ues measure updates: refrigerator and freezer recycling (continued from june) adam hadley regional...
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UES Measure Updates:Refrigerator and Freezer Recycling
(Continued from June)Adam Hadley
Regional Technical ForumJune 16, 2015
2
OverviewToday, we are seeking RTF approval of the updates to the Refrigerator and Freezer Decommissioning UES measure.• Updated Energy Savings
– Efficient-case updated with recent RTF refrigerator and freezer analysis– Baseline updated with
• 2014 JACO program data• New-ish unit energy use updated to reflect updated efficient-case unit energy use and federal test procedure
change
• Updated Cost– Program Cost Updated– To be consistent with savings estimates, proposal is to include the costs of “early replacements”
and “induced replacements”, where they apply
We covered everything above in June (that presentation is included in the “extra slides” section), so today we’ll review the subcommittee’s recommendations and the final results• Also, there are additional energy savings updates not covered in June
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Subcommittee(s)
At its June meeting, the RTF assigned to subcommittees the following, with the provision that the subcommittees do not change the logic model:• A small sub-group of the RTF to answer:
– RUL on costs– Risk mitigation credit for early retirement
• The refrigerator recycling subcommittee to answer:– Review Measure Costs
1. Should participant incentives be included in the Regional Cost-effectiveness test?
2. Review of early replacement cost methodology3. Review cost (and benefits) of induced replacement
4
Review: Small Sub-group of the RTF’s Recommendations
• Group answered their questions July 2nd– RUL on Costs
• Answer: – The staff proposal was appropriate. – The measure’s initial capital cost value should be preserved
in RTF analysis and reporting.
– Risk mitigation credit for early retirement• Answer: The risk mitigation credit should be set to $0
for savings that do not persist through the planning horizon.
• Also note: The Grocery SP-to-EC Motors and Display Case LED’s measures that used both of these methods were adopted at the July RTF meeting
Sub-group met 7/2 Participants:Lauren GageJennifer AnzianoTina JayaweeraMohit ChhabraChristian DouglassJosh Rushton
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Refrigerator Recycling Subcommittee Recommendations
• Q: Should participant incentives be included in the Regional Cost-effectiveness test?– A: Do not include the incentive as a cost; consider it a
transfer payment• Q: Are early replacement costs appropriate?
– A: Yes. Keep as proposed in June.• Q: Are induced replacement costs appropriate? Should
a benefit be included?– A: The approach recommended by the subcommittee is to
include a “utility of refrigeration” benefit based on the electricity cost to run the refrigerator or freezer.
• While not anywhere near perfect, the subcommittee agrees this is the “least uncomfortable” approach
• Additional Question Raised: Phil Sisson reported there was a new study in California which may provide an update to the “Fraction of New Replacement Units” parameter for the R2 case– Adam to work with Phil to review the data
Subcommittee Met 9/1Presentation, MinutesParticipants:Paul Sklar, Energy TrustMark Jerome, CLEAResultDoug Bruchs, CadeoBob Nicholas, JacoSam Sirkin, JacoPhil SissonPhillip Kelsven, BPAHolly Mulvenon, PSERebecca Blanton, PSEDennis Rominger, PSEAdam Hadley, CATRyan Firestone, CATJosh Ruston, CATMohit Singh-Chhabra, CATJennifer Anziano, RTF Manager
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Energy Savings UpdatesThese are in addition to the updates presented at the June meeting
• Update “Fraction of New Replacement Units” Parameter– Previous Values and Sources
• Refrigerators– R1 Case: 79% (JACO Program Data)– R2 Case: 59% (ADM 2004-05 CA Statewide Survey)
• Freezers– All Cases: 100% (RTF Assumption)
– Proposed Values and Sources• Refrigerators
– R1 Case: 78% (JACO Program Data, updated w/2014 data)– R2 Case: 42% (KEMA/DNV-GL ARP Impact Evaluation 2014)
• Freezers– R1 Case: 82% (JACO Program Data)– R2 Case: 43% (KEMA/DNV-GL ARP Impact Evaluation 2014)
• Corrected error in “used replacement unit” energy use estimate– Estimate of average energy use of used units (based on RBSA refrigerator
age distribution) did not previously use the “Annual Degradation Factor”
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Measure Cost
• Reminder:– Induced Replacement – Where the program caused purchase of a unit that otherwise
wouldn’t have been purchased– Early Replacement – Where the program caused early replacement of an existing unit
Type
Average Cost of
New Unit (2006$'s)
New Unit Energy Use (kWh/year),Annual Operating Cost (2006$'s/yr),
NPV of Utility of Refrigeration (2006$'s)
Induced Replacement PV Cost of purchasing a new
unit today, minus utility of refrigeration (2006$'s)
Measure Life (RUL)
Equipment Useful Life
Early ReplacementNPV of cost of early
replacement unit (2006$'s)
422$34$359288$23$298
Source
Recent RTF Analysis (DOE TSD)
Per 9/1/15 subcommittee recommendation, Utility of Refrigeration is estimated as the
cost of the electricity to run the unit.
