Office of Research and DevelopmentNational Risk Management Research Laboratory, RTP, NC

Energy Efficient Technologies in the U.S. Buildings Sector and the Benefits for Carbon

Dioxide Reduction– An Analysis Using the MARKAL Model

Carol Shay Lenox, Dan LoughlinU.S. Environmental Protection Agency

Energy and Climate Assessment Team

2

Outline

• Background

• Baseline Energy Efficiency Scenario

• Choice and Timing Implications

Office of Research and DevelopmentNational Risk Management Research Laboratory, RTP, NC

Background

4

The U.S. Energy System

Uranium

Fossil Fuels

OilRefining & Processing

H2 Generation

Direct Electricity Generation

BiomassCombustion-BasedElectricity Generation

Nuclear Power

Gasification

Wind, Solar, Hydro

Carbon Sequestration

Industry

Industry

Commercial

Residential

Transportation

Primary Energy

Processing and Conversion of Energy Carriers End-Use Sectors

Conversion & Enrichment

PrimaryEnergy

Processing and Conversion of Energy Carriers End-Use Demands

How can more energy efficient buildings contribute to the reduction

of CO2 emissions in the U.S.?

5

Residential and Commercial Sector Contribution to CO2 Emissions

CO2 Emissions by Sector(2005 - EPANMD results)

Electric39%

Transportation33%

Industrial18%

Residential7%

Commercial3%

Electricity Use By Sector(2005 - EPANMD results)

Industrial22%

Commercial40%

Residential38%

Transportation0%

Residential

Commercial

Total CO2 Emissions by Sector (including electricity use)

EPA Inventory of U.S. Greenhouse Gases and Sinks Table 3.8

Transportation34%

Industrial27%

Residential21%

Commercial18%

6

Modeling Technology Change with MARKAL

MARKAL Inputs:• Future-year energy service demands• Primary energy resource supplies• Current and future technology

characteristics• Energy and environmental policies

Uranium

Fossil Fuels

OilRefining & Processing

H2 Generation

Clean Energy

Biomass

Combustion

Nuclear Power

Gasification

RenewableResources

Carbon Sequestration

Industry

Industry

Commercial

Residential

Automobiles

Uranium

Fossil Fuels

OilRefining & Processing

H2 Generation

Clean Energy

Biomass

Combustion

Nuclear Power

Gasification

RenewableResources

Carbon Sequestration

Industry

Industry

Commercial

Residential

Automobiles

MARKAL Outputs:• Technology penetrations for meeting industrial, residential, commercial, and transportation demands• Fuel use by type• Sectoral and system-wide emissions of criteria pollutants and GHGs• Marginal fuel prices and emissions reduction costs

Minimize net present value of capital and O&M by selecting the optimal mix of technologies and

fuels at each time step

7

U.S. EPA MARKAL National Database (EPANMD)

• Coverage: U.S. energy system

• Spatial resolution: National

• Modeling horizon: 2000 to 2050 in five year increments

• Sectors: Electricity production, transportation, industrial, residential, commercial

• Main data source: Annual Energy Outlook (2006 and 2008)

• Pollutants: For all sectors: CO2, NOx, SO2, PM10

For some sectors: PM2.5, VOC, CO, CH4, N2O

• Additional Database Version: EPAUS9r (9-region)

8

U.S. EPA MARKAL Database

TransportationLight duty

Heavy duty

Bus

Off-road

Passenger rail

Freight rail

Air

Marine

Residential

Freezing

Lighting

Refrigeration

Cooling

Heating

Water Heating

Other

Commercial

Cooking

Lighting

Office Equipment

Refrigeration

Cooling

Heating

Ventilation

Water Heating

Other

End-Use Energy DemandsIndustrial

Electrochemical

Feedstock

Machine Drive

Process Heat

Boilers

Other

For:ChemicalFoodPrimary metalsNon-metalsPulp and paperTransportation equip.Other ManufacturingNon-manufacturing

9

Furnace

Heat Pump

Radiant

Wood

TechnologyFuel

Geothermal

Electricity

Natural Gas Residential

Demand

Space Heating

Freezing

Lighting

Refrigeration

Water Heating

Space Cooling

Technology Detail – Residential Space Heating

Other

Office of Research and DevelopmentNational Risk Management Research Laboratory, RTP, NC

Residential and Commercial Buildings Energy Efficiency Analysis

11

MARKAL and Exploratory Modeling

How much could Energy Efficiency Improvements in the residential and commercial sectors (with no policy-driven changes in the electric sector, transportation sector, or industrial sector) contribute to a hypothetical target system-wide CO2 emissions reduction?

