[Federal Register Volume 81, Number 97 (Thursday, May 19, 2016)]
[Proposed Rules]
[Pages 31680-31768]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-11337]
[[Page 31679]]
Vol. 81
Thursday,
No. 97
May 19, 2016
Part II
Department of Energy
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10 CFR Parts 429 and 430
Energy Conservation Program: Energy Conservation Standards for
Compressors; Proposed Rule
Federal Register / Vol. 81 , No. 97 / Thursday, May 19, 2016 /
Proposed Rules
[[Page 31680]]
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DEPARTMENT OF ENERGY
10 CFR Parts 429 and 430
[Docket Number EERE-2013-BT-STD-0040]
RIN 1904-AC83
Energy Conservation Program: Energy Conservation Standards for
Compressors
AGENCY: Office of Energy Efficiency and Renewable Energy, Department of
Energy.
ACTION: Notice of proposed rulemaking (NOPR) and announcement of public
meeting.
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SUMMARY: The Energy Policy and Conservation Act of 1975 (EPCA), as
amended, prescribes energy conservation standards for various consumer
products and certain commercial and industrial equipment. EPCA also
authorizes DOE to establish standards for certain other types of
industrial equipment, including compressors. Such standards must be
technologically feasible and economically justified, and must save a
significant amount of energy. In this document, DOE proposes energy
conservation standards for compressors and announces a public meeting
to receive comment on the proposed standards and associated analyses
and results.
DATES: Meeting: DOE will hold a public meeting on Monday, June 20, 2016
from 1:00 p.m. to 5:00 p.m. in Washington, DC. The test procedure
portion will be held in the morning. The meeting will also be broadcast
as a webinar. See section VIII, ``Public Participation,'' for webinar
registration information, participant instructions, and information
about the capabilities available to webinar participants.
Comments: DOE will accept comments, data, and information regarding
this notice of proposed rulemaking (NOPR) before and after the public
meeting, but no later than July 18, 2016. See section VIII, ``Public
Participation,'' for details.
Comments regarding the likely competitive impact of the proposed
standard should be sent to the Department of Justice contact listed in
the ADDRESSES section before June 20, 2016.
ADDRESSES: The public meeting will be held at the U.S. Department of
Energy, Forrestal Building, Room 8E-089, 1000 Independence Avenue SW.,
Washington, DC 20585.
Instructions: Any comments submitted must identify the NOPR on
Energy Conservation Standards for compressors, and provide docket
number EERE-2013-BT-STD-0040 and/or regulatory information number (RIN)
1904-AC83. Comments may be submitted using any of the following
methods:
1. Federal eRulemaking Portal: www.regulations.gov. Follow the
instructions for submitting comments.
2. Email: [email protected]. Include the docket
number and/or RIN in the subject line of the message. Submit electronic
comments in WordPerfect, Microsoft Word, PDF, or ASCII file format, and
avoid the use of special characters or any form of encryption.
3. Postal Mail: Ms. Brenda Edwards, U.S. Department of Energy,
Building Technologies Office, Mailstop EE-5B, 1000 Independence Avenue
SW., Washington, DC, 20585-0121. If possible, please submit all items
on a compact disc (CD), in which case it is not necessary to include
printed copies.
4. Hand Delivery/Courier: Ms. Brenda Edwards, U.S. Department of
Energy, Building Technologies Office, 950 L'Enfant Plaza, SW., Suite
600, Washington, DC 20024. Telephone: (202) 586-2945. If possible,
please submit all items on a CD, in which case it is not necessary to
include printed copies.
No telefacsimilies (faxes) will be accepted. For detailed
instructions on submitting comments and additional information on the
rulemaking process, see section VIII of this document (``Public
Participation'').
Written comments regarding the burden-hour estimates or other
aspects of the collection-of-information requirements contained in this
proposed rule may be submitted to Office of Energy Efficiency and
Renewable Energy through the methods listed above and by email to
[email protected].
EPCA requires the Attorney General to provide DOE with a written
determination of whether the proposed standard is likely to lessen
competition. The U.S. Department of Justice Antitrust Division invites
input from market participants and other interested persons with views
on the likely competitive impact of the proposed standard. Interested
persons may contact the Division at [email protected] before
June 20, 2016. Please indicate in the ``Subject'' line of your email
the title and Docket Number of this rulemaking notice.
Docket: The docket, which includes Federal Register notices, public
meeting attendee lists and transcripts, comments, and other supporting
documents/materials, is available for review at www.regulations.gov.
All documents in the docket are listed in the www.regulations.gov
index. However, some documents listed in the index may not be publicly
available, such as those containing information that is exempt from
public disclosure.
A link to the docket Web page can be found at: https://www.regulations.gov/#!docketDetail;D=EERE-2013-BT-STD-0040. This Web
page contains a link to the docket for this document on the
www.regulations.gov site. The www.regulations.gov Web page contains
simple instructions on how to access all documents, including public
comments, in the docket. See section VIII, ``Public Participation,''
for further information on how to submit comments through
www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: James Raba, U.S. Department of Energy,
Office of Energy Efficiency and Renewable Energy, Building Technologies
Office, EE-5B, 1000 Independence Avenue SW., Washington, DC 20585-0121.
Telephone: (202) 586-8654. Email: [email protected].
Peter Cochran, U.S. Department of Energy, Office of the General
Counsel, GC-71, 1000 Independence Avenue SW., Washington, DC, 20585-
0121. Telephone: (202) 586-9496. Email: [email protected].
For further information on how to submit a comment, review other
public comments and the docket, or participate in the public meeting,
contact Ms. Brenda Edwards at (202) 586-2945 or by email:
[email protected].
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Synopsis of the Proposed Rule
A. Benefits and Costs to Consumers
B. Impact on Manufacturers
C. National Benefits and Costs
D. Conclusion
II. Introduction
A. Authority
B. Background
1. Current Standards
2. History of Standards Rulemaking for Compressors
III. General Discussion
A. Definition of Covered Equipment
B. Scope of the Energy Conservation Standards in This Rulemaking
1. Equipment System Boundary
2. Compressed Gas
3. Compression Principle
4. Driver Type
a. Combustion Engines
b. Motor Phase Count
c. Styles of Electric Motor
5. Equipment Capacity
[[Page 31681]]
6. Full-load Operating Pressure
C. Test Procedure
D. Technological Feasibility
1. General
2. Maximum Technologically Feasible Levels
E. Compliance Date
F. Energy Savings
1. Determination of Savings
2. Significance of Savings
G. Economic Justification
1. Specific Criteria
a. Economic Impact on Manufacturers and Consumers
b. Savings in Operating Costs Compared To Increase in Price (LCC
and PBP)
c. Energy Savings
d. Lessening of Utility or Performance of Equipment
e. Impact of Any Lessening of Competition
f. Need for National Energy Conservation
g. Other Factors
2. Rebuttable Presumption
H. Compressor Industry Recommendation
1. Summary
2. Specific Provisions
IV. Methodology and Discussion of Related Comments
A. Market and Technology Assessment
1. Equipment Classes
a. Compression Principle
b. Lubricant Presence
c. Cooling Method
d. Motor Speed
e. Motor Phase Count
f. List of Proposed Equipment Classes
2. European Union Regulatory Action
a. Specific Suggested Requirements
b. Next Steps
3. Technology Options
a. Multi-Staging
b. Air-End Improvement
c. Auxiliary Component Improvement
B. Screening Analysis
1. Screened-Out Technologies
2. Remaining Technologies
C. Engineering Analysis
1. Summary of Significant Data Sources
a. CAGI Data Sheets
b. Lot 31--European Union Ecodesign Preparatory Study on
Compressors
c. Confidential Manufacturer Equipment Data
d. Online Retailer Price Data
2. Harmonization With Lot 31
3. Representative Equipment
4. Design Options and Available Energy Efficiency Improvements
5. Efficiency Levels
a. Direct From Lot 31
b. Developed From CAGI Database
c. Scaled From Other Equipment Classes, Using U.S. Data
6. Manufacturer Selling Price
a. Direct Scaling From Lot 31
b. Scaling With U.S. MSP Data
c. MSPs for Water-Cooled Equipment
d. New Relationships From U.S. Data
7. Manufacturer Production Cost
8. Other Analytical Outputs
D. Markups Analysis
E. Energy Use Analysis
1. Applications
2. Annual Hours of Operation
3. Load Profiles
4. Capacity Control Strategies
5. Compressor Sizing
F. Life-Cycle Cost and Payback Period Analysis
1. Equipment Cost
2. Installation Cost
3. Annual Energy Consumption
4. Energy Prices
5. Repair and Maintenance Costs
6. Equipment Lifetime
7. Discount Rates
8. Efficiency Distribution in the No-New-Standards Case
9. Payback Period Analysis
G. Shipments Analysis
H. National Impact Analysis
1. Equipment Efficiency Trends
2. National Energy Savings
3. Net Present Value Analysis
I. Consumer Subgroup Analysis
J. Manufacturer Impact Analysis
1. Overview
2. GRIM Analysis
a. GRIM Key Inputs
b. GRIM Scenarios
3. Manufacturer Interviews
a. Conversion Requirements
b. Engineering Constraints and Development Cycle Times
c. Relationship to the Draft European Union Energy Efficiency
Standards
d. Unfair Advantages for Replacement Technologies
e. Uncertainty of Compliance Cost for Reciprocating Equipment
K. Emissions Analysis
L. Monetizing Carbon Dioxide and Other Emissions Impacts
1. Social Cost of Carbon
a. Monetizing Carbon Dioxide Emissions
b. Development of Social Cost of Carbon Values
c. Current Approach and Key Assumptions
2. Social Cost of Other Air Pollutants
M. Utility Impact Analysis
N. Employment Impact Analysis
V. Analytical Results and Conclusions
A. Trial Standard Levels
B. Economic Justification and Energy Savings
1. Economic Impacts on Individual Consumers
a. Life-Cycle Cost and Payback Period
b. Consumer Subgroup Analysis
c. Rebuttable Presumption Payback
2. Economic Impacts on Manufacturers
a. Industry Cash Flow Analysis Results
b. Impacts on Employment
c. Impacts on Manufacturing Capacity
d. Impacts on Subgroups of Manufacturers
e. Cumulative Regulatory Burden
3. National Impact Analysis
a. Significance of Energy Savings
b. Net Present Value of Consumer Costs and Benefits
c. Indirect Impacts on Employment
4. Impact on Utility or Performance of Equipment
5. Impact of Any Lessening of Competition
6. Need of the Nation To Conserve Energy
7. Other Factors
8. Summary of National Economic Impacts
C. Conclusion
1. Benefits and Burdens of TSLs Considered for Compressor
Standards
2. Summary of Annualized Benefits and Costs of the Proposed
Standards
VI. Certification Requirements
VII. Procedural Issues and Regulatory Review
A. Review Under Executive Orders 12866 and 13563
B. Review Under the Regulatory Flexibility Act
1. Description on Estimated Number of Small Entities Regulated
a. Methodology for Estimating the Number of Small Entities
b. Compressor Industry Structure and Nature of Competition
c. Manufacturer Participation
2. Description and Estimate of Compliance Requirements
3. Duplication, Overlap, and Conflict With Other Rules and
Regulations
4. Significant Alternatives to the Rule
C. Review Under the Paperwork Reduction Act
D. Review Under the National Environmental Policy Act of 1969
E. Review Under Executive Order 13132
F. Review Under Executive Order 12988
G. Review Under the Unfunded Mandates Reform Act of 1995
H. Review Under the Treasury and General Government
Appropriations Act, 1999
I. Review Under Executive Order 12630
J. Review Under the Treasury and General Government
Appropriations Act, 2001
K. Review Under Executive Order 13211
L. Review Under the Information Quality Bulletin for Peer Review
VIII. Public Participation
A. Attendance at the Public Meeting
B. Procedure for Submitting Prepared General Statements for
Distribution
C. Conduct of the Public Meeting
D. Submission of Comments
E. Issues on Which DOE Seeks Comment
IX. Approval of the Office of the Secretary
I. Synopsis of the Proposed Rule
Title III of the Energy Policy and Conservation Act of 1975, as
amended (``EPCA'' or, in context, ``the Act''), sets forth a variety of
provisions designed to improve energy efficiency. (42 U.S.C. 6291, et
seq.) Part C of Title III, which for editorial reasons was re-
designated as Part A-1 upon incorporation into the U.S. Code (42 U.S.C.
6311-6317), establishes the ``Energy Conservation Program for Certain
Industrial Equipment.'' EPCA provides that DOE may include a type of
industrial equipment as covered equipment if it determines that to do
so is necessary to carry out the purposes of Part A-1. (42 U.S.C.
6312(b)). DOE has proposed such a determination for compressors, the
subject of this document (see section II.A for further discussion).
EPCA authorizes DOE to prescribe energy conservation standards for
those types of industrial equipment which the Secretary classifies as
covered equipment. (42 U.S.C. 6311(2) and 6312). Pursuant to EPCA, any
new or amended energy conservation standard must be designed to achieve
the maximum improvement in energy
[[Page 31682]]
efficiency that is technologically feasible and economically justified.
(42 U.S.C. 6295(o)(2)(A) and 6316(a)). Furthermore, the new or amended
standard must result in a significant conservation of energy. (42
U.S.C. 6295(o)(3)(B) and 6316(a)).
In accordance with the relevant EPCA provisions, DOE proposes new
energy conservation standards for compressors. The proposed standards,
which are expressed in terms of package isentropic efficiency (i.e., a
parameter used to measure the degree of degradation of energy in
steady-flow devices), or the ratio of the theoretical isentropic power
required for a compression process to the actual power required for the
same process, are shown in Table I.1. Table I.2 through Table I.5
provide mathematical coefficients required to calculate package
isentropic efficiency in Table I.1. For ``Fixed-speed compressor''
equipment classes, the relevant Package Isentropic Efficiency is Full-
Load Package Isentropic Efficiency; for ``Variable-speed compressor''
equipment classes, the relevant Package Isentropic Efficiency is Part-
Load Package Isentropic Efficiency. Both Full- and Part-Load Package
Isentropic Efficiency are determined in accordance with the test
methods proposed in the April 2016 Compressors Test Procedure Notice of
Proposed Rulemaking (``test procedure NOPR'') 81 FR 27220.\1\ These
proposed standards, if adopted, would apply to all compressors listed
in Table I.1 and manufactured in, or imported into, the United States
starting five years after the publication of the final rule for this
rulemaking.
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\1\ See https://www1.eere.energy.gov/buildings/appliance_standards/product.aspx/productid/78.
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V1 denotes the full-load actual volume flow rate \2\ of
the compressor, in actual cubic feet per minute (``acfm'').\3\ Standard
levels are expressed as a function of full-load actual volume flow rate
for each equipment class, and may be calculated by inserting values
from rightmost two columns into the second leftmost column. Doing so
will yield an efficiency-denominated function of actual volume flow
rate in acfm.
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\2\ The test procedure NOPR defines a term ``actual volume flow
rate'' to characterize compressor output flow as ``the volume flow
rate of air, compressed and delivered at the standard discharge
point, referred to conditions of total temperature, total pressure
and composition prevailing at the standard inlet point.'' It also
proposes a procedure for identifying a compressor's full-load actual
volume flow rate.
\3\ Actual cubic feet per minute (``acfm'') is an industry
convention that describes the actual volume of air emerging from a
compressor, but expressed as though the air were allowed to expand
to ambient conditions at the compressor inlet.
Table I.1--Proposed Energy Conservation Standards for Compressors
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[eta]Regr
(package
Equipment class Minimum package isentropic isentropic d (percentage
efficiency efficiency loss reduction)
reference curve)
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Rotary; Lubricated; Air-cooled; Fixed- [eta]Regr + (1- [eta]Regr) * (d/ -0.00928 * -15
speed. 100). ln(.472 * V1)\2\
+ 0.139 * ln(.472
* V1) + 0.271
Rotary; Lubricated; Air-cooled; Variable- [eta]Regr + (1- [eta]Regr) * (d/ -0.0155 * ln(.472 -10
speed. 100). * V1)\2\ + 0.216
* ln(.472 * V1) +
0.00905
Rotary; Lubricated; Water-cooled; Fixed- .0235 + [eta]Regr + (1- -0.00928 * -15
speed. [eta]Regr) * (d/100). ln(.472 * V1)\2\
+ 0.139 * ln(.472
* V1) + 0.271
Rotary; Lubricated; Water-cooled; .0235 + [eta]Regr + (1- -0.0155 * ln(.472 -15
Variable-speed. [eta]Regr) * (d/100). * V1)\2\ + 0.216
* ln(.472 * V1) +
0.00905
Rotary; Lubricant-free; Air-cooled; [eta]Regr + (1- [eta]Regr) * (d/ A1 * ln(.472 * -11
Fixed-speed. 100). V1)\2\ + B1 *
ln(.472 * V1) +
C1
Rotary; Lubricant-free; Air-cooled; [eta]Regr + (1- [eta]Regr) * (d/ A2 * ln(.472 * -13
Variable-speed. 100). V1)\2\ + B2 *
ln(.472 * V1) +
C2
Rotary; Lubricant-free; Water-cooled; A3 * ln(.472 * V1)\2\ + B3 * A1 * ln(.472 * -11
Fixed-speed. ln(.472 * V1) + C3 + [eta]Regr V1)\2\ + B1 *
+ (1- [eta]Regr) * (d/100). ln(.472 * V1) +
C1
Rotary; Lubricant-free; Water-cooled; A4 * ln(.472 * V1)\2\ + B4 * A2 * ln(.472 * -13
Variable-speed. ln(.472 * V1) + C4 + [eta]Regr V1)\2\ + B2 *
+ (1- [eta]Regr) * (d/100). ln(.472 * V1) +
C2
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Table I.2--Coefficients for Proposed Energy Conservation Standards for Rotary, Lubricant-free, Air- and Water-
Cooled, Fixed-Speed Compressors
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Full-load actual volume flow rate range (actual cubic feet per
minute (acfm)) A1 B1 C1
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0 <= V1 <= 161.................................................. -0.00928 0.139 0.191
161 <= V1 <= 2125............................................... 0.00281 0.0344 0.417
2125 <= V1...................................................... -0.00928 0.139 0.271
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Table I.3--Coefficients for Proposed Energy Conservation Standards for Rotary, Lubricant-Free, Air- and Water-
Cooled, Variable-Speed Compressors
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Full-Load Actual Volume Flow Rate Range (acfm) A2 B2 C2
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0 <= V1 <= 102.................................................. -0.0155 0.216 -0.0984
102 <= V1 <= 1426............................................... 0.000 0.0958 0.134
1426 <= V1...................................................... -0.0155 0.216 0.00905
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Table I.4--Coefficients for Proposed Energy Conservation Standards for Rotary, Lubricant-Free, Water-Cooled,
Fixed-Speed Compressors
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Full-Load Actual Volume Flow Rate Range (acfm) A3 B3 C3
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0 <= V1 < 102................................................... 0 0 0
102 <= V1....................................................... -0.00924 0.117 -0.315
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Table I.5--Coefficients for Proposed Energy Conservation Standards for Rotary, Lubricant-Free, Water-Cooled,
Variable-Speed Compressors
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Full-Load Actual Volume Flow Rate Range (acfm) A4 B4 C4
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0 <= V1 < 74.................................................... 0 0 0
74 <= V1........................................................ 0.000173 0.00783 -0.0300
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DOE has tentatively concluded that the proposed standards represent
the maximum improvement in energy efficiency that is technologically
feasible and economically justified, and would result in the
significant conservation of energy. DOE further notes that air
compressors achieving these standard levels are already commercially
available for all proposed equipment classes. Based on the analyses
described in this preamble, DOE has tentatively concluded that the
benefits of the proposed standards to the nation (energy savings,
positive NPV of consumer benefits, consumer LCC savings, and emission
reductions) would outweigh the burdens (large loss of INPV for
manufacturers and LCC increases for some consumers).
DOE is also seriously considering the adoption of a more-stringent
energy efficiency standard in this rulemaking. Based on consideration
of the public comments DOE receives in response to this notice and
related information collected and analyzed during the course of this
rulemaking effort, DOE may adopt energy efficiency levels presented in
this notice that is higher than the proposed standards, or some
combination of level(s) that incorporate the proposed standards in
part. As discussed in more detail in section V.C.1, DOE is strongly
considering a TSL 3 standard for a compressor standard as an option
with greater than two times the annual net benefits of DOE's current
proposed TSL 2.
The proposed standards correspond to trial standard level (TSL) 2.
As discussed in section V.C, DOE has tentatively concluded that TSL 3,
which is comprised of more stringent energy efficiency standards than
TSL 2, is not economically justified. However, because TSL 3 has
significant benefits, including much higher national energy savings,
national NPV, and emissions reductions than those resulting from TSL 2
(see Table V.36), DOE is still considering the merits of standards at
TSL 3. Accordingly, DOE invites comments on whether DOE should adopt
standards for compressors at TSL 3 instead of at TSL 2. This is
identified as Issue 1 in section VIII.E, ``Issues on Which DOE Seeks
Comment.''
A. Benefits and Costs to Consumers
Table I.6 presents DOE's evaluation of the economic impacts of the
proposed standards on end users of compressors, as measured by the
average life-cycle cost (LCC) savings and the simple payback period
(PBP).\4\ The average LCC savings are positive for all equipment
classes for which a standard has been proposed, and the PBP is less
than the average lifetime of compressors, which is estimated to be
between 9 to 13 years (see section IV.F.6).
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\4\ The average LCC savings are measured relative to the no-new
standards case efficiency distribution in the no-new-standards case,
which depicts the market in the compliance year in the absence of
standards (see section IV.F.9). The simple PBP, which is designed to
compare specific efficiency levels, is measured relative to the
baseline model (see section IV.C.1.a).
Table I.6--Impacts of Proposed Energy Conservation Standards on End
Users of Compressors
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Average LCC Simple
Equipment Class Savings Payback
(2015$) Period (years)
------------------------------------------------------------------------
Rotary, Fixed Speed, Lubricated, Air $8,902 1.7
Cooled.................................
(RP_FS_L_AC )...........................
Rotary, Fixed Speed, Lubricated, Water 15,011 2.4
Cooled.................................
(RP_FS_L_WC )...........................
Rotary, Fixed Speed, Lubricant-Free Air n.a. n.a.
Cooled.................................
(RP_FS_LF_AC) *.........................
Rotary, Fixed Speed, Lubricant-Free n.a. n.a.
Water Cooled (RP_FS_LF_WC) *...........
Rotary, Variable Speed, Lubricated, Air 6,061 2.5
Cooled.................................
(RP_VS_L_AC )...........................
[[Page 31684]]
Rotary, Variable Speed, Lubricated, 13,865 3.4
Water Cooled...........................
(RP_VS_L_WC )...........................
Rotary, Variable Speed, Lubricant-Free n.a. n.a.
Air Cooled (RP_VS_LF_AC) *.............
Rotary, Variable Speed, Lubricant-Free n.a. n.a.
Water Cooled (RP_VS_LF_WC) *...........
Reciprocating, Single-Phase, Lubricated. n.a. n.a.
(R1_FS_L_XX) **.........................
Reciprocating, Three-Phase, Lubricated.. n.a. n.a.
(R3_FS_L_XX) **.........................
------------------------------------------------------------------------
* No increase in efficiency is proposed for this equipment class.
** No new standard is proposed for this equipment class.
DOE's analysis of the impacts of the proposed standards on end
users is described in section V.B.1 of this document.
B. Impact on Manufacturers
The industry net present value (INPV) is the sum of the discounted
cash flows to the industry from the base year through the end of the
analysis period (2015 to 2051). Using a real discount rate of 8.7
percent, DOE estimates that the INPV for manufacturers of compressors
in the case without standards is $497.1 million in 2014$. Under the
proposed standards, DOE expects that manufacturers may lose up to 11.6
percent of this INPV, or approximately $57.8 million.
DOE's analysis of the impacts of the proposed standards on
manufacturers is described in section IV.J of this document.
C. National Benefits and Costs 5
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\5\ All monetary values in this document are expressed in 2015
dollars and, where appropriate, are discounted to 2015 unless
explicitly stated otherwise. Energy savings in this section refer to
the full-fuel-cycle savings (see section IV.H for discussion).
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DOE's analyses indicate that the proposed energy conservation
standards for compressors would save a significant amount of energy.
Relative to the case without new standards, the lifetime energy savings
for compressors purchased in the 30-year period that begins in the
anticipated first full year of compliance with the new standards (2022-
2051) \6\ amount to 0.18 quadrillion British thermal units (Btu), or
quads.\7\ This represents a savings of 0.4 percent relative to the
energy use of these equipment in the case without new standards
(referred to as the ``no-new-standards case'').
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\6\ The analysis uses January 1st, 2022 to represent the
expected compliance date in late 2021. Therefore, the 30-year
analysis period is referred to as 2022-2051.
\7\ The quantity refers to full-fuel-cycle (FFC) energy savings.
FFC energy savings includes the energy consumed in extracting,
processing, and transporting primary fuels (i.e., coal, natural gas,
petroleum fuels), and, thus, presents a more complete picture of the
impacts of energy efficiency standards. For more information on the
FFC metric, see section IV.H.1.
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The cumulative net present value (NPV) of total consumer costs and
savings of the proposed standards for compressors ranges from $0.21
billion (at a 7-percent discount rate) to $0.62 billion (at a 3-percent
discount rate). This NPV expresses the estimated total value of future
operating-cost savings minus the estimated increased equipment costs
for compressors purchased in 2022-2051.
In addition, the proposed standards for compressors would have
significant environmental benefits. DOE estimates that the proposed
standards would result in cumulative emission reductions (over the same
period as for energy savings) of 10.6 million metric tons (Mt) \8\ of
carbon dioxide (CO2), 5.8 thousand tons of sulfur dioxide
(SO2), 19.5 thousand tons of nitrogen oxides
(NOX), 46.7 thousand tons of methane (CH4), 0.1
thousand tons of nitrous oxide (N2O), and 0.02 tons of
mercury (Hg).\9\ The cumulative reduction in CO2 emissions
through 2030 amounts to 1.2 Mt, which is equivalent to the emissions
resulting from the annual electricity use of 0.11 million homes.
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\8\ A metric ton is equivalent to 1.1 short tons. Results for
emissions other than CO2 are presented in short tons.
\9\ DOE calculated emissions reductions relative to the no-new-
standards case, which reflects key assumptions in the Annual Energy
Outlook 2015 (AEO 2015) Reference case. AEO 2015 generally
represents current legislation and environmental regulations for
which implementing regulations were available as of October 31,
2014.
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The value of the CO2 reductions is calculated using a
range of values per metric ton of CO2 (otherwise known as
the Social Cost of Carbon, or SCC) developed by a recent Federal
interagency process.\10\ The derivation of the SCC values is discussed
in section IV.L. Using discount rates appropriate for each set of SCC
values (see Table I.X), DOE estimates the present monetary value of the
CO2 emissions reduction (not including CO2
equivalent emissions of other gases with global warming potential) is
between $0.06 billion and $0.99 billion, with a value of $0.32 billion
using the central SCC case represented by $40.0/t in 2015. DOE also
estimates the present monetary value of the NOX emissions
reduction to be $0.01 billion at a 7-percent discount rate and $0.03
billion at a 3-percent discount rate.\11\ DOE is investigating
appropriate valuation of the reduction in methane and other emissions,
and did not include any values in this rulemaking.
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\10\ United States Government--Interagency Working Group on
Social Cost of Carbon. Technical Support Document: Technical Update
of the Social Cost of Carbon for Regulatory Impact Analysis Under
Executive Order 12866. May 2013. Revised July 2015. https://www.whitehouse.gov/sites/default/files/omb/inforeg/scc-tsd-final-july-2015.pdf.
\11\ DOE estimated the monetized value of NOX
emissions reductions associated with electricity savings using
benefit per ton estimates from the Regulatory Impact Analysis for
the Clean Power Plan Final Rule, published in August 2015 by EPA's
Office of Air Quality Planning and Standards. Available at http://www.epa.gov/cleanpowerplan/clean-power-plan-final-rule-regulatory-impact-analysis. See section IV.L.2 for further discussion. The U.S.
Supreme Court has stayed the rule implementing the Clean Power Plan
until the current litigation against it concludes. Chamber of
Commerce, et al. v. EPA, et al., Order in Pending Case, 136 S.Ct.
999 (Mem). However, the benefit-per-ton estimates established in the
Regulatory Impact Analysis for the Clean Power Plan are based on
scientific studies that remain valid irrespective of the legal
status of the Clean Power Plan. Note that DOE is primarily using a
national benefit-per-ton estimate for NOX emitted from
the Electricity Generating Unit sector based on an estimate of
premature mortality derived from the ACS study (Krewski et al.
2009). If the benefit-per-ton estimates were based on the Six Cities
study (Lepuele et al. 2011), the values would be nearly two-and-a-
half times larger.
---------------------------------------------------------------------------
Table I.7 summarizes the economic benefits and costs expected to
result from the proposed standards for compressors.
[[Page 31685]]
Table I.7.--Summary of Economic Benefits and Costs of Proposed Energy
Conservation Standards for Compressors
[TSL 2] *
------------------------------------------------------------------------
Present value Discount rate
Category (billion 2015$) (percent)
------------------------------------------------------------------------
Benefits:
Consumer Operating Cost Savings... 0.3 7
0.8 3
CO2 Reduction (using mean SCC at 0.1 5
5% discount rate) \**\...........
CO2 Reduction (using mean SCC at 0.3 3
3% discount rate) \**\...........
CO2 Reduction (using mean SCC at 0.5 2.5
2.5% discount rate) \**\.........
CO2 Reduction (using 95th 1.0 3
percentile SCC at 3% discount
rate) \**\.......................
NOX Reduction [dagger]............ 0.0 7
0.0 3
Total Benefits [Dagger]........... 0.7 7
1.2 3
Costs:
Consumer Incremental Installed 0.1 7
Costs............................
0.2 3
Total Net Benefits:
Including CO2 and NOX Reduction 0.6 7
Monetized Value [Dagger].........
1.0 3
------------------------------------------------------------------------
\*\ This table presents the costs and benefits associated with
compressors shipped in 2022-2051. These results include benefits to
consumers which accrue after 2048 from the equipment purchased in 2022-
2051. The costs account for the incremental variable and fixed costs
incurred by manufacturers due to the standard, some of which may be
incurred in preparation for the rule.
\**\ The interagency group selected four sets of SCC values for use in
regulatory analyses. Three sets of values are based on the average SCC
from the integrated assessment models, at discount rates of 5%, 3%,
and 2.5%. For example, for 2015 emissions, these values are $12.4/t,
$40.6/t, and $63.2/t, in 2015$, respectively. The fourth set ($118/t
in 2015$ for 2015 emissions), which represents the 95th percentile of
the SCC distribution calculated using a 3% discount rate, is included
to represent higher-than-expected impacts from temperature change
further out in the tails of the SCC distribution. The SCC values are
emission year specific. See section IV.L.1 for more details.
[dagger] DOE estimated the monetized value of NOX emissions reductions
using benefit per ton estimates from the Regulatory Impact Analysis
for the Clean Power Plan Final Rule, published in August 2015 by EPA's
Office of Air Quality Planning and Standards. (Available at: http://www.epa.gov/cleanpowerplan/clean-power-plan-final-rule-regulatory-impact-analysis.) See section IV.L.2 for further discussion. Note that
DOE is primarily using a national benefit-per-ton estimate for NOX
emitted from the Electricity Generating Unit sector based on an
estimate of premature mortality derived from the ACS study (Krewski et
al., 2009). If the benefit-per-ton estimates were based on the Six
Cities study (Lepuele et al., 2011), the values would be nearly two-
and-a-half times larger.
[Dagger] Total Benefits for both the 3% and 7% cases are presented using
only the average SCC with 3-percent discount rate.
The benefits and costs of the proposed standards, for compressors
sold in 2022-2051, can also be expressed in terms of annualized values.
The monetary values for the total annualized net benefits are the sum
of: (1) The national economic value of the benefits in reduced consumer
operating costs, minus (2) the increase in equipment purchase prices
and installation costs, plus (3) the value of the benefits of
CO2 and NOX emission reductions, all
annualized.\12\
---------------------------------------------------------------------------
\12\ To convert the time-series of costs and benefits into
annualized values, DOE calculated a present value in 2016, the year
used for discounting the NPV of total consumer costs and savings.
For the benefits, DOE calculated a present value associated with
each year's shipments in the year in which the shipments occur
(e.g., 2020 or 2030), and then discounted the present value from
each year to 2016. The calculation uses discount rates of 3 and 7
percent for all costs and benefits except for the value of
CO2 reductions, for which DOE used case-specific discount
rates, as shown in Table I.3. Using the present value, DOE then
calculated the fixed annual payment over a 30-year period, starting
in the compliance year that yields the same present value.
---------------------------------------------------------------------------
The national operating savings are domestic U.S. consumer monetary
savings that occur as a result of purchasing the covered products. The
national operating cost savings is measured for the lifetime of
compressors shipped in 2022-2051. The CO2 reduction is a
benefit that accrues globally due to decreased domestic energy
consumption that is expected to result from this rule. Because
CO2 emissions have a very long residence time in the
atmosphere, the SCC values in future years reflect future
CO2-emissions impacts that continue beyond 2100 through
2300.
Estimates of annualized benefits and costs of the proposed
standards are shown in Table I.8. The results under the primary
estimate are as follows.
Using a 7-percent discount rate for benefits and costs other than
CO2 reduction (for which DOE used a 3-percent discount rate
along with the average SCC series that has a value of $40.0/t in 2015),
the estimated cost of the standards proposed in this rule is 10.4
million per year in increased equipment costs, while the estimated
annual benefits are $36.0 million in reduced equipment operating costs,
$19.2 million in CO2 reductions, and $1.4 million in reduced
NOX emissions. In this case, the net benefit amounts to $46
million per year.
Using a 3-percent discount rate for all benefits and costs and the
average SCC series that has a value of $40.0/t in 2015, the estimated
cost of the proposed standards is $10.9 million per year in increased
equipment costs, while the estimated annual benefits are $48.4 million
in reduced operating costs, $19.2 million in CO2 reductions,
and $2.0 million in reduced NOX emissions. In this case, the
net benefit amounts to $59 million per year.
[[Page 31686]]
Table I.8--Annualized Benefits and Costs of Proposed Energy Conservation Standards for Compressors
[TSL 2]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Million 2015$/year
-------------------------------------------------------------------------------------------
Discount rate High net benefits estimate
Primary estimate * Low net benefits estimate * *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Benefits
--------------------------------------------------------------------------------------------------------------------------------------------------------
Consumer Operating Cost 7%........................... 36.0......................... 29.3......................... 43.7
Savings.
3%........................... 48.4......................... 38.9......................... 60.4
CO2 Reduction (using mean SCC 5%........................... 5.7.......................... 4.8.......................... 6.9
at 5% discount rate) \**\.
CO2 Reduction (using mean SCC 3%........................... 19.2......................... 16.0......................... 23.2
at 3% discount rate) \**\.
CO2 Reduction (using mean SCC 2.5%......................... 28.1......................... 23.3......................... 33.9
at 2.5% discount rate) \**\.
CO2 Reduction (using 95th 3%........................... 58.5......................... 48.6......................... 70.6
percentile SCC at 3%
discount rate ) \**\.
NOX Reduction [dagger]....... 7%........................... 1.4.......................... 1.2.......................... 3.7
3%........................... 2.0.......................... 1.6.......................... 5.4
Total Benefit 7% plus CO2 range............ 43 to 96..................... 35 to 79..................... 54 to 118
[dagger][dagger].
7%........................... 57........................... 46........................... 71
3% plus CO2 range............ 56 to 109.................... 45 to 89..................... 73 to 136
3%........................... 70........................... 57........................... 89
--------------------------------------------------------------------------------------------------------------------------------------------------------
Costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
Consumer Incremental 7%........................... 10.4......................... 8.9.......................... 11.8
Installed Equipment Costs. 3%........................... 10.9......................... 9.2.......................... 12.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
Net Benefits
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total [dagger][dagger]... 7% plus CO2 range............ 33 to 85..................... 26 to 70..................... 42 to 106
7%........................... 46........................... 38........................... 59
3% plus CO2 range............ 45 to 98..................... 36 to 80..................... 60 to 124
3%........................... 59........................... 47........................... 77
--------------------------------------------------------------------------------------------------------------------------------------------------------
* This table presents the annualized costs and benefits associated with compressors shipped in 2022-2051. These results include benefits to consumers
which accrue after 2051 from the equipment purchased in 2022-2051. The Primary, Low Benefits, and High Benefits Estimates utilize projections of
energy prices from the AEO 2015 Reference case, Low Economic Growth case, and High Economic Growth case, respectively. In addition, incremental
product costs reflect a constant trend in the Primary Estimate, an increasing trend in the Low Benefits Estimate, and a decreasing trend in the High
Benefits Estimate. The methods used to derive projected price trends are explained in section IV.H.1.]. Note that the Benefits and Costs may not sum
to the Net Benefits due to rounding.
** The CO2 reduction benefits are calculated using 4 different sets of SCC values. The first three use the average SCC calculated using 5%, 3%, and 2.5%
discount rates, respectively. The fourth represents the 95th percentile of the SCC distribution calculated using a 3% discount rate. The SCC values
are emission year specific. See section IV.L.1 for more details.
