TABLE 3.A.2 Sources and Key Assumptions Used to Develop Energy Savings and Cost Estimates
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Buildings Sector
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Transportation Sector
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Industry Sectora
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Reference scenario
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EIA (2007, 2008)
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Developed by committeeb
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EIA (2007, 2008)
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Source of cost estimates
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Critical assessment of the literature
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Critical assessment of the literature
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Critical assessment of the literature
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Source of savings estimates
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Critical assessment of the literature on individual technologies and committee-derived conservation supply-curve analysis
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-
Critical assessment of the literature on specific technologies
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For light-duty vehicles (LDVs), committee-derived illustrative scenario analysis of overall savings in fuel consumption
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Critical assessment of the literature on industry-wide savings, industry-specific savings, and savings from specific crosscutting technologies
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Key cost-effectiveness criteria
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Levelized cost of energy savings is less than the average national electricity and natural gas prices
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Recovery of discounted costs of energy savings over the life of the vehicle
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Energy savings provide an internal rate of return on investment of at least 10 percent or exceed the company’s cost of capital by a risk premium
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Technology lifetimes
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Technology specific
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Average vehicle lifetime
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Technology specific
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Before-tax discount rate (percent/yr)
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7
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7
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15
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Other considerations
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Assessment accounts for stock turnover in buildings and equipment
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For LDVs, assessment considers how the distribution of specific vehicle types in the new-vehicle fleet affects the on-the-road fleet
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Assessment of savings in specific industries used to confirm industry-wide estimates
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aManufacturing only.
bThis is a “no-change” baseline in which, beyond 2020 (when Energy Independence and Security Act targets are met), any efficiency improvements are fully offset by increases in vehicle performance, size, and weight.
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