Cost of New Unit - Utility of Refrigeration
Same methodology as previous
RTF
Same values as Fridge Freezer
Workbook
NPV of the first 6.4 (or 5.2) years of a 15.2 (or 21.7) year stream of constant
payments toward the cost of a new unit, using 5%
real discount rate.
$484
$178
15.2
21.7
6.4
5.2
Fridge
Freezer
$582
$218
$942
$516
Refrigerator Replacement Cost Logic Map
Cost % New
55% 75% 484$ 42%
25% -$ n/a 108$
62%
Cost % New
Induced Replacement (R1d) 6% $ 582 78%
Cost % New
7% Induced Replacement (R1k) 6% 484$ 78%
No Replacement (1-R1k) 95% -$ n/a
*D+K=Total Left on Grid
Cost % New
-$ n/a
38%
Cost % New
Induced Replacement (R1n) 6% $ 582 78%
1- % of Total
Recycled Unit
Left On-Grid (Used)
Left Off-Grid (Not Used)
Sold/Donated (D)
Kept (K)
Scenarios if Program Did not Exist
Program Participant's Action After Recycling
Refrigerator
Potential Recipient's Action in the Absence of Recycled Unit
Recycling Program Made Recycled Unit Unavailable
Percentage of Total
Recycled Units
Total Number of
Units Recycled
Percentage of Total
Recycled Units
Percentage of Total
Recycled
Cost to Region for Replacement Unit
Aggregated Replacement
Unit Cost (2006$'s):
Refrigerator Replacement (R2)*
No Refrigerator Replacement (1-R2)
Program Participant's Action After Recycling
Refrigerator
Program Participant's Action After Recycling
Refrigerator
Savings
* Recycled unit would have been off-grid without the program,
savings = 0
Freezer Replacement Cost Logic Map
Cost % New
53% 75% 178$ 43%
25% -$ n/a 41$
66% Cost % New
Induced Replacement (R1d) 6% $ 218 82%
Cost % New
13% Refrigerator Replacement (R1) 6% 178$ 82%
No Replacement (1-R1) 94% -$ n/a*D+K=Total Left on Grid
Cost % New
-$ n/a
Cost % New
Induced Replacement (R1n) 6% $ 218 82%
Program Participant's Action After Recycling Refrigerator
Left On-Grid (Used)
Kept (K) Program Participant's Action After Recycling
Refrigerator
Percentage of Total
Recycled Units
Percentage of Total
Recycled Units
1- % of Total
Recycled Unit
34%
Total Number of
Units Recycled
Percentage of Total
Recycled Units
Sold/Donated (D) Potential Recipient's Action in the Absence of Recycled Unit
Scenarios if Program Did not Exist (Counterfactual)
Recycling Program Made Recycled Unit Unavailable
Cost to Region for Replacement Unit
Aggregated Replacement
Unit Cost (2006$'s):
Left Off-Grid (Not Used)
Program Participant's Action After Recycling
Refrigerator
Savings
* Recycled unit would have been off-grid without the program,
Freezer Replacement (R2)
No Freezer Replacement (1-R2)
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Collection, Disposal, Incentive, etc. Costs
(no replacement costs)
Collection, Disposal, etc.
