DOE/EA-XXXX



## ENVIRONMENTAL ASSESSMENT FOR PROPOSED ENERGY CONSERVATION STANDARDS FOR COMMERCIAL UNITARY AIR CONDITIONERS AND HEAT PUMPS

July 2004

U.S. Department of Energy Assistant Secretary Office of Energy Efficiency & Renewable Energy Building Technologies Program Appliances and Commercial Equipment Standards Washington, DC 20585EA-i ENVIRONMENTAL ASSESSMENT FOR COMMERCIAL UNITARY AIR CONDITIONERS AND HEAT PUMPS
TABLE OF CONTENTS
1.0 INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EA-1 2.0 METHODOLOGY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EA-1 3.0 RESULTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EA-2a For more information on NEMS, please refer to the U.S. Department of Energy, Energy Information Administration documentation. A useful summary is National Energy Modeling System: An Overview 2000 , DOE/EIA-0581(2000), March, 2000. DOE/EIA approves use of the name NEMS to de scribe only an official version of the model without any modification to code or data. Because this analysis enta ils some minor code modifications and the model is run under various policy scenarios that are variations on DOE/EIA assu mptions, we refer to it as NEMS-BT (BT is DOE’s Building Technologies Program). NEMS-BT was previously called NEMS-BRS.
EA-1 ENVIRONMENTAL ASSESSMENT FOR COMMERCIAL UNITARY AIR CONDITIONERS AND HEAT PUMPS

1.0 INTRODUCTION The Department will assess the impacts of proposed commercial unitary air conditioner standard levels on certain environmental indicators using a variant of the U.S.DOE/Energy Information Administration (EIA)’s National Energy Modelling System (NEMS) a . DOE/EIA uses NEMS to produce the 2003 Annual Energy Outlook (AEO2003)

. 1 The Department will use a variant known as NEMS-BT to provide key inputs to the analysis. Results of the environmental analysis are similar to those provided in AEO2003

. The Department intends the environmental assessment to provide emissions results to policymakers and interveners, and to fulfill requirements that the environmental effects of all new Federal rules be properly quantified and considered. The environmental analysis considers two pollutants, sulfur dioxide (SO 2 ) and nitrogen oxides (NO x ), as well as carbon emissions. The only form of carbon tracked by NEMS-BT is carbon dioxide (CO 2 ), so the carbon discussed in this report is only in the form of CO 2 . For each of the standard levels, the Department will calculate total emissions using NEMS-BT, with external analysis used as needed. The Department will conduct the environmental assessment as a policy deviation from the AEO2003 , using the same basic set of assumptions. For example, the emissions characteristics of an electricity generating plant will be exactly those used in AEO2003 . The NEMS reference case and alternative growth scenarios are as described in the utility impact analysis (Chapter 13 of the Technical Support Document).

2.0 METHODOLOGY The NEMS-BT tracks carbon emissions using a detailed carbon module; this gives good results because of its broad coverage of all sectors and inclusion of interactive effects. Past experience with carbon results from NEMS suggests that the NEMS-generated emissions estimates are somewhat lower than estimates based on simple average factors. One of the reasons for this divergence is that NEMS tends to predict that conservation displaces renewable generating capacity in the later years of its forecast. On the whole, NEMS-BT provides carbonEA-2 emissions results of reasonable accuracy, at a level consistent with other published Federal results. The NEMS-BT model reports the two airborne pollutant emissions that DOE has reported in past analyses, SO 2and NO x . The Clean Air Act Amendments of 1990 set an SO 2 emissions cap on all power generation. The attainment of this target, however, is flexible among generators through the use of emissions allowances and tradable permits. The NEMS-BT model includes a module for SO 2allowance trading and delivers a forecast of SO 2allowance prices. Accurate simulation of SO 2trading tends to imply that physical emissions effects will be zero, as long as emissions are at the ceiling. This fact has caused considerable confusion in the past. However, there is an SO 2 benefit from conservation in the form of a lower allowance price as aresult of additional allowances from this rule, and, if it is big enough to be calculable by NEMSBT, DOE will report this value. The NEMS-BT model also has an algorithm for estimating NO x emissions from power generation. Two recent regulatory actions proposed by the EPA regarding regulations and guidelines for best available retrofit technology determinations and the reduction of interstate transport of fine particulate matter and ozone are tending towards further NO x reductions and likely to an eventual emissions cap on nation-wide NO x . 69 FR 25184 (May 5, 2004) and 69 FR 32684 (June 10, 2004). As with SO 2emissions, a cap on NO xemissions will likely result in no physical emissions effects from equipment efficiency standards. However, there is an NO xbenefit from conservation in the form of a lower allowance price as a result of additional allowances from this rule, and, if it is big enough to be calculable by NEMS-BT, DOE will report this value.

3.0 RESULTS The results for the environmental analysis are similar to a complete NEMS run, as published in the AEO2003 . These include power sector emissions for SO 2 , NO x , and carbon, and SO 2 prices, in five-year forecasted increments extrapolated to the year 2035. The Department reports the outcome of the analysis for each trial standard level as a deviation from the AEO2003 reference cases.EA-3 1. U.S. Department of Energy-Energy Information Administration, Annual Energy Outlook 2003, January 2003 . Washington, DC. Report No. DOE/EIA-0383(2003). REFERENCES