CHAPTER 1 5

. UTILITY IMPACT ANALYSIS

TABLE OF CONTENTS

15.1 INTRODUCTION

................................ ................................ ................................ ......... 15

- 1

15.2 METHODOLOGY

................................ ................................ ................................ ........ 15

- 1

15.3 UTILITY IMPACT RESUL TS

................................ ................................ ..................... 15

- 2

15.3.1 Installed Capacity

................................ ................................ ................................ ........... 15

- 3

15.3.2 Electricity Generation

................................ ................................ ................................ .... 15

- 6

15.3.3 Results Summary

................................ ................................ ................................ ......... 15

- 10

LIST OF TABLES

Table 15.3.1 Packaged Terminal Air Conditioners and Packaged Terminal Heat Pumps: Summary of Utility Impact Results

................................ ................................ . 15

- 10

LIST OF FIGURES

Figure 15.3.1 Packaged Terminal Air Conditioners and Packaged Terminal Heat Pumps: Total Electric Capacity Reduction

................................ ................................ ..... 15

- 3 Figure 15.3.2 Packaged Terminal Air Conditioners and Packaged Terminal Heat Pumps: Coal Capacity Reduction

................................ ................................ ................... 15

- 4 Figure 15.3.3 Packaged Terminal Air Conditioners and Packaged Terminal Heat Pumps: Nuclear Capacity Reduction

................................ ................................ .............. 15

- 4 Figure 15.3.4 Packaged Terminal Air Conditioners and Packaged Terminal Heat Pumps: Gas Combined Cycle Capacity Reduction

................................ ......................... 15

- 5 Figure 15.3.5 Packaged Terminal Air Conditioners and Packaged Terminal Heat Pumps: Peaking Capacity Reduction

................................ ................................ .............. 15

- 5 Figure 15.3.6 Packaged Terminal Air Conditioners and Packaged Terminal Heat Pumps: Renewables Capacity Reduction

................................ ................................ ........ 15

- 6 Figure 15.3.7 Packaged Ter minal Air Conditioners and Packaged Terminal Heat Pumps:

Total Generation Reduction

................................ ................................ ............... 15

- 7 Figure 15.3.8 Packaged Terminal Air Cond itioners and Packaged Terminal Heat Pumps:

Coal Generation Reduction

................................ ................................ ................ 15

- 7 Figure 15.3.9 Packaged Terminal Air Conditioners and Packaged Terminal Heat Pumps:

Nuclear Generation Reduction

................................ ................................ ........... 15

- 8 Figure 15.3.10 Packaged Terminal Air Conditioners and Packaged Ter minal Heat Pumps: Gas Combined Cycle Generation Reduction

................................ ..................... 15

- 8 Figure 15.3.11 Packaged Terminal Air Conditioners and Packaged Ter minal Heat Pumps: Peaking Generation Reduction

................................ ................................ .......... 15

- 9 Figure 15.3.12 Packaged Terminal Air Conditioners and Packaged Terminal Heat Pumps:

Renewables Generation Reduction

................................ ................................ .... 15

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15

- iCHAPTER 15. UTILITY IMPACT ANALY SIS

15.1 INTRODUCTION

In the utility impact analysis

, the U.S. Department of Energy ( DOE ) analyze s the changes in electric installed capacity and power generation that result for each trial standard level (TSL).

The utility impact analysis uses a variant 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 forecast for the United States, the Annual Ener gy Outlook (AEO) . DOE uses a variant of this model, referred to as NEMS

- BT, b to account for selected utility impacts from energy conservation standards. DOE’s analysis consists of a comparison between model results for the

most recent AEO Reference Case an d for cases in which energy use is decremented to reflect the impact of standards. For the analysis of standards for packaged terminal air conditioners (PTACs) and packaged terminal heat pumps (PTHPs) , DOE used the version of NEMS based on

AEO 201 3

. 2

NEMS

- BT has a number of advantages that have led to its use in the analysis of energy

conservation standards:

• NEMS

- BT uses a set of assumptions that are well known and fairly transparent, due to the exposure and scrutiny each AEO receives.

• NEMS

- BT is updated each year, with each edition of the AEO, to reflect changes in energy prices, supply trends, regulations, etc.

• The comprehensiveness of NEMS

- BT permits the modeling of interactions among the various energy supply and demand s ectors.