Costs (Incentive removed)
Replacement Costs (net of utility
of refrigeration)
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12
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Proposed Motion
“I _________ move the RTF approve the updates in savings and costs, as presented, for the Refrigerator and Freezer Decommissioning measure UES and set the sunset date to September 2017.”
Purpose of the 2-year sunset date would be to update the measure with 2015 and 2016 program data and any other newly available evaluation data.
14
Additional Subcommittee Discussion
• Subcommittee requested a new measure identifier: Vintage
• The following is a proposal for a measure identifier of vintage defined as:– Units manufactured in 1992 and earlier; and– Units manufactured in 1993 and later
• Methodology (savings, cost, life): Same as the “any vintage” measure, but with the JACO dataset screened by vintage– See measure workbook for details
15 Results
“Any” case shown for reference.
16
Proposed Motion
“I _________ move the RTF approve the measure specification, savings, costs and benefits, and measure life for the ‘1992 and earlier’ and ‘1993 and later’ applications of the Refrigerator and Freezer Decommissioning measure UES and set the sunset date to September 2017.”
Purpose of the 2-year sunset date would be to update the measure with 2015 and 2016 program data and any other newly available evaluation data.
17
Extra Slides
The following slides are from the June 2015 RTF presentation
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Overview
Today, we are seeking RTF approval of the updates to the Refrigerator and Freezer Decommissioning UES measure.• Updated Energy Savings
– Efficient-case updated with recent RTF refrigerator and freezer analysis– Baseline updated with
• 2014 JACO program data• New-ish unit energy use updated to reflect updated efficient-case unit energy use and
federal test procedure change
• Updated Cost– Program Cost Updated– Proposal is to include the costs of “early replacements” and “induced
replacements”, where they apply
Caution: This is the June 2015 Presentation
19 Measure OverviewCAT Team Review Yes, in detail
Tech Sub-Com Review
No official subcommittee, but proposed cost approach (per “rev2” presentation) was reviewed by the following people through email/phone calls with Adam Hadley:Bob Nicholas and Sam Sirkin (JACO)(Program Implementation Company) - Concern about lack of subcommittee review of replacement costs - Would like time for official subcommittee reviewPhil Sisson (Sisson and Associates)(Refrigerator Recycling Measure Expert, Technical Contractor to JACO) - Concerned about new unit replacement costs being quantified “in perpetuity”Kate Bushman, M. Sami Khawaja, Jason Christensen (Cadmus)(Program Impact Evaluation Company) - Agree with the approach for costs of induced replacementDoug Bruchs (Cadeo, formerly with Cadmus)(Refrigerator Recycling Measure Expert, Authored UMP for this measure) - Agrees with approach from high level; not familiar enough with the Regional Cost Effectiveness test to comment on appropriateness of approach for the RTF
Notes • Last RTF decision was May 2014• Sunset date was set to June 2015 to update measure with refrigerator and
freezer federal standard changes
Please note: The opinions of the people/organizations as stated above are as interpreted by Adam Hadley.
Caution: This is the June 2015 Presentation
20 Energy Savings: Changes
• Updated New Replacement-unit’s Energy Use (Represents a portion of the efficient-case)– Based on recent RTF fridge/freezer analysis (Oct 2014)– Refrigerator
• Previous: 491 kWh/yr (v3.0 workbook)• Proposed: 570 kWh/yr (ResRefrigeratorsAndFreezers_v4.0)
– Freezer• Previous: 500 kWh/yr (v2.2 workbook)• Proposed: 389 kWh/yr (ResRefrigeratorsAndFreezers_v4.0)
• Updated Replaced-unit’s Energy use (Baseline)– New JACO Data
• Update database with units recycled in 2014 JACO programs. (Energy consumption assigned based on model year.)