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

CO2 Emissions

Hypothetical target: 36% reduction in cumulative CO2 emissions

(2000 through 2050)

Policy-induced CO2 Reduction

The policy induced carbon trajectory is representative of the level of CO2 emissions reductions that have been targeted by various proposed U.S. carbon mitigation policies.

Reference Case

Mt

12

Energy Efficiency Baseline Case (EEBS)

• Shell improvements in new buildings reduces residential and commercial heating and cooling demands and water heating demands starting in 2010

• Residential lighting largely compact fluorescents and LEDs by 2020• Commercial lighting largely efficient fluorescent and LEDs by 2020• Energy conservation efforts begin in 2010, for example:

–Programmable thermostats–Energy management systems–Low flow shower heads–Home weatherization

• Starting in 2015, only highest efficiency technology choices areavailable for both new buildings and for replacement of retired technologies in old buildings

• Ground source heat pumps penetrate the market reaching 2% of demand for space heating by 2015, increasing to 5% by 2030

13

Total System Electricity Use

16.0% Reduction from Reference Case in 2030

22.3% Reduction from Reference Case in 2050

EPANMD Base Case - Electricity Use by Sector

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5000

10000

15000

20000

25000

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

PJ

OtherTransportationResidentialCommercialIndustrial

Energy Efficiency Case - Electricity Use by Sector

0

5000

10000

15000

20000

25000

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

PJ

OtherTransportationResidentialCommercialIndustrial

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Comparison to Other Studies

AEO High Tech (High Technology Case, AEO2009): Assumes earlier availability, lower costs, and higher efficiency for more advanced equipment and building shell efficiency improvements.

EPRI RAP (Realistic Achievement Potential, “Assessment of Achievable Potential from Energy Efficiency and Demand Response Programs in the U.S.”): Represents a forecast of likely consumer behavior, taking into account existing market, financial, political, and regulatory barriers.

EPRI MAP (Maximum Achieveable Potential , “Assessment of Achievable Potential from Energy Efficiency and Demand Response Programs in the U.S.”): Represents a forecast under an ideal set of conditions, taking into account barriers that limit customer participation under a scenario of perfect information and utility programs.

AEO BAT (Best Available Technology, AEO2009): Assumes consumers will install only the most efficient technology regardless of cost, at normal replacement intervals, and that new buildings will meet the most energy efficient specifications available

LBNL EE Potential (Lawrence Berkeley National Laboratory, “U.S. Building-Sector Energy Efficiency Potential”): Applies annual percentage savings estimates by end use drawn from several prior efficiency potential studies, including the U.S. Department of Energy’s Scenarios for a Clean Energy Future.

% Reduction in Electricity Use from 2030 Reference Case

5.16.8

8.610.911.4 12.7

16

22.321.918.7

29.8

34.3

0

5

10

15

20

25

30

35

Residential Commercial

AEO Hight TechEPRI RAPEPRI MAPEPA EEBSAEO BATLBNL EE Potential

EPA

EEB

S

EPA

EEB

S

15

Total System CO2 Emissions Reduction

Energy Efficiency Base scenario achieves 11% of Policy Induced CO2 Reduction

System-wide CO2 Emissions

0

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2000

3000

4000

5000

6000

7000

8000

9000

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Mt

Reference Case

Energy Efficiency Case

Policy Induced CO2 Reduction

Office of Research and DevelopmentNational Risk Management Research Laboratory, RTP, NC

Choice and Timing Implications

17

Exploratory Modeling – Choice and Timing Implications

The baseline energy efficiency scenario is one possible outcome when:• More efficient technologies are aggressively introduced into the system • Consumer conservation efforts begin immediately and grow over time • New buildings employ the latest methods to conserve energy

What are the impacts of the timing of implementation of any of these energy efficiency measures on total CO2 emissions?

18

ApproachStep 1.

