DRAFT
Time Dependent Valuation (TDV) for use in Regional DOE Air Conditioning Standards
January 2009
Introduction
As the DOE considers regionally-differentiated air conditioning appliance standards, we propose
that time dependent valuation (TDV) be used to evaluate performance of alternative designs.
Rather than source energy, which is related to the total amount of energy consumed by the air
conditioner, TDV provides an estimate of the cost of supplying electricity to the air conditioner
over its life. Improvements in air conditioner design will save energy, but they will also reduce
peak loads and therefore generation, transmission, and distribution capacity requirements,
greenhouse gas emissions, ancillary services for electric grid operation, and losses. TDV
provides a measurement of performance improvements across all of these elements.
The US has a range of climates and a given air conditioner will perform differently in each. In part
because of the cooling load, as well as other uses of electricity, each region also has a different
electric consumption profile and time-specific cost structure. Therefore, we have developed
regionally-specific, hourly estimates of the marginal cost of electricity for a set of major load and
climate centers across the US. Since marginal costs of electricity are highly correlated with load
on the system, and load is highly correlated with temperature, the TDV values have been
developed so that they are consistent with the TMY3 NREL weather data. Therefore, air
conditioner and building simulations using TMY3 will correlate with the TDV estimates.
The approach used to develop the TDV values is very similar to the one originally developed for
the 2005 update to the California Title 24 building energy efficiency standards, and improved in
the 2008 Title 24 update. All of the data used is publicly available. The calculation methodology
is documented in this proposal, and an open source spreadsheet used to generate the TDV
values is freely available for download.
Section 1: Time Dependent Valuation (TDV) in a Nutshell
We believe that using TDV estimates to compare alternative air conditioner designs will lead to air
conditioner designs that provide the most long term value for the US. The TDV values account
for the major regional drivers of air conditioning design including climate, the relative cost of
energy and capacity, and the correlation between weather, and energy savings.
In order to facilitate designs for air conditioner standards, the project team has developed TDV
values for the following cities; Fresno, CA; Phoenix, AZ; Houston, TX; Washington DC; St. Louis,
MO; Chicago, IL, and New York, NY. The location of these cities on the DOE climate zone map
is shown in Figure 1, below1. The selection of the cities was chosen to span the range of US
climates and major markets for air conditioners in the US.
1
The map is borrowed from Climate Classification for Building Energy Codes and Standards, 2002,
Robert S. Briggs, Robert G. Lucas, and Z. Todd Taylor, see
Memberhttp://www.energycodes.gov/implement/pdfs/climate_paper_review_draft_rev.pdf
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Chicago, IL
Fresno, CA
New York, NY
St. Louis, MO
Washington DC
Phoenix, AZ
Atlanta, GA
Houston, TX
Figure 1: Map of Locations Chosen for TDV
For each of the locations, the major components of long-run marginal costs for electricity are
estimated. The components that have been included, and a brief description of each, are
provided in Table 1, below.
Table 1: Components of the TDV Formulation
Component
Energy
Losses
Ancillary Services (A/S)
System Capacity
T&D Capacity
Environment
Description
Estimate of hourly wholesale value of energy
measured at the point of wholesale energy transaction
Losses between the appliance location and the point
of wholesale energy transaction
The costs of providing system operations and
reserves for electricity grid reliability
The costs of building new generation capacity to meet
system peak loads
The costs of expanding transmission and distribution
capacity to meet peak loads
The costs of SOx, NOx, PM10, and CO2 associated
with electricity production
Figure 2, below, shows an example of the components of TDV for a week in the summer in
Washington DC. As shown, the cost of providing an additional amount of electricity is significantly
higher in the summer afternoons, than in the very early morning hours. This chart also shows the
relative magnitude of different components in Chicago in the summer for during these days.
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2
Figure 2: A 3 Day snapshot of TDV values in Washington DC
TDV Value by Component for 3 Consecutive Days
$600
$500
$400
$300
$200
$100
$-
Mon, Jul 15
3
5
7
9
11
13
15
17
19
21
23
Tue, Jul 16
3
5
7
9
11
13
15
17
19
21
23
Wed, Jul 17
3
5
7
9
11
13
15
17
19
21
23
Levelized Value ($/MWh)
$700
Hour
Energy
Losses
A/S
System Capacity
T&D Capacity
Environment
Figure 3, below, shows the annual chronological set of estimated TDVs for Washington DC.