– Update Newer Unit Energy Consumption (Refrigerators only)• Based on crosswalk from old-to-new federal test procedure (~15% more energy use)• Also aligns the new replacement unit’s energy use (570 kWh/yr)• See next slide for further explanation
– While complicated, this increases savings for refrigerators by less than 2%
Type Previous ProposedRefrigerator 1,274 kWh/yr 1,239 kWh/yrFreezer 1,509 kWh/yr 1,325 kWh/yr
Caution: This is the June 2015 Presentation
21
0
200
400
600
800
1000
1200
1400
1600
1800
2000kW
h/ye
ar
Model Year
Refrigerators - "Tested Energy Use"
Current Proposed
Increased energy use of 2001-2010 units by ~15% based on revised federal test procedure
Set 2011 to 2015 units at 570 kWh/yr
(RTF Baseline)
Caution: This is the June 2015 Presentation
22
0
100
200
300
400
500
600
Refrigerator Decommissioning andRecycling
Freezer Decommissioning andRecycling
Ener
gy S
avin
gs a
t Site
(kW
hyr)
Energy Savings
Current
Proposed
Caution: This is the June 2015 Presentation
23
• Previously, measure cost estimated at $125/unit (2012$’s). – Summary Sheet: “All program costs, including all direct implementation,
incentives, and marketing costs for all utilities that JACO serves across the NW region, are summed and divided by number of units recycled to arrive at a cost per unit recycled.”
• Proposed revised estimate: $114 (2015$’s)– JACO program costs have gone down: lower incentives, mostly
• Does not include A. Cost of early replacementB. Cost of induced replacement…
Measure Cost: ChangesCaution: This is the
June 2015 Presentation
24
• Proposal: Add cost of Replacement Units– Induced Replacement – Where the program caused purchase of a unit that otherwise
wouldn’t have been purchased– Early Replacement – Where the program caused early replacement of an existing unit
– The induced replacement cost or the early replacement cost is used, depending on the circumstances, as shown on upcoming slides (“logic maps”)
– Cost only incurred where replacement unit is new because purchase of a used unit represents a transfer payment within Region: How many are new units?
• Same values as used in energy savings calculations• Refrigerators
– “Brother-in-Law” (R2): 59%» ADM 2004-2005 CA Statewide survey
– Participant (R1): 78%» Source: JACO 2012-2014 Program Data
• Freezers: 100%
Measure Cost: Changes (continued)
TypeInduced Replacement PV Cost of purchasing a new unit today (2006$'s)
Measure Life (RUL) Equipment Useful LifeEarly ReplacementNPV of cost of early
replacement unit (2006$'s)
SourceRecent RTF Analysis
(DOE TSD)Same methodology
as previous RTFSame values as Fridge
Freezer WorkbookSee Next Slide
6.45.2
$484$178
15.221.7
FridgeFreezer
$942$516
Caution: This is the June 2015 Presentation
25 Early Replacement Cost MethodologyMimics calculations ProCost uses where costs or benefits are truncated by program life
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 $-
$10 $20 $30 $40 $50 $60 $70 $80 $90
$100 PV Annual Payments
PV Cost
Year
Notes: This example is for refrigerators, the same methodology is used for freezers. All costs are in 2006$’s.
• PV of Cost of Purchasing New: $942• Real Discount Rate: 5%• EUL (new unit): 15.2 years• Annualized Constant Payment for life of new equipment: $90
• RUL (replaced unit): 6.4 years• Early Replacement Cost = $942 – Sum(Red Bubble)
Caution: This is the June 2015 Presentation
Refrigerator Replacement Cost Logic Map
Cost % New
55% 75% 484$ 59%
25% -$ n/a 155$
62%
Cost % New
Induced Replacement (R1d) 6% $ 942 78%
Cost % New
7% Induced Replacement (R1k) 6% 484$ 78%
No Replacement (1-R1k) 95% -$ n/a
*D+K=Total Left on Grid
Cost % New
-$ n/a
38%
Cost % New
Induced Replacement (R1n) 6% $ 942 78%
1- % of Total
Recycled Unit
Left On-Grid (Used)
Left Off-Grid (Not Used)
Sold/Donated (D)
Kept (K)
Scenarios if Program Did not Exist
Program Participant's Action After Recycling
Refrigerator
Potential Recipient's Action in the Absence of Recycled Unit
Recycling Program Made Recycled Unit Unavailable
Percentage of Total
Recycled Units