[dagger] DOE estimated the monetized value of NOX emissions reductions using benefit per ton estimates from the Regulatory Impact Analysis for the Clean
Power Plan Final Rule, published in August 2015 by EPA's Office of Air Quality Planning and Standards. (Available at: http://www.epa.gov/cleanpowerplan/clean-power-plan-final-rule-regulatory-impact-analysis.) See section IV.L.2 for further discussion. For DOE's Primary Estimate and Low
Net Benefits Estimate, the agency is using a national benefit-per-ton estimate for NOX emitted from the Electric Generating Unit sector based on an
estimate of premature mortality derived from the ACS study (Krewski et al., 2009). For DOE's High Net Benefits Estimate, the benefit-per-ton estimates
were based on the Six Cities study (Lepuele et al., 2011), which are nearly two-and-a-half times larger than those from the ACS study.
[dagger][dagger] Total Benefits for both the 3% and 7% cases are derived using the series corresponding to the average SCC with a 3-percent discount
rate ($40.0/t case). In the rows labeled ``7% plus CO2 range'' and ``3% plus CO2 range,'' the operating cost and NOX benefits are calculated using the
labeled discount rate, and those values are added to the full range of CO2 values.
DOE's analysis of the national impacts of the proposed standards is
described in sections IV.H, IV.K and IV.L of this document.
D. Conclusion
DOE has tentatively concluded that the proposed standards represent
the maximum improvement in energy efficiency that is technologically
feasible and economically justified, and would result in the
significant conservation of energy. DOE further notes that air
compressors achieving these standard levels are already commercially
available for all proposed equipment classes. Based on the analyses
described in this preamble, DOE has tentatively concluded that the
benefits of the proposed standards to the nation (energy savings,
positive NPV of consumer benefits, consumer LCC savings, and emission
reductions) would outweigh the burdens (large loss of INPV for
manufacturers and LCC increases for some consumers).
DOE is also seriously considering the adoption of a more -stringent
energy efficiency standard in this rulemaking. Based on consideration
of the public comments DOE receives in response to this notice and
related information collected and analyzed during the course of this
rulemaking effort, DOE may adopt energy efficiency levels presented in
this notice that is higher than the proposed standards, or some
combination of level(s) that incorporate the proposed standards in
part. As discussed in more detail in section V.C.1, DOE is strongly
considering a TSL 3 standard for a compressor standard as an option
with greater than two times the annual net benefits of DOE's current
proposed TSL 2.
[[Page 31687]]
II. Introduction
The following section briefly discusses the statutory authority
underlying this proposed rule, as well as some of the relevant
historical background related to the establishment of standards for
compressors.
A. Authority
EPCA provides that DOE may include a type of industrial equipment,
including compressors, as covered equipment if it determines that to do
so is necessary to carry out the purposes of Part A-1. (42 U.S.
6311(2)(B)(i) and 6312(b)). The purpose of Part A-1 is to improve the
efficiency of electric motors and pumps and certain other industrial
equipment in order to conserve the energy resources of the Nation. (42
U.S.C. 6312(a)). DOE has proposed to determine that because (1) DOE may
only prescribe energy conservation standards for covered equipment; and
(2) energy conservation standards for compressors would improve the
efficiency of such equipment more than would be likely to occur in the
absence of standards, including compressors as covered equipment is
necessary to carry out the purposes of Part A-1. 77 FR 76972 (Dec. 31,
2012).
Pursuant to EPCA, any new or amended energy conservation standard
for compressors must be designed to achieve the maximum improvement in
energy efficiency that is technologically feasible and economically
justified. (42 U.S.C. 6295(o)(2)(A) and 6316(a)). Furthermore, the new
or amended standard must result in a significant conservation of
energy. (42 U.S.C. 6295(o)(3)(B) and 6316(a)).
Pursuant to EPCA, DOE's energy conservation program for covered
products consists essentially of four parts: (1) Testing; (2) labeling;
(3) the establishment of Federal energy conservation standards; and (4)
certification and enforcement procedures. For commercial and industrial
products, DOE is primarily responsible for labeling requirements.
Subject to certain criteria and conditions, DOE is required to develop
test procedures to measure the energy efficiency, energy use, or
estimated annual operating cost of each covered product. (42 U.S.C.
6295(o)(3)(A) and 6314) Manufacturers of covered products must use the
prescribed DOE test procedure as the basis for certifying to DOE that
their products comply with the applicable energy conservation standards
adopted under EPCA and when making representations to the public
regarding the energy use or efficiency of those products. (42 U.S.C.
6293(c), 6295(s) and 6316(a)) Similarly, DOE must use these test
procedures to determine whether the products comply with standards
adopted pursuant to EPCA. (42 U.S.C. 6295(s) and 6316(a)) There are
currently no DOE test procedures for compressors. DOE issued a test
procedure NOPR for Compressors in April 2016. Upon finalization, any
DOE test procedure for compressors will appear at title 10 of the Code
of Federal Regulations (CFR) part 431, subpart T, appendix A.
DOE follows specific statutory criteria for prescribing new or
amended standards for covered equipment, including compressors. Any new
or amended standard for a covered product must be designed to achieve
the maximum improvement in energy efficiency that is technologically
feasible and economically justified. (42 U.S.C. 6316(a), and
6295(o)(2)(A) and (3)(B)) Furthermore, DOE may not adopt any standard
that would not result in the significant conservation of energy. (42
U.S.C. 6295(o)(3) and 6316(a)) Moreover, DOE may not prescribe a
standard: (1) For certain products, including compressors, if no test
procedure has been established for the product, or (2) if DOE
determines by rule that the standard is not technologically feasible or
economically justified. (42 U.S.C. 6295(o)(3)(A)-(B) and 6316(a)) In
deciding whether a proposed standard is economically justified, DOE
must determine whether the benefits of the standard exceed its burdens.
(42 U.S.C. 6295(o)(2)(B)(i) and 6316(a)) DOE must make this
determination after receiving comments on the proposed standard, and by
considering, to the greatest extent practicable, the following seven
statutory factors:
(1) The economic impact of the standard on manufacturers and
consumers of the products subject to the standard;
(2) The savings in operating costs throughout the estimated average
life of the covered products in the type (or class) compared to any
increase in the price, initial charges, or maintenance expenses for the
covered products that are likely to result from the standard;
(3) The total projected amount of energy (or as applicable, water)
savings likely to result directly from the standard;
(4) Any lessening of the utility or the performance of the covered
products likely to result from the standard;
(5) The impact of any lessening of competition, as determined in
writing by the Attorney General, that is likely to result from the
standard;
(6) The need for national energy and water conservation; and
(7) Other factors the Secretary of Energy considers relevant. (42
U.S.C. 6295(o)(2)(B)(i)(I)-(VII) and 6316(a))
Further, EPCA, as codified, establishes a rebuttable presumption
that a standard is economically justified if the Secretary finds that
the additional cost to the consumer of purchasing a product complying
with an energy conservation standard level will be less than three
times the value of the energy savings during the first year that the
consumer will receive as a result of the standard, as calculated under
the applicable test procedure. (42 U.S.C. 6295(o)(2)(B)(iii) and
6316(a))
EPCA, as codified, also contains what is known as an ``anti-
backsliding'' provision, which prevents the Secretary from prescribing
any amended standard that either increases the maximum allowable energy
use or decreases the minimum required energy efficiency of a covered
product. (42 U.S.C. 6295(o)(1) and 6316(a)) Also, the Secretary may not
prescribe an amended or new standard if interested persons have
established by a preponderance of the evidence that the standard is
likely to result in the unavailability in the United States in any
covered product type (or class) of performance characteristics
(including reliability), features, sizes, capacities, and volumes that
are substantially the same as those generally available in the United
States. (42 U.S.C. 6295(o)(4) and 6316(a))
Additionally, 42 U.S.C. 6295(q)(1) and 6316(a) specifies
requirements when promulgating an energy conservation standard for a
covered product that has two or more subcategories. DOE must specify a
different standard level for a type or class of product that has the
same function or intended use, if DOE determines that products within
such group: (A) Consume a different kind of energy from that consumed
by other covered products within such type (or class); or (B) have a
capacity or other performance-related feature which other products
within such type (or class) do not have and such feature justifies a
higher or lower standard. (42 U.S.C. 6295(q)(1) and 6316(a)) In
determining whether a performance-related feature justifies a different
standard for a group of products, DOE must consider such factors as the
utility to the consumer of the feature and other factors DOE deems
appropriate. Id. Any rule prescribing such a standard must include an
explanation of the basis on which such higher or lower level was
established. (42 U.S.C. 6295(q)(2) and 6316(a))
Federal energy conservation requirements generally supersede State
[[Page 31688]]
laws or regulations concerning energy conservation testing, labeling,
and standards. (42 U.S.C. 6297(a)-(c) and 6316(a)) DOE may, however,
grant waivers of Federal preemption for particular State laws or
regulations, in accordance with the procedures and other provisions set
forth under 42 U.S.C. 6297(d) and 6316(a)).
B. Background
1. Current Standards
DOE does not currently have a test procedure or energy conservation
standard for compressors. In considering whether to establish standards
for compressors, DOE issued a Proposed Determination of Coverage on
December 31, 2012. 77 FR 76972.
2. History of Standards Rulemaking for Compressors
DOE initiated its rulemaking efforts to examine the possibility of
setting energy conservation standards for compressors by publishing a
notice that announced the availability of a framework document and a
public meeting to discuss that document and invite comment from
interested parties.\13\ 79 FR 06839. The Framework Document described
the procedural and analytical approaches that DOE anticipated using to
evaluate energy conservation standards for compressors, and also
identified and solicited comment on various issues to be resolved in
the rulemaking. DOE held that public meeting on March 3, 2014. Comments
received both in response to the Framework Document and public meeting
are discussed later in this document. In April 2016, DOE published a
Notice of Proposed Rulemaking to address a potential test procedure for
compressors.\14\
---------------------------------------------------------------------------
\13\ Available at: http://www.regulations.gov/#!documentDetail;D=EERE-2013-BT-STD-0040-0002.
\14\ Available at: https://www1.eere.energy.gov/buildings/appliance_standards/product.aspx/productid/78.
---------------------------------------------------------------------------
III. General Discussion
DOE developed this proposal after considering verbal and written
comments, data, and information from interested parties representing a
variety of interests. The following discussion addresses issues raised
by these commenters. Commenters, are listed in Table III.1.
Table III.1--Commenters and Affiliation
------------------------------------------------------------------------
Commenter Affiliation
------------------------------------------------------------------------
Air-Conditioning, Heating, and Trade Association.
Refrigeration Institute.
American Council for an Energy Advocacy Organization.
Efficient Economy.
Appliance Standards Awareness Advocacy Organization.
Project.
Association of Equipment Trade Association.
Manufacturers.
Atlas Copco...................... Manufacturer.
California Investor Owned Utility Association.
Utilities (Pacific Gas and
Electric Company, San Diego Gas,
Southern California Edison).
Compressed Air and Gas Institute. Trade Association.
Edison Electric Institute........ Utility Association.
G.H.S. Corporation (parent to Manufacturer.
Saylor-Beall and Sullivan-
Palatek).
Ingersoll-Rand................... Manufacturer.
Jenny Products, Inc.............. Manufacturer.
Kaeser Compressors............... Manufacturer.
Natural Resource Defense Council. Advocacy Organization.
Northwest Energy Efficiency Utility Association.
Alliance.
Southern California Gas Company.. Utility.
Sullair Distributor Council...... Manufacturer.
Sullair, LLC..................... Manufacturer.
William Scales, P.E.............. Consultant.
------------------------------------------------------------------------
A. Definition of Covered Equipment
Although compressors are listed as one type of industrial equipment
under 42 U.S.C. 6311(2) that DOE may regulate provided certain
conditions are met, the term ``compressor'' is not defined in EPCA. In
the Framework Document, DOE introduced a possible a definition for
``compressor'' which centered on a mechanical device that uses a
pressure ratio of 1.1.\15\ This value had the possible advantage of
consistency with International Organization for Standardization (ISO)
Technical Report 12942:2012, ``Compressors--Classification--
Complementary information to ISO 5390'' (ISO/TR 12942:2012).
---------------------------------------------------------------------------
\15\ DOE has previously used both the terms ``pressure ratio''
and ``pressure-increase ratio'' to refer to the ratio of absolute
discharge pressure to absolute inlet pressure. DOE notes that, while
it considers the terms to mean the same thing, only ``pressure
ratio'' will be used in this document in order to preserve clarity.
---------------------------------------------------------------------------
In response to the Framework Document, the American Council for an
Energy-Efficient Economy (ACEEE), the Appliance Standards Awareness
Project (APSP), the Northwest Energy Efficiency Alliance (NEEA), and
the Alliance to Save Energy (ASE) (hereafter referred to as the Joint
Commenters), as well as the National Resources Defense Council (NRDC),
and the California Investor Owned Utilities (CAIOU) recommended that,
with respect to pressure-increase ratio, DOE take, as a lower limit for
compressors, the upper limit (1.2) for Commercial and Industrial Fans
and Blowers suggested in that equipment's 2013 Framework Document.\16\
(Joint Comment, No. 0016 at p. 1; NRDC, No. 0019 at p. 1; CAIOU, No.
0018 at p. 2) The commenters noted that this would avoid creating a
coverage gap, wherein certain air processing equipment would be
uncovered if its pressure ratio fell between the respective scope limit
of fans/blowers and compressors. (Docket No. EERE-2013-BT-STD-0006) DOE
agreed that no gap in coverage should exist between this and the fans
and blowers rulemaking and proposed a definition for ``compressor''
with a pressure ratio of 1.3 in the test procedure NOPR as follows:
---------------------------------------------------------------------------
\16\ http://www.regulations.gov/#!documentDetail;D=EERE-2013-BT-
STD-0006-0001.
---------------------------------------------------------------------------
``Compressor'' means a machine or apparatus that converts different
types of energy into the potential energy of gas pressure for
displacement and compression of gaseous media to any higher pressure
values above
[[Page 31689]]
atmospheric pressure and has a pressure ratio \17\ greater than 1.3.
---------------------------------------------------------------------------
\17\ DOE proposes to use terminology consistent with ISO
1217:2009 in describing the ratio of discharge to inlet pressures as
``pressure ratio,'' as opposed to ``pressure-increase ratio,'' which
is the term used in some other industry documents. However, for the
purpose of this document ``pressure-increase ratio'' and ``pressure
ratio'' are synonymous.
---------------------------------------------------------------------------
In order to objectively and unambiguously determine which equipment
meets the definition of ``compressor,'' DOE also proposed, in the test
procedure NOPR, a definition of the term ``pressure ratio'' as ``the
ratio of discharge pressure to inlet pressure, determined at full-load
operating pressure . . .'' Such a definition allows DOE to
quantitatively establish which equipment meet the pressure ratio
requirement proposed in the definition of compressor.
This definition of ``pressure ratio'' relies on the terms discharge
pressure and inlet pressure. Definitions for these, and several other
technical terms specific to testing of compressors are established in
of ISO 1217:2009 and DOE proposed in the test procedure NOPR to adopt
those definitions as part of incorporating by reference certain
portions of ISO 1217:2009.
B. Scope of the Energy Conservation Standards in This Rulemaking
DOE notes that while the definition of ``compressor,'' as proposed
in the test procedure NOPR, is broad, the styles of compressors to
which the proposed test procedure applies would be limited to a more
narrow range of equipment. Specifically, after consideration of
feedback from interested parties, as well as DOE research, DOE limited
the scope of analysis of this document to compressors that meet the
following criteria:
Are air compressors, as described in section III.B.1,
Are rotary or reciprocating compressors, as described in
section III.B.3,
Are driven by a brushless electric motor, as described in
section III.B.4,
Are distributed in commerce with a compressor motor
nominal horsepower greater than or equal to 1 and less than or equal to
500 horsepower (hp), as described in section III.B.4, and
Operate at a full-load operating pressure of greater than
or equal to 31 and less than or equal to 225 pounds per square inch
gauge (psig), as defined in section III.B.6.
DOE notes that ultimately, based on the results of the analyses
performed for this NOPR, DOE does not propose to establish energy
conservation standards for reciprocating compressors in this document.
Section V provides further details on this decision. Consequently, the
complete scope of the energy conservation standards proposed in this
rulemaking is as follows:
Are air compressors, as described in section III.B.1,
Are rotary compressors, as described in section III.B.3,
Are driven by a brushless electric motor, as described in
section III.B.4,
Are distributed in commerce with a compressor motor
nominal horsepower greater than or equal to 1 and less than or equal to
500 horsepower (hp), as described in section III.B.4, and
Operate at a full-load operating pressure of greater than
or equal to 31 and less than or equal to 225 pounds per square inch
gauge (psig), as defined in section III.B.6.
The following subsections discuss interested party comments related
to the DOE's scope of analysis and ultimate scope of proposed energy
conservation standards.
1. Equipment System Boundary
In the Framework Document, DOE discussed three separate boundary
levels of compressor equipment--``bare'' compressor, compressor
``package,'' and compressed air system (CAS)--and requested comment
regarding the feasibility of covering each boundary level of compressor
equipment. Saylor-Beall commented that ``while it might be possible to
rate the air compressor package, attention needs to be given to the
entire compressed air system of the end user;'' whereas, Jenny
Compressors (``Jenny'') stated that ``covering the entire `CAS' may
prove nearly impossible since many systems include components from many
different manufacturers, and no two systems are the same.'' (Saylor-
Beall, No. 0003 at p. 2; Jenny, No. 0005 at p. 2) Compressed Air and
Gas Institute (CAGI) and the Joint Commenters agreed that DOE should
cover the compressor package as part of this rulemaking. (CAGI, No.
0009 at p. 3; Joint Comment, No. 0016 at p. 2) the Joint Commenters
also stated that, if DOE covers the package, DOE would need to ensure
companies that assemble packages from purchased components are also
covered under this rulemaking. (Joint Comment, No. 0016 at p. 2-3) In
this NOPR, DOE proposes to align with the scope of applicability of the
test procedure NOPR and cover the compressor ``package.'' DOE considers
covering a ``bare'' compressor to represent significantly lower energy
savings compared to the other two compressor equipment levels. DOE also
understands that, while the CAS represents the largest available energy
savings, covering the CAS has significant drawbacks that weigh against
its adoption as the basis for an equipment classification for the
following reasons:
Each CAS is often unique to a specific installation;
Each CAS may include equipment from several different
manufacturers; and
A single CAS can include several different compressors, of
different types, which may all have different full-load operating
pressures.
Implementing a broader, CAS-based approach to compressor efficiency
would require DOE to (1) establish a methodology for measuring losses
in a given air-distribution network; and (2) assess what certification,
compliance, or enforcement practices would be required for a large
variety of system designs, and potential waiver criteria. For these
reasons, DOE does not believe the CAS to be a viable equipment
classification for coverage and proposes to cover only compressor
``packages.''
In the test procedure NOPR, DOE proposed to use the following
definition for ``air compressor,'' which is based on the concept of a
compressor package and borrows language from the definitions used by
the European Union's (EU) Lot 31 Ecodesign Study on Compressors (``Lot
31 Study,'' discussed further in section IV.A.2):
``Air compressor'' means a compressor designed to compress air that
has an inlet open to the atmosphere or other source of air, and is made
up of a compression element (bare compressor), driver(s), mechanical
equipment to drive the compressor element, and any ancillary equipment.
Also in the test procedure NOPR, DOE proposed the following
definitions which give meaning to terms used in the definition of ``air
compressor'':
``Bare compressor'' means the compression element and auxiliary
devices (e.g., inlet and outlet valves, seals, lubrication system, and
gas flow paths) required for performing the gas compression process,
but does not include the driver; speed-adjusting gear(s); gas
processing apparatuses and piping; or compressor equipment packaging
and mounting facilities and enclosures.\18\
---------------------------------------------------------------------------
\18\ The compressor industry frequently uses the term ``air-
end'' or ``air end'' to refer to the bare compressor. DOE uses
``bare compressor'' in the regulatory text of this proposed rule but
clarifies that, for the purposes of this rulemaking, it considers
the terms to be synonymous.
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``Driver'' means the machine providing mechanical input to drive a
[[Page 31690]]
bare compressor directly or through the use of mechanical equipment.
``Mechanical equipment'' means any component of an air compressor
that transfers energy from the driver to the bare compressor.
``Ancillary equipment'' means any equipment distributed in commerce
with an air compressor that is not a bare compressor, driver, or
mechanical equipment. Ancillary equipment is considered to be part of a
given air compressor, regardless of whether the ancillary equipment is
physically attached to the bare compressor, driver, or mechanical
equipment at the time when the air compressor is distributed in
commerce.
DOE seeks comment on its proposal to limit the scope of energy
conservation standard proposed in this document to only equipment that
is made up of a compression element (bare compressor), driver(s),
mechanical equipment to drive the compressor element, and any ancillary
equipment (i.e., a ``packaged compressor''), through the use of the
defined term, ``air compressors.'' This is identified as Issue 2 in
section VIII.E, ``Issues on Which DOE Seeks Comment.''
2. Compressed Gas
Broadly, compressors are used to compress a wide variety of gases.
In the Framework Document,\19\ DOE requested comment on limiting the
scope to only ``air compressors'' and stated that information gathered
to that point indicated that non-air compressing equipment accounted
for a relatively small fraction of the overall compressors market, in
terms of both shipments and annual energy consumption. DOE received
conflicting feedback on the topic from stakeholders. The Edison
Electric Institute (EEI) recommended covering all compressor types
regardless of gas type because natural gas compressor energy use is
projected to increase, while CAGI agreed that DOE should cover only air
compressors. (EEI, No. 0012 at p. 1-2; CAGI, No. 0009 at p. 1) The Air-
Conditioning, Heating, and Refrigeration Institute (AHRI) requested
that compressors used in heating, ventilation, and air-conditioning
(HVAC) equipment be specifically excluded. (AHRI No. 0015, at p. 1)
---------------------------------------------------------------------------
\19\ Available at: http://www.regulations.gov/#!documentDetail;D=EERE-2013-BT-STD-0040-0001.
---------------------------------------------------------------------------
After the publication of the Framework Document, DOE announced
several new initiatives to modernize the country's natural gas
transmission and distribution infrastructure, including one to explore
establishing efficiency standards for natural gas compressors.\20\ As
part of that effort, DOE's Appliance Standards Program published a
Request for Information (RFI), on August 5, 2014, to help determine
both the feasibility of energy conservation standards for natural gas
compressors and whether they are similar enough to air compressors to
be considered within the scope of this rulemaking. 79 FR 25377.
Additionally, DOE announced the availability of some preliminary, high-
level description of the market and technology for natural gas
compressors. DOE also published a notice of public meeting \21\ (NOPM),
held on December 17, 2014, to present and seek comment on the content
of that data. Based upon the feedback received from the RFI, NOPM, and
public meeting, DOE opted to consider natural gas compressors
separately from air compressors. (Docket No. EERE-2014-BT-STD-0051)
---------------------------------------------------------------------------
\20\ See: http://energy.gov/articles/department-energy-announces-steps-help-modernize-natural-gas-infrastructure.
\21\ Available at: http://www.regulations.gov/?s#!documentDetail;D=EERE-2014-BT-STD-0051-0005.
---------------------------------------------------------------------------
Regarding refrigerant compressors, DOE considers refrigerant
compressors to have the same basic function as air compressors in that
they both compress a working fluid to a higher pressure, but with the
working fluid of refrigerant compressors being refrigerant instead of
air. Refrigerant compressors are usually only included in equipment
where cooling or heating is required, such as heating, ventilation,
air-conditioning and refrigeration (HVACR) equipment. Similar to
natural gas compressors, DOE has determined that refrigerant
compressors serve a specific and unique application and also
necessitate unique standards. As a result, DOE has opted not to
consider refrigerant compressors in this rulemaking.
Furthermore, DOE's research found no large market segments or
applications for compressor equipment used on gases other than air or
natural gas. Information gathered during confidential manufacturer
interviews indicated that non-air and non-natural gas compressing
equipment represented relatively low sales volume and annual energy
consumption.
Because air compressors comprise a significant portion of the
compressor market and DOE intends to consider natural gas equipment as
part of a separate rulemaking,\22\ DOE proposes to consider standards
for only air compressors in this rulemaking. DOE believes that
compressors for other fluids serve different applications and are
technically very different equipment than air compressors. As a result,
compressors for gases other than air would likely require separate test
procedures and energy conservation standards analyses. Consequently,
DOE proposes to align with the scope of applicability of the test
procedure NOPR, and limit the scope of energy conservation standards to
only compressors that are designed to compress air and that have inlets
open to the atmosphere or other source of air, through the use of the
defined term, ``air compressors.'' As discussed in Section III.B.1, DOE
proposed a definition for the term ``air compressor'' in the test
procedure NOPR.
---------------------------------------------------------------------------
\22\ Docket viewable here: http://www.regulations.gov/#!docketDetail;D=EERE-2014-BT-STD-0051.
---------------------------------------------------------------------------
DOE seeks comment on its proposal to limit the scope of energy
conservation standard proposed in this document to only compressors
that are designed to compress air and that have inlets open to the
atmosphere or other source of air, through the use of the defined term,
``air compressors.'' This is identified as Issue 3 in section VIII.E,
``Issues on Which DOE Seeks Comment.''
3. Compression Principle
Compressor equipment can be classified by compression principle,
and on that basis can include dynamic compressors, rotary compressors,
and reciprocating compressors. In the Framework Document, DOE offered
definitions for each:
``Dynamic compressor'' means ``a compressor in which the gas
pressure increase is achieved in continuous flow essentially by
increasing its kinetic energy in the flow path of the machine due to
acceleration to the high velocities by mechanical action of blades
placed on a rapid rotating wheel and further transformation of the
kinetic energy into the potential energy of the elevated pressure by
successive deceleration of the said flow.'' The definition for dynamic
compressor is consistent with the definition included in ISO/TR
12942:2012 and aligns with industry standards.
``Rotary compressor'' means ``a positive displacement compressor in
which gas admission and diminution of its successive volumes or its
forced discharge are performed cyclically by rotation of one or several
rotors in a compressor casing.'' The definition for rotary compressor
is consistent with the definition included in ISO/TR 12942:2012 and
aligns with industry standards.
``Reciprocating compressor'' means ``a positive displacement
compressor in which gas admission and diminution of its successive
volumes are performed
[[Page 31691]]
cyclically by straight-line alternating movements of a moving member(s)
in a compression chamber(s).'' The definition for reciprocating
compressor is consistent with the definition included in ISO/TR
12942:2012 and aligns with industry standards.
DOE's test procedure NOPR proposes those definitions for ``rotary
compressor,'' and ``reciprocating compressor,'' and added a proposed
definition for ``positive-displacement compressor.'' The test procedure
NOPR did not propose a definition for ``dynamic compressor,'' as no
test methods were proposed for equipment commonly referred to as
``dynamic compressors.'' In the test procedure NOPR, the term
``positive-displacement compressor'' is proposed to mean ``a compressor
in which the admission and diminution of successive volumes of the
gaseous medium are performed periodically by forced expansion and
diminution of a closed space(s) in a working chamber(s) by means of
displacement of a moving member(s) or by displacement and forced
discharge of the gaseous medium into the high-pressure area.''
In response to the Framework Document, several stakeholders agreed
that DOE should cover all three compressor types. (Joint Comment, No.
0016 at p. 2; CAGI, No. 0009 at p. 1) Scales commented that DOE should
focus on centrifugal and rotary screw compressors above 350-hp. (W.
Scales, No. 0020 at p. 1) DOE also received annual shipments data in
industry stakeholder submittals. This shipments data are discussed in
detail in section IV.G. DOE used these data to estimate the overall
size of the air compressors market. The shipments data for 2013
provided to DOE suggest that rotary and reciprocating compressors
account for the majority of the air compressors market by units
shipped. By contrast, dynamic compressors account for fewer than 300
total units shipped, or roughly one percent of the total market.
DOE research indicated that dynamic compressors are typically
larger in power than positive displacement compressors, and commonly
engineered specifically for an order. Due to specialization and size,
little cost and performance data are publicly available, as both will
vary from unit to unit. Further, DOE found that the standard
international test procedure for dynamic compressors, ISO 5389, was
considered complicated and not widely used by industry. This fact may
also contribute to the general lack of publicly available performance
data.
Due to the lack of available data and relatively small market share
of dynamic compressors, DOE did not include dynamic compressors within
the scope of analysis of this energy conservation standards rulemaking;
rather, DOE aligned with the scope of applicability of the test
procedure NOPR, and analyzed and considered standards for rotary and
reciprocating compressors. Although DOE considered reciprocating
compressors within its scope of analysis, based on the results of DOE's
analyses, DOE does not propose to establish standards for reciprocating
compressors in this document. Consequently, in this NOPR, DOE proposes
to establish energy conversation standards for only rotary compressors.
Section V of this document provides further details on this decision.
DOE notes that it may explore in the future whether standards for
reciprocating or dynamic compressors are warranted.
4. Driver Type
Compressors can be powered using several types of drivers, commonly
including electric motors and internal combustion engines. Electric
motor-driven equipment may use either single-phase or three-phase
electric motors. Combustion engine-driven air compressors can be
powered by using different kinds of fuels, commonly including diesel,
gasoline, and natural gas. In the Framework Document, DOE considered
establishing standards for compressors regardless of driver type and
requested stakeholder comments.
a. Combustion Engines
DOE received varying comments regarding the inclusion of combustion
engine \23\ driven compressors. Jenny, the Association of Equipment
Manufacturers (AEM), and Sullair recommended excluding engine-driven
compressors due to the burden imposed by current emissions regulations
and overall low energy consumption by these products. (Jenny, No. 0005
at p. 2; AEM, No. 0011 at p. 1-2; Sullair, No. 0013 at p. 2) EEI and
the CAIOU urged DOE to include engine-driven compressors to avoid
creating a market trend towards engine-driven compressors. (EEI, No.
0012 at p. 2-3; CAIOU, No. 0018 at p. 2) The Joint Commenters
recommended that DOE examine engine-driven compressors to evaluate
possible energy savings but noted that generally they are used in low-
duty cycle applications. (Joint Comment, No. 0016 at p. 2)
---------------------------------------------------------------------------
\23\ For the purposes of this document, the term ``engine''
means ``combustion engine,'' equipment which can convert chemical
energy into mechanical energy by combusting fuel in the presence of
air.
---------------------------------------------------------------------------
Engine-driven air compressors are generally portable and designed
to be used in environments where access to electricity is limited or
non-existent, particularly at the current or voltage levels required by
comparable electric motor-driven compressors. Engine-driven compressors
are also typically used as on-demand units, with a low duty cycle and
annual energy consumption. Additionally, engine-driven compressors, by
nature of their portability, are less able to be optimized for a
specific set of operating conditions, which may harm efficiency
relative to a stationary unit that is designed or selected with a
specific load profile in mind. Consequently, engine-driven and electric
motor-driven compressors do not serve the same applications and are not
mutual substitutes.
DOE is aware that engine-driven compressors are currently covered
by the Environmental Protection Agency's Tier 4 emissions regulations
(40 CFR 1039).\24\ DOE understands that these Tier 4 regulations have
resulted in market-wide redesigns for the engines typically used in
these compressors, which has required compressor manufacturers to
redesign some of their own equipment. Based on the relatively lower
annual energy consumption, non-overlapping applications of motor- and
engine-driven equipment, and potentially competing priorities between
current emissions regulations and potential energy conservation
standards, DOE proposes to align with the scope of applicability of the
test procedure NOPR and not include engine-driven equipment in the
scope of this energy conservation standards this rulemaking. DOE may
explore in the future whether standards for engine-driven units are
warranted.
---------------------------------------------------------------------------
\24\ See also: http://www.epa.gov/otaq/nonroad-diesel.htm.
---------------------------------------------------------------------------
b. Motor Phase Count
In the Framework Document, DOE also considered excluding single-
phase electric motor-driven equipment. Stakeholders generally agreed
with excluding these products. (Saylor-Beall, No. 0003 at p. 2; CAGI,
No. 0009 at p. 3; Joint Comment, No. 0016 at p. 2). Other stakeholders
commented that compressors under 10-hp are generally packaged with
single-phase electric motors. (CAGI, No. 0009 at p. 3; Jenny, No. 0005
at p. 2). Saylor-Beall commented that, particularly for compressors
under 5-hp, three-phase shipment volumes are low. (Saylor-Beall, No.
0003 at p. 2) The Lot 31 Study estimated that single-phase compressors
in the EU represent less than one
[[Page 31692]]
percent of total compressor annual energy consumption. DOE research
suggests that the U.S. compressors market exhibits similar trends.
However, DOE is aware that some reciprocating compressors can be
packaged with either single- or three-phase electric motors.
Establishing energy conservation standards for only one variation of a
shared platform (e.g., three-phase motor-driven reciprocating
compressors) could create a market shift towards less efficient single-
phase motor-driven reciprocating compressors. Consequently, in this
document, DOE analyzed energy conservations standards for both single-
phase and three-phase reciprocating compressors. Ultimately, based on
the results of its analyses, DOE does not propose to establish
standards for either single- or three-phase motor-driven reciprocating
compressors in this document.
For rotary compressors, DOE understands that a very small fraction
of the market may be shipped as single-phase. DOE currently has no data
on the performance of single-phase rotary equipment. If the applicable
single-phase motors are less efficient than their three-phase
counterparts, it is possible that single-phase compressor packages may
be less efficient as well.
In the absence of more information on the relative cost and
efficiency of single- and three-phase compressors, DOE wishes to avoid
the risk of a substitution incentive. As a result, DOE proposes, in
this document, to consider standards for single-phase and three-phase
rotary compressors in this rulemaking.
DOE requests comment on its proposal to consider standards for both
single- and three-phase compressor equipment. DOE also requests comment
on any market trends that may affect the efficiency of such equipment
in the future. DOE requests data that may aid in characterizing the
relative cost and performance of equipment of different motor phase
counts, so that DOE can better evaluate whether a substitution
incentive is likely to be created. This is identified as Issue 4 in
section VIII.E, ``Issues on Which DOE Seeks Comment.''
c. Styles of Electric Motor
DOE is aware that some small compressors intended for very low
duty-cycles may be manufactured with motors which use sliding electric
contacts, or ``brushes.'' Although brushes are simple to control and
inexpensive to construct, they are rarely used in applications with
significant operating hours, for several reasons. First, brushes
generally impose a reduction in efficiency, relative to brushless
technology, and are thereby suitable only for applications with low
duty cycles. Second, brushes wear and require replacement at regular
intervals, which may pose risk of inducing costly downtime in an
industrial process. Third, brushes may create electrical arcing,
rendering them unsuitable for certain industrial environments where
combustible or explosive gases or dust may exist. Finally, brushes may
create greater acoustic noise than brushless technology, which can be
viewed as a form of utility to the end user.
All of these factors limit the applications for which any
compressors distributed in commerce with brushed motors are suitable.
However, DOE recognizes the applications for which brushed motors are
appropriate as a unique market segment serving specific applications
where, in particular, operating life and durability are not important
criteria.
DOE also notes that compressors sold with brushed motors play a
niche role in the market and, as a result, DOE does is electing to
focus on the dominant brushless motor technology in developing the
energy conservation standards proposed herein. Consequently, DOE
proposes to align with the scope of applicability of the test procedure
NOPR, and limit the scope of energy conservation standards to only
those compressors that are driven by brushless motors.\25\ DOE may
consider energy conservation standards for compressors sold with
brushed electric motors as part of a separate, future, rulemaking, if
it determines such actions are warranted.
---------------------------------------------------------------------------
\25\ In the test procedure NOPR, DOE proposed to define
``brushless electric motor'' as a machine that coverts electrical
power into rotational mechanical power without use of sliding
electrical contacts.'' DOE considers ``brushless'' motors to
include, but not be limited to, what are commonly known as
``induction,'' ``brushless DC,'' ``permanent magnet,''
``electrically commutated,'' and ``reluctance'' motors. The term
``brushless'' motors would not include what are commonly known as
``brushed DC'' and ``universal'' motors.
---------------------------------------------------------------------------
5. Equipment Capacity
Compressors are sold in a very wide range of capacities. Compressor
capacity refers to the overall rate at which a compressor can perform
work. Although the ultimate end-user requirement is a specific output
volume flow rate of air at a certain pressure, industry typically
describes compressor capacity in terms of the ``nominal'' horsepower of
the motor. As a result, in the test procedure NOPR, DOE proposed to
consider equipment capacity in terms of the ``nominal'' horsepower of
the motor with which the compressor is distributed in commerce.
However, DOE recognizes that although the term nominal motor
horsepower is commonly used within the compressor industry, it is not
explicitly defined in ISO 1217:2009. To alleviate any ambiguity
associated with these terms, DOE proposed in the test procedure NOPR to
define the term ``compressor motor nominal horsepower'' to mean the
motor horsepower of the electric motor, as determined in accordance
with the applicable procedures in subpart B and subpart X of 10 CFR
431, with which the rated compressor is distributed in commerce.
