programs, partnerships, and similar initiatives to encourage the penetration and adoption of improved technologies, some of which appear to have achieved some success. In general, these initiatives have contributed to improvements in energy efficiency, carbon emissions, air quality, energy security, international competitiveness, and quality of life.

EIA incorporates the impacts of ongoing research, development, and deployment programs into its reference case, assuming support for these activities at historic levels. Therefore, reductions in these programs over time could lead EIA to raise its projections of energy consumption and carbon emissions, and new or expanded programs could lead to a reduction in the EIA estimates.

While recognizing the success of past and current research, development, and deployment programs, it is difficult to establish a quantitative relationship between levels of funding and specific improvements in the characteristics, availability, and adoption of energy technologies. By its nature, research and development is highly uncertain. Seemingly plausible avenues of research may not achieve success; however, breakthrough developments are also possible.

In addition, successful development of new technologies may not lead to immediate penetration in the marketplace. A number of factors may serve to slow adoption, including consumer preference for product attributes other than fuel efficiency or reduced emissions; higher costs for new technologies; low prices for fossil energy and conventional technologies; unfamiliarity with the benefits, use, and maintenance of new products; and uncertainties concerning the reliability and further development of new technologies. Some of the barriers may be reduced by some of the CCTI initiatives. In any case, these barriers do not mean that the impacts of the research, development, and deployment programs could not be substantial over time. Continued technology development may lower costs or improve technology efficiencies, reliability, or other attributes, so that the technologies become more economically competitive and attractive in the market. Also, gradual penetration may increase familiarity with technologies, establish the supporting infrastructure, and help reduce technology costs.

Some of the research, development, and deployment programs are discussed qualitatively in the analysis, or the impacts of ongoing programs in the reference case are presented. EIA also quantitatively evaluated some of the CCTI programs with specific program goals. For these programs, EIA assumed that the goal was realized and analyzed the impact on energy consumption and carbon emissions. Assuming the success of the PATH program for efficiency improvements in new homes resulted in energy and emissions reductions of about 1 percent in the residential sector in 2010 and about 2 percent in 2020. Carbon emissions were reduced by 3.1 and 6.7 million metric tons in 2010 and 2020, respectively, as a result of the realization of the PATH goals as stated by the Administration; however, the projected impacts of the Administration's goals for the Million Solar Roofs programs were considerably less, only 0.9 million metric tons in both years.

In the transportation sector, EIA assumed that the goals of PNGV programs were achieved, saving about 0.15 percent of total transportation energy in 2010 and 0.53 percent in 2020. As a result, projected carbon emissions could be reduced by 0.9 million metric tons (0.14 percent) in 2010 and by 3.9 million metric tons (0.56 percent) in 2020. EIA also analyzed the potential impacts of the advanced diesel program for light and heavy trucks by assuming the successful achievement of program goals for the underlying technologies. It is projected that this program would save 0.42 percent of total transportation energy in 2010 and 1.22 percent in 2020, reducing carbon emissions by 2.8 million metric tons (0.45 percent) in 2010 and 8.8 million metric tons (1.26 percent) in 2020, if the development of the technologies met the target goal.

Some of the CCTI programs for technology research, development, and deployment may achieve benefits only in a long time frame beyond 2020, or they may not achieve success at all. Even if technology development is successful new equipment may penetrate slowly, and significant changes in the average stock of equipment may take a long time. Although many of the programs for residential and commercial buildings have the potential for success, the goal of the Million Solar Roofs program is unlikely to be reached because of high equipment costs. Some of the industrial programs also have the potential for success; however, the capacity expansion goals of the CHP Challenge program appear too ambitious, given that equipment stock turns over slowly in this sector and that this sector expects a relatively short payback. For the transportation programs, the most recent report by the NRC evaluating the PNGV programs is skeptical about the prospect for success in meeting its goals, and while technology is improving, the goals appear optimistic to EIA as well. Advanced diesel light trucks may have difficulties with both emissions requirements and public acceptance. Assuming that technology development for heavy trucks is successful. the average efficiency of new heavy trucks could be improved from 6.1 to 7.5 miles per gallon in 2020, raising the average stock efficiency from 5.8 to 6.5 miles per gallon, but that would still be short of the stated efficiency goal of 12 miles per gallon because of slow stock turnover and late introduction dates for some technologies.

Many of the programs for electricity generation may have longer-term success, even beyond the 2020 time frame of the analysis, including the fossil technology programs for efficiency improvements and carbon sequestration. Hydrogen and superconductivity are also much longer-term programs. Some of the renewable technology programs may be successful; however, the goal of reducing the cost of wind technology to 2.5 cents per kilowatthour by 2002 appears unlikely. Even if the renewable programs are successful, they may not make a significant impact by 2020 due to high technology costs relative to fossil fuel technologies and limited opportunities for some of the renewable technologies. On the other hand, higher energy prices or other changing market conditions may serve to make any of the CCTI programs more economically attractive and improve their success. Also, efforts to meet carbon reduction goals may contribute to the success of some of the initiatives.

4. Energy-Efficient Appliances and Equipment

Introduction

In 1987. Congress passed the National Appliance Energy Conservation Act (NAECA), which gave the U.S. Department of Energy (DOE) legal authority to promulgate minimum efficiency requirements for 13 classes of consumer products. The Energy Policy Act of 1992 (EPACT) expanded the coverage to include certain commercial building equipment. The law also mandated that DOE revise and update the standards over time, as technologies and economic conditions changed. From 1988 to 1998, DOE was active in establishing and updating standards for the consumer products it was assigned to evaluate. Table 44 shows the products and years in which standards were either established or revised. The table includes the most recent revisions to the standards for room air conditioners and refrigerators/freezers, which take effect in 2000 and 2001, respectively.