15.2 METHODOLOGY

DOE uses NEMS

- BT to estimate 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 . In pra ctice, the numerical differences between marginal and average values may turn out to be smaller than the intrinsic uncertainties in the

AEO.

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

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

. 1

b DOE/EIA approves use of the name NEMS to describe only an official version of the model without any modification to code or data. Because this analysis entails some minor code modifications and the model is run under various policy scenarios that ar e variations on DOE/EIA assumptions, DOE refers to it by the name NEMS

BT (BT is DOE’s Building Technologies Program, under whose aegis this work has been performed).

15

- 1NEMS uses predicted growth in demand for each end use to build up a projection of the total electric system load gr owth . 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

rel ated effects: the annual generation ( terawatt hours

, TWh) from the stock of electric generating capacity changes, the total generation capacity itself ( gigawatts

, GW) may change, and the mix of capacity by fuel type may change. Each of these effects can va ry 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 associated with the

end use.

To model the impact of a standard, DOE inputs a reduction to annual energy demand for the corresponding end use in the appropriate start year. The NEMS

- BT model is run with the decremented energy demand to determine the modified build

- out of capacity and total generation. Region al effects of a standard can be accounted for by defining the energy demand

decrement as a function of census division.

The output of the NEMS

- BT analysis includes the effective marginal heat rate (ratio of the change in energy consumption in quads to the change in generation in TWh), and the capacity reduction by plant type for a given reduction in total generation. DOE uses the site energy savings multiplied by a transmission

- and

- distribution ( T&D ) loss factor to estimate the reduction in generation for each TSL. The relationship between a reduction c in electricity generation (TWh) and the reduction in capacity (GW) is estimated based on the output of

NEMS

- BT model runs using the end

- use specific energy demand decrement. Detail s on the approach use d may be found in Coughlin (2013 ). 3

NEMS

- BT provides out put for the following capacity types: coal, nuclear,

combined cycle (natural gas), renewable sources, oil and natural gas steam,
combustion turbine/diesel, pumped storage, fuel cells, and distributed generation (natural gas). DOE grouped oil and natural ga s steam and combustion turbine/diesel into a “ peaking ” category, and grouped pumped storage, fuel cells, and distributed generation (natural gas) into an “other”

category.

In general, energy conservation standards i mpact primarily fossil combustion (coal, natural gas and diesel) and renewables. Pumped storage and nuclear power are very insensitive to small changes in demand, while fuel cells and distributed generation make up a very small fraction (less than 1 percent ) of the generation capacity base.

15.3 UTILITY IMPACT RESUL TS

This section presents results of the analysis for all of the capacity types except “Other”, for which the impacts are very small.

c These reductions are defined relative to the AEO Reference case.

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- 215.3.1 Installed Capacity

The figures in this section show the changes in U.S. electricity installed capacity that result for each TSL by major plant type for selected years. The changes have been calculated based on factors ( megawatts ( MW ) of capacity reduction per gigawatt hours ( GWh ) of generation reduction) estimated from a NEMS

- BT model run that simulated a decrement in energy demand for a load shape that approximates PTACs and PTHPs

. Note that a positive change means a reduction in capacity under a TSL.

Figure 15.3.1 Packaged Terminal Air Conditioners and Packaged Terminal Heat Pumps : Total Electric Capacity

Reduction 0 50 100 150 200 250 300 35020172022202720322037204220472052205720622067MW Total

TSL 1 TSL 2 TSL 3 TSL 4 TSL 5

15

- 3Figure 15.3.2 Packaged Terminal Air Conditioners and Packaged Terminal Heat Pumps : Coal Capacity Reduction

Figure 15.3.3 Packaged Terminal Air Conditioners and Packaged Terminal Heat Pumps : Nuclear Capacity Reduction 0 10 20 30 40 50 6020172022202720322037204220472052205720622067MW Coal

TSL 1 TSL 2 TSL 3 TSL 4 TSL 5

-4 -4 -3 -3 -2 -2 -1 -1 0 120172022202720322037204220472052205720622067MW Nuclear

TSL 1 TSL 2 TSL 3 TSL 4 TSL 5

15

- 4Figure 15.3.4 Packaged Terminal Air Conditioners and Packaged Terminal Heat Pumps : Gas Combined Cycle Capacity Reduction

Figure 15.3.5 Packaged Terminal Air Conditioners and Packaged Terminal Heat Pumps : Peaking Capacity Reduction 0 10 20 30 40 50 60 70 8020172022202720322037204220472052205720622067MW NGCC

