Conditioners and Heat Pumps Figure 11.3.12

Renewables Generation Reduction ............................................................... 11-10

Water

- Source Heat Pumps: Total Electric Capacity Reduction ................... 11-12 Figure 11.3.13

Water

- Source Heat Pumps: Coal Capacity Reduction .................................. 11-12 Figure 11.3.14

Water

- Source Heat Pumps: Nuclear Capacity Reduction ............................ 11-13 Figure 11.3.15

Water

- Source Heat Pumps: Gas Combined Cycle Capac ity Reduction ....... 11-13 Figure 11.3.16

Water -Source Heat Pumps: Peaking Capacity Reduction ............................ 11-14 Figure 11.3.17

Water

- Source Heat Pumps: Renewables Capacity Reduction ...................... 11-14 Figure 11.3.18

Water

- Source Heat Pumps: Total Generation Reduction ............................. 11-15 Figure 11.3.19

Water

- Source Heat Pumps: Coal Generation Reduction .............................. 11-15 Figure 11.3.20

Water

- Source Heat Pumps: Nuclear Generation Reduction ......................... 11-16 Figure 11.3.21

Water -Source Heat Pumps: Gas Combined Cycle Generation Reduction ... 11-16 Figure 11.3.22

Water -Source Heat Pumps: Oil Generation Reduction ................................ 11-17 Figure 11.3.23

Water

- Source Heat Pumps: Renewables Generation Reduction .................. 11-17 Figure 11.3.24

11

- iiCHAPTER 11. UTILITY IMPACT ANALYSIS

11.1 INTRODUCTION

In the utility impact analysis, the U.S. Department of Energy (DOE) analyzes the changes

in electric installed capacity and power generation that result for each trial standard level (TSL).

The utility impact analysis is base d on output of the DOE/Energy Information

Administration (EIA)’s National Energy Modeling System (NEMS). a NEMS is a public domain,

multi -sectored, partial equilibrium model of the U.S. energy sector. Each year, DOE/EIA uses

NEMS to produce an energy foreca st for the United States, the Annual Energy Outlook (AEO).

The EIA publishes a reference case, which incorporates all existing energy

- related policies at the

time of publication, and a variety of side cases which analyze the impact of different policies,

energy price and market trends. As of 2014, DOE is using a new methodology based on results

published for the Annual Energy Outlook 2014 ( AEO 2014 ) R eference case and a set of side

cases that implement a variety of efficiency

- related policies

. 2

The new approach retains key aspects of DOE’s previous methodology, and provides

some improvements:

• The assumptions used in the AEO reference case and side cases are fully

documented and receive detailed public scrutiny.

• NEMS is updated each year, with each edition of the AEO, to reflect changes in

energy prices, supply trends, regulations, etc.

• The comprehensiveness of NEMS permits the modeling of interactions among

the various energy supply and demand sectors.

• Using EIA published side cases to estimate the utility impacts enhances the

transparency of DOE’s analysis.

• The variability in impacts estimates from one edition of AEO to the next will be

reduced under the new approach.

On the average, however, over the full analysis period, the results from the new approach

are comparable to results from the old approach.

a For more information on NEMS, refer to the U.S. Department of Energy, Energy Information Administration

documentation. A useful summary is National Energy Modeling System: An Overview

. 1

11 -111.2 METHODO LOGY

DOE estimate s the marginal impacts of re duction in energy demand on the energy supply

sector. In principle, marginal values should provide a better estimate of the actual impact of

energy conservation standards.

NEMS uses predicted growth in demand for each end use to build up a projection of the

total electric system load growth . The system load shapes are converted internally to load

duration curves, which are then used to estimate the most cost

- effective additions to capacity.

When electricity demand deviates from the AEO reference case, in general there are three inter

related effects: the annual generation (TWh) from the stock of electric generating capacity

changes, the total generation capacity itself (GW) may change, and the mix of capacity by fuel

type may change. Each of these effects can vary for different types of end use. The change in

total generating capacity is sensitive to the degree to which the end

- use is peak coincident, while

the capacity mix is sensitive to the hourly load shape a ssociated with the end use. Changes in

generation by fuel type lead in turn to changes in total power sector emissions of SO 2 , NO

x , Hg

and CO 2

.