In the Framework Document, DOE discussed limiting the scope of
applicability based on equipment capacity as measured in horsepower
(hp) to units with capacities of between 1 to 500 hp in order to align
the scope of compressor standards with the scope of DOE's electric
motors standards. See 10 CFR 431.25. Commenters generally recommended
expanding the scope to cover compressors larger than 500 hp, in order
to capture the maximum possible energy savings. (EEI, No. 0012 at p. 3;
Joint Comment, No. 0016 at p. 2; Natural Resource Defense Council
(NRDC), No. 0019 at p. 1; CA IOUs, No. 0018 at p. 2) Jenny and the
Joint Commenters also recommended that the lower hp limit should be
increased due to the low annual energy usage of compressors under 10
hp. (Jenny, No. 0005 at p. 3; Joint Comment, No. 0016 at p. 2)
DOE considered the comments of interested parties regarding the
range of equipment capacities. Shipment data, broken down by rated
capacity and compression principle (i.e., rotary, reciprocating, and
dynamic) indicate that units above 400 hp represent less than 1 percent
of the rotary market and virtually none of the reciprocating market.
Although it is possible to build positive displacement compressors
above 500 hp, shipments are very low and the equipment is typically
custom-ordered. DOE notes that, above 500 hp, dynamic compressors are
the dominant choice for industrial compressed air service. Furthermore,
as discussed in section III.B.3, little performance data is available
on units with capacities greater than 500 hp. Due to this lack of data
and the small market share for positive displacement compressors with
capacities greater than 500 hp, DOE proposes to align with the scope of
applicability of the test procedure NOPR and limit the scope of this
energy conservation rulemaking to compressors with a compressor motor
nominal horsepower of greater than or equal to 1 and less than or equal
to 500 hp. Based on available shipment data,
[[Page 31693]]
DOE's proposal is expected to cover nearly the entirety of the rotary
and reciprocating compressor market.
DOE requests comment on the proposal to include only compressors
with a compressor motor nominal horsepower of greater than or equal to
1 and less than or equal to 500 within the scope of this energy
conservation standard. This is identified as Issue 5 in section VIII.E,
``Issues on Which DOE Seeks Comment.''
6. Full-Load Operating Pressure
Because different compressed air applications require air to be
delivered at specific pressure ranges, output pressure is a critical
characteristic in equipment selection and compressed air system design.
DOE notes that there may be several ways to characterize output
pressure. In the test procedure NOPR, DOE proposed to use ``full-load
operating pressure'' as the most relevant metric, where ``full-load
operating pressure'' is a declared pressure, which must be greater than
or equal to 90 percent and less than or equal to 100 percent of the
maximum full-flow operating pressure.
The test procedure NOPR also proposed a definition and test method
for finding ``maximum full-flow operating pressure,'' which is a term
needed to characterize ``full-load operating pressure.'' DOE proposed
that ``maximum full-flow operating pressure'' means the maximum
discharge pressure at which the compressor is capable of operating.
Industry convention holds that when output pressure is cited
absolutely or in ``gauge'' (i.e., not as a ratio), the input pressure
is assumed to be that at which a compressor would ingest ambient air at
sea level.\26\ ``Gauge'' pressure, whether given in U.S. or metric
units, normally means ``the amount above intake pressure.'' A
compressor described as delivering 100 psig,\27\ then, can be assumed
to produce 114.7 psi in absolute terms when operated in a standard
atmosphere. Gauge pressure is commonly used because for most purposes,
the pressure differential is more critical to the application than the
absolute measurement. Another commonly-used pressure descriptor is
``pressure ratio.'' Simply, it is the ratio of the absolute output
(discharge) and absolute input (suction) pressures. For compressors
operating in the same conditions, this value expresses identical
information.
---------------------------------------------------------------------------
\26\ Commonly approximated in pounds per square inch (psi) as
14.7.
\27\ i.e., psi in gauge terms.
---------------------------------------------------------------------------
In response to discussions of operating pressure in the Framework
Document, CAGI provided the following detailed breakdown of output
pressures in the rotary compressors market. (CAGI, No. 0030 at p. 4):
Approximately 4.4 to 30 pounds per square inch gauge
(psig) (pressure ratio greater than 1.3 and less than or equal to 3.0):
The compressors industry generally refers to these products as
blowers--a term DOE is considering defining as part of its fans and
blowers rulemaking (Docket No. EERE-2013-BT-STD-0006). The majority of
these units are typically distributed in commerce as bare compressors
and do not include a driver, mechanical equipment, or controls.
31 to 79 psig (pressure ratio greater than 3.1 and less
than or equal to 6.4): There are relatively few compressed air
applications in this pressure range, contributing to both low product
shipment volume and low annual energy consumption.
80 to 139 psig (pressure ratio greater than 6.4 and less
than or equal to 10.5): This range represents the majority of general
compressed air applications, shipments, and annual energy use.
140 to 215 psig (pressure ratio greater than 10.5 and less
than or equal to 15.6): This range represents certain specialized
applications, relatively lower sales volumes and annual energy
consumption when compared to the 80 to 139 psig rotary compressor
segment.
Greater than 215 psig (pressure ratio greater than 15.6):
This range represents even more specialized applications, which require
highly engineered rotary compressors that vary based on each
application.
DOE did not receive any additional information that separated the
market of reciprocating compressors by pressure. According to the Lot
31 preparatory study final report,\28\ single- and two-stage
reciprocating compressors typically operate from 0.8 to 12 bar (12 to
174 psig; pressure ratio 1.8 to 13), and multi-stage reciprocating
compressors typically operate from 12 to 700 bar (174 to 10,152 psig;
pressure ratio 13 to 701). However, based on market research and
discussions with various compressor manufacturers, DOE believes that
pressure ranges for reciprocating compressors are similar to rotary
compressors.
---------------------------------------------------------------------------
\28\ The European Union regulatory body is also exploring
standards for compressors, which is part of a product group which it
refers to as ``Lot 31.'' For copies of the EU Lot 31 Final Report of
a study on Compressors please go to: www.regulations.gov/#!documentDetail;D=EERE-2013-BT-STD-0040-0031. For copies of the EU
Lot 31 draft regulation: www.regulations.gov/contentStreamer?documentId=EERE-2013-BT-STD-0040-0031&disposition=attachment&contentType=pdf.
---------------------------------------------------------------------------
In the test procedure NOPR, DOE proposed defining a ``compressor''
as equipment with a pressure ratio exceeding 1.3. Furthermore, in the
test procedure NOPR, DOE proposed that the test procedure only be
applicable to compressors with full-load operating pressures greater
than or equal to 31 psig and less than or equal to 225 psig. In this
document, DOE proposes to align with the scope of applicability of the
test procedure NOPR, and limit the scope of energy conversation
standards to compressors with full-load operating pressures of between
31 and 225 psig (pressure ratios greater than ~3.1 and less than or
equal to 16.3). DOE notes that while some commenters suggested an upper
limit of 215 psig, full-load operating pressure values may be generated
differently by each manufacturer and it is not clear that they are
completely comparable between manufacturers.\29\ For example, a product
listed at 215 psig from one manufacturer may compete with a product
listed at 217 psig from another, which may compete with one listed at
212 psig from a third. Although DOE's proposed test procedure seeks to
eliminate this issue, DOE must still account for the current lack of
consistent pressure rating methodology in the compressor industry. As a
result, DOE proposes to adopt an upper limit of 225 psig to include the
majority of non-special purpose equipment DOE could identify on the
market. Compressor equipment with full-load operating pressures below
31 psig and above 225 psig generally represent a different equipment
type and serve applications that do not often overlap with the 31-225
psig compressor market, and do not represent a significant volume of
sales.
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\29\ DOE notes that there is no universally accepted procedure
for establishing full-load operating pressure and, thus, no
assurances that values are comparable.
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C. Test Procedure
DOE is currently conducting a rulemaking to establish a uniform
test procedure for determining the energy efficiency of compressors.
DOE proposed a test method for calculating the package isentropic
efficiency of compressors, by measuring the delivered power (in the
form of compressed air) and the electric input power to the motor or
controls. DOE proposed that the methods be based on International
Organization for Standardization (ISO) Standard 1217:2009,
``Displacement
[[Page 31694]]
compressors--Acceptance tests,'' (hereinafter referred to as ``ISO
1217:2009'') with modifications. In response to the Framework, Jenny
recommended that compressors not be separated based on rated
horsepower, as they do not always run at full horsepower. (Jenny, No.
0005 at p. 2) The Joint Commenters recommended that a metric using both
package specific power \30\ and package isentropic efficiency be used
to provide useful information for consumers. (Joint Comment, No. 0016
at p. 3)
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\30\ In the test procedure NOPR, DOE proposes to define the term
``package specific power'' as ``the compressor power input at a
given load point, divided by the actual volume flow rate at the same
load point, as determined in accordance with the test procedures
prescribed in Sec. 431.344.''
---------------------------------------------------------------------------
In the test procedure NOPR, DOE proposed that the energy
conservation standards for compressors be expressed in terms of fixed-
speed package isentropic efficiency ([eta]isen,FS) for
fixed-speed compressors and variable-speed package isentropic
efficiency ([eta]isen,VS) for variable-speed compressors.
The terms [eta]isen,FS and [eta]isen,VS describe
the power required for an ideal isentropic compression process, divided
by the actual input power of the packaged compressor. The
[eta]isen,FS considers this ratio at full-load operating
pressure and [eta]isen,VS considers this ratio at a
weighted-average of full-load and part-load operating pressures. The
metrics are defined in Equations 1 and 2 as follows:
[GRAPHIC] [TIFF OMITTED] TP19MY16.000
Where:
[eta]isen,FS is the package isentropic efficiency at full-
load operating pressure;
Pisen,FL is the isentropic power required for compression
at full-load operating pressure, as determined in accordance with
the DOE test procedure. This metric applies only to fixed-speed
compressors, and;
Preal,FL is the packaged compressor power input at full-
load operating pressure, as tested in accordance with the DOE test
procedure. This metric applies only to fixed-speed compressors.
[GRAPHIC] [TIFF OMITTED] TP19MY16.001
Where:
[eta]isen,VS is the package isentropic efficiency as
applied to variable-speed compressors;
Pisen,i is the isentropic power required for compression at
rating point i, as determined in accordance with the DOE test
procedure. This metric applies only to variable-speed compressors;
Preal,i is the packaged compressor power input at rating
point i, as tested in accordance with the DOE test procedure. This
metric applies only to variable-speed compressors;
[omega]i is the weighting at each rating point, as
described in the DOE test procedure; and
i are the load points corresponding to 40-, 470-, and 100-
percent of the full-load actual volume flow rate.
The measured value of package isentropic efficiency would then be
compared to DOE's proposed energy conservation standard. A value
greater than the proposed standard indicates that the compressor
exceeds the minimum efficiency standard, while a value lower than the
proposed standard indicates that the compressor fails to meet the
proposed standard.
D. Technological Feasibility
1. General
In each energy conservation standards rulemaking, DOE conducts a
screening analysis based on information gathered on all current
technology options and prototype designs that could improve the
efficiency of the products or equipment that are the subject of the
rulemaking. As the first step in such an analysis, DOE develops a list
of technology options for consideration in consultation with
manufacturers, design engineers, and other interested parties. DOE then
determines which of those means for improving efficiency are
technologically feasible. DOE considers technologies incorporated in
commercially-available products or in working prototypes to be
technologically feasible. See, e.g., 10 CFR part 430, subpart C,
appendix A, section 4(a)(4)(i).
After DOE has determined that particular technology options are
technologically feasible, it further evaluates each technology option
in light of the following additional screening criteria: (1)
Practicability to manufacture, install, and service; (2) adverse
impacts on product utility or availability; and (3) adverse impacts on
health or safety. See, e.g., 10 CFR part 430, subpart C, appendix A,
section 4(a)(4)(ii)-(iv). Additionally, DOE generally does not include
in its analysis any proprietary technology that is a unique pathway to
achieving a certain efficiency level. Section IV.B of this document
discusses the results of the screening analysis for compressors,
particularly with respect to the designs DOE considered, those it
screened out, and those serving as the basis for the proposed standards
being considered. For further details on the screening analysis for
this rulemaking, see chapter 4 of the NOPR technical support document
(TSD).
2. Maximum Technologically Feasible Levels
When DOE proposes to adopt a new standard for a type or class of
covered product, it must determine the maximum improvement in energy
efficiency or maximum reduction in energy use that is technologically
feasible for such product. (42 U.S.C. 6295(p)(1) and 6316(a))
Accordingly, in the engineering analysis, DOE determined the maximum
technologically feasible (``max-tech'') improvements in energy
efficiency for compressors, using the design parameters for the most
efficient products available on the market or in working prototypes.
The max-tech levels that DOE determined for this rulemaking are
described in section IV.C of this proposed rule and in chapter 5 of the
NOPR TSD.
E. Compliance Date
DOE estimates that any final rule would publish in late 2016.
Therefore, DOE has used an estimated compliance date for this
rulemaking in late 2021.\31\
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\31\ DOE's analysis begins in the first full year of compliance
with new standards, 2022.
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[[Page 31695]]
F. Energy Savings
1. Determination of Savings
For each trial standard level (TSL), DOE projected energy savings
from applying the TSL to compressors purchased in the 30-year period
that begins in the first full-year of compliance with the proposed
standards (2022-2051).\32\ The savings are measured over the entire
lifetime of compressors purchased during this 30-year period. DOE
quantified the energy savings attributable to each TSL as the
difference in energy consumption between each standards case and the
no-new-standards case. The no-new-standards case represents a
projection of energy consumption that reflects how the market for a
product would likely evolve in the absence of new energy conservation
standards.
---------------------------------------------------------------------------
\32\ Each TSL is comprised of specific efficiency levels for
each product class. The TSLs considered for this NOPR are described
in section V.A. DOE conducted a sensitivity analysis that considers
impacts for products shipped in a 9-year period.
---------------------------------------------------------------------------
DOE used its national impact analysis (NIA) spreadsheet model to
estimate national energy savings (NES) from potential for compressors.
The NIA spreadsheet model (described in section IV.H of this document)
calculates energy savings in terms of site energy, which is the energy
directly consumed by products at the locations where they are used.
Based on the site energy, DOE calculates NES)in terms of primary energy
savings at the site or at power plants, and also in terms of full-fuel-
cycle (FFC) energy savings. The FFC metric includes the energy consumed
in extracting, processing, and transporting primary fuels (i.e., coal,
natural gas, petroleum fuels), and thus presents a more complete
picture of the impacts of energy conservation standards.\33\ DOE's
approach is based on the calculation of an FFC multiplier for each of
the energy types used by covered products or equipment. For more
information on FFC energy savings, see section IV.H.1 of this document.
---------------------------------------------------------------------------
\33\ The FFC metric is discussed in DOE's statement of policy
and notice of policy amendment. 76 FR 51282 (Aug. 18, 2011), as
amended at 77 FR 49701 (Aug. 17, 2012).
---------------------------------------------------------------------------
2. Significance of Savings
To adopt any new or amended standards for a covered product, DOE
must determine that such action would result in ``significant'' energy
savings. (42 U.S.C. 6295(o)(3)(B) and 6316(a)) Although the term
``significant'' is not defined in the Act, the U.S. Court of Appeals
for the District of Columbia Circuit, in Natural Resources Defense
Council v. Herrington, 768 F.2d 1355, 1373 (D.C. Cir. 1985), opined
that Congress intended ``significant'' energy savings in the context of
EPCA to be savings that were not ``genuinely trivial.'' The energy
savings for all of the TSLs considered in this rulemaking, including
the proposed standards (presented in section V), are nontrivial, and,
therefore, DOE considers them ``significant'' within the meaning of
section 325 of EPCA.
G. Economic Justification
1. Specific Criteria
As noted in this preamble, EPCA provides seven factors to be
evaluated in determining whether a potential energy conservation
standard is economically justified. (42 U.S.C. 6295(o)(2)(B)(i)(I)-
(VII) and 6316(a)) The following sections discuss how DOE has addressed
each of those seven factors in this rulemaking.
a. Economic Impact on Manufacturers and Consumers
DOE considers the economic impacts of its potential standards on
both manufacturers and consumers. See 42 U.S.C. 6295(o)(2)(B)(i)(I) and
6316(a). In determining the impacts of a potential amended standard on
manufacturers, DOE conducts a manufacturer impact analysis (MIA), as
discussed in section IV.J. DOE first uses an annual cash-flow approach
to determine the quantitative impacts. This step includes both a short-
term assessment--based on the cost and capital requirements during the
period between when a regulation is issued and when entities must
comply with the regulation--and a long-term assessment over a 30-year
period. The industry-wide impacts analyzed include: (1) Industry net
present value (INPV), which values the industry on the basis of
expected future cash flows; (2) cash flows by year; (3) changes in
revenue and income; and (4) other measures of impact, as appropriate.
Second, DOE analyzes and reports the impacts on different types of
manufacturers, including impacts on small manufacturers. Third, DOE
considers the impact of standards on domestic manufacturer employment
and manufacturing capacity, as well as the potential for standards to
result in plant closures and loss of capital investment. Finally, DOE
takes into account cumulative impacts of various DOE regulations and
other regulatory requirements on manufacturers.
For individual consumers, measures of economic impact include the
changes in LCC and payback period (PBP) associated with new or amended
standards. These measures are discussed further in the following
section. For consumers in the aggregate, DOE also calculates the
national net present value of the consumer costs and benefits expected
to result from particular standards. DOE also evaluates the impacts of
potential standards on identifiable subgroups of consumers that may be
affected disproportionately by a standard.
b. Savings in Operating Costs Compared to Increase in Price (LCC and
PBP)
DOE considers the savings in operating costs throughout the
estimated average life of the covered equipment in the type (or class)
compared to any increase in the price, initial charges, or maintenance
expenses of that equipment that are likely to result from a standard.
(42 U.S.C. 6295(o)(2)(B)(i)(II) and 6316(a)) DOE conducts this
comparison in its LCC and PBP analysis.
The LCC is the sum of the purchase price of a product (including
its installation) and the operating expense (including energy,
maintenance, and repair expenditures) discounted over the lifetime of
the product. The LCC analysis requires a variety of inputs, such as
product prices, product energy consumption, energy prices, maintenance
and repair costs, product lifetime, and discount rates appropriate for
consumers. To account for uncertainty and variability in specific
inputs, such as product lifetime and discount rate, DOE uses a
distribution of values, with probabilities attached to each value.
The PBP is the estimated amount of time (in years) it takes
consumers to recover the increased purchase cost (including
installation) of a more-efficient product through lower operating
costs. DOE calculates the PBP by dividing the change in purchase cost
due to a more stringent standard by the change in annual operating cost
for the year that standards are assumed to take effect.
For its LCC and PBP analysis, DOE assumes that consumers will
purchase the covered products in the first year of compliance with
amended standards. The LCC savings for the considered efficiency levels
are calculated relative to the case that reflects projected market
trends in the absence of amended standards. DOE's LCC and PBP analysis
is discussed in further detail in section IV.F.
c. Energy Savings
Although significant conservation of energy is a separate statutory
requirement for adopting an energy conservation standard, EPCA requires
[[Page 31696]]
DOE, in determining the economic justification of a standard, to
consider the total projected energy savings that are expected to result
directly from the standard. (42 U.S.C. 6295(o)(2)(B)(i)(III) and
6316(a)) As discussed in section III.D, DOE uses the NIA spreadsheet
models to project national energy savings.
d. Lessening of Utility or Performance of Equipment
In establishing equipment classes and in evaluating design options
and the impact of potential standard levels, DOE evaluates potential
standards that would not lessen equipment utility or performance. (42
U.S.C. 6295(o)(2)(B)(i)(IV) and 42 U.S.C. 6316) Based on data available
to DOE, the standards proposed in this document would not reduce the
utility or performance of the products under consideration in this
rulemaking.
e. Impact of Any Lessening of Competition
EPCA directs DOE to consider the impact of any lessening of
competition, as determined in writing by the Attorney General, which is
likely to result from a proposed standard. (42 U.S.C.
6295(o)(2)(B)(i)(V) and 6316(a)) It also directs the Attorney General
to determine the impact, if any, of any lessening of competition likely
to result from a proposed standard and to transmit such determination
to the Secretary within 60 days of the publication of a proposed rule,
together with an analysis of the nature and extent of the impact. (42
U.S.C. 6295(o)(2)(B)(ii) and 6316(a)) DOE will transmit a copy of this
proposed rule to the Attorney General with a request that the
Department of Justice (DOJ) provide its determination on this issue.
DOE will include the Attorney General's response in the docket for this
rulemaking and will respond to the Attorney General's determination in
the final rule.
f. Need for National Energy Conservation
DOE also considers the need for national energy conservation in
determining whether a new or amended standard is economically
justified. (42 U.S.C. 6295(o)(2)(B)(i)(VI) and 6316(a)) The energy
savings from the proposed standards are likely to provide improvements
to the security and reliability of the nation's energy system.
Reductions in the demand for electricity also may result in reduced
costs for maintaining the reliability of the nation's electricity
system. DOE conducts a utility impact analysis to estimate how
standards may affect the nation's needed power generation capacity, as
discussed in section IV.M.
The proposed standards also are likely to result in environmental
benefits in the form of reduced emissions of air pollutants and
greenhouse gases associated with energy production and use. DOE
conducts an emissions analysis to estimate how potential standards may
affect these emissions, as discussed in section IV.K; the emissions
impacts are reported in section V.L of this document. DOE also
estimates the economic value of emissions reductions resulting from the
considered TSLs, as discussed in section IV.L.
g. Other Factors
In determining whether an energy conservation standard is
economically justified, DOE may consider any other factors that the
Secretary deems to be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII) and
6316(a)) To the extent there are other factors relevant to evaluating
whether the proposed standards are economically justified, DOE may
consider other factors that fall outside of the categories discussed
above.
2. Rebuttable Presumption
As set forth in 42 U.S.C. 6295(o)(2)(B)(iii) and 6316(a), EPCA
creates a rebuttable presumption that an energy conservation standard
is economically justified if the additional cost to the consumer of a
product that meets the standard is less than three times the value of
the first year's energy savings resulting from the standard, as
calculated under the applicable DOE test procedure. DOE's LCC and PBP
analyses generate values used to calculate the effects that proposed
energy conservation standards would have on the payback period for
consumers. These analyses include, but are not limited to, the 3-year
payback period contemplated under the rebuttable-presumption test. In
addition, DOE routinely conducts an economic analysis that considers
the full range of impacts to consumers, manufacturers, the nation, and
the environment. See 42 U.S.C. 6295(o)(2)(B)(i) and 6316(a). The
results of this analysis serve as the basis for DOE's evaluation of the
economic justification for a potential standard level (thereby
supporting or rebutting the results of any preliminary determination of
economic justification). The rebuttable presumption payback calculation
is discussed in section V.B.1.c of this proposed rule.
H. Compressor Industry Recommendation
DOE received a comment on proposed standards and test methods from
CAGI, the primary compressor trade association. That recommendation is
summarized below.\34\ DOE responds to the points made within the
comment in the appropriate sections of this document.
---------------------------------------------------------------------------
\34\ Available at: http://www.regulations.gov/#!documentDetail;D=EERE-2013-BT-STD-0040-0030.
---------------------------------------------------------------------------
1. Summary
CAGI recommended making mandatory the use of standardized test
methods and reporting formats that are presently voluntary. With
respect to scope, CAGI suggested that DOE address lubricated, rotary
compressors operating from 80-139 psig and with ``flows'' from 35 to
2000 cfm. (CAGI, No. 0030 at p. 1) The benefits, according to CAGI,
include energy savings, regulatory simplicity, and granting industry
the ability to continue energy efficiency efforts undisrupted. Id.
2. Specific Provisions
CAGI makes the following comments and recommendations in its
submission:
With respect to European efforts, that the Lot 31 Study
made use of CAGI-published data, and that those efforts can inform the
work being done by DOE. (CAGI, No. 0030 at p. 3)
The biggest part of the compressed air industry serves
``general industrial air'' customers which primarily use rotary
equipment, rated from 80-139 psig and 35-2000 cfm, and driven by
electric motors rated from 10 to 500-hp. (CAGI, No. 0030 at p. 3)
There is little risk of substitution for compressors if
DOE opts to leave certain market segments unregulated. Customer needs
generally define which equipment is purchased. (CAGI, No. 0030 at p. 4)
Lubricant-free \35\ equipment is used in more specialized
applications and carries significantly smaller market size. As a
result, regulation carries smaller potential to save energy and greater
risk of negative impact to manufacturers and consumers. (CAGI, No. 0030
at p. 5) DOE, like EU Lot 31, should not include lubricant-free
equipment.
---------------------------------------------------------------------------
\35\ Although industry frequently uses the term ``oil-free'' to
describe equipment with substances injected during the compression
process, not all of the substances used are oils, in the chemical
sense, and so DOE will use the term ``lubricant-free'' to refer to
such equipment.
---------------------------------------------------------------------------
Reciprocating compressors should not be included in the
rulemaking. Low duty cycle and small average capacity means that energy
savings potential is
[[Page 31697]]
significantly lower than for other compressor types. The market is
highly fragmented, with many assemblers purchasing parts from a variety
of suppliers. Finally, low production volumes could generate large
negative impacts to manufacturers forced to redesign in order to comply
with a standard. (CAGI, No. 0030 at p. 6)
CAGI supplies proposed definitions for ``basic package
compressor,'' ``standard air compressor,'' and ``rotary standard air
compressor.'' (CAGI, No. 0030 at p. 8)
With respect to measurement, CAGI proposes use of ISO
1217:2009 for both fixed- (Annex C) and variable-speed (Annex E)
equipment. For variable-speed equipment, CAGI proposes a weighted
average performance across certain load points, also proposed for use
by EU Lot 31. (CAGI, No. 0030 at p. 8-9)
In CAGI's view, standardizing measurement and data
publication will be sufficient to drive continued energy conservation
in compressors. CAGI asserts that the market already self-establishes a
de facto minimum performance standard, and attempts by DOE to introduce
one may be counterproductive to both energy savings and manufacturer
welfare. (CAGI, No. 0030 at p. 9)
IV. Methodology and Discussion of Related Comments
This section addresses the analyses DOE has performed in this
rulemaking for compressors. Separate subsections address each component
of DOE's analyses.
DOE used several analytical tools to estimate the impact of the
standards proposed in this document. The first tool is a spreadsheet
that calculates the LCC savings and PBP of potential amended or new
energy conservation standards. The national impacts analysis uses a
second spreadsheet set that provides shipments forecasts and calculates
national energy savings and net present value of total end user costs
and savings expected to result from potential energy conservation
standards. DOE uses the third spreadsheet tool, the Government
Regulatory Impact Model (GRIM), to assess manufacturer impacts of
potential standards. These spreadsheet tools are available at http://www1.eere.energy.gov/buildings/appliance_standards/product.aspx/productid/78. Additionally, DOE used output from the latest version of
EIA's Annual Energy Outlook (AEO), a widely known energy forecast for
the United States, for the emissions and utility impact analyses.
A. Market and Technology Assessment
DOE develops information in the market and technology assessment
that provides an overall picture of the market for the equipment
concerned, including the purpose of the equipment, the industry
structure, manufacturers, market characteristics, and technologies used
in the equipment. This activity includes both quantitative and
qualitative assessments, based primarily on publicly-available
information (e.g., manufacturer specification sheets, and industry
publications) and data submitted by manufacturers, trade associations,
and other stakeholders. The subjects addressed in the market and
technology assessment for this rulemaking include: (1) A determination
of the scope of the rulemaking and equipment classes; (2) manufacturers
and industry structure; (3) existing efficiency programs; (4) shipments
information; (5) market and industry trends; and (6) technologies or
design options that could improve the energy efficiency of compressors.
The key findings of DOE's market assessment are summarized below. See
chapter 3 of the NOPR TSD for further discussion of the market and
technology assessment.
1. Equipment Classes
When evaluating and establishing energy conservation standards, DOE
divides covered products into equipment classes by the type of energy
used or by capacity or other performance-related features that justify
differing standards. In making a determination whether a performance-
related feature justifies a different standard, DOE must consider such
factors as the utility of the feature to the consumer and other factors
DOE determines are appropriate. (42 U.S.C. 6295(q) and 6316(a)) DOE
proposes dividing compressors based on the following factors, which are
discussed in sections IV.A.1.a through IV.A.1.e:
Compression principle,
Lubricant presence,
Cooling method,
Motor speed type, and
Motor phase count.
In the Framework Document, DOE requested stakeholder comment
regarding whether and how compressors should be divided into separate
classes. Stakeholder comments regarding equipment classes, the specific
separation of equipment classes based on the listed factors, and the
final list of proposed equipment classes are discussed further in the
following sections. Generally, the notion of establishing separate
equipment classes was supported by commenters.
a. Compression Principle
In response to the Framework Document, Saylor-Beall and Jenny
compressors commented that rotary compressors are generally high-duty
cycle equipment, while reciprocating compressors are generally low-duty
cycle equipment. (Saylor-Beall, No. 0003 at p. 3; Jenny, No. 0005 at p.
4) As noted in section III.A, DOE considered standards for both
reciprocating and rotary compressors as part of this rulemaking. DOE
also proposes to divide these two compressor types into separate
equipment classes. Rotary and reciprocating compressors have
significantly different operating characteristics; as a result these
equipment types are used in different applications and have different
levels of attainable efficiency. Both rotary and reciprocating are
considered to be positive displacement compressors, which act by
compressing successive trapped volumes of air.
Reciprocating compressors compress air using the repeated linear
motion of a moving member (e.g., a piston) within a sealed compression
chamber. Reciprocating compressors do not require a warm up period and
can be operated using an on/off control scheme, making them best suited
for intermittent and low duty cycle applications. This is because low
cycles require frequent starting and stopping. Equipment which required
warming up to operate properly would operate inefficiently, wear
prematurely, or both. Reciprocating compressors use actuated valves to
seal the compression chamber, which holds air leakage (a form of energy
loss) to modest levels even when operating cold. Rotary compressors, by
contrast, do not use valves but rely on carefully designed and
manufactured rotor clearances, which are efficient after the rotor has
heated and expanded to design specifications, in order to limit air
leakage. Customers with low duty cycles may find additional utility,
therefore, in reciprocating compressors. By contrast, reciprocating
compressors, by nature of their reciprocating motion, produce more
vibration and, therefore, may wear more quickly and, therefore, may
offer reduced utility to customers with higher duty cycles and high
cost of downtime.
Rotary compressors compress air progressively as it moves from the
inlet point to the discharge point using the cyclical motion of one or
several rotors. Rotary compressors may require a warm-up period to
operate properly, and are therefore better suited for high duty cycle
applications, in which equipment is less frequently cycled on
[[Page 31698]]
and off and, therefore, in which design operating temperatures may be
maintained. Rotary compressors typically cannot be operated using an
on/off control scheme; rather, they may be controlled by other methods
such as load/unload, inlet flow modulation, and variable displacement
drives. As mentioned in the previous paragraph, rotary compressors rely
on reaching a certain operating temperature, or ``warming up,'' to
allow mechanical parts to expand to reach the proper design clearances.
Operating a rotary compressor in a low-duty, on/off manner, may cause
the compressor to operate inefficiently, wear prematurely, or both.
These control methods are discussed further in chapter 3 of the NOPR
TSD.
Although reciprocating compressors typically have lower isentropic
efficiencies than rotary compressors, reciprocating compressors excel
in low duty cycle or intermittent applications and may consume less
overall energy than a rotary compressor when deployed in such settings.
Alternatively, to provide air for intermittent loads, a rotary
compressor would be required to remain running in a modulated or
unloaded condition, even at times of low or zero load. This is inherent
in the scheme; a technology which cannot start and stop (either
literally or because doing so would cause adverse consequences such as
premature wear) must employ other capacity-reducing measures such as
modulation or unloading to match supply to demand. Consequently, DOE
concludes that dividing rotary and reciprocating compressors into
separate equipment classes on the basis of suitability for different
duty cycles is appropriate.
DOE requests comment on its proposal to establish separate
equipment classes for rotary and reciprocating equipment, and on
whether and why utility or performance differences exist between the
two types of equipment. This is identified as Issue 6 in section
VIII.E, ``Issues on Which DOE Seeks Comment.''
b. Lubricant Presence
In response to the Framework Document, Atlas Copco commented that
compressors can be divided into two separate groups, lubricated and
lubricant-free.\36\ (Atlas-Copco, No. 0008 at p. 3) DOE proposes to
divide lubricated and lubricant-free into separate equipment classes.
Compressors are manufactured in both lubricated and lubricant-free
configurations. For the purposes of this rulemaking, DOE is proposing
to define these lubrication types as follows:
---------------------------------------------------------------------------
\36\ Although industry frequently uses the term ``oil-free'' to
describe equipment with substances injected during the compression
process, not all of the substances used are oils, in the chemical
sense, and so DOE will use the term ``lubricant-free'' to refer to
such equipment.
---------------------------------------------------------------------------
``Lubricated compressor'' means a compressor that introduces an
auxiliary substance into the compression chamber during compression.
``Lubricant-free compressor'' means a compressor that does not
introduce any auxiliary substance into the compression chamber at any
time during operation.
For the purposes of this rulemaking, DOE proposes to define
``auxiliary substance'' as follows:
``Auxiliary substance'' means any substance deliberately introduced
into a compression process to aid in compression of a gas by any of the
following: Lubricating, sealing mechanical clearances, or absorbing
heat.
DOE notes that lubricant-free compressors may still use lubricant
within other portions of the compressor, as long as the lubricant does
not enter the compression chamber at any point during operation. DOE
also notes that, under the proposed definitions, compressors would be
considered ``lubricated'' if an auxiliary substance of any sort were
introduced into the compression chamber. This would include oil, and
water, which is not typically described as a lubricant within the
compressor industry.
DOE's analysis and research found that lubricated compressors are
generally more efficient than lubricant-free compressors. In lubricated
compressors, the lubricant is injected into the compression chamber to
serve two primary purposes:
1. Sealing the compression chamber mechanical clearances and reduce
air leakage by using the surface tension of the liquid to form a
barrier to air escape, and
2. Cooling the compressed air during compression, increasing
efficiency by bringing the compression process closer to a
thermodynamic ideal.
Due to their inherently lower efficiencies and comparatively higher
costs, lubricant-free compressors do not compete directly with
lubricated compressors for general-purpose compressed air applications.
However, certain applications with specific air purity requirements
cannot use lubricated compressors due to the presence of residual
lubricant that cannot be effectively removed from the output air using
filtration. Examples of these applications include food processing
equipment, clean-room manufacturing, and air for medical uses.
Lubricant-free compressors are necessary to meet the air purity
requirements of these applications. By contrast, a lubricant-free
compressor could likely be used with no loss of utility in applications
traditionally served by lubricated compressors. Because of their higher
cost, however, they are typically deployed only when called for by
customer utility requirements.
Lacking lubricant to aid in sealing clearances, lubricant-free
compressors are usually manufactured with smaller clearances. Although
this practice adds cost, it reduces some of the air leakage that result
from a lack of lubrication. However, reducing clearances too far may
result in increased friction and maintenance requirements. This limits
how tight the clearances of lubricant-free compressors can be. As such,
lubricant-free compressors still allow more leakage relative to
lubricated compressors. This leakage reduces efficiency, because as the
air is lost, so is the energy that was used to treat it. Further,
lubricant-free compressors may require larger after-coolers than
lubricated compressors. An after-cooler is used to cool the compressed
air after compression and prior to discharge. The after-cooler causes
package pressure losses and decreases in efficiency.
DOE notes that an ISO standard, 8573-1:2010,\37\ exists and is used
by industry to measure and describe the purity of air. Air is described
as being ``class zero'' if it is determined to meet the most stringent
air purity levels recognized by this standard. DOE is aware that some
compressors that meet the proposed definition of lubricated in this
document may also be able to meet the class zero standard of ISO 8573-
1:2010. For example, the compressor may include an advanced lubricant
filtration system to bring lubricant concentration below a certain
threshold. Alternatively, the compressor may inject only water into the
chamber, which may be removed with ordinary cooling and drying
equipment.
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\37\ See: http://www.iso.org/iso/catalogue_detail.htm?csnumber=46418
---------------------------------------------------------------------------
DOE requests comment on separating equipment classes by lubricant
presence, and specifically on whether ISO 8573-1:2010 is suitable for
characterizing compressors on that basis. DOE also requests comments on
the proposed definitions for lubricated compressor, lubricant-free
compressors, and auxiliary substance. This is identified as Issue 7 in
section VIII.E, ``Issues on Which DOE Seeks Comment.''
[[Page 31699]]
c. Cooling Method
DOE proposes to divide air-cooled and water-cooled rotary
compressors into separate equipment classes. Due to considerable heat
created during compression, compressors are normally packaged with
cooling systems for both the air itself, and, if applicable, the
lubricant. The cooling system may utilize either air or water to remove
heat from the system. For the purposes of this rulemaking, DOE proposes
to define the two cooling methods as follows:
``Air-cooled compressor'' means a compressor that utilizes air to
cool both the compressed air and, if present, any auxiliary substance
used to facilitate compression.
``Water-cooled compressor'' means a compressor that utilizes
chilled water provided by an external system to cool both the
compressed air and, if present, any auxiliary substance used to
facilitate compression.
DOE's research and analysis of industry data indicates that water-
cooled compressors are typically more efficient than air-cooled
compressors, as measured by ISO 1217:2009.