Develop alternative trajectories for:–Conservation implementation–Adoption rate of high efficient technologies–Penetration rate of advanced lighting technologies–Penetration rate of GHP and high efficient water heating

Step 2.Model all combinations of:- Conservation (Base conservation levels, Base-50%, Base+100%, No conservation)

- High Efficient Technologies (Base – Forced in 2025, Forced in 2015, No forced use)

- Advanced Lighting (Base penetration, late penetration, high penetration)

- GHP and Water Heating (Base penetration, late penetration, high penetration)

19

Scenario AssumptionsConservation Energy Savings in PJ

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2000

3000

4000

5000

6000

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

PJ

BASE BASE-50% BASE+100% No Consv

Commercial and Residential Lighting Energy Use in PJ

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500

1000

1500

2000

2500

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

PJ

BASE Late High

Commercial and Residential Space Heating and Water Heating Energy Use in PJ

6000

6500

7000

7500

8000

8500

9000

9500

10000

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

PJ

BASE Late High

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Cumulative System CO2 Emissions in Gt

Base Energy Efficiency Case

ConservationGHP and Water

HeatersHigh Eff - No forcing

High Eff - Forced 2025

High Eff - Forced 2015

High Eff - No forcing

High Eff - Forced 2025

High Eff - Forced 2015

High Eff - No forcing

High Eff - Forced 2025

High Eff - Forced 2015

None Late Penetration 367 362 361 363 359 358 363 359 358BASE 366 361 360 362 358 359 362 358 359High Penetration 366 361 361 362 358 360 362 358 360

BASE-50% Late Penetration 362 358 358 359 355 356 359 355 356BASE 361 357 358 357 355 355 357 355 355High Penetration 361 358 359 357 357 355 357 357 355

BASE Late Penetration 358 354 355 355 353 351 355 353 352BASE 356 354 354 356 352 350 356 352 350High Penetration 357 356 354 356 351 350 356 352 351

BASE+100% Late Penetration 353 349 348 350 345 344 350 345 344BASE 353 348 346 349 344 342 349 344 342High Penetration 353 348 347 349 344 342 349 344 342

Lighting - Late Penetration Lighting BASE Lighting - High Penetration

21

Cumulative System CO2 Emissions Reduction – Percent from Base

Importance of conservation practices timing and level

ConservationGHP and Water

HeatersHigh Eff - No forcing

High Eff - Forced 2025

High Eff - Forced 2015

High Eff - No forcing

High Eff - Forced 2025

High Eff - Forced 2015

High Eff - No forcing

High Eff - Forced 2025

High Eff - Forced 2015

None Late Penetration 0.0% -1.4% -1.7% -1.0% -2.2% -2.4% -1.1% -2.1% -2.4%BASE -0.3% -1.5% -1.9% -1.4% -2.4% -2.2% -1.4% -2.4% -2.2%High Penetration -0.2% -1.5% -1.7% -1.3% -2.3% -2.0% -1.4% -2.3% -1.9%

BASE-50% Late Penetration -1.3% -2.3% -2.5% -2.2% -3.3% -3.1% -2.3% -3.2% -3.0%BASE -1.6% -2.6% -2.4% -2.6% -3.1% -3.3% -2.6% -3.2% -3.3%High Penetration -1.5% -2.5% -2.2% -2.6% -2.8% -3.2% -2.6% -2.8% -3.2%

BASE Late Penetration -2.5% -3.5% -3.3% -3.3% -3.9% -4.2% -3.3% -3.8% -4.2%BASE -2.8% -3.4% -3.4% -3.0% -4.2% -4.5% -3.0% -4.1% -4.5%High Penetration -2.8% -3.0% -3.4% -2.9% -4.2% -4.5% -2.9% -4.2% -4.5%

BASE+100% Late Penetration -3.8% -5.0% -5.3% -4.6% -6.0% -6.4% -4.7% -6.0% -6.3%BASE -3.9% -5.3% -5.6% -4.9% -6.3% -6.7% -5.0% -6.3% -6.7%High Penetration -3.9% -5.3% -5.5% -4.9% -6.3% -6.8% -4.9% -6.3% -6.7%

Lighting - Late Penetration Lighting BASE Lighting - High Penetration

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1000

2000

3000

4000

5000

6000

7000

8000

9000

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

CO2 Emissions

36% Reduction in Total System CO 2 Emissions

22

Cumulative System CO2 Emissions Reduction – Percent from Base

ConservationGHP and Water

HeatersHigh Eff - No forcing

High Eff - Forced 2025

High Eff - Forced 2015

High Eff - No forcing

High Eff - Forced 2025

High Eff - Forced 2015

High Eff - No forcing

High Eff - Forced 2025

High Eff - Forced 2015

None Late Penetration 0.0% -1.4% -1.7% -1.0% -2.2% -2.4% -1.1% -2.1% -2.4%BASE -0.3% -1.5% -1.9% -1.4% -2.4% -2.2% -1.4% -2.4% -2.2%High Penetration -0.2% -1.5% -1.7% -1.3% -2.3% -2.0% -1.4% -2.3% -1.9%