DO E ’s new approach examines a series of AEO side cases to estimate the relationship

between demand reductions and the marginal energy, emissions and capacity changes. The

assumptions for each side case are documented in Appendix E of the AEO. The side cases, or

scenarios, that incorporate significant changes to equipment efficiencies relative to the R eference

case are:

• 2013 Technology (leaves all technologies at 2013 efficiencies) ; • Best Available Technology (highest efficiency irrespective of cost) ; • High Technology (higher penetration rates for efficiency and demand management);

• Extended Policies (includes efficiency standards that are not in the reference)

.

Scenarios that incorporate policies that directly affect the power sector without changes

in energy demand (for example , subsidies for renewables, or high fuel price assumptions) are not

appropriate for this analysis. The methodology proceeds in seven steps:

1. Supply-side data on generation, capacity and emissions, and demand- side data on electricity

use by sector and end

- use, are extracte d from each side case. The data are converted to

differences relative to the AEO R eference case.

2. The changes in electricity use on the demand

- side data are allocated to one of three

categories: on-peak, shoulder, and off- peak. These categories are used in the utility sector to

correlate end -use consumption with supply types. For each of the end- uses that are modeled

explicitly in NEMS , load shape information is used to identify the fraction of annual

electricity use assigned to each category. On -peak hours are defined as noon -5pm, June

through September. Off-peak hours are nights and Sundays. All other hours are assigned to

the shoulder period.

11 -23. For each year and each side case, the demand -side reductions to on-peak, off-peak and

shoulder- period electricity use are matched on the supply-side to reductions in generation by

fuel type. The fuel types are petroleum fuels, natural gas, renewables, nuclear and coal. The

allocation is based on the following rules:

3.1. All petroleum -based generation is allocated to peak periods;

3.2. Natural gas generation is allocated to any remaining peak reduction; this is consistent

with the fact that oil and gas steam units are used in NEMS to meet peak demand;

3.3. Base -load generation (nuclear and coal) is allocated proportionally to all periods;

3.4. The remaining generation of all types is allocated to the remaining off -peak and shoulder

reductions proportionally.

4. The output of step 3 defines fuel-share weights giving the fraction of energy demand in each

load category that is met by each fu el type as a function of time . These are combined with the

weights that define the load category shares by end

- use to produce coefficients that allocate a

marginal reduction in end

- use electricity demand to each of the five fuel types

.

5. A regression model is used to relate reductions in generation by fuel type to reductions in

emissions of power sector pollutants. The model produces coefficients that define the change

in total annual emissions of a given pollutant resulting from a unit change in total annual

generation for each fuel type , as a function of time . These coefficients are combined with the

weights calculated in step 4 to produce coefficients that relate emissions changes to changes

in end-use demand.

6. A regression model is used to relate reductions in generation by fuel type to reductions in

installed capacity. The categories used for installed capacity are the same as for generation

except for peak: NEMS uses two peak capacity types (combustion turbine/diesel and oil and

gas st eam) which are combined here into a single “peak” category. The model produces

coefficients that define the change in total installed capacity of a given type resulting from a unit change in total annual generation for the corresponding fuel type. These coefficients are

combined with the weights calculated in step 4 to produce coefficients that relate installed

capacity changes to changes in end

- use demand , as a function of time.

7. The coefficient time

- series for fuel share, pollutant emissions and capacity for the

appropriate end use are multiplied by the stream of energy savings calculated in the NIA to

produce estimates of the utility impacts.

This analysis ignores pumped storage , fuel cells and distributed generation , as these

generation types are not affected by the policy changes modeled in the EIA side cases. The

methodology is described in more detail in K. Coughlin, “Utility S ector I mpacts of E lectricity

D emand Reductions”. 3

11 -311.3 UTILITY IMPACT RESUL TS

This section presents results of the analysis for all of the capacity types used to supply

electricity to operate small commercial air

- cooled air -conditioning and heating equipment less

than 65,000 Btu/h and water-source heat pumps in commercial buildings

.

11.3.1 Small Three

- Phase Air -Cooled Air Conditioners and Heat Pumps <65,000 Btu/h

11.3.1.1 Installed Capacity

The figures in this section show the changes in U.S. electricity installed capacity that

result for each efficiency level by major plant type for selected years. Note that a negative

number means an increase in capacity under an efficiency level

.

