UES Measure Updates: Refrigerator and Freezer Recycling (Continued from June) Adam Hadley Regional Technical Forum June 16, 2015

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

http://rtf.nwcouncil.org/subcommittees/fridgerecycle/meetings/Subcommittee%20Presentation%20Cost%20Refrigerator%20Recycling_rev.pptx

http://rtf.nwcouncil.org/subcommittees/fridgerecycle/meetings/Fridge-FreezerDecommissioning-Notes-090115.docx

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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)


Refrigerator


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


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


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)







Refrigerator

Savings


Freezer Replacement (R2)

No Freezer Replacement (1-R2)

10

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.

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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.

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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.”


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Extra Slides

The following slides are from the June 2015 RTF 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

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.


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


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)


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


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• 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

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• 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


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)


Refrigerator Replacement Cost Logic Map

Cost % New

55% 75% 484$ 59%

25% -$ n/a 155$

62%

Cost % New


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


1- % of Total

Recycled Unit

Left On-Grid (Used)


Sold/Donated (D)

Kept (K)

Scenarios if Program Did not Exist


Refrigerator

Potential Recipient's Action in the Absence of Recycled Unit


Percentage of Total

Recycled Units

Total Number of

Units Recycled

Percentage of Total

Recycled Units

Percentage of Total

Recycled




Refrigerator Replacement (R2)*

No Refrigerator Replacement (1-R2)


Refrigerator


Refrigerator

Savings


savings = 0


Freezer Replacement Cost Logic Map

Cost % New

53% 75% 178$ 100%

25% -$ n/a 99$

66% Cost % New


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


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)







Refrigerator

Savings


Freezer Replacement (R2)

No Freezer Replacement (1-R2)


28

$-

$50

$100

$150

$200

$250

$300

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


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


http://rtf.nwcouncil.org/meetings/2014/05/minutes20140617.pdf

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


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.”



32

Additional Slides


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)


Documents

UES Measure Updates: Refrigerator and Freezer Recycling (Continued from June) Adam Hadley Regional Technical Forum June 16, 2015