Energy Efficient Technologies in the U.S. Buildings Sector and the Benefits for Carbon Dioxide Reduction An Analysis Using the MARKAL Model

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1 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 Loughlin U.S. Environmental Protection Agency Energy and Climate Assessment Team Office of Research and Development National Risk Management Research Laboratory, RTP, NC

2 Outline Background Baseline Energy Efficiency Scenario Choice and Timing Implications 2

3 Background Office of Research and Development National Risk Management Research Laboratory, RTP, NC

4 Primary Energy Fossil Fuels The U.S. Energy System Processing and Conversion of Energy Carriers Oil Refining & Processing How can more energy efficient buildings contribute to the reduction of CO 2 emissions in the U.S.? End-Use Demands Sectors Transportation Biomass Gasification Combustion-Based Electricity Generation H2 Generation Residential Uranium Conversion & Enrichment Nuclear Power Carbon Sequestration Commercial Wind, Solar, 4 Hydro Direct Electricity Generation Industry Industry

5 Residential and Commercial Sector Contribution to CO 2 Emissions CO2 Emissions by Sector ( EPANMD results) Electricity Use By Sector ( EPANMD results) Residential 7% Commercial 3% Transportation 0% Industrial 22% Industrial 18% Electric 39% Residential 38% Residential Transportation 33% Commercial 18% Commercial 40% Commercial Transportation 34% Residential 21% 5 Total CO2 Emissions by Sector (including electricity use) EPA Inventory of U.S. Greenhouse Gases and Sinks Table 3.8 Industrial 27%

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 Fossil Fuels Biomass Gasification Uranium Renewable Resources Oil Refining & Processing Combustion Nuclear Power Clean Energy H 2 Generation Carbon Sequestration Automobiles Residential Commercial Industry Industry Minimize net present value of capital and O&M by selecting the optimal mix of technologies and fuels at each time step 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 6

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: CO 2, NOx, SO 2, PM 10 For some sectors: PM 2.5, VOC, CO, CH 4, N 2 O Additional Database Version: EPAUS9r (9-region) 7

8 U.S. EPA MARKAL Database End-Use Energy Demands Industrial Commercial Residential Transportation Electrochemical Feedstock Machine Drive Cooking Lighting Office Equipment Freezing Lighting Refrigeration Light duty Heavy duty Bus Off-road Process Heat Refrigeration Cooling Passenger rail Boilers Other For: Chemical Food Primary metals Non-metals Pulp and paper Transportation equip. Other Manufacturing Non-manufacturing Cooling Heating Ventilation Water Heating Other Heating Water Heating Other Freight rail Air Marine 8

9 Technology Detail Residential Space Heating Fuel Technology Demand Freezing Geothermal Furnace Lighting Electricity Heat Pump Space Heating Natural Gas Radiant Space Cooling Residential Wood Refrigeration Water Heating Other 9

10 Residential and Commercial Buildings Energy Efficiency Analysis Office of Research and Development National Risk Management Research Laboratory, RTP, NC

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 CO 2 emissions reduction? Mt CO 2 Emissions Reference Case Hypothetical target: 36% reduction in cumulative CO 2 emissions (2000 through 2050) Policy-induced CO 2 Reduction The policy induced carbon trajectory is representative of the level of CO 2 emissions reductions that have been targeted by various proposed U.S. carbon mitigation policies.

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, only highest efficiency technology choices are available 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, increasing to 5% by

13 Total System Electricity Use EPANMD Base Case - Electricity Use by Sector PJ Other Transportation Residential Commercial Industrial Energy Efficiency Case - Electricity Use by Sector PJ Other Transportation Residential Commercial Industrial % Reduction from Reference Case in % Reduction from Reference Case in 2050

14 Comparison to Other Studies % Reduction in Electricity Use from 2030 Reference Case EPA EEBS Residential EPA EEBS Commercial AEO Hight Tech EPRI RAP EPRI MAP EPA EEBS AEO BAT LBNL EE Potential 14 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.

15 Total System CO 2 Emissions Reduction System-wide CO 2 Emissions Reference Case Mt Policy Induced CO2 Reduction Energy Efficiency Case Energy Efficiency Base scenario achieves 11% of Policy Induced CO 2 Reduction 15

16 Choice and Timing Implications Office of Research and Development National Risk Management Research Laboratory, RTP, NC

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? 17

18 Approach Step 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 in, in, No forced use) - Advanced Lighting (Base penetration, late penetration, high penetration) - GHP and Water Heating (Base penetration, late penetration, high penetration) 18

19 Scenario Assumptions Conservation Energy Savings in PJ Commercial and Residential Lighting Energy Use in PJ PJ 3000 PJ BASE BASE-50% BASE+100% No Consv BASE Late High Commercial and Residential Space Heating and Water Heating Energy Use in PJ PJ BASE Late Hig h

20 Cumulative System CO 2 Emissions in Gt Lighting - Late Penetration Lighting BASE Lighting - High Penetration Conservation GHP and Water Heaters None Late Penetration BASE High Penetration BASE-50% Late Penetration BASE High Penetration BASE Late Penetration BASE High Penetration BASE+100% Late Penetration BASE High Penetration Base Energy Efficiency Case 20

21 Cumulative System CO 2 Emissions Reduction Percent from Base CO 2 Emissions 36% Reduction in Total System CO 2 Emissions Lighting - Late Penetration Lighting BASE Lighting - High Penetration Conservation GHP and Water Heaters 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% Importance of conservation practices timing and level 21

22 Cumulative System CO 2 Emissions Reduction Percent from Base CO 2 Emissions 36% Reduction in Total System CO 2 Emissions Lighting - Late Penetration Lighting BASE Lighting - High Penetration Conservation GHP and Water Heaters 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% Importance of penetration of higher efficient technologies 22

23 Cumulative System CO 2 Emissions Reduction Percent from Base CO 2 Emissions 36% Reduction in Total System CO 2 Emissions Lighting - Late Penetration Lighting BASE Lighting - High Penetration Conservation GHP and Water Heaters 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% Importance of penetration of GHP and Instantaneous Water Heating 23

24 Cumulative System CO 2 Emissions Reduction Percent from Base CO 2 Emissions 36% Reduction in Total System CO 2 Emissions Lighting - Late Penetration Lighting BASE Lighting - High Penetration Conservation GHP and Water Heaters 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% Importance of penetration of high efficiency lighting technologies 24

25 Comparing Sensitivities to Assumptions Change in Cumulative CO 2 Emissions Over Range of Assumptions Delay in implementation -6.3% -2.4% Factor Conservation -4.5% -3.0% High Efficiency -3.4% Lighting -3.9% GHP and Water Heaters -4.2% EEBASE relative to reference case More reduction in CO 2 emissions 25

26 Percent Contribution to Policy Induced Total System CO 2 Reduction Mt System-wide CO 2 Emissions 9000 Reference Case Energy Efficiency Case Policy Induced CO2 Reduction Lighting - Late Penetration Lighting BASE Lighting - High Penetration Conservation GHP and Water Heaters 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% 26

27 Key Insights For Commercial and Residential Energy Efficiency measures to have a impact on total CO 2 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 reduces the benefits towards CO 2 reductions A rapid adoption of conservation measures will yield the greatest benefit 27

28 Next Steps Add costs and detailed options for conservation measures Add detailed carbon neutral technology options and choices Regionalize analysis (using EPAUS9r) 28

29 Thank You Contact information: Carol Shay Lenox U.S. Environmental Protection Agency RTP, NC

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