Air-cooled compressors circulate ambient air through the heat
exchangers to cool both the compressed air and lubricant. Air-cooled
compressors usually require fans to circulate air through the heat
exchangers; these fans increase the total package energy consumption,
thus decreasing the total package efficiency.
Water-cooled compressors circulate chilled water from an external
water supply through heat exchangers to cool both the compressed air
and lubricant. The chilled water heat exchanger does not cause any
additional energy consumption within the compressor package, as the
cooling water is chilled and pumped from a remote location. However,
water-cooled compressors can only be used in locations where chilled
water is available, thus limiting the utility and applicability of
water-cooled compressors. Conversely, air-cooled compressors require
only air for cooling and can be used in locations where chilled water
may not be available. Therefore, air-cooled compressors present a
utility advantage to customers without access to a cooling water
supply.
DOE notes that efficiency, as measured by the proposed test
procedure NOPR, would reflect slightly different concepts for air- and
water-cooled compressors. In both cases, a cooling medium is being
actively circulated to remove heat from the unit and energy is being
consumed to circulate the medium. But only in the case of air-cooled
units is that energy consumption reflected in the efficiency metric.
The consumption occurs remotely for water-cooled units. Without further
analysis, it is difficult to assess which consumption may be greater
overall. But this difference is what is measured by efficiency, in
addition to the difference in end user utility already discussed, and
offers a second justification for establishment of separate equipment
classes.
DOE is not aware of any water-cooled reciprocating compressors
currently available in the U.S. market. However, if such equipment does
exist, or enters the market in the future, the data presented earlier
in this section suggest that water-cooled compressors may be more
efficient than similar air-cooled units. As a result, DOE proposes to
consider both air- and water-cooled reciprocating compressors in a
single equipment class and to base any energy conservation standards
for both only on available air-cooled data. Based on comparison of air-
and water-cooled rotary compressors, DOE concludes that it is
technologically feasible for any water-cooled reciprocating compressor
introduced to the market to meet an energy conservation standard set
based on the current air-cooled reciprocating compressors market.
DOE requests comment on its proposal to establish separate
equipment classes for air- and water-cooled equipment. DOE also
requests comments on the proposed definitions for air- and water-cooled
compressor. This is identified as Issue 8 in section VIII.E, ``Issues
on Which DOE Seeks Comment.''
d. Motor Speed
DOE's research indicates that electric motor-driven compressors can
be further separated by the style of electric driver used in the
package. Specifically, DOE found that compressors are sold with either
a variable-speed driver, which can operate across a continuous range of
driver speeds, or a fixed-speed driver, which can operate at only a
single fixed-speed. In the test procedure NOPR, DOE proposed
definitions for ``fixed-speed compressor'' and ``variable-speed
compressor.''
The term ``fixed-speed compressor'' means an air compressor that is
not capable of adjusting the speed of the driver continuously over the
driver operating speed range in response to incremental changes in the
required compressor flow rate.
The term ``variable-speed compressor'' means an air compressor that
is capable of adjusting the speed of the driver continuously over the
driver operating speed range in response to incremental changes in the
required compressor actual volume flow rate.
DOE found that variable-speed compressors are typically less
efficient at full load than comparable fixed-speed compressors,
partially due to efficiency losses within the variable-speed drive.
Variable-speed compressors are typically intended for use in systems
where air demand is expected to vary over the course of operation; this
takes advantage of the unit's ability to operate more efficiently at
part load. For this reason, variable-speed compressors are sometimes
optimized for efficiency at part-load; this will typically result in
full-load efficiencies lower than those of comparable fixed-speed
units. Additionally, they may function as ``trim'' compressors in
multi-unit installations. Trim compressors are normally the first ones
to adjust their capacity output when overall system air demand changes.
If the overall system air demand changes outside what the trim
compressor is able to accommodate, additional compressors may be turned
on and off according to which configuration would produce most
efficient operation. By contrast, a ``base load'' compressor is
expected to be operated either on or off a large fraction; this
compressors is a poor candidate for variable-speed functionality,
because of both the financial and full-load performance cost of adding
that capability. Due to the difference in utility and attainable
efficiency between fixed and variable-speed compressors, DOE proposes
to separate these two compressor styles into separate equipment
classes.
e. Motor Phase Count
DOE also proposes to divide single- and three-phase reciprocating
compressors into separate equipment classes. Lower power reciprocating
compressors, typically less than 10 hp, can be packaged with either
single-phase or three-phase electric motors. Reciprocating compressors
packaged with single-phase electric motors are typically less efficient
than those packaged with three-phase electric motors due to the
inherent lower efficiency of single-phase motors. Single-phase
reciprocating compressors are generally used in applications with lower
duty cycles and no access to three-phase power, such as tire inflation
at a local service station, or oral surgery at a dental office. Three-
phase reciprocating compressors typically see higher duty cycles and
can only be used for applications in which three-phase power is
available. An automotive body shop or very light industrial production
[[Page 31700]]
may have such compressors, but they would likely not be found as the
primary air source for a high-volume industrial production application.
Few residential applications have access to three-phase power. As a
result, DOE concludes that single- and three-phase compressors offer
different end user utility. Consequently, DOE proposes to divide
reciprocating compressors packaged with single-phase and three-phase
electric motors into separate equipment classes.
By contrast, DOE was able to find little data on single-phase
rotary compressors, which appear to form a very small fraction of the
market. As a result, DOE was not able to determine whether such
equipment was able to meet the same performance levels as three-phase
equipment. To avoid the risk of in advertently incentivizing the market
to shift to single-phase rotary equipment (if separated or not
included), DOE proposes in this NOPR not to separate rotary equipment
classes by motor phase count. As such, each rotary equipment class
encompasses both single- and three-phase equipment.
Based on interviews with manufacturers, DOE is aware that single-
phase rotary equipment may be gaining popularity in European markets.
If such equipment is being chosen to conserve energy, and if the
adoption of increased standards may hinder the adoption or development
of single-phase rotary equipment to save energy, DOE may consider
establishing a separate standard for single-phase rotary equipment in
the final rule.
DOE requests comment on the establishment of separate equipment
classes, by motor phase count, for reciprocating equipment. This is
identified as Issue 9 in section VIII.E, ``Issues on Which DOE Seeks
Comment.''
DOE also requests comment on the proposal to combine single- and
three-phase rotary equipment in each rotary equipment class. This is
identified as Issue 10 in section VIII.E, ``Issues on Which DOE Seeks
Comment.''
f. List of Proposed Equipment Classes
DOE's list of proposed equipment classes is provided in Table IV.1:
Table IV.1--List of DOE Proposed Compressor Equipment Classes
--------------------------------------------------------------------------------------------------------------------------------------------------------
Equipment class
Compressor type Lubrication type Cooling method Driver type Motor phase designation
--------------------------------------------------------------------------------------------------------------------------------------------------------
Rotary.................. Lubricated.............. Air-Cooled........ Fixed-Speed.................. Any..................... RP_FS_L_AC
Variable-speed............... ........................ RP_VS_L_AC
Water-Cooled...... Fixed-Speed.................. ........................ RP_FS_L_WC
Variable-speed............... ........................ RP_VS_L_WC
Lubricant-Free.......... Air-Cooled........ Fixed-Speed.................. ........................ RP_FS_LF_AC
Variable-speed............... ........................ RP_VS_LF_AC
Water-Cooled...... Fixed-Speed.................. ........................ RP_FS_LF_WC
Variable-speed............... ........................ RP_VS_LF_WC
Reciprocating........... Lubricated.............. Air-Cooled or Fixed-Speed.................. Three-Phase............. R3_FS_L_XX
Water-Cooled. Single-Phase............ R1_FS_L_XX
Lubricant-Free.......... .................. ............................. Three-Phase............. R3_FS_LF_XX
Single-Phase............ R1_FS_LF_XX
--------------------------------------------------------------------------------------------------------------------------------------------------------
2. European Union Regulatory Action
The EU Ecodesign directive established a framework under which
manufacturers of energy-using products are obliged to reduce the energy
consumption and other negative environmental impacts occurring
throughout the product life cycle.\38\ Products are broken out in to
different ``Lots,'' with compressors studied in Lot 31. In June 2014,
the EU completed and published its final technical and economic study
of Lot 31 compressors.\39\
---------------------------------------------------------------------------
\38\ Source: www.eceee.org/ecodesign/products/Compressors.
\39\ For copies of the EU Lot 31 Final Report on Compressors,
please go to: www.regulations.gov/#!documentDetail;D=EERE-2013-BT-
STD-0040-0031.
---------------------------------------------------------------------------
As part of its study, the EU examined the entire compressors market
to determine an appropriate scope of coverage for its energy
conservation standards. The results of this study led the Commission of
the European Communities to establish a working document proposing
possible energy efficiency requirements for compressors. The EU draft
regulation \40\ proposed to cover the following compressor types:
---------------------------------------------------------------------------
\40\ For copies of the EU draft regulation: www.regulations.gov/contentStreamer?documentId=EERE-2013-BT-STD-0040-0031&disposition=attachment&contentType=pdf.
---------------------------------------------------------------------------
Oil-lubricated Rotary Air Compressor Packages with:
[cir] Rated output flow rate of between 5 to 1,280 liters per
second,\41\
---------------------------------------------------------------------------
\41\ When express in terms of inlet conditions, as is industry
convention.
---------------------------------------------------------------------------
[cir] Three-phase electric motors,
[cir] Fixed or variable-speed drives, and
[cir] Full-load operating pressure of between 7 to 14 bar gauge.
Oil-lubricated Reciprocating Air Compressor Packages with:
[cir] Rated output flow rate of between 2 to 64 liters per second,
[cir] Three-phase electric motors,
[cir] Fixed-speed drives, and
[cir] Full-load operating pressure of between 7 to 14 bar gauge.
The Lot 31 study used data collected from CAGI Performance
Verification Program data sheets to determine the market distribution
of compressor efficiency for rotary compressors and data collected from
a confidential survey conducted of European manufacturers for
reciprocating compressors.
The EU draft regulation proposed to separate the covered products
into the following three equipment classes and to set a different
standard level, based on package isentropic efficiency, for each class:
Fixed-speed Rotary Standard Air Compressors--Standard
level set as package isentropic efficiency at full-load operating
conditions;
Variable-speed Rotary Standard Air Compressors--Standard
level set as a weighted average of package isentropic efficiency at
100-percent, 70-percent, and 40-percent of full-load operating
conditions; and
Piston Standard Air Compressors--Standard level set as
package isentropic efficiency at full-load operating conditions.
a. Specific Suggested Requirements
The EU draft proposal suggests compliance beginning in 2018, and
are increased in 2020 for certain compressor
[[Page 31701]]
types, as explain in Table IV.2 and Table IV.3:
Table IV.2--Draft First Tier Minimum Energy Efficiency Requirements for
Standard Air Compressors From January 1, 2018
------------------------------------------------------------------------
Formula to calculate
the minimum package
isentropic efficiency, Proportional
Standard air compressor type depending on the flow loss factor
rate (V1) an (d) to be used
proportional loss in the formula
factor (d)
------------------------------------------------------------------------
Fixed-speed Rotary Standard Air (-.0928 ln\2\ (V1) + -5
Compressor. 13.911 ln (V1) +
27.110) + (100-(-.0928
ln\2\ (V1) + 13.911 ln
(V1) + 27.110) * d/100.
Variable-speed Rotary Standard (-1.549 ln\2\ (V1) + -5
Air Compressor. 21.573 ln (V1) +
0.905) + (100-(-1.549
ln\2\ (V1) + 21.573 ln
(V1) + 0.905) * d/100.
Piston Standard Air Compressor. (8.931 ln (V1) + -5
31.477) + (100-(8.931
ln (V1) + 31.477) * d/
100.
------------------------------------------------------------------------
Table IV.3--Draft Second Tier Minimum Energy Efficiency Requirements for
Standard Air Compressors From January 1, 2020
------------------------------------------------------------------------
Formula to calculate
the minimum package
isentropic efficiency, Proportional
Standard air compressor type depending on the flow loss factor
rate (V1) an (d) to be used
proportional loss in the formula
factor (d)
------------------------------------------------------------------------
Fixed-speed Rotary Standard Air (-0.928 ln\2\ (V1) + 0
Compressor. 13.911 ln (V1) +
27.110) + (100-(-0.928
ln\2\ (V1) + 13.911 ln
(V1) + 27.110) * d/100.
Variable-speed Rotary Standard (-1.549 ln\2\ (V1) + 0
Air Compressor. 21.573 ln (V1) +
0.905) + (100-(-1.549
ln\2\ (V1) + 21.573 ln
(V1) + 0.905) * d/100.
Piston Standard Air Compressor. (8.931 ln (V1) + 0
31.477) + (100-(8.931
ln (V1) + 31.477) * d/
100.
------------------------------------------------------------------------
b. Next Steps
The outcome of this draft regulation is undetermined, based on
publicly available information. Based on the process outlined on the
Ecodesign Web site, the document may need to be reviewed internally by
the European Commission, sent to the World Trade Organization,
submitted to the Regulatory Committee (composed of one representative
from each EU Member State), and the finally sent to the European
Parliament and Council for scrutiny.\42\
---------------------------------------------------------------------------
\42\ As detailed here: www.eceee.org/ecodesign/products/Ecodesign135lg.png.
---------------------------------------------------------------------------
In parallel, the EU has announced \43\ a second compressors study
focusing on low-pressure and oil-free equipment. From the Web site,\44\
the study was kicked off on 17 June, 2015, draft publications for
``Task 1-4'' were posted on 31 March, 2016, and additional draft
publications and stakeholder meetings are planned for the future (with
dates yet to be determined). Publication of the final report is
scheduled for April 2017.
---------------------------------------------------------------------------
\43\ As viewed here: http://www.eco-compressors.eu/documents.htm.
\44\ As viewed here: http://www.eco-compressors.eu/documents.htm.
---------------------------------------------------------------------------
3. Technology Options
In the Framework Document, DOE identified several design options
that could be used to improve compressor package efficiency including:
Improved controls;
Improved bare compressor \45\ efficiency;
---------------------------------------------------------------------------
\45\ Frequently described in the compressor industry as an
``air-end'' or ``airend.'' For the purposes of this rulemaking, DOE
considers the terms to be synonymous.
---------------------------------------------------------------------------
Improved cooling fan efficiency;
Improved part-load efficiency;
Improved electric motors; and
The use of multistage compressors.
In response to the Framework Document, the Joint Commenters
recommended that DOE consider equipment that affect compressor
efficiency, such as zero-loss condensate traps and waste heat recovery
technologies. (Joint Comment, No. 0016 at p. 3-4) Further, DOE research
indicated that even though all of the options listed in the Framework
Document were valid paths to higher efficiency, in practice, they were
not considered independently by manufacturers but, rather, deployed as
needed depending on the specifics of the compressor design and ultimate
desired efficiency level. As for this document, DOE is altering its
proposed categorization of options to improve efficiency. This is
because the options listed above are in some cases able to be deployed
independently (e.g., cooling fan efficiency) and in other cases require
coordination (e.g., using a more efficient motor). Instead of a bottom-
up approach, wherein DOE could attempt to assign a characteristic
improvement, DOE's proposed approach ``top-down,'' where the primary
consideration is the overall package efficiency and exploration is of
the overall cost required to achieve certain efficiencies. Instead of
independent options, DOE will generally consider all efficiency
improvement to come from a ``package redesign'' which could include
any, or all of the listed options from the Framework Document. This
package redesign can be thought of as including three broad categories
of improvements:
Multi-staging;
Air-end Improvement; and
Auxiliary Component Improvement.
These package redesign options are addressed separately in the
sections that follow.
[[Page 31702]]
a. Multi-Staging
Compressors ingest air at ambient conditions and compress it to a
higher pressure required by the specific application. Compressors can
perform this compression in one or multiple stages, where a stage
corresponds to a single air-end and offers the opportunity for heat
removal before the next stage. Units that compress the air from ambient
to the specified design pressure of the compressor in one step are
referred to as single-stage compressors, while units that use multiple
steps are referred to as multistage compressors.
The act of compression generates inherent heat in a gas. If the
process occurs quickly enough to limit the transfer of that heat to the
environment, the compression is known as ``adiabatic.'' By contrast,
compression may be performed slowly such that heat flows from the gas
at the same rate it is generated, and such that the temperature of the
gas never exceeds that of the environment. This process is called
``isothermal.'' DOE notes that a hotter gas is conceptually ``harder''
to compress; the compressor must overcome the heat energy present in
the gas in order to continue the compression process. As a result,
compression to a given volume requires less work if performed
isothermally. ``Real'' (i.e., not idealized in any respect) compressors
are neither adiabatic nor isothermal, and dissipate some portion of
compressive heat during the process. If a compressor is able to
dissipate more heat, the resulting act of compression becomes easier
and the compressor requires less input energy.
Multi-stage compressors are specifically designed to take advantage
of this principle and split the compression process into two or more
stages (each performed in a single air-end) to allow heat removal
between the stages using a heat-exchange device sometimes called an
``intercooler.'' The more stages used, the closer the compressor
behavior comes to the isothermal ideal. Eventually, however, the
benefits to adding further stages diminish; gains from each marginal
stage is countered by the inherent inefficiencies of using smaller
compressor units. Depending on the specific pressure involved, the
optimal number of stages may vary widely. Most standard industrial air
applications, however, do not use more than two stages.
Lubricant-free compressors typically realize greater efficiency
gains than lubricated compressors, as the lubricant used, usually oil,
acts as a coolant during the compression process, thus reducing the
benefit of intercooling between stages.
b. Air-End Improvement
The efficiency of any given air-end depends upon a number of
factors, including:
Rated compressor output capacity;
Compression chamber geometry;
Operating speed;
Surface finish;
Manufacturing precision; and
Designed equipment tolerances.
Each individual air-end has a best efficiency operating point based
upon the characteristics listed. However, because air-ends can operate
at multiple flow rates, manufacturers commonly utilize a given air-end
in multiple compressor packages to reduce overall costs. This results
in air-ends operating outside of the best efficiency point. Using one
air-end in multiple compressor packages reduces the total number of
air-ends a manufacturer needs to provide across the entire market,
reducing costs at the price of reduced efficiency for those packages
operating outside of the best efficiency point for the air-end.
However, a manufacturer could redesign and optimize air-ends for any
given flow rate and discharge pressure, increasing the overall
efficiency of the compressor package.
Manufacturers can use two viable design pathways to increase
compressor efficiency via air-end improvement. The first is to enhance
a given air-end design's properties that affect efficiency, which could
include manufacturing precision, surface finish, mechanical design
clearances, and overall aerodynamic efficiency. The second is to more
appropriately match air-ends and applications by building an overall
larger number of air-end designs. As a result, a given air-end will be
used less frequently in applications requiring it to operate further
from its optimal operating point. These two practices may be employed
independently or jointly; the option that is prioritized will depend on
the specifics of a manufacturer's equipment line and the ultimate
efficiency level desired.
c. Auxiliary Component Improvement
As discussed in the previous section, compressor manufacturers
normally use one air-end in multiple compressor packages that are
designed to operate at different discharge pressures and flow rates.
Each compressor package consists of multiple design features that
affect package efficiency, including valves, piping system, motor,
capacity controls, fans, fan motors, filtration, drains, and driers.
This equipment, for example, may control the flow of air, moisture, or
oil, or the temperature and humidity of output air, or regulate
temperature and operation, Compressor manufacturers do not normally
provide the option to replace any individual part of a compressor
package to increase efficiency, as each feature also has a direct
effect on compressor performance. However, improving the operating
characteristics of any of these ``auxiliary'' parts may offer a chance
to improve the overall efficiency of the compressor package.
For example, package isentropic efficiency can be increased by
reducing the internal pressure drop of the package using improved
valves and pipe systems, or by improving the efficiency of (1) both the
drive and fan motors (if present), (2) the fan, itself, (3) condensate
drains, (4) both air and lubricant filters (if present), (4) air
driers, and (5) controls. The improvement must be considered relative
to a starting point, however. Even if the modifications could be
deployed independently of each other, and not all can, the spread of
efficiencies available in the market likely already reflects the more
cost effective choice for improving efficiency at any given point.
Perhaps one manufacturer, by virtue of features of its product lines,
finds that reaching a given efficiency level in a particular equipment
class, is most cost effectively done by improving Technology X. Another
may find that it is more cost effective to improve Technology Y. And
both could be correct, because each may have had a different starting
point. Adding to this difficulty in ascertaining exactly when a given
technology should be deployed (as with a bottom-up technology option
approach) is a manufacturing reality--it is not cost effective to offer
an infinite number of combinations and equipment sizes. Perhaps a
compressor of output level between two others would most optimally use
a fan sized specifically for that compressor. Because it is not cost
effective for that compressor's manufacturer to stock another fan size,
however, the compressor ends up sub-optimally using a fan either
slightly too large or slightly too small, at some small cost to
efficiency. So, less may be learned by scrutinizing the design choices
of a specific model that is learned by considering the overall spread
of costs and efficiencies available in the market at-large.
DOE notes that, because the compressor packages function as an
ensemble of complementary parts, changing one part often calls for
[[Page 31703]]
changing others. A special case may come with more efficient electric
motors. Compressors normally use induction motors, which generally vary
operating speed as efficiency is improved. Using a more efficient (but
otherwise identical) induction motor without considering the rest of
the compressor design could be counterproductive if the gains in motor
efficiency were more than offset by subsequent loss in performance of
the air-end and other parts. DOE's proposal assumes that the best-
performing compressors on the market are built using the most-efficient
available electric motors that are suited to the task. However, it
could not confirm instances of a manufacturer using ``super premium''
or ``IE4'' induction motors, which appear to only recently have been
made available commercially.\46\ These terms (``super premium'' and
``IE4'') have been used (in the U.S. and Europe, respectively) to
describe the motor industry's ``next tier'' of efficiency. Possible
reasons for this include the motors not being suitable for use in
compressors, manufacturers are still exploring the relatively new
motors and have not yet introduced equipment redesigned to make use of
them, or that manufacturers are already, in fact, using them in the
most efficient compressor offerings.
---------------------------------------------------------------------------
\46\ One manufacturer, for example, describes its IE4 offerings
here: http://www.regulations.gov/#!documentDetail;D=EERE-2013-BT-
STD-0040-0033.
---------------------------------------------------------------------------
As an example of the influence of auxiliary componentry, the
European Union Draft Standard offers a list of equipment with which the
unit must be tested in order to certify compliance with standards.\47\
It does not provide definitions for the terms, but as an example, for
fixed-speed rotary compressors, required equipment includes:
---------------------------------------------------------------------------
\47\ See page 12 of http://www.regulations.gov/#!documentDetail;D=EERE-2013-BT-STD-0040-0032.
1. Electric motor
2. Cooling fan
3. Compression element
4. Transmission (Belt, Gear, Coupling . . .), (if applicable)
5. Inlet filter
6. Inlet valve
7. Minimum pressure check valve/backflow check valve
8. Oil separator
9. Air piping
10. Oil piping
11. Oil pump (if applicable)
12. Oil filter
13. Oil cooler
14. Thermostatic valve
15. Electrical switchgear
16. Compressor after-cooler
17. Compressor control device (pressure switch, pressure transducer,
etc.)
The list implies that each component affects efficiency, but does
not say whether improvement of any particular component is possible.
Nonetheless, it is illustrative of the set of componentry that needs to
function harmoniously in order for the package to perform well.
DOE also requests comment specifically on IE4 or ``super premium''
electric motors, their suitability for compressors, and on any efforts
to incorporate them into newly developed equipment. This is identified
as Issue 11 in section VIII.E, ``Issues on Which DOE Seeks Comment.''
B. Screening Analysis
DOE generally uses the following four screening criteria to
determine which technology options are suitable for further
consideration in an energy conservation standards rulemaking:
1. Technological feasibility. Technologies that are not
incorporated in commercial products or in working prototypes will not
be considered further.
2. Practicability to manufacture, install, and service. If it is
determined that mass production and reliable installation and servicing
of a technology in commercial products could not be achieved on the
scale necessary to serve the relevant market at the time of the
projected compliance date of the standard, then that technology will
not be considered further.
3. Impacts on product utility or product availability. If it is
determined that a technology would have significant adverse impact on
the utility of the product to significant subgroups of consumers or
would result in the unavailability of any covered product type with
performance characteristics (including reliability), features, sizes,
capacities, and volumes that are substantially the same as products
generally available in the United States at the time, it will not be
considered further.
4. Adverse impacts on health or safety. If it is determined that a
technology would have significant adverse impacts on health or safety,
it will not be considered further.
See 10 CFR part 430, subpart C, appendix A, 4(a)(4) and 5(b).
Technologies that pass through the screening analysis are referred
to as ``design options'' in the engineering analysis. The screening
analysis and engineering analysis are discussed in detail,
respectively, in Chapters 4 and 5 of the TSD.
The subsequent sections include comments from interested parties
pertinent to the screening criteria, DOE's evaluation of each
technology option against the screening analysis criteria, and whether
DOE screened out a particular technology option based on the above
criteria.
1. Screened-Out Technologies
Of the identified technology options, DOE was not able to identify
any that would fail the screening criteria. The cost of additional
engineering resources is considered in the Manufacturer Impact Analysis
of section IV.J. DOE seeks comment on whether sufficient resources
would be available such that criterion 2 of the screening analysis is
satisfied. This is identified as Issue 12 in section VIII.E, ``Issues
on Which DOE Seeks Comment.''
2. Remaining Technologies
After reviewing each technology, DOE tentatively concludes that all
of the identified technologies listed in section IV.A.3 met all four
screening criteria to be examined further as design options in DOE's
NOPR analysis. In summary, DOE did not screen out the following
technology options:
Multi-staging
Air-end Improvement
Auxiliary Component Improvement
DOE determined that these technology options are technologically
feasible because they are being used or have previously been used in
commercially-available products or working prototypes. DOE also finds
that all of the remaining technology options meet the other screening
criteria (i.e., practicable to manufacture, install, and service and do
not result in adverse impacts on consumer utility, equipment
availability, health, or safety). For additional details, see chapter 4
of the NOPR TSD.
C. Engineering Analysis
In the engineering analysis, DOE describes the relationship between
manufacturer selling price (MSP) to improved compressor package
isentropic efficiency. This relationship serves as the basis for cost-
benefit calculations for individual end users, manufacturers, and the
Nation. DOE typically structures the engineering analysis using one of
three approaches: (1) Design-option; (2) efficiency level; or (3)
reverse-engineering (or cost assessment). The design-option approach
involves adding the estimated cost and associated efficiency of various
efficiency-improving design changes to the baseline equipment to model
different levels of efficiency. The
[[Page 31704]]
efficiency level approach uses estimates of costs and efficiencies of
equipment available on the market at distinct efficiency levels to
develop the cost-efficiency relationship. The reverse-engineering
approach involves testing equipment for efficiency and determining cost
from a detailed bill of materials (BOM) derived from reverse-
engineering representative equipment. The efficiency ranges from that
of the least-efficient compressor sold today (i.e., the baseline) to
the maximum technologically feasible efficiency level. At each
efficiency level examined, DOE determines the MSP; this relationship is
referred to as a cost-efficiency curve.
DOE conducted the engineering analysis for this rulemaking using an
efficiency level approach. The decision to use this approach was made
due to several factors, including the wide variety of equipment sizes
analyzed, the availability of reliable performance data, the
availability of a comparable European Union study, and the nature of
the design options available for the equipment.
1. Summary of Significant Data Sources
For the engineering analysis, DOE utilized four principal data
sources: (1) A database of compressor performance data from CAGI data
sheets; (2) results from the EU Lot 31--Ecodesign Preparatory Study on
Compressors; (3) a dataset of confidential manufacturer price data; and
(4) a dataset of online retailer prices. The following subsections
provide a brief description of each significant data source. Complete
details are found in Chapter 5 of the NOPR TSD.
a. CAGI Data Sheets
CAGI's Performance Verification program provides manufacturers a
standardized test method and performance data reporting format for
rotary compressors.\48\ DOE compiled into one database the information
contained in every CAGI Performance Verification data sheet found on
the Web sites of individual manufacturers. The resulting database
contains performance data on each verified individual compressor and is
referred to as the ``CAGI database'' throughout this NOPR.
---------------------------------------------------------------------------
\48\ For more information regarding CAGI's Performance
Verification program, please see: http://www.cagi.org/performance-verification/
---------------------------------------------------------------------------
b. Lot 31--European Union Ecodesign Preparatory Study on Compressors
The Lot 31 study, described in section IV.A.2, investigated three
types of compressors: Fixed-speed rotary standard air compressors,
variable-speed rotary standard air compressors, and piston standard air
compressors. For each compressor type, the Lot 31 study established two
types of relationships between package isentropic efficiency and flow
rate. The first relationship represents the market average package
isentropic efficiency, as a function of flow, for each compressor type;
this relationship is referred to as the ``Lot 31 regression curve.''
Generally the Lot 31 regression curves show an increase in package
isentropic efficiency with an increase in flow rate.\49\ The second
relationship is derived from each Lot 31 regression curve and is known
as the ``Lot 31 regulation curve.'' Lot 31 regulation curves are scaled
from the Lot 31 regression curves using ``d-values'', which are
explained further in section IV.C.5. The regression curves allowed the
Lot 31 study to evaluate various standard levels, similar to how DOE
would typically investigate various efficiency and trial standard
levels. Chapter 5 and chapter 3 of the NOPR TSD provide further detail
on the Lot 31 regression and regulation curves.
---------------------------------------------------------------------------
\49\ See the Lot 31 Ecodesign Preparatory Study on Compressors
Task 6 section 1.3.9, 1.3.10, and 1.3.11 here: http://www.regulations.gov/#!documentDetail;D=EERE-2013-BT-STD-0040-0031.
---------------------------------------------------------------------------
To evaluate the energy savings potential of these efficiency
levels, the Lot 31 study established relationships between compressor
package isentropic efficiency, flow rate, and list price for each
compressor type. List price represents the price paid by the final
customer. To determine the manufacturer selling price (MSP), or the
price paid by the manufacturer's first customer, the Lot 31 study
scaled the list price by a constant markup factor. Throughout this NOPR
these relationships will be referred to as the ``Lot 31 MSP-Flow-
Efficiency Relationships.'' Chapters 5 and chapter 3 of the NOPR TSD
provide further detail on the Lot 31 MSP-Flow-Efficiency Relationships.
c. Confidential Manufacturer Equipment Data
DOE's contractor collected MSP and performance data for a range of
compressor sizes and equipment classes from manufacturers.\50\ These
data are confidential and covered under non-disclosure agreement
between the DOE contractor and the manufacturers. Data collected
included pressure, flow rate, motor horsepower, full-load power (kW),
motor efficiency, package specific power, and MSP for individual
compressor models. Throughout this NOPR these will be referred to as
the ``confidential, U.S. MSP data.''
---------------------------------------------------------------------------
\50\ In developing standards, DOE may choose to contract with
third party organizations who specialized in various functions.
---------------------------------------------------------------------------
d. Online Retailer Price Data
DOE collected price data for compressors sold by the online
retailers Grainger,\51\ Air Compressors Direct,\52\ and Compressor
World.\53\ DOE also collected price and performance data for electric
motors from Grainger to develop the scaling relationship for the
R1_FS_L_XX equipment class described in section IV.C.5.c. These data
are publicly available on each retailer's Web site and were compiled
into a database that will be referred to as the ``online retailer price
database'' throughout this NOPR.
---------------------------------------------------------------------------
\51\ http://www.grainger.com/.
\52\ http://www.aircompressorsdirect.com/.
\53\ http://www.compressorworld.com/.
---------------------------------------------------------------------------
2. Harmonization With Lot 31
The Lot 31 study resulted in a working document which proposed
energy conservation standards for compressors. The current working
document has not been formally adopted as a final regulation.
Many manufacturers participate in both the EU and U.S. markets, and
during confidential interviews multiple manufacturers indicated that
they have begun preparation to meet the requirements of the draft
proposal, despite its not having been formally adopted as a regulation.
Additionally DOE received comments from Atlas Copco that, due to the
global nature of the industry, DOE should consider the findings in Lot
31 study. (Atlas-Copco, No. 0008 at p.2) And CAGI commented that it is
important for regulations between the U.S. and EU to be similar given
the global nature of the industry and many of its customers. (CAGI, No.
0030 at p. 1)
DOE recognizes that where applicable and justifiable it is
beneficial to align with the Lot 31 study, because manufacturers have
begun preparation for the Lot 31 proposal, the findings of the Lot 31
study can be useful, and it is important to have similar U.S. and EU
regulations.
3. Representative Equipment
In the engineering analysis, DOE analyzed the MSP-efficiency
relationships for the equipment classes specified in section IV.A.1.
For both rotary and reciprocating equipment classes, DOE concluded,
consistent with the EU Lot 31 study, that both incremental MSPs and
attainable efficiency are independent of full-load
[[Page 31705]]
operating pressure.\54\ However, DOE understands that absolute
equipment MSP may vary by pressure. As such, DOE selected
representative pressures as the basis for the development of their MSP-
efficiency relationships. The representative pressures are 125 psig for
rotary equipment classes, and 175 psig for reciprocating equipment
classes. These pressures were selected because they represent the
majority of equipment available in the CAGI database, and online
retailer price database. Additionally, Chapter 5 of the NOPR TSD
provides information regarding the distribution of pressures among
available rotary and reciprocating models.
---------------------------------------------------------------------------
\54\ See the Lot 31 Ecodesign Preparatory Study on Compressors
Task 6 section 1.2.2 and Task 7 section 2.4.1 here: http://www.regulations.gov/#!documentDetail;D=EERE-2013-BT-STD-0040-0031.
---------------------------------------------------------------------------
DOE requests comment on the use of 125 and 175 psig as
representative pressures to establish absolute MSPs for rotary and
reciprocating equipment classes, respectively. This is identified as
Issue 13 in section VIII.E, ``Issues on Which DOE Seeks Comment.''
As mentioned previously, DOE concluded, consistent with the EU Lot
31 study, that attainable efficiency is independent of full-load
operating pressure.\55\ Consequently, DOE used data from all full-load
operating pressures represented in the CAGI database to establish
efficiency levels for rotary air compressors. The CAGI database
contains performance data for compressors ranging from 73 to 200 psig
of full-load operating pressure and is representative of the full range
of rotary compressor pressures available on the market. For
reciprocating air compressors, DOE used a modified version of the EU
Lot 31 regression and regulation curve for piston standard air
compressors. The EU Lot 31 curves were recommended by the study author
to be applicable to the full range of pressures proposed in the EU
standard, ~101.5 - 203 psig (nominally: 7-14 bar (gauge)).\56\ Section
IV.C.5 contains complete details on the development of efficiency
levels.
---------------------------------------------------------------------------
\55\ See the Lot 31 Ecodesign Preparatory Study on Compressors
Task 6 section 1.2.2 here: http://www.regulations.gov/#!documentDetail;D=EERE-2013-BT-STD-0040-0031.
\56\ See the definition of standard air compressor in the
working document here: http://www.regulations.gov/#!documentDetail;D=EERE-2013-BT-STD-0040-0031.
---------------------------------------------------------------------------
DOE requests comment on DOE's proposal to establish efficiency
levels that are independent of pressure. This is identified as Issue 14
in section VIII.E, ``Issues on Which DOE Seeks Comment.''
DOE also requests comment on DOE's proposal to establish
incremental MSPs that are independent of pressure. This is identified
as Issue 15 in section VIII.E, ``Issues on Which DOE Seeks Comment.''
4. Design Options and Available Energy Efficiency Improvements
Section IV.A.2 identifies package redesign as the primary design
option available to improve compressor efficiency. Multi-staging, air-
end improvement, and auxiliary component improvement can be considered
specialized cases of package redesign. In the first case, an additional
air-end is introduced to the package, which affords the opportunity to
dissipate heat after the first compression so that the second
compression requires less work. Air-end improvement permits fine tuning
of the air-end to the specific pressure and flow range in which it is
expected to operate. The auxiliary component improvement option
represents optimization of auxiliary components such as drives, motors,
filters, valves, and piping. Ultimately, a manufacturer can implement a
full package redesign to incrementally improve efficiency to any
efficiency level, up to max-tech, as discussed in subsequent sections.
5. Efficiency Levels
For each equipment class, DOE established and analyzed six
efficiency levels and a baseline to assess the relationship between MSP
and package isentropic efficiency. As discussed previously, DOE's
proposed efficiency levels are independent of full-load operating
pressure. However, DOE concluded, consistent with the Lot 31 study,\57\
that attainable package isentropic efficiency is a function of flow
rate at full-load operating pressure. DOE notes that the test procedure
NOPR proposed to define the term ``full-load actual volume flow rate''
to represent the actual volume flow rate of the compressor at the full-
load operating pressure. As such, each efficiency level is defined by a
mathematical relationship between full-load actual volume flow rate and
package isentropic efficiency. Similarly to the Lot 31 study, DOE
defines a regression curve (market average package isentropic
efficiency, as a function of full-load actual volume flow rate) for
each equipment class and uses specific ``d-values'' to shift the
regression curve and establish efficiency levels for each equipment
class, as discussed in section IV.C.1.b.
---------------------------------------------------------------------------
\57\ Discussed often, e.g., Task 6 Section 1.3. See: http://www.regulations.gov/#!documentDetail;D=EERE-2013-BT-STD-0040-0031.