BASE-50% Late Penetration -1.3% -2.3% -2.5% -2.2% -3.3% -3.1% -2.3% -3.2% -3.0%BASE -1.6% -2.6% -2.4% -2.6% -3.1% -3.3% -2.6% -3.2% -3.3%High Penetration -1.5% -2.5% -2.2% -2.6% -2.8% -3.2% -2.6% -2.8% -3.2%

BASE Late Penetration -2.5% -3.5% -3.3% -3.3% -3.9% -4.2% -3.3% -3.8% -4.2%BASE -2.8% -3.4% -3.4% -3.0% -4.2% -4.5% -3.0% -4.1% -4.5%High Penetration -2.8% -3.0% -3.4% -2.9% -4.2% -4.5% -2.9% -4.2% -4.5%

BASE+100% Late Penetration -3.8% -5.0% -5.3% -4.6% -6.0% -6.4% -4.7% -6.0% -6.3%BASE -3.9% -5.3% -5.6% -4.9% -6.3% -6.7% -5.0% -6.3% -6.7%High Penetration -3.9% -5.3% -5.5% -4.9% -6.3% -6.8% -4.9% -6.3% -6.7%

Lighting - Late Penetration Lighting BASE Lighting - High Penetration

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5000

6000

7000

8000

9000

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

CO2 Emissions

36% Reduction in Total System CO 2 Emissions

Importance of penetration of higher efficient technologies

23

Cumulative System CO2 Emissions Reduction – Percent from Base

ConservationGHP and Water

HeatersHigh Eff - No forcing

High Eff - Forced 2025

High Eff - Forced 2015

High Eff - No forcing

High Eff - Forced 2025

High Eff - Forced 2015

High Eff - No forcing

High Eff - Forced 2025

High Eff - Forced 2015

None Late Penetration 0.0% -1.4% -1.7% -1.0% -2.2% -2.4% -1.1% -2.1% -2.4%BASE -0.3% -1.5% -1.9% -1.4% -2.4% -2.2% -1.4% -2.4% -2.2%High Penetration -0.2% -1.5% -1.7% -1.3% -2.3% -2.0% -1.4% -2.3% -1.9%

BASE-50% Late Penetration -1.3% -2.3% -2.5% -2.2% -3.3% -3.1% -2.3% -3.2% -3.0%BASE -1.6% -2.6% -2.4% -2.6% -3.1% -3.3% -2.6% -3.2% -3.3%High Penetration -1.5% -2.5% -2.2% -2.6% -2.8% -3.2% -2.6% -2.8% -3.2%

BASE Late Penetration -2.5% -3.5% -3.3% -3.3% -3.9% -4.2% -3.3% -3.8% -4.2%BASE -2.8% -3.4% -3.4% -3.0% -4.2% -4.5% -3.0% -4.1% -4.5%High Penetration -2.8% -3.0% -3.4% -2.9% -4.2% -4.5% -2.9% -4.2% -4.5%

BASE+100% Late Penetration -3.8% -5.0% -5.3% -4.6% -6.0% -6.4% -4.7% -6.0% -6.3%BASE -3.9% -5.3% -5.6% -4.9% -6.3% -6.7% -5.0% -6.3% -6.7%High Penetration -3.9% -5.3% -5.5% -4.9% -6.3% -6.8% -4.9% -6.3% -6.7%

Lighting - Late Penetration Lighting BASE Lighting - High Penetration

0

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3000

4000

5000

6000

7000

8000

9000

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

CO2 Emissions

36% Reduction in Total System CO 2 Emissions

Importance of penetration of GHP and Instantaneous Water Heating

24

Cumulative System CO2 Emissions Reduction – Percent from Base

ConservationGHP and Water

HeatersHigh Eff - No forcing

High Eff - Forced 2025

High Eff - Forced 2015

High Eff - No forcing

High Eff - Forced 2025

High Eff - Forced 2015

High Eff - No forcing

High Eff - Forced 2025

High Eff - Forced 2015

None Late Penetration 0.0% -1.4% -1.7% -1.0% -2.2% -2.4% -1.1% -2.1% -2.4%BASE -0.3% -1.5% -1.9% -1.4% -2.4% -2.2% -1.4% -2.4% -2.2%High Penetration -0.2% -1.5% -1.7% -1.3% -2.3% -2.0% -1.4% -2.3% -1.9%

BASE-50% Late Penetration -1.3% -2.3% -2.5% -2.2% -3.3% -3.1% -2.3% -3.2% -3.0%BASE -1.6% -2.6% -2.4% -2.6% -3.1% -3.3% -2.6% -3.2% -3.3%High Penetration -1.5% -2.5% -2.2% -2.6% -2.8% -3.2% -2.6% -2.8% -3.2%