There are a few high spikes, and seasonal increases and decreases over the course of the year.
The spikes are caused by the costs of adding capacity to deliver electricity in the few highest load
hours. For evaluation of regional air conditioning standards, the lifecycle change in costs across
energy savings in many hours of the year will bring the average value of electricity savings well
below the peaks.
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Figure 3: Annual levelized TDV values for Washington DC ($/MWh in $2008)
Annual Levelized TDV Value $/MWh
Levelized TDV $/MWh ($2008)
$2,000
$1,800
$1,600
T&D Capacity
$1,400
System Capacity
$1,200
A/S
$1,000
Environment
$800
Losses
$600
Energy
$400
$200
$0
1
1001
2001
3001
4001
5001
6001
7001
8001
Hour of the year
The following chart shows the components of TDV value for the highest value hours in sorted
order of cost. This chart shows the relative contribution to the highest hours of the year by
component. Note that most of the high cost hours occur in approximately the top 200 to 400
hours. This is true in all regions in the US evaluated.
Figure 4: TDV values by component in sorted order for Washington DC
Price Duration Curve - All TDV Components
$2,000
Levelized Total TDV Value ($/MWh)
$1,800
$1,600
$1,400
T&D Capacity
$1,200
System Capacity
A/S
$1,000
Environment
$800
Losses
$600
Energy
$400
$200
$0
1
51
101
151
201
251
301
351
401
451
501
Top 500 Hours
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4
Section 2: TDV Results for Select American Cities
This section provides the chronological and sorted TDV results for each of the cities evaluated.
Washington, D.C.
Price Duration Curve - All TDV Components
$2,000
Levelized Total TDV Value ($/MWh)
$1,800
$1,600
$1,400
T&D Capacity
$1,200
System Capacity
A/S
$1,000
Environment
$800
Losses
$600
Energy
$400
$200
$0
1
51
101
151
201
251
301
351
401
451
501
Top 500 Hours
Annual Levelized TDV Value $/MWh
Levelized TDV $/MWh ($2008)
$2,000
$1,800
$1,600
T&D Capacity
$1,400
System Capacity
$1,200
A/S
$1,000
Environment
$800
Losses
$600
Energy
$400
$200
$0
1
1001
2001
3001
4001
5001
6001
7001
8001
Hour of the year
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Atlanta, GA
Price Duration Curve - All TDV Components
$2,500
Levelized Total TDV Value ($/MWh)
$2,000
$1,500
T&D Capacity
System Capacity
A/S
$1,000
Environment
Losses
$500
Energy
$0
1
51
101
151
201
251
301
351
401
451
501
($500)
Top 500 Hours
Annual Levelized TDV Value $/MWh
Levelized TDV $/MWh ($2008)
$2,500
$2,000
T&D Capacity
$1,500
System Capacity
A/S
$1,000
Environment
Losses
$500
Energy
$0
1
1001
2001
3001
4001
5001
6001
7001
8001
($500)
Hour of the year
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Chicago, IL
Price Duration Curve - All TDV Components
Levelized Total TDV Value ($/MWh)
$2,500
$2,000
T&D Capacity
System Capacity
$1,500
A/S
Environment
$1,000
Losses
Energy
$500
$0
1
51
101
151
201
251
301
351
401
451
501
Top 500 Hours
Annual Levelized TDV Value $/MWh
Levelized TDV $/MWh ($2008)
$2,500
$2,000
T&D Capacity
System Capacity
$1,500
A/S
Environment
$1,000
Losses
Energy
$500
$0
1
1001
2001
3001
4001
5001
6001
7001
8001
Hour of the year
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Fresno, CA
Price Duration Curve - All TDV Components
Levelized Total TDV Value ($/MWh)