---------------------------------------------------------------------------
Similar to the approach used by the Lot 31 study, DOE defined the
``d-value,'' as a percentage reduction in losses from the regression
curve to theoretical 100 percent package isentropic efficiency. The d-
value is used as a metric to characterize compressor package isentropic
efficiency with respect to the mean efficiency of the market (i.e., the
regression curve), and establish and evaluate various efficiency levels
for all equipment classes. A positive d-value shifts the regression
curve to a higher package isentropic efficiency for all full-load
actual volume flow rates, and a negative d-value shifts the regression
curve to lower package isentropic efficiency. A d-value of 100 would
generate an efficiency level at 100 percent package isentropic
efficiency for all full-load actual volume flow rates. Alternatively, a
d-value of 50 would generate an efficiency level that falls halfway
between the regression curve and 100 percent package isentropic
efficiency for all full-load actual volume flow rates. And a d-value of
zero would generate an efficiency level equal to the regression curve.
For each equipment class, DOE established efficiency levels at max-
tech and a d-value of zero. DOE also established two intermediary
efficiency levels between the baseline and a d-value of zero, and two
efficiency levels between the d-value of zero level and max-tech.
For all equipment classes, efficiency level (EL) 6 represents the
max-tech efficiency level. DOE considers technologies to be
technologically feasible if they are incorporated in any currently
available equipment or working prototypes. A max-tech level results
from the combination of design options predicted to result in the
highest efficiency level possible for an equipment class. DOE considers
compressors a mature technology, with all available design options
already existing in the marketplace. Therefore, for compressors, the
max-tech efficiency level coincides with the maximum available
efficiency already offered in the marketplace. As a result, DOE
performed market-based analyses to determine max-tech/max-available
levels. As with efficiency level, the max-tech/max-available levels are
defined by d-values for each equipment class. Discussion of the process
used to determine max-tech efficiency levels is in section IV.C.5 as
well as chapter 5 of the NOPR TSD.
For all equipment classes, the baseline defines the lowest
efficiency
[[Page 31706]]
equipment present in the market for each equipment class. DOE
established baselines, represented by d-values, for each equipment
class by reviewing available compressor performance data. Chapter 5 of
the NOPR TSD provides additional information on the process used to
select baseline efficiency levels.
Jenny commented that with the variety of air compressors available
on the market, selecting baseline levels is difficult. Jenny added that
larger manufacturers are more likely to test equipment efficiency--and
as a result, Jenny cautioned that they may be unfairly represented in
the baseline because smaller manufacturers are less likely to test
equipment. (Jenny, No. 0005 at p. 4)
DOE recognizes that there are a variety of compressors available on
the market that represent a range of efficiency levels. For this
rulemaking, the baseline represents the lowest efficiency equipment
commonly sold on the market; independent of the manufacturer. DOE used
all available data to select the baseline. DOE requests additional data
which can be used to refine its current baseline, max-tech, and
efficiency level assumptions. This is identified as Issue 16 in section
VIII.E, ``Issues on Which DOE Seeks Comment.''
For all equipment classes, EL 3 corresponds to a d-value of zero,
which represents the mean efficiency available on the market. The
European Union draft regulation proposed a d-value of zero for a
minimum energy efficiency requirement in 2020.\58\ DOE notes that
although the EU Lot 31 draft regulation proposes to cover only fixed-
speed rotary standard air compressors, variable-speed rotary standard
air compressors, and piston standard air compressors, DOE chose to
evaluate a d-value of zero for all equipment classes.
---------------------------------------------------------------------------
\58\ For more information regarding the draft regulation see:
http://www.regulations.gov/#!documentDetail;D=EERE-2013-BT-STD-0040-
0031.
---------------------------------------------------------------------------
EL 1 and EL 2 are established as intermediary efficiency levels
one-third and two-thirds of the way, respectively, between the baseline
and EL 3. EL 4 is an efficiency level established slightly above EL 3
to evaluate the sensitivity of going above the EU Lot 31 draft
regulation. EL 5 is an intermediary efficiency level established
approximately halfway between EL 3 and EL 6. The specific d-values for
EL 1, 2, 4, and 5 vary for each equipment class.
As discussed in section IV.C.3, efficiency levels for each
equipment class are independent of full-load operating pressure.
DOE pursued different analytical methods to establish efficiency
levels for different equipment classes. These analytical methods can be
grouped into three general categories presented in Table IV.4.
Table IV.4--Efficiency Level Analytical Methods
------------------------------------------------------------------------
Method Applicable equipment classes
------------------------------------------------------------------------
Direct from Lot 31............... RP_FS_L_AC
RP_VS_L_AC
R3_FS_L_XX
Developed from CAGI Database..... RP_FS_LF_AC
RP_VS_LF_AC
Scaled from Other Equipment RP_FS_L_WC
Classes, Using U.S. Data. RP_VS_L_WC
RP_FS_LF_WC
RP_VS_LF_WC
R1_FS_L_XX
------------------------------------------------------------------------
The following sections present the analytical methods used by DOE
to develop the efficiency levels for each equipment class.
a. Direct From Lot 31
Table IV.5 shows the three equipment classes for which efficiency
levels are derived from analogous EU Lot 31 regression curves.
Table IV.5--Equipment Class Efficiency Levels Derived From Lot 31
------------------------------------------------------------------------
Equipment Class EU Lot 31 regression curve
------------------------------------------------------------------------
RP_FS_L_AC............................ Fixed speed rotary standard air
compressors.
RP_VS_L_AC............................ Variable-speed rotary standard
air compressors.
R3_FS_L_XX............................ Piston standard air compressors.
------------------------------------------------------------------------
The analogous EU Lot 31 regression curves for the RP_FS_L_AC and
RP_VS_L_AC equipment classes are based on CAGI data for equipment sold
in the United States at the time of the Lot 31 study.\59\ DOE regressed
the CAGI database data for these two equipment classes and compared the
results to the analogous EU Lot 31 regression curves. DOE found that
the shape of the new CAGI database curves were a close approximation to
the Lot 31 regression curves and the magnitude (or y-axis scaling) of
the curves were also a close fit with the EU curve. Generally, the
RP_FS_L_AC CAGI database regression curve was within one efficiency
point of the EU curve and the RP_VS_L_AC CAGI database curve was within
two efficiency points of the EU curve for flow rates where CAGI data
was available. Ultimately, due to the similarity of the regressions and
the overall benefits of harmonizing with the European Union, DOE
decided to use Lot 31 regressions, rather than the regressions obtained
from the current CAGI database. DOE notes that differences between the
CAGI database regression curves and the EU Lot 31
[[Page 31707]]
regression curves can be compensated through use of d-values to scale
to alternative efficiencies. Chapter 5 of the NOPR TSD provides
complete details on the relationships between the EU Lot 31 regression
curves and the current CAGI database regression curves.
---------------------------------------------------------------------------
\59\ See Task 6 Section 1.3: http://www.regulations.gov/#!documentDetail;D=EERE-2013-BT-STD-0040-0031.
---------------------------------------------------------------------------
Unlike rotary air compressors, DOE lacks publicly available
performance data for reciprocating air compressors. Furthermore,
discussions with industry experts indicate that the EU reciprocating
air compressor markets may not be directly analogous or representative
of the U.S. market. Specifically, industry experts indicate that EU
reciprocating air compressors are predominantly single-stage units
designed for lower operating pressures and duty cycles. Alternatively,
industry experts indicate that U.S. reciprocating compressors are a
more balanced mix of single- and two-stage units, typically designed
for higher duty cycles. As described in section IV.A.3.a, single-stage
units are inherently less efficient than two-stage units, and single-
stage units tend to be designed for lower flow rates. These inherent
differences in efficiency and flow rate make it difficult to use
aggregated EU market data as a proxy for the U.S. market.
Ultimately, in the absence of sufficient U.S. efficiency data, DOE
based efficiency levels for the R3_FS_L_XX equipment class on the EU
Lot 31 regression curve for piston standard air compressors. However,
DOE increased the max-tech level for R3_FS_L_XX beyond that of the Lot
31 study, based on limited confidential performance data collected by
DOE's contractor. Chapter 5 of the NOPR TSD provides complete details
on derivation of efficiency levels and max-tech for the R3_FS_L_XX
equipment class.
DOE requests comment on the use of the EU Lot 31 regression curve
for piston standard air compressors to define the regression curve of
the R3_FS_L_XX equipment class. This is identified as Issue 17 in
section VIII.E, ``Issues on Which DOE Seeks Comment.''
i. RP_FS_L_AC Efficiency Levels
The proposed regression curve for the RP_FS_L_AC equipment class is
as follows:
[GRAPHIC] [TIFF OMITTED] TP19MY16.002
Where:
[eta]Isen\Regr\RP_FS_L_AC is the regression
curve package isentropic efficiency for the RP_FS_L_AC equipment
class, and
V1 is full-load actual volume flow rate (cubic
feet per minute).
The proposed efficiency levels for the RP_FS_L_AC equipment class
are defined by the following equation, in conjunction with the d-values
in Table IV.6.
[GRAPHIC] [TIFF OMITTED] TP19MY16.003
Where:
[eta]Ise\STD\RP_FS_L_AC is package isentropic
efficiency for the RP_FS_L_AC equipment class, for a selected
efficiency level,
[eta]Isen\Regr\RP_FS_L_AC is the regression
curve package isentropic efficiency for the RP_FS_L_AC equipment
class, and
d is the d-value for each proposed efficiency level, as
specified in Table IV.6.
Table IV.6--Efficiency Levels Analyzed for Rotary, Lubricated, Air-
Cooled, Fixed-Speed, Three-Phase
------------------------------------------------------------------------
Efficiency level * d-Value
------------------------------------------------------------------------
Baseline...................................................... -49
EL 1.......................................................... -30
EL 2.......................................................... -15
EL 3.......................................................... 0
EL 4.......................................................... 5
EL 5.......................................................... 13
EL 6.......................................................... 30
------------------------------------------------------------------------
* DOE notes that in this NOPR, the spreadsheets for the downstream
economic analyses contain 4 auxiliary efficiency levels, beyond the
primary efficiency levels listed in this table; these are EL 4.1, 5.1,
5.2, and 5.3. These auxiliary efficiency levels were maintained in the
spreadsheets to increase the granularity and improve analytical
accuracy of the economic analyses, however, they are not carried
beyond the spreadsheets. Cost-efficiency relationships for these ELs
are provided in Chapters 5 of the NOPR TSD.
ii. RP_VS_L_AC Efficiency Levels
The proposed regression curve for the RP_VS_L_AC equipment is as
follows:
[GRAPHIC] [TIFF OMITTED] TP19MY16.004
[[Page 31708]]
Where:
[eta]Isen\Regr\RP_VS_L_AC is the regression
curve package isentropic efficiency for the RP_VS_L_AC equipment
class, and
V1 is full-load actual volume flow rate (cubic
feet per minute).
The proposed efficiency levels for the RP_VS_L_AC equipment class
are defined by the following equation, in conjunction with the d-values
in Table IV.7.
[GRAPHIC] [TIFF OMITTED] TP19MY16.005
Where:
[eta]Isen\STD\RP_VS_L_AC is package isentropic
efficiency for the RP_VS_L_AC equipment class, for a selected
efficiency level,
[eta]Isen\Regr\RP_VS_L_AC is the regression
curve package isentropic efficiency for the RP_VS_L_AC equipment
class, and
d is the d-value for each proposed efficiency level, as
specified in Table IV.7.
Table IV.7--Efficiency Levels Analyzed for Rotary, Lubricated, Air-
Cooled, Variable-Speed, Three-Phase
------------------------------------------------------------------------
Efficiency level * d-Value
------------------------------------------------------------------------
Baseline...................................................... -30
EL 1.......................................................... -20
EL 2.......................................................... -10
EL 3.......................................................... 0
EL 4.......................................................... 5
EL 5.......................................................... 15
EL 6.......................................................... 33
------------------------------------------------------------------------
* DOE notes that in this NOPR, the spreadsheets for the downstream
economic analyses contain 4 auxiliary efficiency levels, beyond the
primary efficiency levels listed in this table; these are EL 4.1, 5.1,
5.2, and 5.3. These auxiliary efficiency levels were maintained in the
spreadsheets to increase the granularity and improve analytical
accuracy of the economic analyses, however, they are not carried
beyond the spreadsheets. Cost-efficiency relationships for these ELs
are provided in Chapters 5 of the NOPR TSD.
iii. R3_FS_L_XX Efficiency Levels
The proposed regression curve for the R3_FS_L_XX equipment class is
as follows:
[GRAPHIC] [TIFF OMITTED] TP19MY16.007
Where:
[eta]Isen\Regr\R3_FS_L_XX is the regression
curve package isentropic efficiency for the R3_FS_L_XX equipment
class, and
V1 is full-load actual volume flow rate (cubic
feet per minute).
The proposed efficiency levels for the R3_FS_L_XX equipment class
are defined by the following equation, in conjunction with the d-values
in Table IV.8.
[GRAPHIC] [TIFF OMITTED] TP19MY16.008
Where:
[eta]Isen\STD\R3_FS_L_XX is package isentropic
efficiency for the R3_FS_L_XX equipment class, for a selected
efficiency level,
[eta]Isen\Regr\R3_FS_L_XX is the regression
curve package isentropic efficiency for the R3_FS_L_XX equipment
class, and
d is the d-value for each proposed efficiency level, as
specified in Table IV.8.
Table IV.8--Efficiency Levels Analyzed for Reciprocating, Lubricated,
Air-Cooled or Water-Cooled, Fixed-Speed, Three-Phase
------------------------------------------------------------------------
Efficiency level * d-Value
------------------------------------------------------------------------
Baseline...................................................... -18
EL 1.......................................................... -15
EL 2.......................................................... -5
EL 3.......................................................... 0
EL 4.......................................................... 5
EL 5.......................................................... 20
EL 6.......................................................... 60
------------------------------------------------------------------------
* DOE notes that in this NOPR, the spreadsheets for the downstream
economic analyses contain 4 auxiliary efficiency levels, beyond the
primary efficiency levels listed in this table; these are EL 4.1, 5.1,
5.2, and 5.3. These auxiliary efficiency levels were maintained in the
spreadsheets to increase the granularity and improve analytical
accuracy of the economic analyses, however, they are not carried
beyond the spreadsheets. Cost-efficiency relationships for these ELs
are provided in Chapters 5 of the NOPR TSD.
[[Page 31709]]
DOE requests comment and supporting data on the efficiency levels
established for the RP_FS_L_AC, RP_VS_L_AC, and R3_FS_L_XX equipment
classes. This is identified as Issue 18 in section VIII.E, ``Issues on
Which DOE Seeks Comment.''
b. Developed From CAGI Database
The proposed regression curve and efficiency levels for the
RP_FS_LF_AC and RP_VS_LF_AC equipment classes are derived from data
within the CAGI database. DOE notes that available CAGI data in each
equipment class does not span the entire range of full-load actual
volume flow rates evaluated. There was a lack of data at low and high
full-load actual volume flow rates, so DOE based portions of the
RP_FS_LF_AC and RP_VS_LF_AC equipment class regression curves on the
analogous lubricated equipment classes. Consequently, the regression
curves for the RP_FS_LF_AC and RP_VS_LF_AC equipment classes are
composed of three piece-wise continuous functions. Chapter 5 of the
NOPR TSD provides complete details on the curves developed based on the
CAGI database.
i. RP_FS_LF_AC Efficiency Levels
The proposed regression curve for the RP_FS_LF_AC equipment class
is as follows:
[GRAPHIC] [TIFF OMITTED] TP19MY16.009
Where:
[eta]Isen\Regr\RP_FS_LA is the regression curve
package isentropic efficiency for the RP_FS_LF_AC equipment class,
aRP\FS\LF\AC is a coefficient from Table IV.9,
bRP\FS\LF\AC is a coefficient from Table IV.9,
cRP\FS\LF\AC is a coefficient from Table IV.9, and
V1 is full-load actual volume flow rate (cubic
feet per minute).
Table IV.9--Coefficients for RP_FS_LF_AC Regression Curve
----------------------------------------------------------------------------------------------------------------
Full-load actual volume flow rate range (acfm) aRP\FS\LF\AC bRP\FS\LF\AC cRP\FS\LF\AC
----------------------------------------------------------------------------------------------------------------
0 [eta]Isen\STD\RP_FS_LF_AC is package isentropic
efficiency for the RP_FS_LF_AC equipment class, for a selected
efficiency level,
[eta]Isen\Regr\RP_FS_LF_AC is the regression
curve package isentropic efficiency for the RP_FS_LF_AC equipment
class, and
d is the d-value for each proposed efficiency level, as
specified in Table IV.10.
Table IV.10--Efficiency Levels Analyzed for Rotary, Lubricant-Free, Air-
Cooled, Fixed-Speed, Three-Phase
------------------------------------------------------------------------
Efficiency level * d-Value
------------------------------------------------------------------------
Baseline................................................ -11
EL 1.................................................... -10
EL 2.................................................... -5
EL 3.................................................... 0
EL 4.................................................... 2.5
EL 5.................................................... 7.5
EL 6.................................................... 10
------------------------------------------------------------------------
* DOE notes that in this NOPR, the spreadsheets for the downstream
economic analyses contain 1 auxiliary efficiency level, beyond the
primary efficiency levels listed in this table; this is EL 4.1. This
auxiliary efficiency level was maintained in the spreadsheets to
increase the granularity and improve analytical accuracy of the
economic analyses, however, they are not carried beyond the
spreadsheets. To maintain a consistent analytical structure with other
equipment classes the spreadsheets contain EL 5.1, 5.2, and 5.3 which
are equal to EL 6. Cost-efficiency relationships for these ELs are
provided in Chapters 5 of the NOPR TSD.
ii. RP_VS_LF_AC Efficiency Levels
The proposed regression curve for the RP_VS_LF_AC equipment class
is as follows:
[[Page 31710]]
[GRAPHIC] [TIFF OMITTED] TP19MY16.011
Where:
[eta]Isen\Regr_RP_VP_LF_AC is the regression
curve package isentropic efficiency for the RP_VS_LF_AC equipment
class,
[alpha]RP\VS\LF\AC is a coefficient from Table IV.11,
bRP\VS\LF\AC is a coefficient from Table IV.11,
cRP\VS\LF\AC is a coefficient from Table IV.11, and
V1 is full-load actual volume flow rate (cubic
feet per minute).
Table IV.11--Coefficients for RP_VS_LF_AC Regression Curve
----------------------------------------------------------------------------------------------------------------
Full-load actual volume flow rate range (acfm) [alpha]RP\VP\LF\AC bRP\VP\LF\AC cRP\VP\LF\AC
----------------------------------------------------------------------------------------------------------------
0 [eta]Isen\STD_RP_VS_LF_AC is package isentropic
efficiency for the RP_VS_LF_AC equipment class, for a selected
efficiency level,
[eta]Isen\Regr_RP_VS_LF_AC is the regression
curve package isentropic efficiency for the RP_VS_LF_AC equipment
class, and
d is the d-value for each proposed efficiency level, as
specified in Table IV.12.
Table IV.12--Efficiency Levels Analyzed for Rotary, Lubricant-Free, Air-
Cooled, Variable-Speed, Three-Phase
------------------------------------------------------------------------
Efficiency level * d-Value
------------------------------------------------------------------------
Baseline...................................................... -13
EL 1.......................................................... -10
EL 2.......................................................... -5
EL 3.......................................................... 0
EL 4.......................................................... 2.5
EL 5.......................................................... 7.5
EL 6.......................................................... 13
------------------------------------------------------------------------
* DOE notes that in this NOPR, the spreadsheets for the downstream
economic analyses contain 1 auxiliary efficiency level, beyond the
primary efficiency levels listed in this table; this is EL 4.1. This
auxiliary efficiency level was maintained in the spreadsheets to
increase the granularity and improve analytical accuracy of the
economic analyses, however, they are not carried beyond the
spreadsheets. To maintain a consistent analytical structure with other
equipment classes the spreadsheets contain EL 5.1, 5.2, and 5.3 which
are equal to EL 6. Cost-efficiency relationships for these ELs are
provided in Chapters 5 of the NOPR TSD.
DOE notes that the proposed regression curve and efficiency levels
for the RP_VS_LF_AC equipment class were established with a limited set
of data from the CAGI database. Specifically, the CAGI database
included data for 13 RP_VS_LF_AC air compressors as compared to 60 for
RP_FS_LF_AC compressors, and 835 for RP_FS_L_AC compressors. Chapter 5
of the NOPR TSD contains complete details on the datasets and
regression methodologies.
DOE requests comment on the proposed efficiency levels selected for
the RP_VS_LF_AC equipment class regarding their representation of the
market, and any data that could improve the analysis. This is
identified as Issue 19 in section VIII.E, ``Issues on Which DOE Seeks
Comment.''
c. Scaled From Other Equipment Classes, Using U.S. Data
DOE scaled efficiency levels for water-cooled rotary from analogous
air-cooled rotary equipment classes based on relationships developed
from the CAGI database. Additionally, DOE scaled R1_FS_L_XX efficiency
levels from R3_FS_L_XX efficiency levels based on motor data in the
online retailer price database.
Many air-cooled rotary air compressors are also offered in a water-
cooled variant. These variants are typically identical, except for the
cooling method employed. The air-cooled variant will utilize one or
more cooling fans and heat exchangers to remove heat from the
compressed air. Alternatively, a water-cooled variant utilizes chilled
water (from a separate chilled water system) and one or more heat
exchanges to remove heat from the compressed air. Typically, both
variants will remove the same amount of heat and offer the same output
flow and pressure. The key difference is that the fan(s) used in the
air-cooled unit are within the compressor package and cause the air-
cooled unit to consume more energy than the water-cooled unit, which
receives water pumped from a chiller external to the compressor
package. This means that for water-cooled units the energy used to
remove heat by external pumps and chillers is not accounted for in the
test procedure and not reflected in package isentropic efficiency.
Consequently, DOE established its proposed efficiency levels for water-
cooled equipment classes by scaling analogous air-cooled efficiency
levels to account for the lack of a fan motor. Specifically, for each
equipment class, DOE developed a scaling relationship using the CAGI
database and applied it to efficiency levels from the associated air-
cooled equipment class.
Many reciprocating air compressors with motor power <=7.5-hp are
offered with both single- and three-phase induction motors. These
variants are typically identical, except for the motor. Consequently,
DOE established its proposed efficiency levels for single-
[[Page 31711]]
phase equipment classes by scaling the analogous three-phase efficiency
levels to account for inherent efficiency differences between single-
and three-phase motors. DOE developed a scaling relationship using the
online retailer price database and applied it to efficiency levels from
R3_FS_L_XX. Ultimately, DOE established the proposed single- and three-
phase equipment classes and efficiency levels, such that analogous
single- and three-phase equipment would be rated at approximately the
same efficiency level, when evaluated with the proposed DOE test
procedure.
The following subsections provide the equations and d-values used
to establish the proposed efficiency levels for the RP_FS_L_WC,
RP_VS_L_WC, RP_FS_LF_WC, RP_VS_LF_WC, and R1_FS_L_XX equipment classes.
Chapter 5 of the NOPR TSD provides complete details on the scaling
relationships used to develop the proposed efficiency levels for
equipment classes discussed in this section.
i. RP_FS_L_WC Efficiency Levels
The proposed efficiency levels for the RP_FS_L_WC equipment class
are derived from the RP_FS_L_AC equipment class.
The proposed efficiency levels for the RP_FS_L_WC equipment class
are defined by the following equation, in conjunction with the d-values
in Table IV.13.
[GRAPHIC] [TIFF OMITTED] TP19MY16.013
Where:
[eta]Isen\STD_RP_FS_L_WC is package isentropic
efficiency for the RP_FS_L_WC equipment class, for a selected
efficiency level,
[eta]Isen\Regr_RP_FS_L_AC is the regression
curve package isentropic efficiency for the RP_FS_L_AC equipment
class, and
d is the d-value for each proposed efficiency level, as
specified in Table IV.13.
Table IV.13--Efficiency Levels Analyzed for Rotary, Lubricated, Water-
cooled, Fixed-Speed, Three-phase
------------------------------------------------------------------------
Efficiency level * d-Value
------------------------------------------------------------------------
Baseline................................................ -49
EL 1.................................................... -30
EL 2.................................................... -15
EL 3.................................................... 0
EL 4.................................................... 5
EL 5.................................................... 13
EL 6.................................................... 30
------------------------------------------------------------------------
* DOE notes that in this NOPR, the spreadsheets for the downstream
economic analyses contain 4 auxiliary efficiency levels, beyond the
primary efficiency levels listed in this table; these are EL 4.1, 5.1,
5.2, and 5.3. These auxiliary efficiency levels were maintained in the
spreadsheets to increase the granularity and improve analytical
accuracy of the economic analyses, however, they are not carried
beyond the spreadsheets. Cost-efficiency relationships for these ELs
are provided in Chapters 5 of the NOPR TSD.
ii. RP_VS_L_WC Efficiency Levels
The proposed efficiency levels for the RP_VS_L_WC equipment class
are derived from the RP_VS_L_AC equipment class.
The proposed efficiency levels for the RP_VS_L_WC equipment class
are defined by the following equation, in conjunction with the d-values
in Table IV.14.
[GRAPHIC] [TIFF OMITTED] TP19MY16.014
Where:
[eta]Isen_STD_RP_VS_L_WC is package isentropic
efficiency for the RP_VS_L_WC equipment class, for a selected
efficiency level,
[eta]Isen_Regr_RP_VS_L_AC is the regression
curve package isentropic efficiency for the RP_VS_L_AC equipment
class, and
d is the d-value for each proposed efficiency level, as
specified in Table IV.14.
Table IV.14--Efficiency Levels Analyzed for Rotary, Lubricated, Water-
Cooled, Variable-Speed, Three-Phase
------------------------------------------------------------------------
Efficiency level * d-Value
------------------------------------------------------------------------
Baseline...................................................... -45
EL 1.......................................................... -30
EL 2.......................................................... -15
EL 3.......................................................... 0
EL 4.......................................................... 5
EL 5.......................................................... 15
EL 6.......................................................... 34
------------------------------------------------------------------------
* DOE notes that in this NOPR, the spreadsheets for the downstream
economic analyses contain 4 auxiliary efficiency levels, beyond the
primary efficiency levels listed in this table; these are EL 4.1, 5.1,
5.2, and 5.3. These auxiliary efficiency levels were maintained in the
spreadsheets to increase the granularity and improve analytical
accuracy of the economic analyses, however, they are not carried
beyond the spreadsheets. Cost-efficiency relationships for these ELs
are provided in Chapters 5 of the NOPR TSD.
[[Page 31712]]
iii. RP_FS_LF_WC Efficiency Levels
The proposed efficiency levels for the RP_FS_LF_WC equipment class
are derived from the RP_FS_LF_AC equipment class.
The proposed efficiency levels for the RP_FS_LF_WC equipment class
are defined by the following equation, in conjunction with the d-values
in Table IV.16.
[GRAPHIC] [TIFF OMITTED] TP19MY16.015
Where:
[eta]Isen\STD_RP_FS_LF_WC is package isentropic
efficiency for the RP_FS_LF_WC equipment class, for a selected
efficiency level,
[alpha]RP\FS\LF\WC is a coefficient from Table IV.15,
bRP\FS\LF\WC is a coefficient from Table IV.15,
cRP\FS\LF\WC is a coefficient from Table IV.15,
V1 is full-load actual volume flow rate (cubic
feet per minute),
[eta]Isen\Regr_RP_FS_LF_AC is the regression curve package
isentropic efficiency for the RP_FS_LF_AC equipment class, and
d is the d-value for each proposed efficiency level, as
specified in Table IV.16.
Table IV.15--Coefficients for RP_FS_LF_WC Efficiency Level
----------------------------------------------------------------------------------------------------------------
Full-load actual volume flow rate range (acfm) [alpha]RP\FS\LF\WC bRP\FS\LF\WC cRP\FS\LF\WC
----------------------------------------------------------------------------------------------------------------
0 < V1 < 102.......................................... 0 0 0
102 <= V1............................................. -0.00924 0.117 -0.315
----------------------------------------------------------------------------------------------------------------
Table IV.16--Efficiency Levels Analyzed for Rotary, Lubricant-Free,
Water-Cooled, Fixed-Speed, Three-Phase
------------------------------------------------------------------------
Efficiency level * d-Value
------------------------------------------------------------------------
Baseline...................................................... -11
EL 1.......................................................... -10
EL 2.......................................................... -5
EL 3.......................................................... 0
EL 4.......................................................... 2.5
EL 5.......................................................... 7.5
EL 6.......................................................... 10
------------------------------------------------------------------------
* DOE notes that in this NOPR, the spreadsheets for the downstream
economic analyses contain 2 auxiliary efficiency levels, beyond the
primary efficiency levels listed in this table; these are EL 4.1, and
5.1. These auxiliary efficiency levels were maintained in the
spreadsheets to increase the granularity and improve analytical
accuracy of the economic analyses, however, they are not carried
beyond the spreadsheets. To maintain a consistent analytical structure
with other equipment classes the spreadsheets contain EL 5.2, and 5.3
which are equal to EL 6. Cost-efficiency relationships for these ELs
are provided in Chapters 5 of the NOPR TSD.
iv. RP_VS_LF_WC Efficiency Levels
The proposed efficiency levels for the RP_VS_LF_WC equipment class
are derived from the RP_VS_LF_AC equipment class.
The proposed efficiency levels for the RP_VS_LF_WC equipment class
are defined by the following equation, in conjunction with the d-values
in Table IV.18.
[GRAPHIC] [TIFF OMITTED] TP19MY16.016
Where:
[eta]Isen\STD_RP_VS_LF_WC is package isentropic
efficiency for the RP_VS_LF_WC equipment class, for a selected
efficiency level,
[alpha]RP\VS\LF\WC is a coefficient from Table IV.17,
bRP\VS\LF\WC is a coefficient from Table IV.17,
cRP\VS\LF\WC is a coefficient from Table IV.17,
V1 is full-load actual volume flow rate (cubic
feet per minute),
[eta]Isen\Regr_RP_VS_LF_AC is the regression
curve package isentropic efficiency for the RP_VS_LF_AC equipment
class, and
d is the d-value for each proposed efficiency level, as
specified in Table IV.18.
[[Page 31713]]
Table IV.17--Coefficients for RP_VS_LF_WC Efficiency Level
----------------------------------------------------------------------------------------------------------------
Full-load actual volume flow rate range (acfm) [alpha]RP\VS\LF\WC bRP\VS\LF\WC cRP\VS\LF\WC
----------------------------------------------------------------------------------------------------------------
0 < V1 < 74........................................... 0 0 0
74 <= V1.............................................. 0.000173 0.00783 -0.0300
----------------------------------------------------------------------------------------------------------------
Table IV.18--Efficiency Levels Analyzed for Rotary, Lubricant-Free,
Water-Cooled, Variable-Speed, Three-Phase
------------------------------------------------------------------------
Efficiency level * d-Value
------------------------------------------------------------------------
Baseline...................................................... -13
EL 1.......................................................... -10
EL 2.......................................................... -5
EL 3.......................................................... 0
EL 4.......................................................... 2.5
EL 5.......................................................... 7.5
EL 6.......................................................... 13
------------------------------------------------------------------------
* DOE notes that in this NOPR, the spreadsheets for the downstream
economic analyses contain 2 auxiliary efficiency levels, beyond the
primary efficiency levels listed in this table; these are EL 4.1, and
5.1. These auxiliary efficiency levels were maintained in the
spreadsheets to increase the granularity and improve analytical
accuracy of the economic analyses, however, they are not carried
beyond the spreadsheets. To maintain a consistent analytical structure
with other equipment classes the spreadsheets contain EL 5.2, and 5.3
which are equal to EL 6. Cost-efficiency relationships for these ELs
are provided in Chapters 5 of the NOPR TSD.
DOE notes that the proposed regression curve and efficiency levels
for the RP_VS_LF_WC equipment class were established with a limited set
of data from the CAGI database. Specifically, the CAGI database
included data for 13 RP_VS_LF_WC air compressors as compared to 63 for
RP_FS_LF_WC compressors, and 440 for RP_FS_L_WC compressors. Chapter 5
of the NOPR TSD contains complete details on the datasets and
regression methodologies.
DOE requests comment on the proposed efficiency levels selected for
the RP_VS_LF_WC equipment class regarding their representation of the
market, and any data that could improve the analysis. This is
identified as Issue 20 in section VIII.E, ``Issues on Which DOE Seeks
Comment.''
v. R1_FS_L_XX Efficiency Levels
The proposed efficiency levels for the R1_FS_L_XX equipment class
are defined by the following equation, in conjunction with the d-values
in Table IV.19.
[GRAPHIC] [TIFF OMITTED] TP19MY16.017
Where:
[eta]Isen\STD_R1_FS_L_XX is package isentropic
efficiency for the R1_FS_L_XX equipment class, for a selected
efficiency level,
[eta]Isen\Regr_R3_FS_L_XX is the regression
curve package isentropic efficiency for the R3_FS_L_XX equipment
class, and
d is the d-value for each proposed efficiency level, as
specified in Table IV.19.
Table IV.19--Efficiency Levels Analyzed for Reciprocating, Lubricated,
Air-Cooled or Water-Cooled, Fixed-Speed, Single-Phase
------------------------------------------------------------------------
Efficiency level * d-Value
------------------------------------------------------------------------
Baseline...................................................... -18
EL 1.......................................................... -15
EL 2.......................................................... -5
EL 3.......................................................... 0
EL 4.......................................................... 5
EL 5.......................................................... 20
EL 6.......................................................... 60
------------------------------------------------------------------------
* DOE notes that in this NOPR, the spreadsheets for the downstream
economic analyses contain 4 auxiliary efficiency levels, beyond the
primary efficiency levels listed in this table; these are EL 4.1, 5.1,
5.2, and 5.3. These auxiliary efficiency levels were maintained in the
spreadsheets to increase the granularity and improve analytical
accuracy of the economic analyses, however, they are not carried
beyond the spreadsheets. Cost-efficiency relationships for these ELs
are provided in Chapters 5 of the NOPR TSD.
DOE requests comment and supporting data on the proposed efficiency
levels established for the R1_FS_L_XX equipment class. This is
identified as Issue 21 in section VIII.E, ``Issues on Which DOE Seeks
Comment.''
6. Manufacturer Selling Price
This section presents the MSP-efficiency relationship for each
equipment class and discusses the analytical methods used to develop
these relationships. For all equipment classes, DOE defines MSP by a
mathematical relationship between full-load actual volume flow rate and
package isentropic efficiency. However, for the purposes of DOE's
analysis, package isentropic efficiency is represented indirectly
through the use of a d-value. For a complete discussion of the d-value,
please refer to section IV.C.5.
DOE pursued different analytical methods to find the MSP-efficiency
relationships for different equipment classes. These analytical methods
can be grouped into four general categories, as presented in Table
IV.20.
[[Page 31714]]
Table IV.20--Manufacturer Selling Price Analytical Methods
------------------------------------------------------------------------
Method Applicable equipment classes
------------------------------------------------------------------------
Direct Scaling from Lot 31............. RP_FS_L_AC
RP_VS_L_AC
Scaling with U.S. MSP Data............. RP_FS_LF_AC
RP_VS_LF_AC
MSPs for Water-Cooled Equipment........ RP_FS_L_WC
RP_VS_L_WC
RP_FS_LF_WC
RP_VS_LF_WC
New Relationships from U.S. Data....... R3_FS_L_XX
R1_FS_L_XX
------------------------------------------------------------------------
Jenny commented that pricing information that is publicly available
may not be accurate or contain consistent information between
manufacturers. Specifically, key pricing and costing information such
as labor may be inconsistent because manufacturers operate in different
countries with different costs of labor. (Jenny, No. 0005 at p. 4)
DOE's analysis includes MSP information gathered from a variety of
sources. These sources include publicly available data as well as
confidential manufacturer data collected by a DOE contractor. Data
collected under non-disclosure agreement was vetted by DOE's contractor
for accuracy and consistency between manufacturers. DOE used all
available datasets to establish MSP-efficiency relationships for each
equipment class. The following sections present the analytical methods
DOE applied to each equipment class to develop an MSP-efficiency
relationship.
a. Direct Scaling From Lot 31
When possible, DOE used the Lot 31 study's MSP-Flow-Efficiency
Relationships as a starting point to construct analogous MSP-Flow-
Efficiency Relationships for U.S. equipment. To do so, DOE scaled Lot
31 MSP-Flow-Efficiency Relationships with analogous equipment classes
(i.e., RP_FS_L_AC, and RP_VS_L_AC) using confidential, U.S. MSP data.
Specifically, DOE scaled the Lot 31 study's absolute equipment MSPs to
a magnitude that represents MSPs offered in the U.S. market. Although
MSP magnitudes were scaled, DOE maintained the incremental MSP trends
established in the Lot 31 study. Chapter 5 of the NOPR TSD provides
details on the calculation of MSP for each rotary equipment class.
