CHAPTER 15. UTILITY IMPACT ANALYSIS

TABLE OF CONTENTS

15.1 INTRODUCTION ......................................................................................................... 15-1

15.2 METHODOLOGY ........................................................................................................ 15-1

15.3 UTILITY IMPACT RESULTS ..................................................................................... 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 Terminal Air Conditioners and Packaged Terminal Heat Pumps: 

Total Generation Reduction............................................................................... 15-7

Figure 15.3.8 Packaged Terminal Air Conditioners 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 Terminal Heat Pumps: 

Gas Combined Cycle Generation Reduction ..................................................... 15-8

Figure 15.3.11 Packaged Terminal Air Conditioners and Packaged Terminal Heat Pumps:

Peaking Generation Reduction .......................................................................... 15-9

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

Renewables Generation Reduction.................................................................... 15-9

15-i
CHAPTER 15. UTILITY IMPACT ANALYSIS

15.1 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 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 Energy 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 and 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 2013.

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 sectors. 

15.2 METHODOLOGY 

DOE uses NEMS-BT to estimate the marginal impacts of reduction 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 practice, 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 

documentation. 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 are variations on DOE/EIA assumptions, DOE refers to it by the name NEMSBT (BT is DOE’s Building Technologies Program, under whose aegis this work has been performed). 

15-1

 
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 interrelated 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 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 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. Regional 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 reductionc 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. Details on the 

approach used may be found in Coughlin (2013).3

NEMS-BT provides output 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 gas 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 impact 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 RESULTS

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.

15-2

 
15.3.1 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

350

20172022202720322037204220472052205720622067

MW

Total

TSL 1 TSL 2 TSL 3 TSL 4 TSL 5

15-3
Figure 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

60

20172022202720322037204220472052205720622067

MW

Coal

TSL 1 TSL 2 TSL 3 TSL 4 TSL 5

-4

-4

-3

-3

-2

-2

-1

-1

0

1

20172022202720322037204220472052205720622067

MW

Nuclear

TSL 1 TSL 2 TSL 3 TSL 4 TSL 5

15-4
Figure 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

80

20172022202720322037204220472052205720622067

MW

NGCC

TSL 1 TSL 2 TSL 3 TSL 4 TSL 5

0

20

40

60

80

100

120

140

160

180

20172022202720322037204220472052205720622067

MW

Peaking

TSL 1 TSL 2 TSL 3 TSL 4 TSL 5

15-5
Figure 15.3.6 Packaged Terminal Air Conditioners and Packaged 

Terminal Heat Pumps: Renewables Capacity 

Reduction

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 capacity 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

60

20172022202720322037204220472052205720622067

MW

Renewable

TSL 1 TSL 2 TSL 3 TSL 4 TSL 5

15-6
Figure 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

700

20172022202720322037204220472052205720622067

GWh

Total

TSL 1 TSL 2 TSL 3 TSL 4 TSL 5

0

50

100

150

200

250

300

350

20172022202720322037204220472052205720622067

GWh

Coal

TSL 1 TSL 2 TSL 3 TSL 4 TSL 5

15-7
Figure 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

5

20172022202720322037204220472052205720622067

GWh

Nuclear

TSL 1 TSL 2 TSL 3 TSL 4 TSL 5

0

50

100

150

200

250

300

350

20172022202720322037204220472052205720622067

GWh

NGCC

TSL 1 TSL 2 TSL 3 TSL 4 TSL 5

15-8
Figure 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

70

20172022202720322037204220472052205720622067

GWh

Peaking

TSL 1 TSL 2 TSL 3 TSL 4 TSL 5

0

10

20

30

40

50

60

70

80

90

100

20172022202720322037204220472052205720622067

GWh

Renewable

TSL 1 TSL 2 TSL 3 TSL 4 TSL 5

15-9
15.3.3 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

15-10
REFERENCES

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. 

15-11