$2,500
$2,000
T&D Capacity
System Capacity
$1,500
A/S
Environment
$1,000
Losses
Energy
$500
$0
1
51
101
151
201
251
301
351
401
451
501
Top 500 Hours
Annual Levelized TDV Value $/MWh
Levelized TDV $/MWh ($2008)
$2,500
$2,000
T&D Capacity
System Capacity
$1,500
A/S
Environment
$1,000
Losses
Energy
$500
$0
1
1001
2001
3001
4001
5001
6001
7001
8001
Hour of the year
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Houston, TX
Price Duration Curve - All TDV Components
$2,000
Levelized Total TDV Value ($/MWh)
$1,800
$1,600
$1,400
T&D Capacity
$1,200
System Capacity
A/S
$1,000
Environment
$800
Losses
$600
Energy
$400
$200
$0
1
51
101
151
201
251
301
351
401
451
501
Top 500 Hours
Annual Levelized TDV Value $/MWh
Levelized TDV $/MWh ($2008)
$2,000
$1,800
$1,600
T&D Capacity
$1,400
System Capacity
$1,200
A/S
$1,000
Environment
$800
Losses
$600
Energy
$400
$200
$0
1
1001
2001
3001
4001
5001
6001
7001
8001
Hour of the year
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New York, NY
Price Duration Curve - All TDV Components
$1,800
Levelized Total TDV Value ($/MWh)
$1,600
$1,400
T&D Capacity
$1,200
System Capacity
$1,000
Energy
$800
Losses
A/S
$600
Environment
$400
$200
$0
1
51
101
151
201
251
301
351
401
451
501
Top 500 Hours
Annual Levelized TDV Value $/MWh
$1,800
Levelized TDV $/MWh ($2008)
$1,600
$1,400
$1,200
T&D Capacity
$1,000
System Capacity
A/S
$800
Environment
$600
Losses
$400
Energy
$200
$0
($200)
1
1001
2001
3001
4001
5001
6001
7001
8001
Hour of the year
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Phoenix, AZ
Price Duration Curve - All TDV Components
Annual Levelized TDV Value $/MWh
Levelized
Total
TDV
Value ($/MWh)
Levelized
TDV
$/MWh
($2008)
$2,500
$60,000
$50,000
$2,000
$40,000
T&D
Capacity
T&D Capacity
$30,000
$1,500
System
System Capacity
Energy
A/S
$20,000
Environment
Losses
$1,000
$10,000
Losses
A/S
Energy
Environment
$0
1
$500
($10,000)
1001 2001 3001 4001 5001 6001 7001 8001
($20,000)
$0
1
51
101
151
Hour of the year
201 251 301 351
401
451
501
Top 500 Hours
Annual Levelized TDV Value $/MWh
Levelized TDV $/MWh ($2008)
$2,500
$2,000
T&D Capacity
System Capacity
$1,500
A/S
Environment
$1,000
Losses
Energy
$500
$0
1
1001
2001
3001
4001
5001
6001
7001
8001
Hour of the year
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St. Louis, MO
Price Duration Curve - All TDV Components
Levelized Total TDV Value ($/MWh)
$3,000
$2,500
T&D Capacity
$2,000
System Capacity
A/S
$1,500
Environment
Losses
$1,000
Energy
$500
$0
1
51
101
151
201
251
301
351
401
451
501
Top 500 Hours
Annual Levelized TDV Value $/MWh
Levelized TDV $/MWh ($2008)
$3,000
$2,500
$2,000
T&D Capacity
System Capacity
$1,500
A/S
Environment
$1,000
Losses
Energy
$500
$0
1
1001
2001
3001
4001
5001
6001
7001
8001
($500)
Hour of the year
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Appendix 1:
TDV framework and theoretical underpinnings
[To be developed. Explanation of why TDV is the appropriate value methodology with academic
references.]
Appendix 2:
Detailed TDV formulation
[Details on TDV formulation.]
Note to simulation modelers. The TDV values are correlated to the TMY 3 weather data.
Appendix 3:
Data references and sources
This appendix provides links and references for all of the data used in the development of the
TDV values, by data type.