DOE requests comment on the use of Lot 31 MSP-Flow-Efficiency
Relationships to develop MSP-flow-efficiency relationships for the
proposed RP_FS_L_AC and RP_VS_L_AC equipment classes. This is
identified as Issue 22 in section VIII.E, ``Issues on Which DOE Seeks
Comment.''
i. RP_FS_L_AC MSP-Flow-Efficiency Relationship
The MSP-flow-efficiency relationship for the RP_FS_L_AC equipment
class is as follows:
[GRAPHIC] [TIFF OMITTED] TP19MY16.018
Where:
MSPRP_FS_L_AC is the manufacturer selling price
for the RP_FS_L_AC at a selected efficiency level and full-load
actual volume flow rate,
[eta]Isen\STD_RP_FS_L_AC is package isentropic
efficiency for the RP_FS_L_AC equipment class, for a selected
efficiency level and full-load actual volume flow rate, and
V1 is full-load actual volume flow rate (cubic
feet per minute).
MSP for each efficiency level for the RP_FS_L_AC equipment class is
presented in Table IV.21 at representative full-load actual volume flow
rates.
Table IV.21--Representative MSPs for the RP_FS_L_AC Equipment Class
--------------------------------------------------------------------------------------------------------------------------------------------------------
Full-load actual volume flow rate (acfm) Baseline EL 1 EL 2 EL 3 EL 4 EL 5 EL 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
10...................................... $2,166 $2,351 $2,618 $3,024 $3,195 $3,510 $4,368
20...................................... 2,437 2,784 3,192 3,742 3,960 4,349 5,349
50...................................... 3,350 4,007 4,680 5,506 5,818 6,357 7,677
100..................................... 4,975 6,039 7,063 8,264 8,707 9,460 11,257
200..................................... 8,517 10,319 11,983 13,877 14,562 15,716 18,414
500..................................... 20,350 24,243 27,719 31,572 32,943 35,230 40,484
1000.................................... 41,492 48,764 55,158 62,159 64,633 68,739 78,091
2000.................................... 84,566 98,510 110,668 123,888 128,539 136,240 153,696
5000.................................... 208,211 242,244 271,856 304,004 315,302 333,997 376,324
--------------------------------------------------------------------------------------------------------------------------------------------------------
ii. RP_VS_L_AC MSP-Flow-Efficiency Relationship
The MSP-flow-efficiency relationship for the RP_VS_L_AC equipment
class is as follows:
[[Page 31715]]
[GRAPHIC] [TIFF OMITTED] TP19MY16.019
Where:
MSPRP_VS_L_AC is the manufacturer selling
price for the RP_VS_L_AC at a selected efficiency level and full-
load actual volume flow rate,
[eta]Isen\STD_RP_VS_L_AC is package
isentropic efficiency for the RP_VS_L_AC equipment class, for a
selected efficiency level and full-load actual volume flow rate, and
V1 is full-load actual volume flow rate
(cubic feet per minute).
MSP for each efficiency level for the RP_VS_L_AC equipment class is
presented in Table IV.22 at representative full-load actual volume flow
rates.
Table IV.22--Representative MSPs for the RP_VS_L_AC Equipment Class
--------------------------------------------------------------------------------------------------------------------------------------------------------
Full-load actual volume flow rate (acfm) Baseline EL 1 EL 2 EL 3 EL 4 EL 5 EL 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
10...................................... $3,330 $3,386 $3,514 $3,742 $3,904 $4,340 $5,587
20...................................... 3,606 3,818 4,131 4,565 4,834 5,488 7,109
50...................................... 4,935 5,474 6,139 6,943 7,401 8,437 10,743
100..................................... 7,577 8,526 9,624 10,883 11,576 13,097 16,314
200..................................... 13,526 15,189 17,044 19,101 20,209 22,590 27,461
500..................................... 33,464 37,092 41,031 45,292 47,548 52,317 61,802
1000.................................... 68,234 75,013 82,293 90,093 94,193 102,806 119,743
2000.................................... 135,819 148,853 162,796 177,678 185,481 201,831 233,842
5000.................................... 312,284 344,330 378,745 415,616 434,998 475,708 555,762
--------------------------------------------------------------------------------------------------------------------------------------------------------
b. Scaling With U.S. MSP Data
For rotary equipment classes with no Lot 31 study analogues (i.e.,
RP_FS_LF_AC and RP_VS_LF_AC), DOE used confidential, U.S. MSP data from
representative lubricant-free units to scale the lubricated MSP-flow-
efficiency relationship, presented in section I.A.1.a, to represent the
U.S. lubricant-free MSP-flow-efficiency relationship.
i. RP_FS_LF_AC MSP-Flow-Efficiency Relationship
DOE used MSP data from equipment of the same full-load actual
volume flow rate and d-value to scale the RP_FS_L_AC MSP-flow-
efficiency relationship to a new RP_FS_LF_AC MSP-flow-efficiency
relationship. The new relationship resulted in significantly larger
absolute MSP for RP_FS_LF_AC, as compared to RP_FS_L_AC. The new
relationship also resulted in significantly larger incremental MSP for
RP_FS_LF_AC, as compared to RP_FS_L_AC. Equation 20 provides the
mathematical relationship between RP_FS_L_AC and RP_FS_LF_AC MSP for a
given d-value and full-load actual volume flow rate. Chapter 5 of the
NOPR TSD provides details on the calculation of MSP for each rotary
equipment class.
DOE requests comment on the methods used to develop RP_FS_LF_AC
(lubricant-free) incremental MSP. Specifically, DOE requests comment on
the use of RP_FS_L_AC (lubricated) incremental MSP relationship to
develop a lubricant-free incremental MSP relationship. This is
identified as Issue 23 in section VIII.E, ``Issues on Which DOE Seeks
Comment.''
The MSP relationship for the RP_FS_LF_AC equipment class is as
follows:
[GRAPHIC] [TIFF OMITTED] TP19MY16.020
Where:
MSPRP_FS_LF_AC is the manufacturer selling price
for the RP_FS_LF_AC at a selected d-value and full-load actual
volume flow rate, and
MSPRP_FS_L_AC is the manufacturer selling price
for the RP_FS_L_AC at the same d-value and full-load actual volume
flow rate.
MSP for each efficiency level for the RP_FS_LF_AC equipment class
is presented in Table IV.25 at representative full-load actual volume
flow rates.
[[Page 31716]]
Table IV.23--Representative MSPs for the RP_FS_LF_AC Equipment Class
--------------------------------------------------------------------------------------------------------------------------------------------------------
Full-load actual volume flow rate (acfm) Baseline EL 1 EL 2 EL 3 EL 4 EL 5 EL 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
10...................................... $37,453 $37,488 $37,678 $37,893 $38,010 $38,265 $38,403
20...................................... 38,316 38,365 38,623 38,905 39,055 39,376 39,547
50...................................... 40,516 40,591 40,978 41,392 41,608 42,061 42,298
100..................................... 44,013 44,122 44,686 45,280 45,588 46,227 46,558
200..................................... 51,202 51,376 52,265 53,193 53,671 54,656 55,163
500..................................... 74,101 74,456 76,266 78,137 79,095 81,060 82,066
1000.................................... 113,933 114,580 117,869 121,256 122,987 126,523 128,330
2000.................................... 194,459 195,681 201,892 208,275 211,531 218,175 221,563
5000.................................... 428,595 431,568 446,672 462,185 470,096 486,231 494,456
--------------------------------------------------------------------------------------------------------------------------------------------------------
DOE requests comment and supporting data on the MSPs established
for the RP_FS_LF_AC equipment class. This is identified as Issue 24 in
section VIII.E, ``Issues on Which DOE Seeks Comment.''
ii. RP_VS_LF_AC MSP-Flow-Efficiency Relationship
As with RP_FS_LF_AC, DOE used MSP data from equipment of the same
full-load actual volume flow rate and d-value to scale the RP_VS_L_AC
MSP-flow-efficiency relationship to a new RP_VS_LF_AC MSP-flow-
efficiency relationship. The new relationship resulted in significantly
larger absolute MSP for RP_VS_LF_AC, as compared to RP_VS_L_AC. The new
relationship also resulted in significantly larger incremental MSP for
RP_VS_LF_AC, as compared to RP_VS_L_AC. Equation 21 provides the
mathematical relationship between RP_VS_L_AC and RP_FS_VF_AC MSP, for a
given d-value and full-load actual volume flow rate. Chapter 5 of the
NOPR TSD provides details on the calculation of MSP for each rotary
equipment class.
DOE requests comment on the methods used to develop RP_VS_LF_AC
(lubricant-free) incremental MSP. Specifically, DOE requests comment on
the use of RP_VS_L_AC (lubricated) incremental MSP relationship to
develop a lubricant-free incremental MSP relationship. This is
identified as Issue 25 in section VIII.E, ``Issues on Which DOE Seeks
Comment.''
The MSP relationship for the RP_VS_LF_AC equipment class is as
follows:
[GRAPHIC] [TIFF OMITTED] TP19MY16.021
Where:
MSPRP_VS_LF_AC is the manufacturer selling price
for the RP_VS_LF_AC at a selected d-value and full-load actual
volume flow rate,
MSPRP_FS_LF_AC is the manufacturer selling price
for the RP_FS_LF_AC at the same d-value and full-load actual volume
flow rate, and
V1 is full-load actual volume flow rate (cubic
feet per minute).
MSP for each efficiency level for the RP_VS_LF_AC equipment class
is presented in Table IV.24 at representative full-load actual volume
flow rates.
Table IV.24--Representative MSPs for the RP_VS_LF_AC Equipment Class
--------------------------------------------------------------------------------------------------------------------------------------------------------
Full-load actual volume flow rate (acfm) Baseline EL 1 EL 2 EL 3 EL 4 EL 5 EL 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
10...................................... $37,751 $37,854 $38,044 $38,259 $38,376 $38,631 $38,944
20...................................... 38,854 38,998 39,255 39,538 39,688 40,009 40,393
50...................................... 41,804 42,025 42,412 42,826 43,042 43,495 44,025
100..................................... 46,567 46,892 47,456 48,050 48,358 48,996 49,735
200..................................... 56,300 56,816 57,706 58,633 59,111 60,096 61,225
500..................................... 86,851 87,908 89,718 91,589 92,548 94,512 96,747
1000.................................... 139,459 141,386 144,676 148,063 149,794 153,330 157,338
2000.................................... 245,550 249,196 255,407 261,790 265,046 271,690 279,202
5000.................................... 556,337 565,206 580,311 595,824 603,735 619,870 638,105
--------------------------------------------------------------------------------------------------------------------------------------------------------
DOE requests comment and supporting data on the MSPs established
for the RP_VS_LF_AC equipment class. This is identified as Issue 26 in
section VIII.E, ``Issues on Which DOE Seeks Comment.''
c. MSPs for Water-Cooled Equipment
As discussed in section IV.C.5.c, many air-cooled rotary air
compressors are also offered in a water-cooled variant. These variants
are typically identical, except for the cooling method employed. The
air-cooled variant will utilize one or more cooling fans and heat
exchangers to remove heat from the compressed air. Alternatively, a
water-cooled variant utilizes chilled water (from a separate chilled
water system) and one or more heat exchanges to remove heat from the
compressed air. As such, the MSP of analogous air- and water-cooled
equipment, not factoring in the cooling system, is expected to be
equivalent. Furthermore, DOE expects that any difference in incremental
MSP between air- and water-cooled systems will not be significant, when
compared to the incremental MSP of the greater package. Consequently,
DOE concluded
[[Page 31717]]
that the incremental cost and price of efficiency will be the same for
both air-cooled and water-cooled equipment classes at each efficiency
level. Thus, DOE did not develop unique MSP-flow-efficiency
relationships for water-cooled equipment classes.
Specifically, for all water-cooled equipment classes, DOE used
incremental MSPs equivalent to analogous air-cooled equipment classes.
DOE requests comment on the use of incremental MSP for air-cooled
equipment classes to represent incremental MSP for water-cooled
equipment classes. This is identified as Issue 27 in section VIII.E,
``Issues on Which DOE Seeks Comment.''
d. New Relationships From U.S. Data
As discussed in section IV.C.5.a, DOE compared the Lot 31 study
MSP-Flow-Efficiency Relationship for three-phase reciprocating air
compressors to U.S. equipment data and concluded that the Lot 31 study
relationship was not representative of the U.S. market. Consequently,
DOE used the online retailer price database and confidential U.S. MSP
data from representative units to establish a new relationship between
MSP, d-value, and full-load actual volume flow rate for three-phase
reciprocating air compressors. Chapter 5 of the NOPR TSD provides
additional information on the calculation of MSP for each reciprocating
equipment class.
i. R3_FS_L_XX MSP-Flow-Efficiency Relationship
The MSP-Flow-Efficiency Relationship for the R3_FS_L_XX equipment
class is as follows:
[GRAPHIC] [TIFF OMITTED] TP19MY16.022
Where:
MSPR3_FS_L_XX is the manufacturer selling
price for the R3_FS_L_XX at a selected efficiency level,
V1 is full-load actual volume flow rate (cubic
feet per minute), and
d is the d-value for each efficiency level.
MSP for each efficiency level for the R3_FS_L_XX equipment class is
presented in Table IV.25 at representative full-load actual volume flow
rates.
Table IV.25--Representative MSPs for the R3_FS_L_XX Equipment Class
--------------------------------------------------------------------------------------------------------------------------------------------------------
Full-load actual volume flow rate (acfm) Baseline EL 1 EL 2 EL 3 EL 4 EL 5 EL 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
5....................................... $429 $456 $544 $588 $632 $764 $1,117
10...................................... 722 767 915 989 1,063 1,286 1,880
25...................................... 1,437 1,526 1,821 1,969 2,116 2,559 3,740
50...................................... 2,419 2,568 3,065 3,313 3,562 4,307 6,295
75...................................... 3,279 3,482 4,155 4,492 4,829 5,840 8,535
100..................................... 4,070 4,321 5,158 5,576 5,994 7,248 10,594
--------------------------------------------------------------------------------------------------------------------------------------------------------
DOE requests comment and supporting data on the MSPs established
for the R3_FS_L_XX equipment class. This is identified as Issue 28 in
section VIII.E, ``Issues on Which DOE Seeks Comment.''
ii. R1_FS_L_XX MSP-Flow-Efficiency Relationship
As discussed in section IV.C.5.c, many reciprocating air
compressors with motor power <=7.5-hp are offered with both single- and
three-phase induction motors. These variants are typically identical,
except for the motor. Consequently, the MSP of analogous single- and
three-phase equipment, not factoring the motor price, is expected to be
equivalent. Furthermore, DOE expects that any difference in incremental
MSP between single- and three-phase motors will not be significant when
compared to the incremental MSP of the greater package. Consequently,
DOE concluded that the incremental cost and price of efficiency will be
the same for single- and three-phase equipment classes at each
efficiency level. DOE notes that the efficiency levels for single- and
three-phase equipment are defined by the same d-values, but are scaled
to account for the inherent differences in attainable efficiency
between single- and three-phase equipment.
Specifically, DOE used the MSPs for the R3_FS_L_XX equipment class
to directly represent the MSPs for the R1_FS_L_XX equipment class. This
means that the incremental cost to move from one d-value (or efficiency
level) to another, is identical between single- and three-phase units
of the same full-load actual volume flow rate.
The MSP relationship for the R1_FS_L_XX equipment class is
identical to the equation for the R3_FS_L_XX equipment class, and is as
follows:
[GRAPHIC] [TIFF OMITTED] TP19MY16.023
Where:
MSPR1_FS_L_XX is the manufacturer selling price
for the R1_FS_L_XX at a selected efficiency level,
V1 is full-load actual volume flow rate (cubic
feet per minute), and
d is the d-value for each efficiency level.
MSP for each efficiency level for the R1_FS_L_XX equipment class at
representative full-load actual volume flow rates is equivalent to the
MSPs in
[[Page 31718]]
Table IV.25 for the R3_FS_L_XX equipment class.
DOE requests comment on the use of incremental MSP for the
R3_FS_L_XX equipment classes to represent incremental MSP for the
R1_FS_L_XX equipment classes. This is identified as Issue 29 in section
VIII.E, ``Issues on Which DOE Seeks Comment.''
7. Manufacturer Production Cost
As discussed in the previous section, DOE developed MSP-flow-
efficiency relationships for each equipment class. However, certain
downstream analyses, such as the MIA, require DOE to also assess the
relationship between manufacturer production costs (MPCs), flow, and
efficiency. To determine the MPC-flow-efficiency relationship, DOE
backed out manufacturer markups from each MSP-flow-efficiency
relationship. The manufacturer markup is defined as the ratio of MSP to
MPC and covers non-production costs such as selling, general and
administrative expenses (SG&A); research and development expenses
(R&D), interest expenses, and profit. DOE developed estimates of
manufacturer markups based on confidential data obtained during
confidential manufacturer interviews. DOE's estimates of markups are
presented in Table IV.26.
Table IV.26--Baseline Markup Estimates
------------------------------------------------------------------------
Equipment class Markup
------------------------------------------------------------------------
RP_FS_L_AC.............................................. 1.35
RP_VS_L_AC
RP_FS_L_WC..............................................
RP_VS_L_WC..............................................
RP_FS_LF_AC............................................. 1.40
RP_VS_LF_AC
RP_FS_LF_WC.............................................
RP_VS_LF_WC.............................................
R3_FS_L_XX.............................................. 1.26
R1_FS_L_XX
------------------------------------------------------------------------
The MIA also requires MPCs to be disaggregated the MPCs into
material, labor, depreciation, and overhead costs. DOE estimated MPC
breakdowns based on information gathered from consultants familiar with
the compressor manufacturing industry. Table IV.27 presents DOE's
estimates for material, labor, depreciation, and overhead breakdown.
Table IV.27--Breakdown of MPC for Compressors
------------------------------------------------------------------------
Percentage of
Category total MPC
------------------------------------------------------------------------
Materials............................................... 53.8
Labor................................................... 23.1
Depreciation............................................ 4.1
Overhead................................................ 19.0
------------------------------------------------------------------------
DOE requests comment on its estimates for manufacturer markups, as
well as material, labor, depreciation, and overhead breakdowns. This is
identified as Issue 30 in section VIII.E, ``Issues on Which DOE Seeks
Comment.''
8. Other Analytical Outputs
In the engineering analysis DOE calculated values for full-load
power and no load power for use in cost-benefit calculations for
individual end users, manufacturers, and the Nation. Full-load power
was calculated for each equipment classes using the formula proposed
for package isentropic efficiency in the test procedure NOPR and the
outputs of efficiency, full-load actual volume flow rate, and pressure
from the engineering analysis. DOE used the CAGI database to establish
a relationship and calculate values for no load power based on full-
load power. Chapter 5 of the NOPR TSD provides additional information
on these outputs.
D. Markups Analysis
The markups analysis develops appropriate markups (e.g., retailer
markups, distributor markups, contractor markups) in the distribution
chain and sales taxes to convert the MSP estimates derived in the
engineering analysis to end user prices, which are then used in the LCC
and PBP analysis and in the manufacturer impact analysis. At each step
in the distribution channel, companies mark up the price of the
equipment to cover business costs and profit margin. For compressors,
the main distribution channels are (1) manufacturers directly to end-
users, (2) manufacturers to distributors to end-users, (3)
manufacturers to contractors to end-users, and (4) manufacturers to
end-users through other means. Table IV.28 shows the estimated market
shares of each channel, based on air equipment type and capacity.
Table IV.28--Compressors Distribution Chain
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Rotary
Reciprocating
----------------------------------------------------------------------------------------------------------------------------------------------------------
Channel structure <500 ACFM >=500 ACFM <100 ACFM >=100 ACFM
(%) (%) (%) (%)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manufacturer.......................................................................................................... User................ 7.5 20.0 5.0 20.0
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manufacturer......................... Distributor/Manufacturer Rep User................ 85.0 77.5 75.0 75.0
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manufacturer......................... Distributor/Manufacturer Rep..................... Contractor.................. User................ 5.0 2.5 15.0 5.0
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manufacturer......................... Other User................ 2.5 0.0 5.0 0.0
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total................................................................................................................................... 100 100 100 100
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
DOE developed separate markups for baseline equipment (baseline
markups) and for the incremental cost of more-efficient equipment
(incremental markups). Incremental markups are coefficients that relate
the change in the MSP of higher-efficiency models to the change in the
retailer sales price.
To develop markups for the parties involved in the distribution of
the equipment, DOE utilized several sources, including: (1) The U.S.
Census Bureau 2007 Economic Census Manufacturing Industry Series (NAICS
33 Series) \60\ to develop original equipment manufacturer markups; (2)
the U.S. Census Bureau 2012 Annual Wholesale Trade Survey, Machinery,
[[Page 31719]]
Equipment, and Supplies Merchant Wholesalers \61\ to develop
distributor markups; and (3) 2013 RS Means Electrical Cost Data \62\ to
develop mechanical contractor markups.
---------------------------------------------------------------------------
\60\ U.S. Census Bureau (2007). Economic Census Manufacturing
Industry Series (NAICS 33 Series). http://www.census.gov/manufacturing/asm.
\61\ U.S. Census Bureau (2012). Annual Wholesale Trade Survey,
Machinery, Equipment, and Supplies Merchant Wholesalers (NAICS
4238). http://www.census.gov/wholesale/index.html.
\62\ RS Means (2013), Electrical Cost Data, 36th Annual Edition
(Available at: http://www.rsmeans.com).
---------------------------------------------------------------------------
In addition to the markups, DOE derived State and local taxes from
data provided by the Sales Tax Clearinghouse. These data represent
weighted-average taxes that include county and city rates. DOE derived
shipment-weighted-average tax values for each region considered in the
analysis.
Chapter 6 of the NOPR TSD provides details on DOE's development of
markups for compressors.
Because the identified market channels are complex and their
characterization required a number of assumptions, DOE seeks input on
its analysis of market channels listed above in Table IV.28,
particularly related to whether the channels include all necessary
intermediate steps, and the estimated market share of each channel.
This is identified as Issue 31 in section VIII.E, ``Issues on Which DOE
Seeks Comment.''
E. Energy Use Analysis
The purpose of the energy use analysis is to determine the annual
energy consumption of air compressors at different efficiencies in
representative U.S. manufacturing and commercial facilities, and to
assess the energy savings potential of increased air compressor
efficiency. The energy use analysis estimates the range of energy use
of air compressors in the field (i.e., as they are actually used by end
users). The energy use analysis provides the basis for other analyses
DOE performed, particularly assessments of the energy savings and the
savings in end user operating costs that could result from adoption of
new standards.
Annual energy use of air compressors depends on the utilization of
the equipment, which is influenced by air compressor application,
annual hours of operation, load profiles, capacity controls, and
compressor sizing. The annual energy use is calculated as the sum of
input power at each load point multiplied by the annual operating hours
at each respective load point.
1. Applications
DOE found that air compressors operate in response to system
demands in three general ways, which were classified as applications.
DOE determined these applications after examining available field
assessment data from two database sources: (1) A database of motor
nameplate and field data compiled by the Washington State University
(WSU) Extension Energy Program, Applied Proactive Technologies (APT),
and New York State Energy Research and Development Authority (NYSERDA)
(``WSU/NYSERDA database'') \63\ and (2) the Northwest Industrial Motor
Database.\64\ Based on the distribution of compressor-specific
assessments found in these databases, DOE defined three application
types to capture variations in air demand and control strategies. The
three applications types are defined as:
---------------------------------------------------------------------------
\63\ The motors database is composed of information gathered by
WSU and APT during 123 industrial motor surveys or assessments: 11
motor assessments were conducted between 2005 and 2011 and occurred
in industrial plants; 112 industrial motor surveys were conducted
between 2005 and 2011 and were funded by NYSERDA and conducted in
New York State.
\64\ Northwest Industrial Motor Database Summary, 2009,
Strategic Energy Group.
---------------------------------------------------------------------------
Trim: Compressors equipped with controls configured to serve
fluctuating air demand. The trim application is used to represent
either the operation of an individual compressor, or a compressor
within a compressor plant, that serves the fluctuating portion of the
demand.
Base load: Compressors equipped with controls configured to serve
steady-state air demands. The base-load application is used to
represent a compressor within a compressor plant that serves the
constant portion of fluctuating demand, while the remaining fluctuating
portion of demand is covered by a trim application.\65\
---------------------------------------------------------------------------
\65\ Air demand (in cfm)) can vary considerably during plant
operations. A portion of this air demand may be steady-state,
driving equipment that is run constantly, while the remaining
portion may be fluctuating.
---------------------------------------------------------------------------
Intermittent: Compressors equipped with controls configured to
serve sporadic loads. For example, these could be operated as back-up
compressors for either base-load or trim compressors, or as a dedicated
air compressor to a specific process such as sand blasting or
fermentation.
Table IV.29 shows the distribution of air compressor application
for both rotary and reciprocating air compressors. DOE seeks comment on
its distribution of air compressors application. This is identified as
Issue 32 in section VIII.E, ``Issues on Which DOE Seeks Comment.''
Table IV. 29--Distribution of Air Compressors by Application
------------------------------------------------------------------------
Probability
Application (%)
------------------------------------------------------------------------
Trim.................................................... 50
Base-load............................................... 28
Intermittent............................................ 22
------------------------------------------------------------------------
2. Annual Hours of Operation
DOE constructed a probability distribution of average annual hours
of operation for each of the three application types based on NYSEDA
and WSU system assessments data discussed previously and Ecodesign
Preparatory Study on Electric motor systems/Compressors (Lot 31
Study).\66\
---------------------------------------------------------------------------
\66\ Ecodesign Preparatory Study on Electric Motor Systems/
Compressors; 2014; Prepared for the European Commission by Van
Holsteijn en Kemna B.V. (VHK); ENER/C3/413-2010-LOT 31-SI2.612161;
http://www.regulations.gov/#!documentDetail;D=EERE-2013-BT-STD-0040-
0031.
---------------------------------------------------------------------------
Table IV.30 shows the distribution of annual hours of operation for
each application by equipment type, where each row is the probability
of a compressor's annual operating hours when operated at a specific
application.
Table IV. 30--Distribution of Annual Hours of Operation by Application
--------------------------------------------------------------------------------------------------------------------------------------------------------
Rotary Reciprocating
Probability * (%) -----------------------------------------------------------------------------------------------
Base-load Trim Intermittent Base-load Trim Intermittent
--------------------------------------------------------------------------------------------------------------------------------------------------------
0....................................................... 4,000 2,000 1,000 1,100 650 150
20...................................................... 6,552 6,552 3,876 1,198 708 202
40...................................................... 7,446 7,446 4,400 1,361 804 338
60...................................................... 8,400 8,400 5,928 1,535 1,083 368
80...................................................... 8,400 8,400 8,064 1,601 1,474 395
[[Page 31720]]
100..................................................... 8,400 8,400 8,400 1,601 1,601 731
--------------------------------------------------------------------------------------------------------------------------------------------------------
* DOE assumes a uniform distribution between the listed values.
DOE requests comment and information on average annual operating
hours for the compressor types and applications in the scope of this
rulemaking. This is identified as Issue 33 in section VIII.E, ``Issues
on Which DOE Seeks Comment.''
3. Load Profiles
Information on typical load profiles for compressors is not
available in the public domain. DOE reviewed resources provided by
stakeholders, as well as sample compressed air system assessments of
commercial and industrial customers. Given the lack of data, DOE
developed several load profiles based on how typical compressor
applications would likely be employed in the field. Each compressor
load profile is approximated by weights that specify the percentage of
time the compressor operates at one of four load points: 20, 40, 70,
and 100 percent of its duty point airflow.\67\ Load profiles are then
mapped to each application type to capture compressor operation in the
field; this mapping is shown in Table IV.32. The four load profile
types are described below:
---------------------------------------------------------------------------
\67\ DOE assumes that 20-percent is the lowest point at which a
compressor will operate before being cycled by capacity controls
into its Stop or Unload status. See chapter 7 of the TSD for more
information on capacity controls.
---------------------------------------------------------------------------
Flat-load profile: Represents a constant maximum airflow demand.
All annual hours of operation are assigned to the duty point airflow.
The flat-load profile is used for most base-load applications, and for
intermittent applications to represent the event where a intermittent
compressor is operating in a base-load role. It can also represent a
situation where intermittent demand has been attenuated due to the
inclusion of appropriately-sized secondary (demand) air receiver
storage to the compressed air system.
High-load profile: Represents a high fraction of annual operating
hours spent at, or near the maximum airflow demand. The annual hours of
operation are distributed across the higher airflow load points. The
high-load profile is used to represent most trim applications, and some
base-load applications.
Low-load profile: Represents a low fraction of annual operating
hours spent at maximum air flow. Annual hours of operation are
distributed across the lower airflow load points. Low-load profile,
although undesirable, occurs if a single compressor is supplying
airflow to a range of tools, with only a small fraction of operating
hours at which all of these tools are operating. This profile is also
used with both trim and intermittent applications.
Even-load profile: Represents an even distribution of annual
operating hours spent at each airflow load point. This load profile is
a characteristic of trim or intermittent applications. Table IV.31
shows the percentage of annual operating hours at each of the load
points described above for the four load profiles. Table IV.32 shows
the assumed probability of each type of load profile being selected for
each application type.
Table IV. 31--Fraction of Annual Operating Hours (%) as a Fraction of Rated Airflow
----------------------------------------------------------------------------------------------------------------
Load profile
Load point (%) ---------------------------------------------------------------
Flat (%) High (%) Low (%) Even (%)
----------------------------------------------------------------------------------------------------------------
20.............................................. 0 0 30 0
40.............................................. 0 10 30 33.3
70.............................................. 0 40 30 33.3
100............................................. 100 50 10 33.3
----------------------------------------------------------------------------------------------------------------
Table IV. 32--Distribution of Load Profiles by Application
------------------------------------------------------------------------
Load profile
Application Load profile probability
------------------------------------------------------------------------
Trim............................... Flat.
Even............... 40
Low................ 40
High............... 20
Base-load.......................... Flat............... 80
Even.
Low.
High............... 20
Intermittent....................... Flat............... 30
Even............... 20
Low................ 20
High............... 30
------------------------------------------------------------------------
DOE requests comment and information on typical load profiles for
the air compressor types and applications in the scope of this
rulemaking. This is identified as Issue 34 in section VIII.E, ``Issues
on Which DOE Seeks Comment.''
4. Capacity Control Strategies
Facility demands for compressed air rarely match a compressor's
rated air capacity. To account for this discrepancy, some form of
compressed air control strategy is necessary. Some forms of capacity
control only apply to certain compressor designs and are effective over
a limited range of a compressor's capacity. In addition, some capacity
controls can be used in combination. As the capacity is regulated, the
power required for the compressor to meet the airflow demand will
change depending on the chosen control strategy. Chapter 7 of the NOPR
TSD describes the implemented control in detail with mathematical
models for each of the following control strategies: Start/Stop, Load/
Unload (2-step), Inlet Valve Modulation, Variable Displacement, and
Multi-step. DOE also included the following combined control
strategies: Inlet Valve Modulation/Unload, Variable Displacement/
Unload, and Multi-step/Unload. DOE modeled these control strategies
largely on the following
[[Page 31721]]
sources: Analysis Methodology Manual for AIRMaster Compressed Air
System Audit and Analysis Software,\68\ CAGI's Compressed Air and Gas
Handbook,\69\ and Compressed Air System Controls.\70\
---------------------------------------------------------------------------
\68\ Wheeler, G. M., Bessey, E. G. & McGill, R. D. Analysis
Methodology Manual for AIRMaster Compressed Air System Audit and
Analysis Software, 1997.
\69\ McCulloh, D. M. Compressed Air and Gas Handbook. Compressed
Air and Gas Institute (CAGI), 2003. at <http://www.cagi.org.
\70\ Compressed Air Challenge, U.S. DOE, Compressed Air System
Controls, 1998, at <https://www.compressedairchallenge.org/library/factsheets/factsheet06.pdf.
---------------------------------------------------------------------------
5. Compressor Sizing
In the Framework Document, DOE requested information on compressor
sizing. CAGI noted that demand of operation dictates whether an
installed system is adequate, inadequate, or oversized, but was unsure
whether there are data available as to the number of systems that may
be potentially oversized at the point of sale. (CAGI, No. 0014 at p.
210) Kaeser commented that they often see oversizing--specifically
multiple units running at varying part-load levels. Kaeser stated that
this is more of an issue of how compressors are controlled. (Kaeser
Compressors, No. 0014 at p. 212-213) DOE was unable to find any
information quantifying the degree of oversizing at the point of sale.
In addition, DOE was unable to find information quantifying the
frequency that compressors are misconfigured or oversized in the field,
so DOE assumed that compressors were perfectly sized for this analysis.
DOE seeks data on the degree that compressors are over- or under-
sized for an intended application. Specifically, DOE requests data on
the degree that air compressors are operated at duty points other than
their intended design point. This is identified as Issue 35 in section
VIII.E, ``Issues on Which DOE Seeks Comment.''
Additionally, Scales commented that air compressors are often set
to operate at an elevated pressure, which increases input power as well
as compressed air output. (W. Scales, No. 0020 at p. 1) DOE was unable
to find any information quantifying the impacts of operating air
compressors at pressures other than at their specified design point.
DOE requests information and data on the degree that a compressor's
pressure can be set above or below its design point. Additionally, DOE
requests information and data on air compressor efficiency when it is
operated above the design point pressure. This is identified as Issue
36 in section VIII.E, ``Issues on Which DOE Seeks Comment.''
Chapter 7 of the NOPR TSD provides details on DOE's energy use
analysis for air compressors.
F. Life-Cycle Cost and Payback Period Analysis
DOE conducted LCC and PBP analyses to evaluate the economic impacts
on individual end users of potential energy conservation standards for
air compressors. The effect of new or amended energy conservation
standards on individual end users usually involves a reduction in
operating cost and an increase in purchase cost. DOE used the following
two metrics to measure end-user impacts:
The LCC (life-cycle cost) is the total end user expense of
an appliance or equipment over the life of that equipment, consisting
of total installed cost (manufacturer selling price, distribution chain
markups, sales tax, and installation costs) plus operating costs
(expenses for energy use, maintenance, and repair). To compute the
operating costs, DOE discounts future operating costs to the time of
purchase and sums them over the lifetime of the equipment.
The PBP (payback period) is the estimated amount of time
(in years) it takes end users to recover the increased purchase cost
(including installation) of more-efficient equipment through lower
operating costs. DOE calculates the PBP by dividing the change in
purchase cost at higher efficiency levels by the change in annual
operating cost for the year that amended or new standards are assumed
to take effect.
For any given efficiency level, DOE measures the change in LCC
relative to the LCC in the no-standards case, which reflects the
estimated efficiency distribution of air compressors in the absence of
new or amended energy conservation standards. In contrast, the PBP for
a given efficiency level is measured relative to the baseline
equipment.
For each considered efficiency level in each equipment class, DOE
calculated the LCC and PBP for a nationally representative set of air
compressors. DOE used data from NYSERDA and NW databases, Lot 31 and
acquired system assessments to define each air compressor's
application, load profile, annual hours or operation, and combination
of employed controls.71 72 73 For each of these air
compressors, DOE determined the energy consumption and the appropriate
electricity price, thus capturing the variability in energy consumption
and energy prices associated with the use of air compressors.
---------------------------------------------------------------------------
\71\ Washington State University Extension Energy Program (WSU)
and Applied Proactive Technologies (APT). Database of Motor
Nameplate and Field Measurement Data. New York State Energy Research
and Development Authority (NYSERDA) (2011).
\72\ Strategic Energy Group, Northwest Industrial Motor Database
Summary (2009).
\73\ Van Holsteijn en Kemna B.V. (VHK). Ecodesign Preparatory
Study on Electric Motor Systems/Compressors; 2014; Prepared for the
European Commission by Van Holsteijn en Kemna B.V. (VHK); ENER/C3/
413-2010-LOT 31-SI2.612161, available at http://www.regulations.gov/#!documentDetail;D=EERE-2013-BT-STD-0040-0031.
---------------------------------------------------------------------------
Inputs to the calculation of total installed cost include equipment
costs--which includes MPCs, manufacturer markups, retailer and
distributor markups, and sales taxes--and installation costs. Inputs to
the calculation of operating expenses include annual energy
consumption, energy prices and price projections, repair and
maintenance costs, equipment lifetimes, and discount rates. DOE created
distributions of values for equipment lifetime, discount rates, and
sales taxes, with probabilities attached to each value, to account for
their uncertainty and variability.
The computer model DOE uses to calculate the LCC and PBP relies on
a Monte Carlo simulation to incorporate uncertainty and variability
into the analysis. The Monte Carlo simulations randomly sample input
values from the probability distributions and air compressor end user
sample. The model calculated the LCC and PBP for equipment at each
efficiency level for 10,000 end users per simulation run.
DOE calculated the LCC and PBP for all end users as if each were to
purchase a new equipment in the expected year of compliance with a new
standard. DOE has tentatively determined that any standards would apply
to air compressors manufactured five years after the date on which any
standard is published.\74\ At this time, DOE estimates publication of a
final rule in the second half of 2016. Therefore, for purposes of its
analysis, DOE used 2022 as the first
[[Page 31722]]
full year of compliance with any standards for compressors.
---------------------------------------------------------------------------
\74\ EPCA specifies that the provisions of subsections (l)
through (s) of section 42 U.S.C. 6295 shall apply to any other type
of industrial equipment which the Secretary classifies as covered
equipment, which includes compressors. (42 U.S.C. 6316(a))
Subsection (l)(2) of 42 U.S.C. 6295 states that any new or amended
standard for any other type of consumer product which the Secretary
classifies as a covered product shall not apply to products
manufactured within five years after the publication of a final rule
establishing such standard. DOE believes that this five-year lead
time also applies to other types of industrial equipment, such as
compressors.
