UES Measure Updates:
Refrigerator and Freezer Recycling
(Continued from June)
Adam Hadley
Regional Technical Forum
June 16, 2015
2
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
– 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
3
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.
2.
3.
Should participant incentives be included in the Regional Costeffectiveness test?
Review of early replacement cost methodology
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 Gage
Jennifer Anziano
Tina Jayaweera
Mohit Chhabra
Christian Douglass
Josh Rushton
5
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 9/1
Presentation, Minutes
Participants:
Paul Sklar, Energy Trust
Mark Jerome, CLEAResult
Doug Bruchs, Cadeo
Bob Nicholas, Jaco
Sam Sirkin, Jaco
Phil Sisson
Phillip Kelsven, BPA
Holly Mulvenon, PSE
Rebecca Blanton, PSE
Dennis Rominger, PSE
Adam Hadley, CAT
Ryan Firestone, CAT
Josh Ruston, CAT
Mohit Singh-Chhabra, CAT
Jennifer Anziano, RTF Manager
6
Energy Savings Updates
These 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”
7
Measure Cost
Type
Average
Cost of
New Unit
(2006$'s)
Fridge
$942
Freezer
$516
Source
Recent
RTF
Analysis
(DOE TSD)
New Unit Energy Use (kWh/year),
Annual Operating Cost (2006$'s/yr),
NPV of Utility of Refrigeration (2006$'s)
422
$34
$359
288
$23
$298
Per 9/1/15 subcommittee recommendation,
Utility of Refrigeration is estimated as the
cost of the electricity to run the unit.
Induced Replacement
PV Cost of purchasing a new
unit today, minus utility of
refrigeration (2006$'s)
Measure Life
(RUL)
Equipment
Useful Life
Early Replacement
NPV of cost of early
replacement unit (2006$'s)
$582
6.4
15.2
$484
$218
5.2
21.7
$178
Cost of New Unit - Utility of
Refrigeration
Same
methodology
as previous
RTF
Same values
as Fridge
Freezer
Work book
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.
• 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
8
Refrigerator Replacement Cost Logic Map
Recycling Program Made Recycled
Unit Unavailable
Scenarios if Program Did not Exist
Sold/Donated (D)
Left On-Grid
(Used)
Percentage
of Total
Recycled
Units
Percentage
of Total
Recycled
Units
55%
Potential Recipient's
Action in the Absence of
Recycled Unit
Cost
% New
Refrigerator Replacement
(R2)*
75%
$
484
No Refrigerator
Replacement (1-R2)
25%
$
-
Program Participant's
Action After Recycling
InducedRefrigerator
Replacement (R1d)
Percentage
of Total
Recycled
7%
Program Participant's
Action After Recycling
Refrigerator
Induced Replacement (R1k)
No Replacement (1-R1k)
Cost
6%
$
n/a
% New
582
Cost
78%
% New
6%
$
484
95%
$
-
78%
n/a
*D+K=Total Left on Grid
Savings
Left Off-Grid (Not
Used)
1- % of
Total
Recycled
Unit
Cost
* Recycled unit would have been
off-grid without the program,
savings = 0
$
% New
-
n/a
38%
Program Participant's
Action After Recycling
Refrigerator
Induced Replacement (R1n)
Cost
6%
$
% New
582
Aggregated
Replacement
Unit Cost
(2006$'s):
42%
62%
Kept (K)
Total
Number of
Units
Recycled
Cost to Region for Replacement Unit
78%
$
108
Freezer Replacement Cost Logic Map
9
Scenarios if Program Did not Exist
(Counterfactual)
Sold/Donated (D)
Left On-Grid (Used)
Percentage
of Total
Recycled
Units
Total
Number of
Units
Recycled
Percentage
of Total
Recycled
Units
53%
Recycling Program Made Recycled
Unit Unavailable
Potential Recipient's
Action in the Absence of
Recycled Unit
Cost
75%
$
178
No Freezer Replacement (1R2)
25%
$
-
Percentage
of Total
Recycled
Units
*D+K=Total Left on Grid
Cost
6%
$
Program Participant's
Action After Recycling
Refrigerator
Kept (K)
13%
Refrigerator Replacement (R1)
No Replacement (1-R1)
1- % of
Total
Recycled
Unit
34%
Program Participant's
Action After Recycling
Refrigerator
Induced Replacement (R1n)
218
$
178
94%
$
-
Cost
$
$
82%
82%
n/a
% New
-
Cost
6%
n/a
% New
6%
* Recycled unit would have been
off-grid without the program,
43%
% New
Cost
Savings
Left Off-Grid (Not
Used)
% New
Freezer Replacement (R2)
Program Participant's
Action After Recycling
InducedRefrigerator
Replacement (R1d)
66%
Cost to Region for Replacement Unit
n/a
% New
218
82%
Aggregated
Replacement
Unit Cost
(2006$'s):
$
41
10
Replacement
Costs (net of utility
Collection, Disposal,
Incentive, etc. Costs
(no replacement costs)
of refrigeration)
Collection,
Disposal, etc.
Costs (Incentive
removed)
11
12
13
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
“Any” case shown for reference.
Results
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
Caution: This is the
June 2015 Presentation
18
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
Measure Overview
19
Caution: This is the
June 2015 Presentation
CAT 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 review
Phil 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 replacement
Doug 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
Energy Savings: Changes
20
• 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.)