Total Number of
Units Recycled
Percentage of Total
Recycled Units
Percentage of Total
Recycled
Cost to Region for Replacement Unit
Aggregated Replacement
Unit Cost (2006$'s):
Refrigerator Replacement (R2)*
No Refrigerator Replacement (1-R2)
Program Participant's Action After Recycling
Refrigerator
Program Participant's Action After Recycling
Refrigerator
Savings
* Recycled unit would have been off-grid without the program,
savings = 0
Caution: This is the June 2015 Presentation
Freezer Replacement Cost Logic Map
Cost % New
53% 75% 178$ 100%
25% -$ n/a 99$
66% Cost % New
Induced Replacement (R1d) 6% $ 516 100%
Cost % New
13% Refrigerator Replacement (R1) 6% 178$ 100%
No Replacement (1-R1) 94% -$ n/a*D+K=Total Left on Grid
Cost % New
-$ n/a
Cost % New
Induced Replacement (R1n) 6% $ 516 100%
Program Participant's Action After Recycling Refrigerator
Left On-Grid (Used)
Kept (K) Program Participant's Action After Recycling
Refrigerator
Percentage of Total
Recycled Units
Percentage of Total
Recycled Units
1- % of Total
Recycled Unit
34%
Total Number of
Units Recycled
Percentage of Total
Recycled Units
Sold/Donated (D) Potential Recipient's Action in the Absence of Recycled Unit
Scenarios if Program Did not Exist (Counterfactual)
Recycling Program Made Recycled Unit Unavailable
Cost to Region for Replacement Unit
Aggregated Replacement
Unit Cost (2006$'s):
Left Off-Grid (Not Used)
Program Participant's Action After Recycling
Refrigerator
Savings
* Recycled unit would have been off-grid without the program,
Freezer Replacement (R2)
No Freezer Replacement (1-R2)
Caution: This is the June 2015 Presentation
28
$-
$50
$100
$150
$200
$250
$300
Capital Cost Non-EnergyBenefit
Capital Cost Non-EnergyBenefit
Capital Cost Non-EnergyBenefit
Capital Cost Non-EnergyBenefit
Refrigerator Freezer Refrigerator Freezer
Current Proposed
(200
6$'s
)Measure Cost and NEBs
No change to non-energy benefit
Program, etc. Costs(no replacement costs)
Program, etc. Costs
Replacement Costs
Caution: This is the June 2015 Presentation
29
Cost-Effectiveness Methodology Question
• Should the Risk-Mitigation Credit apply?– In the current measure, the “Retrofit” risk-
mitigation credit of 43 mills/kWh is used– This was questioned at the May 2014 meeting, but
not acted on• Minutes from May 2014: See page 7, starting at Eckman
– Key points: » Not analytically rigorous to include risk-mitigation credit
for a short measure that doesn’t replenish itself» RTF was uncomfortable dealing with the issue at that time;
instead wanted to take it up with the Guidelines edits
Caution: This is the June 2015 Presentation
30
There was a <1% increase in measure life years, based on the program data update.
0
1
2
3
Refrigerator Freezer
Regi
onal
Ben
efit-
to-C
ost R
atio
Regional Cost-Effectiveness
Current
Proposed with Risk-mitigation credit
Proposed withoutRisk-mitigation credit
Caution: This is the June 2015 Presentation
31
Proposed Motion
“I _________ move the RTF approve the updates in savings and cost for the Refrigerator and Freezer Decommissioning measure UES and set the sunset date to June 2017. The risk-mitigation credit (should) or (should not) be used in the cost-effectiveness calculation.”
Purpose of the 2-year sunset date would be to update the measure with 2015 and 2016 program data and any other newly available evaluation data.
Caution: This is the June 2015 Presentation
32
Additional Slides
Caution: This is the June 2015 Presentation
33
Difference between this presentation and what was posted earlier
• Last week (~ June 9), CAT posted to the meeting agenda a presentation (rev 2) and workbook that showed a different method of calculating the additional proposed early replacement costs (using the cost of buying early as a perpetuity, etc.)
• While the results of the methodology shown in this presentation and the previous presentation are the same, this presentation explains the methodology as is done in ProCost (for consistency and simplicity of explanation)
Caution: This is the June 2015 Presentation