---------------------------------------------------------------------------
Table IV. 33 summarizes the approach and data DOE used to derive
inputs to the LCC and PBP calculations. The subsections that follow
provide further discussion. Details of the spreadsheet model, and of
all the inputs to the LCC and PBP analyses, are contained in chapter 8
of the NOPR TSD and its appendices.
---------------------------------------------------------------------------
\75\ Edison Electric Institute (EEI), Typical Bills and Average
Rates Report Summer, and Winger (2014).
Table IV. 33--Summary of Inputs and Methods for the LCC and PBP Analysis
*
------------------------------------------------------------------------
Inputs Source/method
------------------------------------------------------------------------
Equipment Cost................................. Derived by multiplying
MPCs by manufacturer
and retailer markups
and sales tax, as
appropriate. Used
historical data to
derive a price scaling
index to forecast
equipment costs.
Installation Costs............................. Baseline installation
cost determined with
data from
stakeholders. Assumed
no change with
efficiency level.
Annual Energy Use.............................. The total annual energy
use multiplied by the
hours per year.
Average number of
hours based on field
data.
Energy Prices.................................. Electricity: Marginal
prices derived from
EEI \75\
Energy Price Trends............................ Based on AEO 2015 price
forecasts.
Repair and Maintenance Costs................... Assumed no change with
efficiency level.
Equipment Lifetime............................. Assumed average life
time of 12.5 years for
rotary, and 8.4 for
reciprocating air
compressors.
Discount Rates................................. Approach involves
identifying all
possible debt or asset
classes that might be
used to purchase air
compressors. Primary
data source was the
Damodaran Online.
Compliance Date................................ Late 2021.
------------------------------------------------------------------------
\*\ References for the data sources mentioned in this table are provided
in the sections following the table or in chapter 8 of the NOPR TSD.
1. Equipment Cost
To calculate end user equipment costs, DOE multiplied the MPCs
developed in the engineering analysis by the markups described in
section IV.D (along with sales taxes). DOE used different markups for
baseline equipment and higher-efficiency equipment because DOE applies
an incremental markup to the increase in MSP associated with higher-
efficiency equipment.
The markup is the percentage increase in price as the air
compressor equipment passes through distribution channels. As explained
in section IV.D, DOE assumed that compressors are delivered by the
manufacturer through one of four distribution channels. The overall
markups used in the LCC analysis are weighted averages of all of the
relevant distribution channel markups.
To project an equipment price trend for the NOPR, DOE derived an
inflation-adjusted index of the Producer Price Index for air and gas
compressor equipment manufacturers over the period 1984-2013.\76\ These
data show a slight decrease from 1989 through 2004. Since 2004,
however, there has been an increase in the price index. Given the
relatively slow global economic activity in 2009 through 2013, the
extent to which the future trend can be predicted based on the last
decade is uncertain. Because the observed data do not provide a firm
basis for projecting future cost trends for compressor equipment, DOE
used a constant price assumption as the default trend to project future
compressor prices from 2022. Thus, prices projected for the LCC and PBP
analysis are equal to the 2014 values for each efficiency level in each
equipment class.
---------------------------------------------------------------------------
\76\ Series ID PCU333911333911; http://www.bls.gov/ppi/.
---------------------------------------------------------------------------
DOE requests comments on the most appropriate trend to use for real
(inflation-adjusted) compressor prices. This is identified as Issue 37
in section VIII.E, ``Issues on Which DOE Seeks Comment.''
2. Installation Cost
Installation cost includes labor, overhead, and any miscellaneous
materials and parts needed to install the equipment. In the Framework
Document, DOE requested information on whether installation costs would
be expected to change with efficiency. CAGI responded that there might
be an added cost of installation related to efficiency (CAGI, No.0009
at p.8), but CAGI did not provide any rationale for this increase. In
the absence of data to indicate at what efficiency level DOE may need
to consider an increase in installation costs, or other drivers that
would trigger higher installation costs for more efficient equipment,
DOE has not included an estimate for installation costs for this
analysis. DOE requests comment on whether any of the efficiency levels
considered in this NOPR might lead to an increase in installation costs
and, if so, data regarding the magnitude of the increased cost for each
relevant efficiency level. This is identified as Issue 38 in section
VIII.E, ``Issues on Which DOE Seeks Comment.''
3. Annual Energy Consumption
For each sampled compressor, DOE determined the energy consumption
for an air compressor at different efficiency levels using the approach
described above in section IV.E of this document.
4. Energy Prices
DOE derived average and marginal annual non-residential (commercial
and industrial) electricity prices using data from EIA's Form EIA-861
database (based on ``Annual Electric Power Industry Report''),\77\ EEI
Typical Bills and Average Rates Reports,\78\ and information from
utility tariffs. Electricity tariffs for non-residential end users can
be very complex, with the principal difference from residential rates
being the incorporation of demand charges. The presence of demand
charges means that two end users with the same monthly electricity
consumption may have very different bills, depending on their peak
demand. For the NOPR analysis DOE used marginal electricity prices to
estimate the impact of demand charges for end users of air compressors.
The methodology of use to calculate the marginal electricity rates can
be found in appendix 8B of the NOPR TSD.
---------------------------------------------------------------------------
\77\ Available at: www.eia.doe.gov/cneaf/electricity/page/eia861.html.
\78\ Edison Electric Institute. Typical Bills and Average Rates
Report. Winter 2014 published April 2014, Summer 2014 published
October 2014: Washington, DC (Last accessed June 2, 2015.) http://www.eei.org/resourcesandmedia/products/Pages/Products.aspx.
---------------------------------------------------------------------------
To estimate energy prices in future years, DOE multiplied the
average national energy prices by the forecast of annual change in
national-average commercial and industrial energy price in the
Reference case from AEO 2015,
[[Page 31723]]
which has an end-year of 2040.\79\ To estimate price trends after 2040,
DOE used the average annual rate of change in prices from 2020 to 2040.
---------------------------------------------------------------------------
\79\ U.S. Department of Energy-Energy Information
Administration, Annual Energy Outlook 2015 with Projections to 2040
(Available at: <http://www.eia.gov/forecasts/aeo/).
---------------------------------------------------------------------------
5. Repair and Maintenance Costs
Commenting on the framework document, Kaeser stated that the cost
of repair for more efficient compressors depends on whether it is
fixed-speed or variable-speed, and that comparing more efficient fixed-
speed to less efficient fixed-speed shows no variation in costs.
(Kaeser Compressors, No. 0014 at p. 236-237) CAGI commented in response
to the Framework document that VSDs can have higher repair and
troubleshooting costs based on issues of cleanliness of the operating
site and electrical noise/interference. (CAGI, No. 0006 at p. 8)
For this analysis DOE is considering separate equipment classes for
compressors using fixed-speed drives and VSDs, so they are not
considered as potential replacements for one another in the LCC
analysis. Based on the comments from Kaeser, DOE does not expect repair
or maintenance costs to change with increased efficiency, so DOE did
not estimate either repair or maintenance costs.
6. Equipment Lifetime
DOE defines ``equipment lifetime'' as the age when a given air
compressor is retired from service. DOE presented several average
equipment lifetimes estimates in the framework document. In response,
CAGI commented that well-cared-for compressors can have lifetimes
spanning decades, while Kaeser commented that very old equipment
exists, but some equipment may experience much shorter lifetimes.
(CAGI, No. 0009 at p.8; Kaeser Compressors, No. 0014 at p. 228) CAGI
further noted that there are many variables that could affect equipment
lifetime, such as quality of installation, operating environment,
quality of replacement parts, and qualifications of maintenance
technicians. (CAGI, No. 0014 at p. 238) While no stakeholder directly
commented on the lifetimes presented, Kaeser stated they were
reasonable as an average over the entire market. (Kaeser Compressors,
No. 0014 at p. 229)
For the NOPR, DOE based equipment lifetimes on new information
published in the Lot31 study.\80\ DOE calculated a distribution of
lifetimes shown in Table IV.34. DOE also used a distribution of
mechanical lifetime in hours to allow a negative correlation between
annual operating hours and lifetime in years--air compressors with more
annual operating hours tend to have shorter lifetimes. Chapter 8 of the
NOPR TSD contains a detailed discussion of equipment lifetimes.
---------------------------------------------------------------------------
\80\ Ecodesign Preparatory Study on Electric Motor Systems/
Compressors; 2014; Prepared for the European Commission by Van
Holsteijn en Kemna B.V. (VHK); ENER/C3/413-2010-LOT 31-SI2.612161;
http://www.regulations.gov/#!documentDetail;D=EERE-2013-BT-STD-0040-
0031.
Table IV. 34--Air Compressor Lifetimes (years)
----------------------------------------------------------------------------------------------------------------
Minimum Average Maximum
----------------------------------------------------------------------------------------------------------------
Rotary.......................................................... 4 12.5 36
Reciprocating................................................... 1 8.4 25
----------------------------------------------------------------------------------------------------------------
DOE seeks comment on these minimum, average, and maximum equipment
lifetimes, and whether or not they are appropriate for all equipment
classes. This is identified as Issue 39 in section VIII.E, ``Issues on
Which DOE Seeks Comment.''
7. Discount Rates
The discount rate is the rate at which future expenditures are
discounted to estimate their present value. The weighted average cost
of capital is commonly used to estimate the present value of cash flows
to be derived from a typical company project or investment. Most
companies use both debt and equity capital to fund investments, so the
cost of capital is the weighted-average cost to the firm of equity and
debt financing. DOE estimated the cost of equity using the capital
asset pricing model, which assumes that the cost of equity for a
particular company is proportional to the systematic risk faced by that
company.
The primary source of data for this analysis was Damodaran Online,
a widely used source of information about company debt and equity
financing for most types of firms.\81\ DOE estimated a separate
weighted average cost of capital for each business sector that
purchases compressors. More details regarding DOE's estimates of end
user discount rates are provided in chapter 8 of the NOPR TSD.
---------------------------------------------------------------------------
\81\ Damodaran Online, The Data Page: Cost of Capital by
Industry Sector, 2001-2013. (Last accessed March, 2014.) See: http:/
/pages.stern.nyu.edu/~adamodar/.
---------------------------------------------------------------------------
8. Efficiency Distribution in the No-New-Standards Case
To accurately estimate the share of end users that would be
affected by a potential energy conservation standard at a particular
efficiency level, DOE's LCC analysis considered the projected
distribution (i.e., market shares) of equipment efficiencies that end
users purchase in the no-new-standards case (i.e., the case without new
energy conservation standards). To estimate the efficiency distribution
of air compressors for 2021, DOE examined the frequency of efficiencies
made available under CAGI's voluntary testing program for each
equipment class (CAGI database), and the distribution of efficiencies
of shipments of commercial and industrial pumps provided,\82\ scaled to
the capacity range of compressors. DOE found the distribution for both
samples to be similar, with the distribution of efficiencies of
shipments for pumps skewed slightly toward higher efficiencies. For the
NOPR analysis, DOE used the re-scaled distribution of pump
efficiencies, as it is based on the efficiencies of shipments of a
durable industrial product, rather than the frequency of efficiency of
an entry in a catalog, and thus better reflects end user choice. The
estimated market shares for the no-new-standards case efficiency
distribution for air compressors are shown in Table IV.35. See chapter
8 of the NOPR TSD for further information on the derivation of the
efficiency distributions.
---------------------------------------------------------------------------
\82\ U.S. Department of Energy. Energy Efficiency and Renewable
Energy Office. Energy Conservation Program: Energy Conservation
Standards for Pumps; Notice of proposed rulemaking (NOPR), 2015.
See: http://www.regulations.gov/#!documentDetail;D=EERE-2011-BT-STD-
0031-0040.
[[Page 31724]]
Table IV. 35--Distribution of Efficiencies in the No-New-Standards Case
------------------------------------------------------------------------
Average of
EL probability
(%)
------------------------------------------------------------------------
0....................................................... 11.50
1....................................................... 15.50
2....................................................... 15.90
3....................................................... 18.40
4....................................................... 11.30
5....................................................... 22.40
6....................................................... 5.10
------------------------------------------------------------------------
9. Payback Period Analysis
The payback period is the amount of time it takes the end user to
recover the additional installed cost of more-efficient equipment,
compared to baseline equipment, through energy cost savings. Payback
periods are expressed in years. Payback periods that exceed the life of
the equipment mean that the increased total installed cost is not
recovered in reduced operating expenses.
The inputs to the PBP calculation for each efficiency level are the
change in total installed cost of the equipment and the change in the
first-year annual operating expenditures relative to the baseline. The
PBP calculation uses the same inputs as the LCC analysis, except that
discount rates are not needed.
As noted above, EPCA, as amended, establishes a rebuttable
presumption that a standard is economically justified if the Secretary
finds that the additional cost to the end user of purchasing equipment
complying with an energy conservation standard level will be less than
three times the value of the first year's energy savings resulting from
the standard, as calculated under the applicable test procedure. (42
U.S.C. 6295(o)(2)(B)(iii) and 6316(a)) For each considered efficiency
level, DOE determined the value of the first year's energy savings by
calculating the energy savings in accordance with the applicable DOE
test procedure, and multiplying those savings by the average energy
price forecast for the year in which compliance with the new standards
would be required.
G. Shipments Analysis
DOE uses forecasts of annual equipment shipments to calculate the
national impacts of potential energy conservation standards on energy
use, NPV, and future manufacturer cash flows.\83\ The shipments model
takes an accounting approach, tracking market shares of each equipment
class and the vintage of units in the stock. Stock accounting uses
equipment shipments as inputs to estimate the age distribution of in-
service equipment stocks for all years. The age distribution of in-
service equipment stocks is a key input to calculations of both the NES
and NPV, because operating costs for any year depend on the age
distribution of the stock.
---------------------------------------------------------------------------
\83\ DOE uses data on manufacturer shipments as a proxy for
national sales, as aggregate data on sales are lacking. In general
one would expect a close correspondence between shipments and sales.
---------------------------------------------------------------------------
In its proposed Coverage Determination and subsequent Framework
Document, DOE considered using the shipment data available from the
U.S. Census Bureau. In reference to the shipments found in the Census
data, CAGI commented that air compressors used for actual commercial
and industrial applications are significantly lower, being a fraction
of the referenced number (CAGI, EERE-2012-BT-DET-0033-0003, pg. 7). In
response, DOE sought, and received, recent shipments data for rotary
compressors from a number of stakeholders and subject matter experts.
DOE was able to find only limited shipments data for reciprocating
compressors, so DOE continued to use the data from the U.S. Census
Bureau.\84\ DOE aggregated these data into its shipments estimate for
2013 (see chapter 9 of the NOPR TSD).
---------------------------------------------------------------------------
\84\ U.S. Department of Commerce, Census Bureau, Manufacturing
and Construction Division, Series MA333P(10)-1, Stationary Air
Compressors, Reciprocating, Single and Double Acting (333912110T),
2011.
---------------------------------------------------------------------------
DOE seeks comment on the total 2013 shipments by equipment class.
This is identified as Issue 40 in section VIII.E, ``Issues on Which DOE
Seeks Comment.''
The 2013 shipments estimates were disaggregated by compressor
capacity in actual cubic feet per minute (ACFM). To project future
shipments of air compressors, DOE scaled the 2013 values using
particular forecasts from AEO 2015. DOE understands that air
compressors are used widely in both commercial, and manufacturing and
industrial sectors. However, DOE was not able to locate and information
indication what fraction of equipment was used in either sector. For
this analysis DOE assumed that industrial/manufacturing processes will
require a greater volume of compressed air than commercial processes.
With higher electrical loads in the industrial/manufacturing sector
than the commercial sector, DOE assumed that compressors greater than
50 ACFM capacity are mainly used in manufacturing, so DOE used the
forecast for value of manufacturing shipments for this category. DOE
assumed compressors equal to or less than 50 ACFM capacity are mainly
used in commercial buildings, so DOE used the forecast for commercial
floor space for this category.
DOE seeks comment on its assumption that air compressors with a
capacity of no more than 50 ACFM are used in commercial applications,
and air compressors greater than 50 ACFM are used in industrial
applications. This is identified as Issue 41 in section VIII.E,
``Issues on Which DOE Seeks Comment.''
For rotary equipment classes DOE then used CAGI test data for air
compressors collected directly from manufacturers to distribute
shipments into the different lubrication and cooling type equipment
classes. For reciprocating compressors DOE was unable to locate any
information on the fractions of equipment shipped that are single-phase
or three-phase. DOE assumed an equal division of shipments between
single-phase and three-phase reciprocating compressors for equipment
rated less than or equal to 10-hp,\85\ while any reciprocating
shipments above 10-hp were considered to be three-phase equipment. The
equipment classes and their estimated market shares are shown in Table
IV.36. DOE used the same shares for all years in the projection.
---------------------------------------------------------------------------
\85\ For this analysis DOE considers 10-hp is the upper nominal
power limit for single-phase electric motors and air compressors
driven by these motors, For this analysis DOE approximated as 10-hp
as 50 ACFM to match available shipment data to the equipment class
capacities defined in the engineering analysis. Equipment class
capacities are chapter 5 of the TSD.
Table IV. 36--Share of Shipments by Equipment Class
------------------------------------------------------------------------
Market share
Equipment class Description (%)
------------------------------------------------------------------------
RP_FS_L_AC..................... Rotary Screw, Fixed- 1.62
Speed, Lubricated, Air
Cooled.
RP_FS_L_WC..................... Rotary Screw, Fixed- 0.29
Speed, Lubricated,
Water-Cooled.
RP_FS_LF_AC.................... Rotary Screw, Fixed- 0.06
Speed, Lubricant Free,
Air Cooled.
[[Page 31725]]
RP_FS_LF_WC.................... Rotary Screw, Fixed- 0.04
Speed, Lubricant Free,
Water-Cooled.
RP_VS_L_AC..................... Rotary Screw, Variable- 0.34
speed, Lubricated, Air
Cooled.
RP_VS_L_WC..................... Rotary Screw, Variable- 0.06
speed, Lubricated,
Water-Cooled.
RP_VS_LF_AC.................... Rotary Screw, Variable- 0.01
speed, Lubricant Free,
Air Cooled.
RP_VS_LF_WC.................... Rotary Screw, Variable- 0.02
speed, Lubricant Free,
Water-Cooled.
R1_FS_L_XX..................... Reciprocating 1-phase, 44.02
Fixed-Speed,
Lubricated, Air Cooled.
R3_FS_L_XX..................... Reciprocating 3-phase, 53.54
Fixed-Speed,
Lubricated, Air Cooled.
------------------------------------------------------------------------
DOE seeks comment on the share of shipments by equipment class, and
how these shares may change over time. This is identified as Issue 42
in section VIII.E, ``Issues on Which DOE Seeks Comment.''
DOE recognizes that an increase in equipment price resulting from
energy efficiency standards may affect end user decision-making
regarding whether to purchase a new compressor, a refurbished one, or
repair the existing failed unit. DOE has not found any information in
the literature that indicates a demand price elasticity for commercial
and industrial firms. For the NOPR, it used a medium elasticity of -0.5
for commercial customers, and a lower elasticity (-0.25) for industrial
customers.\86\ DOE used a lower elasticity for industrial customers
because these customers are likely to place greater value on the
reliability and efficiency provided by new equipment, over the
alternative of purchasing used equipment.
---------------------------------------------------------------------------
\86\ A price elasticity of -0.5 means that for every 1 percent
increase in price, the demand for the product (i.e., shipments)
would decline by 0.5 percent. An elasticity of 1 indicates very high
elasticity of demand, whereas an elasticity of zero indicates no
elasticity of demand. Elasticities are considered constant over
time.
---------------------------------------------------------------------------
DOE seeks comment on whether the assumed price elasticities are
reasonable for air compressors. This is identified as Issue 43 in
section VIII.E, ``Issues on Which DOE Seeks Comment.''
H. National Impact Analysis
The NIA assesses the national energy savings (NES) and the national
net present value (NPV) from a national perspective of total consumer
costs and savings that would be expected to result from new or amended
standards at specific efficiency levels. (``Consumer'' in this context
refers to consumers of the equipment being regulated.) DOE calculates
the NES and NPV for the potential standard levels considered based on
projections of annual equipment shipments, along with the annual energy
consumption and total installed cost data from the energy use and LCC
analyses.\87\ For the present analysis, DOE forecasted the energy
savings, operating cost savings, equipment costs, and NPV of consumer
benefits over the lifetime of air compressors sold from 2022 through
2051.
---------------------------------------------------------------------------
\87\ For the NIA, DOE adjusts the installed cost data from the
LCC analysis to exclude sales tax, which is a transfer.
---------------------------------------------------------------------------
DOE evaluates the impacts of potential standards for compressors by
comparing a case without such standards with standards-case
projections. For the no-new-standards case, DOE considers historical
trends in efficiency and various forces that are likely to affect the
mix of efficiencies over time. For the standards cases, DOE considers
how a given standard would likely affect the market shares of equipment
with efficiencies greater than the standard.
DOE uses a spreadsheet model to calculate the energy savings and
the national consumer costs and savings from each TSL. Interested
parties can review DOE's analyses by changing various input quantities
within the spreadsheet. The NIA spreadsheet model uses typical values
(as opposed to probability distributions) as inputs.
Table IV.37 summarizes the inputs and methods DOE used for the NIA
analysis for the NOPR. Discussion of these inputs and methods follows
the table. See chapter 10 of the NOPR TSD for further details.
Table IV. 37--Summary of Inputs and Methods for the National Impact
Analysis
------------------------------------------------------------------------
Inputs Method
------------------------------------------------------------------------
Shipments.............................. Annual shipments from shipments
model.
Compliance Date of Standard............ Late 2021.
Efficiency Trends...................... No-new-standards case: constant
market shares.
Annual Energy Consumption per Unit..... Annual weighted-average values
are a function of energy use
at each TSL.
Total Installed Cost per Unit.......... Annual weighted-average values
are a function of cost at each
TSL.
Incorporates projection of
future equipment prices based
on historical data.
Annual Energy Cost per Unit............ Annual weighted-average values
as a function of the annual
energy consumption per unit
and energy prices.
Repair and Maintenance Cost per Unit... Annual values do not change
with efficiency level.
Energy Prices.......................... AEO 2015 forecasts (to 2040)
and extrapolation thereafter.
Energy Site-to-Primary Conversion...... A time-series conversion factor
based on AEO 2015.
Discount Rate.......................... Three and seven percent.
Present Year........................... 2015.
------------------------------------------------------------------------
1. Equipment Efficiency Trends
A key component of the NIA is the trend in energy efficiency
projected for the no-new-standards case and each of the standards
cases. Section IV.F.8 of this document describes how DOE developed an
energy efficiency distribution for the no-new-standards case (which
yields a shipment-weighted average efficiency) for each of the
considered equipment classes for the
[[Page 31726]]
first full year of anticipated compliance with an amended standard.
Several stakeholders commented that manufacturers will continue to
increase the efficiency of air compressors in the absence of standards.
(CAGI, No. 0014 at p. 247-251; Kaeser Compressors, No. 0014 at p. 252-
253; Ingersoll-Rand, No. 0014 at p. 254) Data on the number of air
compressor designs by efficiency is available for 2006 through 2014
from manufacturer performance test reports. These data show that in
some years the number of higher-efficiency designs increases,
indicating a potential average improvement in efficiency. However, DOE
has no data indicating what percentage of shipments are attributed to
these more-efficient air compressors, so no clear trend toward more
efficient air compressors could be determined. Thus, DOE assumed no
change in efficiency in the no-new-standards case.
DOE seeks comment on its assumption of no change over time in the
market share of more efficient equipment in the no-new-standards case.
This is identified as Issue 44 in section VIII.E, ``Issues on Which DOE
Seeks Comment.''
For each standards case, DOE used a ``roll-up'' scenario to
establish the market shares by efficiency level for the year that
compliance would be required with new standards (i.e., late 2021). In
this case, equipment efficiencies in the no-new-standards case that
were above the standard level under consideration would not be
affected. After the compliance year, DOE maintained consistency with
the no-new-standards case and assumed no change in efficiency.
DOE seeks information on any projected change in equipment
efficiencies over time, specifically whether or not the market shares
of air compressors by efficiency would change after the publication of
a new standard. This is identified as Issue 45 in section VIII.E,
``Issues on Which DOE Seeks Comment.''
2. National Energy Savings
The national energy savings analysis involves a comparison of
national energy consumption of the considered equipment between each
potential standards case (TSL) and the no-new-standards case. DOE
calculated the national energy consumption by multiplying the number of
units (stock) of each product (by vintage or age) by the unit energy
consumption (also by vintage). DOE calculated annual NES based on the
difference in national energy consumption for the no-new-standards case
and for each higher efficiency standard. DOE estimated energy
consumption and savings based on site energy and converted the
electricity consumption and savings to primary energy (i.e., the energy
consumed by power plants to generate site electricity) using annual
conversion factors derived from AEO 2015. Cumulative energy savings are
the sum of the NES for each year over the timeframe of the analysis.
In 2011, in response to the recommendations of a committee on
``Point-of-Use and Full-Fuel-Cycle Measurement Approaches to Energy
Efficiency Standards'' appointed by the National Academy of Sciences,
DOE announced its intention to use full-fuel-cycle (FFC) measures of
energy use and greenhouse gas and other emissions in the national
impact analyses and emissions analyses included in future energy
conservation standards rulemakings. 76 FR 51281 (August 18, 2011).
After evaluating the approaches discussed in the August 18, 2011
notice, DOE published a statement of amended policy in which DOE
explained its determination that EIA's National Energy Modeling System
(NEMS) is the most appropriate tool for its FFC analysis and its
intention to use NEMS for that purpose. 77 FR 49701 (August 17, 2012).
NEMS is a public domain, multi-sector, partial equilibrium model of the
U.S. energy sector \88\ that EIA uses to prepare its Annual Energy
Outlook. The approach used for deriving FFC measures of energy use and
emissions is described in appendix 10A of the NOPR TSD.
---------------------------------------------------------------------------
\88\ For more information on NEMS, refer to The National Energy
Modeling System: An Overview, DOE/EIA-0581 (98) (Feb.1998)
(Available at: http://www.eia.gov/oiaf/aeo/overview/).
---------------------------------------------------------------------------
3. Net Present Value Analysis
The inputs for determining the NPV of the total costs and benefits
experienced by consumers are: (1) Total annual installed cost; (2)
total annual operating costs; and (3) a discount factor to calculate
the present value of costs and savings. DOE calculates net savings each
year as the difference between the no-new-standards case and each
standards case in terms of total savings in operating costs versus
total increases in installed costs. DOE calculates operating cost
savings over the lifetime of each product shipped during the forecast
period. DOE used a discount factor based on real discount rates of 3
percent and 7 percent to discount future costs and savings to present
values.
As discussed in section IV.F.1of this document, DOE did not find a
firm bases to project a trend in air compressor prices, so DOE used
constant real prices as the default. To evaluate the effect of
uncertainty regarding the price trend estimates, DOE investigated the
impact of different product price forecasts on the consumer NPV for the
considered TSLs for air compressors. In addition to the default price
trend, DOE considered two equipment price sensitivity cases--(1) a high
price decline case based on Air and Gas Compressor Manufacturer
historical Producer Price Index (PPI) series \89\ and (2) a low price
decline case based on AEO 2015 industrial equipment price trend. The
derivation of these price trends and the results of these sensitivity
cases are described in appendix 10C of the NOPR TSD.
---------------------------------------------------------------------------
\89\ U.S. Department of Labour, Bureau of Labor Statistics, Air
& gas compressors, ex. compressors for ice making, refrigeration, or
a/c equipment, Series ID: PCU33391233391211Z
---------------------------------------------------------------------------
The operating cost savings are energy cost savings, which are
calculated using the estimated energy savings in each year and the
projected price of the appropriate form of energy. To estimate energy
prices in future years, DOE multiplied the average regional energy
prices by the forecast of annual national-average residential energy
price changes in the Reference case from AEO 2015, which has an end
year of 2040. To estimate price trends after 2040, DOE used the average
annual rate of change in prices from 2020 to 2040. As part of the NIA,
DOE also analyzed scenarios that used inputs from the AEO 2015 Low
Economic Growth and High Economic Growth cases. Those cases have higher
and lower energy price trends compared to the Reference case. NIA
results based on these cases are presented in appendix 10C of the NOPR
TSD.
In calculating the NPV, DOE multiplies the net savings in future
years by a discount factor to determine their present value. DOE uses
discount factors based on both a 3-percent and a 7-percent real
discount rate, in accordance with guidance provided by the Office of
Management and Budget (OMB) to Federal agencies on the development of
regulatory analysis.\90\ The discount rates for the determination of
NPV are in contrast to the discount rates used in the LCC analysis,
which are designed to reflect a consumer's perspective. The 7-percent
real value is an estimate of the average before-tax rate of return to
private capital in the U.S. economy. The 3-percent real value
represents the ``social rate of time
[[Page 31727]]
preference,'' which is the rate at which society discounts future
consumption flows to their present value.
---------------------------------------------------------------------------
\90\ United States Office of Management and Budget. Circular A-
4: Regulatory Analysis,'' (Sept. 17, 2003), section E (Available at:
www.whitehouse.gov/omb/memoranda/m03-21.html).
---------------------------------------------------------------------------
I. Consumer Subgroup Analysis
In analyzing the potential impact of new or amended energy
conservation standards on consumers, DOE evaluates the impact on
identifiable subgroups of consumers that may be disproportionately
affected by a new or amended national standard. The purpose of a
subgroup analysis is to determine the extent of any such
disproportional impacts. DOE evaluates impacts on particular subgroups
of consumers by analyzing the LCC impacts and PBP for those particular
consumers from alternative standard levels. For this NOPR, DOE analyzed
the impacts of the considered standard levels on small business
consumers. DOE used the LCC and PBP spreadsheet model to estimate the
impacts of the considered efficiency levels on this subgroup. Chapter
11 in the NOPR TSD describes the consumer subgroup analysis.
J. Manufacturer Impact Analysis
1. Overview
DOE performed an MIA to estimate the financial impacts of energy
conservation standards on manufacturers of compressors and to estimate
the potential impacts of such standards on employment and manufacturing
capacity.
The MIA has both quantitative and qualitative aspects and includes
analyses of forecasted industry cash flows, the industry net present
value (INPV), investments in research and development (R&D) and
manufacturing capital, and domestic manufacturing employment.
Additionally, the MIA seeks to determine how new energy conservation
standards might affect manufacturing capacity and industry competition,
as well as how standards contribute to the overall regulatory burden
facing manufacturers. Finally, the MIA serves to identify any
disproportionate impacts on manufacturer subgroups, including small
business manufacturers.
The quantitative part of the MIA primarily relies on the Government
Regulatory Impact Model (GRIM), an industry cash flow model with inputs
specific to this rulemaking. The key GRIM inputs include data on the
industry cost structure, unit production costs, equipment shipments,
manufacturer markups, and investments in R&D and manufacturing capital
required to produce compliant equipment. The key GRIM output is the
INPV, which is the sum of industry annual cash flows over the analysis
period, discounted using the industry-weighted average cost of capital.
The model uses standard accounting principles to estimate the impacts
of new energy conservation standards on a given industry by comparing
changes in INPV between a base case and the various standards cases
(TSLs). To capture the uncertainty relating to manufacturer pricing
strategy following amended standards, the GRIM estimates a range of
possible impacts under different markup scenarios.
The qualitative part of the MIA addresses manufacturer
characteristics and market trends. Specifically, the MIA considers such
factors as a potential standard's impact on manufacturing capacity, R&D
capacity, competition within the industry, cumulative impact of other
regulations, and impacts on manufacturer subgroups. The complete MIA is
outlined in chapter 12 of the NOPR TSD.
DOE conducted the MIA for this rulemaking in three-phases. In Phase
1 of the MIA, DOE prepared a profile of the compressor industry using
publicly available information, such as Securities and Exchange
Commission (SEC) 10-K reports,\91\ market research tools (e.g., Hoovers
\92\), corporate annual reports, the U.S. Census Bureau's 2013 Annual
Survey of Manufacturers (ASM),\93\ and industry trade association
membership directories (e.g., CAGI), as well as information obtained
through DOE's engineering analysis and market and technology assessment
prepared for this rulemaking.
---------------------------------------------------------------------------
\91\ U.S. Securities and Exchange Commission, Annual 10-K
Reports (Various Years) (Available at: www.sec.gov).
\92\ Hoovers Inc., Company Profiles, Various Companies
(Available at: www.hoovers.com/).
\93\ U.S. Census Bureau, Annual Survey of Manufacturers: General
Statistics: Statistics for Industry Groups and Industries (2013)
(Available at: http://www.census.gov/manufacturing/asm/index.html).
---------------------------------------------------------------------------
In Phase 2 of the MIA, DOE prepared a framework industry cash-flow
analysis to quantify the potential impacts of new energy conservation
standards on manufacturers. In general, energy conservation standards
can affect manufacturer cash flow in three distinct ways: (1) Creating
a need for increased investment; (2) raising production costs per unit;
and (3) altering revenue due to higher per-unit prices and changes in
sales volumes. To quantify these impacts, DOE uses the GRIM to estimate
a series of annual cash flows starting with the announcement of the
standard and extending over a 30-year period following the compliance
date of the standard. Inputs to the GRIM include annual expected
revenues, costs of sales, SG&A expenses, R&D expenses, taxes, and
capital expenditures.
In addition, DOE developed interview guides to distribute to
manufacturers of compressors in order to develop and refine key GRIM
inputs, including product and capital conversion costs, and to gather
additional information on the anticipated effects of energy
conservation standards on revenues, direct employment, capital assets,
industry competitiveness, and subgroup impacts.
In Phase 3 of the MIA, DOE conducted structured, detailed
interviews with manufacturers. During these interviews, DOE discussed
engineering, manufacturing, procurement, and financial topics to
validate assumptions used in the GRIM and to identify key issues or
concerns. A copy of the manufacturer interview guide is provided in
appendix 12B of NOPR TSD. Additionally, see section IV.J.3 for a
description of the key issues raised by manufacturers during the
interviews. As part of Phase 3, DOE also evaluated subgroups of
manufacturers that may be disproportionately impacted by amended
standards or that may not be accurately represented by the average cost
assumptions used to develop the industry cash flow analysis. Such
manufacturer subgroups may include small business manufacturers, niche
players, and/or manufacturers exhibiting a cost structure that largely
differs from the industry average. DOE identified one compressor
manufacturer subgroup for which average cost assumptions may not hold:
small businesses. The small business subgroup is discussed in section
VII.B, ``Review under the Regulatory Flexibility Act,'' and in chapter
12 of the NOPR TSD.
2. GRIM Analysis
As discussed previously, DOE uses the GRIM to quantify the changes
in cash flow that result in a higher or lower industry value due to
energy conservation standards. The GRIM analysis uses a discounted
cash-flow methodology that incorporates manufacturer costs, markups,
shipments, and industry financial information as inputs. The GRIM
models changes in MPCs, distributions of shipments, investments, and
manufacturer margins that could result from new energy conservation
standards. The GRIM spreadsheet uses the inputs to arrive at a series
of annual cash flows, beginning in 2015 (the base year of the analysis)
and continuing to 2051. DOE calculated INPVs by
[[Page 31728]]
summing the stream of annual discounted cash flows during this period.
DOE applied a discount rate of 8.7 percent, derived from industry
financials and then modified according to feedback received during
manufacturer interviews.
In the GRIM, DOE calculates cash flows using standard accounting
principles and compares changes in INPV between the base case and each
TSL (the standards case). The difference in INPV between the base case
and a standards case represents the financial impact of the energy
conservation standard on manufacturers. Additional details about the
GRIM, the discount rate, and other financial parameters can be found in
chapter 12 of the NOPR TSD.
a. GRIM Key Inputs
i. Manufacturer Production Costs
Manufacturer production costs (MPCs) are those incurred by the
manufacturer to produce a covered compressor. The cost includes raw
materials and purchased components, production labor, factory overhead,
and production equipment depreciation. Changes in the MPCs of the
analyzed equipment can affect revenues, gross margins, and industry
cash flows. In the MIA, DOE used the MPCs for each efficiency level
calculated in the engineering analysis, as described in section IV.C.7
and further detailed in chapter 5 of the NOPR TSD.
ii. Manufacturer Markups
Manufacturer selling prices (MSPs) include direct manufacturing
production costs and all non-production costs (i.e., SG&A, R&D, and
interest), along with profit. To calculate the MSPs in the GRIM, DOE
applied non-production cost markups to the MPCs estimated in the
engineering analysis for each equipment class and efficiency level. For
the MIA, DOE modeled a baseline markup for the compressor industry in
both the base case and the standards case.
With a baseline markup, DOE applied a uniform ``gross margin
percentage'' for each equipment class, across all efficiency levels.
This assumes that manufacturers would be able to maintain the same
amount of profit as a percentage of revenues at all efficiency levels
within an equipment class. As production costs increase with
efficiency, the absolute dollar markup will increase as well. As
discussed in section IV.C.7, DOE estimated the average non-production
cost baseline markup--which includes SG&A expenses, R&D expenses,
interest, and profit--to be 1.35 for lubricated rotary compressors,
1.40 for lubricant-free rotary compressors, and 1.26 for reciprocating
compressors.