Type
Previous
Proposed
Refrigerator
1,274 kWh/yr
1,239 kWh/yr
Freezer
1,509 kWh/yr
1,325 kWh/yr
– 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%
Refrigerators - "Tested Energy Use"
21
2000
Current
Proposed
1800
1600
kWh/year
1400
1200
1000
800
600
400
200
0
Model Year
Increased energy use of 20012010 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
Caution: This is the
June 2015 Presentation
22
Energy Savings at Site (kWhyr)
Energy Savings
600
500
400
300
Current
Proposed
200
100
0
Refrigerator Decommissioning and
Recycling
Freezer Decommissioning and
Recycling
Caution: This is the
June 2015 Presentation
23
Measure Cost: Changes
• 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 replacement
B. Cost of induced replacement…
Caution: This is the
June 2015 Presentation
24
Measure Cost: Changes (continued)
•
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
Type
Fridge
Freezer
Source
Induced Replacement
PV Cost of purchasing a
new unit today (2006$'s)
Measure Life (RUL)
Equipment Useful Life
$942
$516
Recent RTF Analysis
(DOE TSD)
6.4
5.2
Same methodology
as previous RTF
15.2
21.7
Same values as Fridge
Freezer Work book
Early Replacement
NPV of cost of early
replacement unit (2006$'s)
$484
$178
See Next Slide
– 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%
Caution: This is the
Early Replacement Cost Methodology
June 2015 Presentation
25
Mimics calculations ProCost uses where costs or benefits are truncated by program life
•
•
•
•
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
PV Annual Payments
$100
$80
$60
$40
PV Cost
$20
$1
2
3
•
•
4
5
6
7
8
9
Year
10
11
12
13
14
RUL (replaced unit): 6.4 years
Early Replacement Cost = $942 – Sum(Red Bubble)
Notes: This example is for refrigerators, the same methodology is used for freezers. All costs are in 2006$’s.
15
16
26
Caution: This is the
Refrigerator Replacement Cost Logic Map
June 2015 Presentation
Recycling Program Made Recycled
Unit Unavailable
Scenarios if Program Did not Exist
Sold/Donated (D)
Left On-Grid
(Used)
Percentage
of Total
Recycled
Units
Percentage
of Total
Recycled
Units
55%
Potential Recipient's
Action in the Absence of
Recycled Unit
Cost
% New
Refrigerator Replacement
(R2)*
75%
$
484
No Refrigerator
Replacement (1-R2)
25%
$
-
Program Participant's
Action After Recycling
InducedRefrigerator
Replacement (R1d)
Percentage
of Total
Recycled
7%
Program Participant's
Action After Recycling
Refrigerator
Induced Replacement (R1k)
No Replacement (1-R1k)
Cost
6%
$
n/a
% New
942
Cost
78%
% New
6%
$
484
95%
$
-
78%
n/a
*D+K=Total Left on Grid
Savings
Left Off-Grid (Not
Used)
1- % of
Total
Recycled
Unit
Cost
* Recycled unit would have been
off-grid without the program,
savings = 0
$
% New
-
n/a
38%
Program Participant's
Action After Recycling
Refrigerator
Induced Replacement (R1n)
Cost
6%
$
% New
942
Aggregated
Replacement
Unit Cost
(2006$'s):
59%
62%
Kept (K)
Total
Number of
Units
Recycled
Cost to Region for Replacement Unit
78%
$
155
Caution: This is the
Freezer Replacement Cost Logic Map
June 2015 Presentation
27
Scenarios if Program Did not Exist
(Counterfactual)
Sold/Donated (D)
Left On-Grid (Used)
Percentage
of Total
Recycled
Units
Total
Number of
Units
Recycled
Percentage
of Total
Recycled
Units
53%
Recycling Program Made Recycled
Unit Unavailable
Potential Recipient's
Action in the Absence of
Recycled Unit
Cost
Kept (K)
Percentage
of Total
Recycled
Units
*D+K=Total Left on Grid
13%
75%
$
178
No Freezer Replacement (1R2)
25%
$
-
Cost
6%
Program Participant's
Action After Recycling
Refrigerator
Refrigerator Replacement (R1)
No Replacement (1-R1)
$
1- % of
Total
Recycled
Unit
34%
Program Participant's
Action After Recycling
Refrigerator
Induced Replacement (R1n)
516
$
178
94%
$
-
Cost
$
$
100%
100%
n/a
% New
-
Cost
6%
n/a
% New
6%
* Recycled unit would have been
off-grid without the program,
100%
% New
Cost
Savings
Left Off-Grid (Not
Used)
% New
Freezer Replacement (R2)
Program Participant's
Action After Recycling
InducedRefrigerator
Replacement (R1d)
66%
Cost to Region for Replacement Unit
n/a
% New
516
100%
Aggregated
Replacement
Unit Cost
(2006$'s):
$
99
Replacement
Costs
$300
$250
(2006$'s)
Caution: This is the
June 2015 Presentation
Measure Cost and NEBs
28
Program, etc. Costs
(no replacement costs)
Program, etc.
Costs
$200
$150
$100
$50
$Capital Cost Non-Energy Capital Cost Non-Energy Capital Cost Non-Energy Capital Cost Non-Energy
Benefit
Benefit
Benefit
Benefit
Refrigerator
Freezer
Current
No change to non-energy benefit
Refrigerator
Freezer
Proposed
29
Caution: This is the
June 2015 Presentation
Cost-Effectiveness Methodology
Question
• Should the Risk-Mitigation Credit apply?
– In the current measure, the “Retrofit” riskmitigation 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
Regional Cost-Effectiveness
Regional Benefit-to-Cost Ratio
3
Current
2
Proposed with Riskmitigation credit
1
Proposed without
Risk-mitigation credit
0
Refrigerator
Freezer
There was a <1% increase in measure life years, based on the program data update.
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
33
Caution: This is the
June 2015 Presentation
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)