Table 44. Effective Dates of Appliance Efficiency Standards, 1988-2001 1968 1990 1992

Technology

Clothes dryers

Clothes washers

Dishwashers.

Refrigerators and freezers

Kitchen ranges and ovens

Room air conditioners

Direct heating equipment

Fluorescent lamp ballasts

Water heaters .

Pool heaters

Central air conditioners and heat pumps..

Furnaces-Central (more than 45,000 Btu per hour)

Fumaces-Small (less than 45,000 Btu per hour)

Fumaces-Mobile home

Boilers

Fluorescent lamps, 8 foot

Fluorescent lamps, 2 and 4 foot (U tube)

Sources: Energy Information Administration, Annual Energy Outlook 1998, DOE/EIA-0383(98) (Washington, DC, December 1997). and Annual Energy Outlook 1999, DOE/EIA-0383(99) (Washington, DC, December 1998).

Historically, appliance efficiency standards have had a major impact on the amounts of energy needed to power many household devices. The reference case for the Annual Energy Outlook 1999 (AEO99) projects a 28-percent decline in electricity use for refrigerators in 2020 from the 1997 level, despite a projected 30-percent increase in the stock of

refrigerators. Table 45 shows historical data for the efficiency of new refrigerators, for which efficiency standards were promulgated in 1990 and 1993 and are planned for 2001.

Source: Association of Home Appliance Manufacturers (October 1997). The value for 2001 represents the standard that was set for a typical refrigerator with an adjusted volume of 20 cubic feet.

The process for setting standards is by no means trivial. Once a product class is determined, detailed engineering. economic, and manufacturer impact analyses are performed over a period of many months. When the analyses have been completed and made available to the public, an Advanced Notice of Proposed Rulemaking (ANOPR) is published. Approximately 8 months later a Proposed Rule is published, and the Final Rule is published approximately 8 months after that.104 After the Final Rule is published, a lead time of 2 to 3 years normally is allowed for the standard to take effect. (In some cases, negotiated rulemaking may be able to shorten the process.) DOE plans to publish final rules in the next 2 years that will revise the standards for four product classes under its NAECA authority: central air conditioners, water heaters, ballasts, and clothes washers.

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In the CCTI, a portion of the $273 million included in the proposed initiative for buildings technology would be used to accelerate the lighting and energy efficiency standards program. Energy use in buildings may be affected by the acceleration of updates to NAECA standards for residential equipment such as heat pumps and central air conditioners, and for fluorescent lamp ballasts. Updates to EPACT standards for commercial equipment may also affect energy use.

To estimate the potential impact of accelerating the standards-setting process, the timetable and levels used in a recent study by the American Council for an Energy-Efficient Economy 106 were applied in the NEMS residential and commercial modules. The efficiency levels and timetable generally appear feasible, assuming that the process operates smoothly. Given the uncertainty surrounding the effective dates of appliance efficiency standards, EIA's reference case forecasts include only the standards that have been officially promulgated by DOE. Although the standards are in no way related to the specific funding levels in the CCTI proposal, the analysis illustrates the effects that accelerated standards may have on levels of energy use and carbon emissions. As with the tax incentive proposals, model results were obtained with and without the accelerated standards to gauge the projected impacts on the energy use and carbon emissions attributable to buildings. The analysis considered only the residential and commercial sectors, with no feedback from effects on energy prices or the economy. Table 46 shows the assumed efficiency levels and effective dates of the accelerated standards for each appliance in the CCTI analysis case.

10*The time line discussed here is the one given for central air conditioners by DOE's Office of Codes and Standards. 185-President Clinton's FY 2000 Climate Change Budget," p. 6, and "Report to Congress on Federal Climate Change Expenditures,"

P. 11.

American Council for an Energy-Efficient Economy, Approaching the Kyoto Targets: Five Key Strategies for the U.S. (Washington DC, August 1998).

Table 46. Assumptions for Accelerated Minimum Efficiency Standards Affecting Buildings

"Heating and cooling efficiency, respectively, are given for heating and cooling combination units. Units for efficiency measures are presented as given in the Department of the Treasury's explanation of the CCTI proposals: MEF, Modified Energy Factor, HSPF, Heating Seasonal Performance Factor, SEER, Seasonal Energy Efficiency Rating: EER, Energy Efficiency Ratio; EF, Energy Factor, kWh, kilowatthour, AFUE, Annual Fuel Utilization Efficiency.

"Effective date changed from that given in source reference. Timetable adjusted from 2001 to 2005 for commercial packaged air conditioners, based on current priority and stage in the rulemaking process.

*A small percentage of magnetic ballasts are retained after the electronic ballast standard takes effect, representing exceptions to the standard granted because electronic ballast frequencies interfere with the performance of other electronic equipment.

Source: American Council for an Energy Efficient Economy, Approaching the Kyoto Targets: Five Key Strategies for the U.S. (Washington, DC, August 1998).

Analysis Results

Table 47 shows the results of the analysis. Again, the values shown do not indicate the effects of the specific funding levels in the CCTI proposal but rather those of the accelerated standards program represented in Table 46,

Source: Energy Information Administration, National Energy Modeling System runs BLDDEF.D040699A and BLDSTND.D040699A.

Efficiency standards are projected to have a greater effect on energy consumption and carbon emissions in the buildings sectors than would the CCTI tax incentives or the voluntary programs discussed elsewhere in this report. because minimum efficiency standards apply to all purchase decisions involving the affected technologies. With the standards assumed for the analysis, it is projected that 144 trillion Btu (0.7 percent) of energy could be saved by 2010. reducing carbon emissions by 5.4 million metric tons (0.9 percent) in 2010.