Small Commercial Air -Cooled Air Conditioners and Heat Figure 11.3.1

Pumps : Total Electric Capacity Reduction

11 -4Small Commercial Air -Cooled Air Conditioners and Heat Figure 11.3.2

Pumps : Coal Capacity Reduction

Small Commercial Air -Cooled Air Conditioners and Heat Figure 11.3.3

Pumps : Nuclear Capacity Reduction

11 -5Small Commercial Air -Cooled Air Conditioners and Heat Figure 11.3.4

Pumps : Gas Combined Cycle Capacity Reduction

Small Commercial Air -Cooled Air Conditioners and Heat Figure 11.3.5

Pumps : Peaking Capacity Reduction

11 -6Small Commercial Air -Cooled Air Conditioners and Heat Figure 11.3.6

Pumps : R enewables Capacity Reduction

11.3.1.2 Electricity Generation

The figures in this section show the annual change in electricity generation that result for

each efficiency level by fuel type. Note that a negative number means an increase in generation

under an effi ciency level

.

11 -7Small Commercial Air -Cooled Air Conditioners and Heat Figure 11.3.7

Pumps : Total Generation Reduction

Small Commercial Air -Cooled Air Conditioners and Heat Figure 11.3.8

Pumps : Coal Generation Reduction

11 -8Small Commercial Air -Cooled Air Conditioners and Heat Figure 11.3.9

Pumps : Nuclear Generation Reduction

Small Commercial Air -Cooled Air Conditioners and Heat Figure 11.3.10

Pumps : Gas Combined Cycle Generation Reduction

11 -9Small Commercial Air -Cooled Air Conditioners and Heat Figure 11.3.11

Pumps : Oil Generation Reduction

Small Commercial Air

- Cooled Ai r Conditioners and Heat Figure 11.3.12

Pumps Renewables Generation Reduction

11

- 1011.3.1.1 Results Summary

Table 11.3.1 presents a summary of the utility impact results for small commercial air

cooled air -conditioning and heating equipment less than 65,000 Btu/h.

Table 11.3.1 Small Commercial Air

- Cooled Air Conditioners and Heat Pumps : Summary

of Utility Impact Results

ASHRAE

Level/ EL0 EL 1 EL 2 EL 3 EL 4 EL 5

Installed Capacity Reduction (MW)

2020 9.78 15.69 35.10 42.19 49.37 53.91

2025 35.65 90.44 198.97 241.48 283.41 307.82

2030 65.55 162.17 342.56 417.99 489.80 529.42

2035 96.39 231.28 467.68 574.52 672.11 722.42

2040 124.02 292.01 561.97 696.29 813.12 867.95

Electricity Generation Reduction (GWh)

2020 27.99 44.90 100.46 120.74 141.31 154.29

2025 80.39 203.96 448.70 544.56 639.11 694.16

2030 142.12 351.61 742.73 906.28 1061.98 1147.89

2035 197.52 473.91 958.30 1177.23 1377.19 1480.30

2040 242.25 570.38 1097.69 1360.06 1588.25 1695.36

11.3.2 Water- Source Heat Pumps

11.3.2.1 Installed Capacity

The figures in this section show the changes in U.S. electricity installed capacity that

result for each efficiency level by major plant type for selected years. Note that a negative

number means an increase in capacity under an efficiency level

.

11

- 11Water- Source Heat Pumps : Total Electric Capacity Reduction Figure 11.3.13

Water- Source Heat Pumps : Coal Capacity Reduction Figure 11.3.14 0 500 1000 1500 2000 25002016202120262031203620412046205120562061206620712076208120862091209621012106MW Total

ASHRAE TSL 1 TSL 2 TSL 3 TSL 4 TSL 5

0 20 40 60 80 100 120 140 160 180 2002016202120262031203620412046205120562061206620712076208120862091209621012106MW Coal

ASHRAE TSL 1 TSL 2 TSL 3 TSL 4 TSL 5

11

- 12Water- Source Heat Pumps : Nuclear Capacity Reduction Figure 11.3.15

Water- Source Heat Pumps : Gas Combined Cycle Capacity Figure 11.3.16

Reduction 0 5 10 15 20 252016202120262031203620412046205120562061206620712076208120862091209621012106MW Nuclear

ASHRAE TSL 1 TSL 2 TSL 3 TSL 4 TSL 5

0 100 200 300 400 500 6002016202120262031203620412046205120562061206620712076208120862091209621012106MW NGCC

ASHRAE TSL 1 TSL 2 TSL 3 TSL 4 TSL 5

11

- 13Water- Source Heat Pumps : Peaking Capacity Reduction Figure 11.3.17

Water- Source Heat Pumps : Renewables Capacity Reduction Figure 11.3.18 0 200 400 600 800 1000 12002016202120262031203620412046205120562061206620712076208120862091209621012106MW Peaking