Natural gas forecast
EIA. Annual Energy Outlook 2008. Table 19.
http://www.eia.doe.gov/oiaf/aeo/pdf/0383(2008).pdf
Power plant cost assumptions
EIA. Annual Energy Outlook 2008.
http://www.eia.doe.gov/oiaf/aeo/pdf/0383(2008).pdf
California PUC. 2007 MPR Proceedings.
http://www.cpuc.ca.gov/PUC/energy/electric/RenewableEnergy/faqs/04MarketPriceReferent.htm
Cost of Emissions (SOx, NOx, PM-10, CO2):
Evolution Markets. SO2 Monthly Market Update. July 2008.
http://new.evomarkets.com/scripts/getmmu.php?uid=web&mmu_id=349
Evolution Markets. NOx Monthly Market Update. July 2008.
http://new.evomarkets.com/scripts/getmmu.php?uid=web&mmu_id=350
System Loads and Local Loads
Note: Please see “Utility and Weather Station Information” table below to see which utilities’ or
zones’ loads were used for each city.
Phoenix, Atlanta, St. Louis:
FERC. Form 714. Please see table below to see which utilities’ loads were used for each city.
http://www.ferc.gov/docs-filing/eforms/form-714/overview.asp
DC, Chicago:
PJM. Hourly load data.
http://www.pjm.com/markets-and-operations/energy/real-time/loadhryr.aspx
Fresno:
CAISO. Hourly System Load.
http://oasis.caiso.com/
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Houston:
ERCOT. Hourly Load Data.
http://www.ercot.com/gridinfo/load/load_hist/
New York:
NYISO. Real time loads.
http://www.nyiso.com/public/market_data/load_data/rt_actual_load.jsp
Energy Prices
Note: Please see “Utility and Weather Station Information” table below to see which utilities’ or
zones’ energy prices were used for each city.
Phoenix, Atlanta, St. Louis:
FERC. Form 714.
http://www.ferc.gov/docs-filing/eforms/form-714/overview.asp
DC, Chicago:
PJM. Day Ahead Hourly LMP.
http://www.pjm.com/markets-and-operations/energy/day-ahead/lmpda.aspx
Fresno:
CAISO. Real time prices.
http://oasis.caiso.com/
Houston:
ERCOT. Balancing energy services market clearing prices.
http://www.ercot.com/mktinfo/prices/mcpe
New York:
NYISO. Real time electricity prices.
http://www.nyiso.com/public/market_data/pricing_data/rt_lbmp_zonal.jsp
Weather Data
Note: Please see “Utility and Weather Station Information” table below to see which weather
stations’ data were used for each city.
NOAA. Quality Controlled Local Climatological Data, Please see table below to see which
stations were used for each city.
NREL. Typical Meteorological Year 3. http://rredc.nrel.gov/solar/old_data/nsrdb/1991-2005/tmy3/
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Utility and Weather Station Information
Phoenix
Houston
Atlanta
DC
NYC
Energy Prices
Load
Local Area: Salt River
Project
Local Area: Salt River
Project
System: Arizona Public
Service
Local Area: ERCOT
Coast Zone
System: ERCOT
Local Area: Georgia
Power
System: Southern
Company
Local Area: PEPCO
System: Arizona Public
Service
Local Area: ERCOT
Coast Zone
System: ERCOT
Local Area: Georgia
Power
System: Southern
Company
Local Area: PEPCO
System: PJM
MidAtlantic
System: PJM
MidAtlantic
System: NYISO
Local Area: NYC/Long
Island
System: NYISO
Local Area: PG&E
Local Area: PG&E
System: CAISO
System: CAISO
Local Area: ComEd
Local Area: ComEd
System: PJM West
System: PJM West
Local Area: AmerenUE
Local Area: Ameren UE
System: AmerenUE +
Ameren IL
System: AmerenUE +
Ameren IL
Local Area: NYC
Fresno
Chicago
St.
Louis
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Temperature Data
(Actual and TMY3)
Phoenix Sky Harbor
Intl Airport
Houston Hobby Airport
Atlanta Hartsfield Intl
Airport
Washington Reagan
Airport
New York Laguardia
Airport
Fresno Yosemite
International Airport
Chicago Midway
Airport
St Louis Lambert
Airport
15