TSL 1 TSL 2 TSL 3 TSL 4 TSL 5

0 20 40 60 80 100 120 140 160 18020172022202720322037204220472052205720622067MW Peaking

TSL 1 TSL 2 TSL 3 TSL 4 TSL 5

15

- 5Figure 15.3.6 Packaged Terminal Air Conditioners and Packaged Terminal Heat Pumps : Renewables Capacity

Reduct ion

15.3.2 Electricity Generation

The figures in this section show the annual change in electricity generation that result for each TSL by plant type. The change by capacity type has been calculated based on shares (percentage of generation reduction for each c apacity type over total generation reduction)

estimated from a NEMS

- BT model run that simulated a decrement in energy demand for a load shape that approximates PTACs and PTHPs

. Note that a positive change means a reduction in generation under a TSL. Coal

- fired power plants account for most of the generation reduction

. 0 10 20 30 40 50 6020172022202720322037204220472052205720622067MW Renewable

TSL 1 TSL 2 TSL 3 TSL 4 TSL 5

15

- 6Figure 15.3.7 Packaged Terminal Air Conditioners and Packaged Terminal Heat Pumps : Total Generation Reduction

Figure 15.3.8 Packaged Terminal Air Conditioners and Packaged Terminal Heat Pumps : Coal Generation Reduction 0 100 200 300 400 500 600 70020172022202720322037204220472052205720622067GWh Total

TSL 1 TSL 2 TSL 3 TSL 4 TSL 5

0 50 100 150 200 250 300 35020172022202720322037204220472052205720622067GWh Coal

TSL 1 TSL 2 TSL 3 TSL 4 TSL 5

15

- 7Figure 15.3.9 Packaged Terminal Air Conditioners and Packaged Terminal Heat Pumps : Nuclear Generation

Reduction

Figure 15.3.10 Packaged Terminal Air Conditioners and Packaged Terminal Heat Pumps : Gas Combined Cycle

Generation Reduction -30 -25 -20 -15 -10

-5 0 520172022202720322037204220472052205720622067GWh Nuclear

TSL 1 TSL 2 TSL 3 TSL 4 TSL 5

0 50 100 150 200 250 300 35020172022202720322037204220472052205720622067GWh NGCC

TSL 1 TSL 2 TSL 3 TSL 4 TSL 5

15

- 8Figure 15.3.11 Packaged Terminal Air Conditioners and Packaged Terminal Heat Pumps : Peaking Generation

Reduction

Figure 15.3.12 Packaged Terminal Air Conditioners and Packaged Terminal Heat Pumps : Renewables Generation

Reduction 0 10 20 30 40 50 60 7020172022202720322037204220472052205720622067GWh Peaking

TSL 1 TSL 2 TSL 3 TSL 4 TSL 5

0 10 20 30 40 50 60 70 80 90 10020172022202720322037204220472052205720622067GWh Renewable

TSL 1 TSL 2 TSL 3 TSL 4 TSL 5

15

- 915.3.3 Results Summary

Table 15.3.1 presents a summary of the utility impact results estimated for PTACs and

PTHPs

.

Table 15.3.1 Packaged Terminal Air Conditioners and Packaged Terminal Heat Pumps : Summary of Utility Impact Results

TSL

1 2 3 4 5 Installed Capacity Reduction (MW)

2020 2.29 7.71 15.32 23.37 27.15

2025 10.65 36.52 72.81 111.17 122.62

2030 20.97 73.98 148.32 223.17 235.40

2035 28.27 102.86 207.46 295.57 303.80

2040 32.38 120.82 244.70 315.96 317.68 Electricity Generation Reduction (GWh)

2020 9.65 32.51 64.57 98.47 114.40

2025 32.66 112.00 223.26 340.89 376.01

2030 50.84 179.35 359.56 541.00 570.66

2035 61.68 224.37 452.53 644.72 662.68

2040 64.55 240.81 487.72 629.76 633.19

15

- 10REFERENCES

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. Energy Information Administration, Annual Energy Outlook 2013 with Projections to

2040 , 2013 . Washington, DC. < http://www.eia.gov/forecasts/aeo/pdf/0383(2013).pdf >

3. Coughlin, K., H. Shen, P. Chan, B. McDevitt, and A. Sturges, Marginal Utility Sector Impacts of Reduced Electricity Demand , 2012.

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