ASHRAE TSL 1 TSL 2 TSL 3 TSL 4 TSL 5

0 20 40 60 80 100 120 140 160 180 2002016202120262031203620412046205120562061206620712076208120862091209621012106MW Renewable

ASHRAE TSL 1 TSL 2 TSL 3 TSL 4 TSL 5

11

- 1411.3.2.2 Electricity Generation

The figures in this section show the annual change in electricity generation that result for

each efficiency level by fuel type. Note that a negative number means an increase in generation

under an efficiency level

.

Water- Source Heat Pumps : Total Generation Reduction Figure 11.3.19

Water- Source Heat Pumps : Coal Generation Reduction Figure 11.3.20 0 500 1000 1500 2000 2500 3000 3500 4000 4500 50002016202120262031203620412046205120562061206620712076208120862091209621012106GWh Total

ASHRAE TSL 1 TSL 2 TSL 3 TSL 4 TSL 5

0 200 400 600 800 1000 12002016202120262031203620412046205120562061206620712076208120862091209621012106GWh Coal

ASHRAE TSL 1 TSL 2 TSL 3 TSL 4 TSL 5

11

- 15Water- Source Heat Pumps : Nuclear Generation Reduction Figure 11.3.21

Water- Source Heat Pumps : Gas Combined Cycle Generation Figure 11.3.22

Reduction 0 20 40 60 80 100 120 140 160 1802016202120262031203620412046205120562061206620712076208120862091209621012106GWh Nuclear

ASHRAE TSL 1 TSL 2 TSL 3 TSL 4 TSL 5

0 500 1000 1500 2000 2500 30002016202120262031203620412046205120562061206620712076208120862091209621012106GWh NGCC

ASHRAE TSL 1 TSL 2 TSL 3 TSL 4 TSL 5

11

- 16Water- Source Heat Pumps : Oil Generation Reduction Figure 11.3.23

Water- Source Heat Pumps : Renewables Generation Reduction Figure 11.3.24

11.3.2.3 Results Summary

Table 11.3.2 presents a summary of the utility impact results for water

- source heat

pumps. 0 5 10 15 20 252016202120262031203620412046205120562061206620712076208120862091209621012106GWh Oil

ASHRAE TSL 1 TSL 2 TSL 3 TSL 4 TSL 5

0 100 200 300 400 500 600 7002016202120262031203620412046205120562061206620712076208120862091209621012106GWh Renewable

ASHRAE TSL 1 TSL 2 TSL 3 TSL 4 TSL 5

11

- 17Table 11.3.2 Water- Source Heat Pumps : Summary of Utility Impact Results

ASHRAE

Level/ EL0 * EL 1 EL 2 EL 3 EL 4 EL 5

Installed Capacity Reduction (MW)

2020

- 2.08 19.96 36.77 50.42 71.04

2025

- 13.45 146.57 272.27 373.37 523.72

2030

- 23.73 271.34 506.24 693.22 966.08

2035

- 34.10 394.49 738.04 1008.29 1393.85

2040

- 43.63 504.36 945.74 1288.17 1763.56

Electricity Generation Reduction (GWh)

2020

- 6.65 63.66 117.28 160.79 226.58

2025

- 34.83 379.64 705.24 967.11 1356.54

2030

- 58.74 671.65 1253.09 1715.92 2391.31

2035

- 79.48 919.62 1720.51 2350.51 3249.31

2040

- 96.60 1116.59 2093.74 2851.85 3904.29

* There are no reductions for the ASHRAE level because there is no market share projected at

the federal baseline in the base case.

11

- 18REFERENCES

1. U.S. Department of Energy- Energy Information Administration, National Energy

Modeling System: An Overview , 2009. Report No. DOE/EIA-0581(2009).

< http://www.eia.gov/oiaf/aeo/overview / >

2. U.S. Department of Energy- Energy Information Administration, Annual Energy Outlook

2014 with Projections to 2040 , 2014. Washington, DC.

< http://www.eia.gov/forecasts/aeo/ >

3. Coughlin, K., Utility S ector Imacts of Reduced Electricity Demand , 2014. Lawrence

Berkeley National Laboratory. Report No. LBNL-6864E.

11

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