TABLE 1.2 Sources and Key Assumptions Used to Develop Energy Savings and Cost Estimates

 

Buildings (Chapter 2)

Transportation (Chapter 3)

Industrya (Chapter 4)

Reference scenario

AEO 2007 reference scenario (EIA, 2007), but with an assessment of whether using the AEO 2008 (EIA, 2008a) reference scenario would have changed the results

Developed by the panel,b but similar to the AEO 2008 reference scenario (EIA, 2008a)

AEO 2008 reference scenario (EIA, 2008a)

Source of cost estimates

Critical assessment of the literature

Critical assessment of the literature

Critical assessment of the literature

Source of savings estimates

Critical assessment of the literature

Critical assessment of the literature on specific technologies

Critical assessment of the literature on:

  • Industry-specific savings

  • Industry-wide savings

  • Savings from specific cross-cutting technologies

Panel-derived conservation supply curve analysis

For light-duty vehicles (LDVs), the panel derived illustrative scenarios of overall savings in fleet fuel consumption

Key cost-effectiveness criteria

Levelized cost of energy savings is less than the national average electricity and natural gas prices

Recovery of discounted costs of energy savings over the life of an LDVc

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

Technology lifetimes

Technology specific

Average vehicle lifetime

Technology specific

Before-tax discount rate (%, annual)

7

7

1 5

Other considerations

Assessment accounts for stock turnover in buildings and equipment

For LDVs, assessment considers how the distribution of specific vehicle types in the new-vehicle fleet affects the on-the-road fleet

Assessment of savings in specific industries used to confirm industry-wide estimates

aManufacturing only.

bThis is a “no-change” baseline in which, beyond 2020 (when the original targets set by the Energy Independence and Security Act of 2007 are assumed to have been met), any fuel efficiency improvements are fully offset by increases in vehicle performance, size, and weight.

cA cost-effectiveness criterion was not applied in the illustrative scenario analysis for transportation. Rather, the panel estimated, using the criteria in this table, whether an initial investment in the specific technologies assessed was likely to be recouped over the life of the vehicle.

Source: Adapted from Table 3.A.2 in NAS-NAE-NRC, 2009.



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