BASE Late Penetration -2.5% -3.5% -3.3% -3.3% -3.9% -4.2% -3.3% -3.8% -4.2%BASE -2.8% -3.4% -3.4% -3.0% -4.2% -4.5% -3.0% -4.1% -4.5%High Penetration -2.8% -3.0% -3.4% -2.9% -4.2% -4.5% -2.9% -4.2% -4.5%

BASE+100% Late Penetration -3.8% -5.0% -5.3% -4.6% -6.0% -6.4% -4.7% -6.0% -6.3%BASE -3.9% -5.3% -5.6% -4.9% -6.3% -6.7% -5.0% -6.3% -6.7%High Penetration -3.9% -5.3% -5.5% -4.9% -6.3% -6.8% -4.9% -6.3% -6.7%

Lighting - Late Penetration Lighting BASE Lighting - High Penetration

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

CO2 Emissions

36% Reduction in Total System CO 2 Emissions

Importance of penetration of high efficiency lighting technologies

25

Comparing Sensitivities to Assumptions

Factor

-4.5%

-6.3% -2.4%

-3.0%

-4.2%

-3.9%

-3.4%

More reduction in CO2 emissions

Conservation

High Efficiency

Lighting

GHP and Water Heaters

Delay in implementation

Change in Cumulative CO2 EmissionsOver Range of Assumptions

EEBASE relative toreference case

26

Percent Contribution to Policy Induced Total System CO2 Reduction

ConservationGHP and Water

HeatersHigh Eff - No forcing

High Eff - Forced 2025

High Eff - Forced 2015

High Eff - No forcing

High Eff - Forced 2025

High Eff - Forced 2015

High Eff - No forcing

High Eff - Forced 2025

High Eff - Forced 2015

None Late Penetration 0.0% -4.0% -4.8% -2.7% -6.1% -6.5% -3.0% -5.9% -6.5%BASE -0.7% -4.2% -5.3% -3.8% -6.7% -6.0% -4.0% -6.6% -6.0%High Penetration -0.5% -4.2% -4.7% -3.6% -6.5% -5.6% -3.8% -6.4% -5.4%

BASE-50% Late Penetration -3.7% -6.5% -6.9% -6.1% -9.1% -8.6% -6.3% -9.0% -8.4%BASE -4.4% -7.2% -6.7% -7.2% -8.7% -9.1% -7.3% -8.8% -9.0%High Penetration -4.3% -7.0% -6.2% -7.3% -7.9% -9.0% -7.3% -7.7% -8.9%

BASE Late Penetration -7.0% -9.7% -9.2% -9.1% -10.7% -11.8% -9.2% -10.6% -11.6%BASE -7.9% -9.5% -9.6% -8.3% -11.7% -12.6% -8.4% -11.5% -12.4%High Penetration -7.9% -8.5% -9.5% -8.0% -11.7% -12.5% -8.1% -11.6% -12.4%

BASE+100% Late Penetration -10.5% -13.8% -14.6% -12.7% -16.8% -17.7% -12.9% -16.6% -17.5%BASE -10.8% -14.7% -15.5% -13.6% -17.6% -18.7% -13.8% -17.5% -18.6%High Penetration -10.7% -14.6% -15.4% -13.6% -17.6% -18.8% -13.7% -17.5% -18.7%

Lighting - Late Penetration Lighting BASE Lighting - High Penetration

System-wide CO2 Emissions

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2000

3000

4000

5000

6000

7000

8000

9000

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Mt

Reference Case

Energy Efficiency Case

Policy Induced CO2 Reduction

27

Key InsightsFor Commercial and Residential Energy Efficiency measures to have a impact on total CO2 emissions reductions:

–A variety of technology efficiency improvements and conservation measures are needed

–Need a widespread and rapid deployment of the most efficient available technologies

–Need a broad adoption of substantial conservation measures in existing buildings

–Need significant shell improvements in new buildings

Delaying implementation of any of these measures greatly reducesthe benefits towards CO2 reductions

A rapid adoption of conservation measures will yield the greatest benefit

28

Next Steps

• Add costs and detailed options for conservation measures

• Add detailed carbon neutral technology options and choices

• Regionalize analysis (using EPAUS9r)

29

Thank You

Contact information:

Carol Shay LenoxU.S. Environmental Protection AgencyRTP, NC919-541-1868shay.carol@epa.gov