Jenny commented that markups data only based on publicly available
information may not be accurate and may not contain key pricing and
costing information. (Jenny, No. 0005 at p. 4) DOE agrees. To develop
its estimated baseline markups, DOE used both publicly available
financial information as well as comments and data received directly
from manufacturers during confidential interviews.
iii. Shipments Forecast
The GRIM estimates manufacturer revenues based on total unit
shipment forecasts and the distribution of shipments by equipment
class. Changes in sales volumes and efficiency mix over time can
significantly affect manufacturer finances. For this analysis, the GRIM
uses the NIA's annual shipment forecasts derived from the shipments
analysis from 2015 (the base year) to 2051 (the end year of the
analysis period). See chapter 9 of the NOPR TSD for additional details.
iv. Product and Capital Conversion Costs
Energy conservation standards can cause manufacturers to incur
conversion costs to make necessary changes to their production
facilities and bring equipment designs into compliance. DOE evaluated
the level of conversion-related expenditures that would be needed to
comply with each considered efficiency level in each equipment class.
For the purpose of the MIA, DOE classified these conversion costs into
two major groups: (1) Product conversion costs; and (2) capital
conversion costs. Product conversion costs are investments in research,
development, testing, and marketing, focused on making equipment
designs comply with the energy conservation standard. Capital
conversion costs are investments in property, plant, and equipment to
adapt or change existing production facilities so that compliant
equipment designs can be fabricated and assembled. Ultimately, for the
MIA, DOE modeled two standards-case conversion cost scenarios to
represent uncertainty regarding the potential impacts on manufacturers
following the implementation of energy conservation standards. These
scenarios are discussed further in section IV.J.2.b.
v. Financial Parameters
DOE estimated eight key financial parameters for use in the GRIM.
Table IV.38 describes these parameters and summarizes DOE's estimated
values. DOE notes that each estimate represents an industry average
value.
Jenny commented that ``deriving baseline information from publicly
traded companies is problematic at best . . . a very high percentage of
compressors sold in the US come from small, privately held companies.''
(Jenny, No. 0005 at p. 5)
To estimate the financial parameters outlined in Table IV.38, DOE
first created estimates based on publicly available financial
information for manufacturers of compressors. DOE then revised its
initial estimates based on discussions with both private and public
compressor companies. Table IV.38 presents the financial parameters
incorporated into the GRIM, which reflect data from both public and
private compressor manufacturing companies.
Table IV.38--Industry Average Financial Parameters for Rotary and Reciprocating Compressor Manufacturers
----------------------------------------------------------------------------------------------------------------
Estimated
Financial parameter Definition industry average
value %
----------------------------------------------------------------------------------------------------------------
Income Tax Rate.............................................. Corporate effective income tax 25.0
paid (percentage of earnings
before taxes, EBT).
Discount Rate................................................ Weighted average cost of 8.7
capital (inflation-adjusted
weighted average of corporate
cost of debt and return on
equity).
Working Capital.............................................. Current assets less current 17.3
liabilities (percentage of
revenues).
Net Property, Plant & Equipment.............................. Fixed assets, or long-lived 11.4
assets, including building,
machinery, and equipment less
accumulated depreciation
(percentage of revenues).
SG&A......................................................... Selling, general, and 17.2
administrative expenses
(percentage of revenues).
R&D.......................................................... Research and development 2.1
expenses (percentage of
revenues).
Depreciation................................................. Amortization of fixed assets 3.0
(percentage of revenues).
[[Page 31729]]
Capital Expenditures......................................... Outlay of cash to acquire or 3.2
improve capital assets
(percentage of revenues, not
including acquisition or sale
of business units).
----------------------------------------------------------------------------------------------------------------
DOE requests comment on its estimates of average industry financial
parameters. This is identified as Issue 46 in section VIII.E, ``Issues
on Which DOE Seeks Comment.''
b. GRIM Scenarios
i. Conversion Cost Scenarios
As mentioned previously, DOE modeled two standards-case conversion
cost scenarios to represent uncertainty regarding the potential impacts
on manufacturers following the implementation of energy conservation
standards: (1) A low conversion cost scenario; and (2) a high
conversion cost scenario.
Specifically, the two scenarios explore uncertainty in conversion
cost, as it relates to the draft EU minimum energy efficiency standards
for compressors. During confidential interviews, multiple manufactures
indicated that they sell similar equipment in the U.S. and the EU. They
also indicated that if the EU adopted the draft standard for
compressors, the efficiency of some equipment sold in the U.S. would be
improved by windfall. As such, if the EU adopts its draft standard,
which would be phased in from 2018 to 2020,\94\ a significant amount of
globally marketed equipment would already exhibit improved efficiency,
regardless of a DOE standard. However, because the EU standard is
currently in draft stage, and is not yet adopted, DOE chose to use a
scenario analysis to evaluate its potential impacts on conversion cost.
---------------------------------------------------------------------------
\94\ See Draft EU Compressors Regulation, Article 3 at p. 4,
available at: http://www.regulations.gov/#!documentDetail;D=EERE-
2013-BT-STD-0040-0031.
---------------------------------------------------------------------------
DOE notes that conversion costs only vary between the scenarios for
lubricated rotary equipment, as lubricant-free rotary equipment is not
proposed for coverage in the EU (but may be evaluated for future
coverage--see section IV.A.2.b), and DOE is unaware of any
reciprocating compressor models sold in both the EU and the United
States.
The low conversion cost scenario assumes that manufacturers active
in the EU market will not face additional product conversion costs to
adapt to a U.S. standard that is at or below the draft EU level (EL 3
and TSL 3). If the U.S. standard is above the draft EU level, these
manufacturers would still incur full redesign costs. In the high
conversion cost scenario, all manufacturers face full product
conversion costs, regardless of an EU regulation. DOE notes that
Manufacturers that are not active in the EU market will face the same
conversion costs, regardless of the scenario.
To evaluate the magnitude of each product and capital conversion
cost scenario, DOE relied on cost estimates provided by representative
manufacturers as well as estimates and appraisals provided by
consultants familiar with compressor and general industrial
manufacturing.
DOE first determined conversion costs for the high scenario. To
find industry-wide conversion costs for each equipment class, DOE first
estimated the average cost per manufacturer to redesign all covered
equipment in its portfolio; this corresponds to the conversion costs
needed to reach the max-tech efficiency level. For each equipment
class, DOE then multiplied the per-manufacturer conversion costs by the
number of manufacturers active in the equipment class with a market
share greater than three percent. DOE believes its per-manufacturer
conversion cost estimates were sufficiently conservative such that this
method yields an estimate of total industry conversion costs to reach
the max-tech efficiency level for each equipment class.
Next, DOE scaled the max-tech conversion costs down to each
efficiency level considered in this NOPR. To do this, DOE multiplied
the max-tech conversion costs by the percentage of models in each
equipment class that fail at each efficiency level. For rotary
equipment classes, DOE estimated the percentage of models failing at
each efficiency level using the CAGI database.
For reciprocating equipment classes, no product data was available
to help estimate the percentage of models failing at each efficiency
level. In the absence of direct data, failure rates for rotary
compressor equipment were used as a proxy. DOE selected this approach
as efficiency levels for reciprocating and rotary compressors were
established using similar methods, and each efficiency level represents
the same relative efficiency, with respect to baseline and max-tech (as
discussed in section IV.C.5). Specifically, for all equipment classes,
DOE established efficiency levels at baseline (EL 0), max-tech (EL 6),
and a d-value of zero (EL 3). DOE also established two intermediary
efficiency levels between the baseline and a d-value of zero (ELs 1 and
EL 2), and two efficiency levels between the d-value of zero level and
max-tech (ELs 4 and 5). Furthermore, DOE believes that rotary and
reciprocating equipment may have similar distributions of efficiency,
with respect to baseline and max-tech, as indicated by graphical data
presented in the Lot 31 study.\95\
---------------------------------------------------------------------------
\95\ See Lot 31 Study, figures 1-1 through 1-3 at pp. 26-28
available at: http://www.regulations.gov/#!documentDetail;D=EERE-
2013-BT-STD-0040-0031.
---------------------------------------------------------------------------
DOE requests comment on the use of failure rates for rotary
compressor equipment as a proxy for reciprocating equipment failure
rates. This is identified as Issue 47 in section VIII.E, ``Issues on
Which DOE Seeks Comment.''
To estimate conversion costs for the low scenario, DOE reduced the
lubricated rotary product conversion costs by 31.25-percent at each
efficiency level at or below the draft EU level. The value of 31.25-
percent represents DOE's estimate of the percentage of U.S. lubricated
rotary models that are offered for sale in the EU and may be redesigned
to meet the draft EU level.
Table IV.39 and Table IV.40 present the resulting product and
capital conversion costs at each efficiency level, for three major
groupings of equipment classes. Due to commonality in design and
components, DOE is presenting the conversion costs for the following
equipment classes in aggregate: (1) Rotary, lubricated, fixed-speed and
variable-speed, air and water cooled; (2) rotary, lubricant-free, VSD,
fixed-speed and variable-speed, air and water cooled; and (3)
reciprocating, 1- and 3-
[[Page 31730]]
phase. Complete results by equipment class, as well as details on the
calculation of industry aggregate product and capital conversion costs
are found in chapter 12 of the NOPR TSD. A comparison of industry
financial impacts under the two conversion cost scenarios is presented
in section V.B.2.a of this document.
Table IV.39--Aggregate Industry Product Conversion Cost, Excluding Compliance and Testing Costs,** at Each
Efficiency Level
[In $Millions]
----------------------------------------------------------------------------------------------------------------
All values in millions of
dollars Scenario EL 1 EL 2 EL 3 EL 4 EL 5 EL 6
----------------------------------------------------------------------------------------------------------------
RP_FS_L_AC................... Low............ 16 57 144 269 333 424
RP_VS_L_AC...................
RP_FS_L_WC................... High........... 24 84 210 269 333 424
RP_VS_L_WC...................
----------------------------------------------------------------------------------------------------------------
RP_FS_LF_AC.................. Not Applicable. 10 27 59 75 92 112
RP_VS_LF_AC..................
RP_FS_LF_WC..................
RP_VS_LF_WC..................
----------------------------------------------------------------------------------------------------------------
R3_FS_L_XX................... Not Applicable. 2 5 13 17 21 27
R1_FS_L_XX...................
----------------------------------------------------------------------------------------------------------------
* Due to commonality in design and components, DOE is presenting conversion costs in three aggregated equipment
class groups. Complete results by equipment class are available in chapter 12 of the NOPR TSD.
** Note that compliance and testing cost estimates are presented separately, later in this section.
Table IV.40--Aggregate Industry Capital Conversion Cost at Each Efficiency Level
----------------------------------------------------------------------------------------------------------------
All values in millions of dollars EL 1 EL 2 EL 3 EL 4 EL 5 EL 6
----------------------------------------------------------------------------------------------------------------
RP_FS_L_AC.................................... 8 29 73 92 113 143
RP_VS_L_AC
RP_FS_L_WC
RP_VS_L_WC
----------------------------------------------------------------------------------------------------------------
Rotary, Non-Lubricated, FS & VSD, AC & WC*.... 3 9 20 26 32 38
----------------------------------------------------------------------------------------------------------------
RP_FS_LF_AC................................... 1 3 8 10 12 16
RP_VS_LF_AC
RP_FS_LF_WC
RP_VS_LF_WC
----------------------------------------------------------------------------------------------------------------
* Due to commonality in design and components, DOE is presenting conversion costs in three aggregated equipment
class groups. Complete results by equipment class are available in chapter 12 of the NOPR TSD.
DOE also estimated the magnitude of the aggregate industry
compliance testing costs needed to conform to new energy conservation
standards. Although compliance testing costs are a subset of product
conversion costs, DOE estimated these costs separately. DOE pursued
this approach because no energy conservation standards currently exist
for compressors; as such, all basic models \96\ will be required to be
tested and certified to comply with new energy conservation standards
regardless of the level of such a standard. As a result, the industry-
wide magnitude of these compliance testing costs will be constant,
regardless of the selected standard level.
---------------------------------------------------------------------------
\96\ In the test procedure NOPR, DOE proposes to define the term
``basic model'' as ``all units of a class of compressors
manufactured by one manufacturer, having the same primary energy
source, the same compressor motor nominal horsepower, and
essentially identical electrical, physical, and functional (or
pneumatic) characteristics that affect energy consumption and energy
efficiency.''
---------------------------------------------------------------------------
DOE notes that new energy conservation standards will require every
model offered for sale to be tested according to the sampling plan
proposed in the test procedure NOPR. This proposed sampling plan
specifies that a minimum of two units must be tested to certify a basic
model as compliant.
DOE estimated the industry-wide magnitude of compliance testing by
multiplying the estimated number of models currently in each equipment
class by the cost to test each model, and doubling this value to
account for the minimum sample size of two units per basic model. DOE
estimated the total number of rotary models in the industry by scaling
the model counts in the CAGI database by CAGI's estimated market share.
The number of reciprocating models was estimated using data collected
from manufacturer Web sites. DOE estimated the cost to test each model
to the method proposed in the test procedure NOPR from discussions with
third-party compressor test labs as well as information gathered during
confidential manufacturer interviews. Table IV.41 presents DOE's
estimates of aggregate industry compliance testing costs for each
equipment class. Complete details on the calculation of aggregate
industry compliance testing costs are found in chapter 12 of the NOPR
TSD.
Table IV.41--Aggregate Industry Compliance Testing Cost
------------------------------------------------------------------------
Aggregate
industry
Equipment class compliance
testing cost
($Millions)
------------------------------------------------------------------------
RP_FS_L_AC.............................................. 4.72
RP_VS_L_AC.............................................. 2.48
RP_FS_L_WC.............................................. 0.95
RP_VS_L_WC.............................................. 0.50
RP_FS_LF_AC............................................. 2.16
[[Page 31731]]
RP_VS_LF_AC............................................. 1.34
RP_FS_LF_WC............................................. 0.46
RP_VS_LF_WC............................................. 0.24
R1_FS_L_XX.............................................. 5.57
R3_FS_L_XX.............................................. 25.1
------------------------------------------------------------------------
In general, DOE assumes that all conversion-related investments
occur between the year of publication of the final rule and the year by
which manufacturers must comply with the standard.
DOE requests feedback on its conversion cost methodology, including
quantitative estimates and qualitative descriptions of the capital and
product conversion costs manufacturers would incur in order to comply
with amended energy conservation standards. This is identified as Issue
48 in section VIII.E, ``Issues on Which DOE Seeks Comment.''
3. Manufacturer Interviews
As part of the MIA, DOE discussed potential impacts of standards
with nine compressor manufacturers. The interviewed manufacturers
account for approximately 70 percent of the domestic rotary compressor
market and approximately 20 percent of the domestic reciprocating
compressor market. In interviews, DOE asked manufacturers to describe
their major concerns about this rulemaking. This section highlights
manufacturer statements that helped shaped DOE's understanding of the
potential impacts of an energy conservation standard on the industry.
a. Conversion Requirements
Manufacturers raised concerns over potentially significant
conversion costs, particularly at higher efficiency levels. Several
manufacturers of rotary equipment indicated that if U.S. standards
exceed the levels proposed in the draft EU Lot 31 compressors
standards, adequate capital may not be available to fund the redesigns
and manufacturing equipment needed to maintain their current product
portfolios. At higher efficiency levels, namely those that remove more
than 75-percent of models from the market, many indicated they would
consider closing manufacturing facilities rather than make the
investments necessary to comply with such efficiency standards.
b. Engineering Constraints and Development Cycle Times
The primary efficiency-improving technology option discussed in
this NOPR is compressor package redesign. A compressor package redesign
relies on the expertise of many highly trained engineers to redesign a
compressor to higher efficiency levels, while still meeting other
performance and reliability criteria. Many manufacturers of rotary
equipment expressed concern surrounding insufficient availability of
engineering resources required to redesign a high volume of compressor
packages during a short time period. Manufacturers indicated that most
experienced compressor design engineers are already employed within the
industry, which limits their ability to rapidly expand their research
and development teams if faced with a high volume of required
compressor redesigns. Consequently, manufacturers typically commented
that at standard levels at or above the equivalent of TSL 3, these
engineering constraints could create time delays in complying with new
standards. DOE notes that manufacturers typically discussed this
constraint with respect to a three-year compliance period.
Some manufacturers indicated that a longer compliance period, such
as the five-year compliance period proposed in this document, may ease
their concern over engineering constraints, as their existing
engineering teams would be able to accomplish more redesigns if given
more time. Under business-as-usual conditions most manufacturers
indicated that a typical lubricated rotary compressor redesign would
last between 18 and 24 months. This timeframe is expected to extend if
R&D teams are faced with large numbers of concurrent redesigns.
c. Relationship to the Draft European Union Energy Efficiency Standards
Some manufacturers emphasized the importance of harmonizing U.S.
energy conservation standards with proposed EU standards for
compressors. Some manufacturers have already begun preparations for the
proposed EU standard. These manufacturers stated that harmonized
standards would promote regulatory consistency and would enable them to
better coordinate product redesigns and reduce conversion costs. If
U.S. and EU standards are not harmonized, these manufacturers noted
they would either have to carry a greater number of equipment lines to
comply with efficiency standards in both domestic and European markets,
or sell a single set of high efficiency equipment in both markets. The
former adds complexity and cost. The latter may put the manufacturer at
a competitive disadvantage in the market regulated to a lower
efficiency.
Conversely, some manufacturers expressed concern that the proposed
EU standard levels are too aggressive, and they indicated that such a
level in the U.S. could result in adverse impacts to manufacturers.
d. Unfair Advantages for Replacement Technologies
Many manufacturers of rotary equipment expressed concerns that
energy conservation standards on rotary compressors of 200-hp or
greater may provide unfair advantages to competing technologies such as
dynamic compressors (also known as centrifugal compressors). These
manufacturers contend that both technologies are already competitive
above 200-hp and both offer certain advantages to the end user.
Increased prices resulting from a standard on only rotary equipment
could push more end users to choose dynamic compressors, which would
remain unregulated and unchanged in price. Furthermore, these
manufacturers believe that coverage of only rotary compressors will
unfairly burden them with costs and expenses not seen by their dynamic
compressor competition.
e. Uncertainty of Compliance Cost for Reciprocating Equipment
Some manufacturers of reciprocating equipment indicated that most
reciprocating equipment in the U.S. market are not currently tested or
labeled for efficiency. These manufacturers expressed two concerns
related to this issue: (1) Many manufacturers do not currently know the
efficiency of their equipment, and therefore cannot estimate the impact
of the standard and the cost to their organization; and (2) many
manufacturers do not currently have test facilities and will be
required to either build facilities or utilize third-party test labs,
both of which are new and unfamiliar costs to them.
K. Emissions Analysis
The emissions analysis consists of two components. The first
component estimates the effect of potential energy conservation
standards on power sector and site (where applicable) combustion
emissions of CO2, NOX, SO2, and Hg.
The second component estimates the impacts of potential standards on
emissions of two additional greenhouse gases, CH4 and
N2O, as well as the reductions to emissions of all species
[[Page 31732]]
due to ``upstream'' activities in the fuel production chain. These
upstream activities comprise extraction, processing, and transporting
fuels to the site of combustion. The associated emissions are referred
to as upstream emissions.
The analysis of power sector emissions uses marginal emissions
factors that were derived from data in AEO 2015, as described in
section IV.M. The methodology is described in chapter 13 and chapter 15
of the NOPR TSD.
Combustion emissions of CH4 and N2O are
estimated using emissions intensity factors from the EPA GHG Emissions
Factors Hub.\97\ The FFC upstream emissions are estimated based on the
methodology described in chapter 15 of the NOPR TSD. The upstream
emissions include both emissions from fuel combustion during
extraction, processing, and transportation of fuel, and ``fugitive''
emissions (direct leakage to the atmosphere) of CH4 and
CO2.
---------------------------------------------------------------------------
\97\ Available at: http://www2.epa.gov/climateleadership/center-corporate-climate-leadership-ghg-emission-factors-hub.
---------------------------------------------------------------------------
The emissions intensity factors are expressed in terms of physical
units per megawatt hour (MWh) or million British thermal units (MMBtu)
of site energy savings. Total emissions reductions are estimated using
the energy savings calculated in the national impact analysis.
The AEO 2015 projections incorporate the projected impacts of
existing air quality regulations on emissions. AEO 2015 generally
represents current legislation and environmental regulations, including
recent government actions, for which implementing regulations were
available as of October 31, 2014. DOE's estimation of impacts accounts
for the presence of the emissions control programs discussed in the
following paragraphs.
SO2 emissions from affected electric generating units
(EGUs) are subject to nationwide and regional emissions cap-and-trade
programs. Title IV of the Clean Air Act sets an annual emissions cap on
SO2 for affected EGUs in the 48 contiguous States and the
District of Columbia (DC). (42 U.S.C. 7651 et seq.) SO2
emissions from 28 eastern States and DC were also limited under the
Clean Air Interstate Rule (CAIR). 70 FR 25162 (May 12, 2005). CAIR
created an allowance-based trading program that operates along with the
Title IV program. In 2008, CAIR was remanded to EPA by the U.S. Court
of Appeals for the District of Columbia Circuit, but it remained in
effect.\98\ In 2011, EPA issued a replacement for CAIR, the Cross-State
Air Pollution Rule (CSAPR). 76 FR 48208 (August 8, 2011). On August 21,
2012, the DC Circuit issued a decision to vacate CSAPR,\99\ and the
court ordered EPA to continue administering CAIR. On April 29, 2014,
the U.S. Supreme Court reversed the judgment of the DC Circuit and
remanded the case for further proceedings consistent with the Supreme
Court's opinion.\100\ On October 23, 2014, the DC Circuit lifted the
stay of CSAPR.\101\ Pursuant to this action, CSAPR went into effect
(and CAIR ceased to be in effect) as of January 1, 2015.
---------------------------------------------------------------------------
\98\ See North Carolina v. EPA, 550 F.3d 1176 (D.C. Cir. 2008);
North Carolina v. EPA, 531 F.3d 896 (D.C. Cir. 2008).
\99\ See EME Homer City Generation, LP v. EPA, 696 F.3d 7, 38
(D.C. Cir. 2012), cert. granted, 81 U.S.L.W. 3567, 81 U.S.L.W. 3696,
81 U.S.L.W. 3702 (U.S. June 24, 2013) (No. 12-1182).
\100\ See EPA v. EME Homer City Generation, 134 S.Ct. 1584, 1610
(2014). The Supreme Court held in part that EPA's methodology for
quantifying emissions that must be eliminated in certain States due
to their impacts in other downwind States was based on a
permissible, workable, and equitable interpretation of the Clean Air
Act provision that provides statutory authority for CSAPR.
\101\ See Georgia v. EPA, Order (D.C. Cir. filed October 23,
2014) (No. 11-1302).
---------------------------------------------------------------------------
EIA was not able to incorporate CSAPR into AEO 2015, so it assumes
implementation of CAIR. Although DOE's analysis used emissions factors
that assume that CAIR, not CSAPR, is the regulation in force, the
difference between CAIR and CSAPR is not significant for the purpose of
DOE's analysis of emissions impacts from energy conservation standards.
The attainment of emissions caps is typically flexible among EGUs
and is enforced through the use of emissions allowances and tradable
permits. Under existing EPA regulations, any excess SO2
emissions allowances resulting from the lower electricity demand caused
by the adoption of an efficiency standard could be used to permit
offsetting increases in SO2 emissions by any regulated EGU.
In past rulemakings, DOE recognized that there was uncertainty about
the effects of efficiency standards on SO2 emissions covered
by the existing cap-and-trade system, but it concluded that negligible
reductions in power sector SO2 emissions would occur as a
result of standards.
Beginning in 2016, however, SO2 emissions will fall as a
result of the Mercury and Air Toxics Standards (MATS) for power plants.
77 FR 9304 (Feb. 16, 2012). In the MATS rule, EPA established a
standard for hydrogen chloride as a surrogate for acid gas hazardous
air pollutants (HAP), and also established a standard for
SO2 (a non-HAP acid gas) as an alternative equivalent
surrogate standard for acid gas HAP. The same controls are used to
reduce HAP and non-HAP acid gas; thus, SO2 emissions will be
reduced as a result of the control technologies installed on coal-fired
power plants to comply with the MATS requirements for acid gas. AEO
2015 assumes that, in order to continue operating, coal plants must
have either flue gas desulfurization or dry sorbent injection systems
installed by 2016. Both technologies, which are used to reduce acid gas
emissions, also reduce SO2 emissions. Under the MATS,
emissions will be far below the cap established by CAIR, so it is
unlikely that excess SO2 emissions allowances resulting from
the lower electricity demand would be needed or used to permit
offsetting increases in SO2 emissions by any regulated
EGU.\102\ Therefore, DOE believes that energy conservation standards
will generally reduce SO2 emissions in 2016 and beyond.
---------------------------------------------------------------------------
\102\ DOE notes that the Supreme Court recently remanded EPA's
2012 rule regarding national emission standards for hazardous air
pollutants from certain electric utility steam generating units. See
Michigan v. EPA (Case No. 14-46, 2015). DOE has tentatively
determined that the remand of the MATS rule does not change the
assumptions regarding the impact of energy efficiency standards on
SO2 emissions. Further, while the remand of the MATS rule
may have an impact on the overall amount of mercury emitted by power
plants, it does not change the impact of the energy efficiency
standards on mercury emissions. DOE will continue to monitor
developments related to this case and respond to them as
appropriate.
---------------------------------------------------------------------------
CAIR established a cap on NOX emissions in 28 eastern
States and the District of Columbia.\103\ Energy conservation standards
are expected to have little effect on NOX emissions in those
States covered by CAIR because excess NOX emissions
allowances resulting from the lower electricity demand could be used to
permit offsetting increases in NOX emissions from other
facilities. However, standards would be expected to reduce
NOX emissions in the States not affected by the caps, so DOE
estimated NOX emissions reductions from the standards
considered in this NOPR for these States.
---------------------------------------------------------------------------
\103\ CSAPR also applies to NOX and it supersedes the
regulation of NOX under CAIR. As stated previously, the
current analysis assumes that CAIR, not CSAPR, is the regulation in
force. The difference between CAIR and CSAPR with regard to DOE's
analysis of NOX emissions is slight.
---------------------------------------------------------------------------
The MATS limit mercury emissions from power plants, but they do not
include emissions caps and, as such, DOE's energy conservation
standards would likely reduce Hg emissions. DOE estimated mercury
emissions reduction
[[Page 31733]]
using emissions factors based on AEO 2015, which incorporates the MATS.
L. Monetizing Carbon Dioxide and Other Emissions Impacts
As part of the development of this proposed rule, DOE considered
the estimated monetary benefits from the reduced emissions of
CO2 and NOX that are expected to result from each
of the TSLs considered. In order to make this calculation analogous to
the calculation of the NPV of consumer benefit, DOE considered the
reduced emissions expected to result over the lifetime of equipment
shipped in the forecast period for each TSL. This section summarizes
the basis for the monetary values used for CO2 and
NOX emissions and presents the values considered in this
NOPR.
1. Social Cost of Carbon
The SCC is an estimate of the monetized damages associated with an
incremental increase in carbon emissions in a given year. It is
intended to include (but is not limited to) climate-change-related
changes in net agricultural productivity, human health, property
damages from increased flood risk, and the value of ecosystem services.
Estimates of the SCC are provided in dollars per metric ton of
CO2. A domestic SCC value is meant to reflect the value of
damages in the United States resulting from a unit change in
CO2 emissions, while a global SCC value is meant to reflect
the value of damages worldwide.
Under section 1(b)(6) of Executive Order 12866, ``Regulatory
Planning and Review,'' 58 FR 51735 (Oct. 4, 1993), agencies must, to
the extent permitted by law, ``assess both the costs and the benefits
of the intended regulation and, recognizing that some costs and
benefits are difficult to quantify, propose or adopt a regulation only
upon a reasoned determination that the benefits of the intended
regulation justify its costs.'' The purpose of the SCC estimates
presented here is to allow agencies to incorporate the monetized social
benefits of reducing CO2 emissions into cost-benefit
analyses of regulatory actions. The estimates are presented with an
acknowledgement of the many uncertainties involved and with a clear
understanding that they should be updated over time to reflect
increasing knowledge of the science and economics of climate impacts.
As part of the interagency process that developed these SCC
estimates, technical experts from numerous agencies met on a regular
basis to consider public comments, explore the technical literature in
relevant fields, and discuss key model inputs and assumptions. The main
objective of this process was to develop a range of SCC values using a
defensible set of input assumptions grounded in the existing scientific
and economic literatures. In this way, key uncertainties and model
differences transparently and consistently inform the range of SCC
estimates used in the rulemaking process.
a. Monetizing Carbon Dioxide Emissions
When attempting to assess the incremental economic impacts of
CO2 emissions, the analyst faces a number of challenges. A
report from the National Research Council \104\ points out that any
assessment will suffer from uncertainty, speculation, and lack of
information about: (1) Future emissions of GHGs; (2) the effects of
past and future emissions on the climate system; (3) the impact of
changes in climate on the physical and biological environment; and (4)
the translation of these environmental impacts into economic damages.
As a result, any effort to quantify and monetize the harms associated
with climate change will raise questions of science, economics, and
ethics and should be viewed as provisional.
---------------------------------------------------------------------------
\104\ National Research Council, Hidden Costs of Energy:
Unpriced Consequences of Energy Production and Use, National
Academies Press: Washington, DC (2009).
---------------------------------------------------------------------------
Despite the limits of both quantification and monetization, SCC
estimates can be useful in estimating the social benefits of reducing
CO2 emissions. The agency can estimate the benefits from
reduced (or costs from increased) emissions in any future year by
multiplying the change in emissions in that year by the SCC values
appropriate for that year. The NPV of the benefits can then be
calculated by multiplying each of these future benefits by an
appropriate discount factor and summing across all affected years.
It is important to emphasize that the interagency process is
committed to updating these estimates as the science and economic
understanding of climate change and its impacts on society improves
over time. In the meantime, the interagency group will continue to
explore the issues raised by this analysis and consider public comments
as part of the ongoing interagency process.
b. Development of Social Cost of Carbon Values
In 2009, an interagency process was initiated to offer a
preliminary assessment of how best to quantify the benefits from
reducing carbon dioxide emissions. To ensure consistency in how
benefits are evaluated across Federal agencies, the Administration
sought to develop a transparent and defensible method, specifically
designed for the rulemaking process, to quantify avoided climate change
damages from reduced CO2 emissions. The interagency group
did not undertake any original analysis. Instead, it combined SCC
estimates from the existing literature to use as interim values until a
more comprehensive analysis could be conducted. The outcome of the
preliminary assessment by the interagency group was a set of five
interim values: Global SCC estimates for 2007 (in 2006$) of $55, $33,
$19, $10, and $5 per metric ton of CO2. These interim values
represented the first sustained interagency effort within the U.S.
government to develop an SCC for use in regulatory analysis. The
results of this preliminary effort were presented in several proposed
and final rules.
c. Current Approach and Key Assumptions
After the release of the interim values, the interagency group
reconvened on a regular basis to generate improved SCC estimates.
Specially, the group considered public comments and further explored
the technical literature in relevant fields. The interagency group
relied on three integrated assessment models commonly used to estimate
the SCC: The FUND, DICE, and PAGE models. These models are frequently
cited in the peer-reviewed literature and were used in the last
assessment of the Intergovernmental Panel on Climate Change (IPCC).
Each model was given equal weight in the SCC values that were
developed.
Each model takes a slightly different approach to model how changes
in emissions result in changes in economic damages. A key objective of
the interagency process was to enable a consistent exploration of the
three models, while respecting the different approaches to quantifying
damages taken by the key modelers in the field. An extensive review of
the literature was conducted to select three sets of input parameters
for these models: Climate sensitivity, socio-economic and emissions
trajectories, and discount rates. A probability distribution for
climate sensitivity was specified as an input into all three models. In
addition, the interagency group used a range of scenarios for the
socio-economic parameters and a range of values for the discount rate.
All other model features were left unchanged, relying on the model
developers' best estimates and judgments.
[[Page 31734]]
In 2010, the interagency group selected four sets of SCC values for
use in regulatory analyses. Three sets of values are based on the
average SCC from the three integrated assessment models, at discount
rates of 2.5-, 3-, and 5-percent. The fourth set, which represents the
95th percentile SCC estimate across all three models at a 3-percent
discount rate, was included to represent higher-than-expected impacts
from climate change further out in the tails of the SCC distribution.
The values grow in real terms over time. Additionally, the interagency
group determined that a range of values from 7-percent to 23-percent
should be used to adjust the global SCC to calculate domestic
effects,\105\ although preference is given to consideration of the
global benefits of reducing CO2 emissions. Table IV.42
presents the values in the 2010 interagency group report,\106\ which is
reproduced in appendix 14A of the NOPR TSD.
---------------------------------------------------------------------------
\105\ It is recognized that this calculation for domestic values
is approximate, provisional, and highly speculative. There is no a
priori reason why domestic benefits should be a constant fraction of
net global damages over time.
\106\ Social Cost of Carbon for Regulatory Impact Analysis Under
Executive Order 12866. Interagency Working Group on Social Cost of
Carbon, United States Government (February 2010) (Available at:
www.whitehouse.gov/sites/default/files/omb/inforeg/for-agencies/Social-Cost-of-Carbon-for-RIA.pdf).
Table IV.42--Annual SCC Values From 2010 Interagency Report, 2010-2050
[2007$ per metric ton CO2]
----------------------------------------------------------------------------------------------------------------
Discount rate
---------------------------------------------------------------
5% 3% 2.5% 3%
Year ---------------------------------------------------------------
95th
Average Average Average percentile
----------------------------------------------------------------------------------------------------------------
2010............................................ 4.7 21.4 35.1 64.9
2015............................................ 5.7 23.8 38.4 72.8
2020............................................ 6.8 26.3 41.7 80.7
2025............................................ 8.2 29.6 45.9 90.4
2030............................................ 9.7 32.8 50.0 100.0
2035............................................ 11.2 36.0 54.2 109.7
2040............................................ 12.7 39.2 58.4 119.3
2045............................................ 14.2 42.1 61.7 127.8
2050............................................ 15.7 44.9 65.0 136.2
----------------------------------------------------------------------------------------------------------------
The SCC values used for this document were generated using the most
recent versions of the three integrated assessment models that have
been published in the peer-reviewed literature, as described in the
2013 update from the interagency working group (revised July
2015).\107\ Table IV.43 shows the updated sets of SCC estimates from
the latest interagency update in 5-year increments from 2010 to 2050.
The full set of annual SCC values between 2010 and 2050 is reported in
appendix 14B of the NOPR TSD. The central value that emerges is the
average SCC across models at the 3-percent discount rate. However, for
purposes of capturing the uncertainties involved in regulatory impact
analysis, the interagency group emphasizes the importance of including
all four sets of SCC values.
---------------------------------------------------------------------------
\107\ Technical Update of the Social Cost of Carbon for
Regulatory Impact Analysis Under Executive Order 12866, Interagency
Working Group on Social Cost of Carbon, United States Government
(May 2013; revised July 2015) (Available at: http://www.whitehouse.gov/sites/default/files/omb/inforeg/scc-tsd-final-july-2015.pdf).
Table IV.43--Annual SCC Values From 2013 Interagency Update (Revised July 2015), 2010-2050
[2007$ per metric ton CO2]
----------------------------------------------------------------------------------------------------------------
Discount rate
---------------------------------------------------------------
5% 3% 2.5% 3%
Year ---------------------------------------------------------------
95th
Average Average Average percentile
----------------------------------------------------------------------------------------------------------------
2010............................................ 10 31 50 86
2015............................................ 11 36 56 105
2020............................................ 12 42 62 123
2025............................................ 14 46 68 138
2030............................................ 16 50 73 152
2035............................................ 18 55 78 168
2040............................................ 21 60 84 183
2045............................................ 23 64 89 197
2050............................................ 26 69 95 212
----------------------------------------------------------------------------------------------------------------
It is important to recognize that a number of key uncertainties
remain, and that current SCC estimates should be treated as provisional
and revisable because they will evolve with improved scientific and
economic understanding. The interagency group also recognizes that the
existing models are imperfect and incomplete. The National Research
Council report mentioned previously points out that there is tension
between the goal of producing quantified estimates of the economic
damages from an incremental ton of carbon and the limits of existing
efforts to model these effects. There are a number of analytical
challenges that are being addressed by the research community,
including
[[Page 31735]]
research programs housed in many of the Federal agencies participating
in the interagency process to estimate the SCC. The interagency group
intends to periodically review and reconsider those estimates to
reflect increasing knowledge of the science and economics of climate
impacts, as well as improvements in modeling.\108\
---------------------------------------------------------------------------
\108\ In November 2013, OMB announced a new opportunity for
public comment on the interagency technical support document
underlying the revised SCC estimates. 78 FR 70586. In July 2015 OMB
published a detailed summary and formal response to the many
comments that were received. https://www.whitehouse.gov/blog/2015/07/02/estimating-benefits-carbon-dioxide-emissions-reductions. It
also stated its intention to seek independent expert advice on
opportunities to improve the estimates, including many of the
approaches suggested by commenters.
---------------------------------------------------------------------------
In summary, in considering the potential global benefits resulting
from reduced CO2 emissions, DOE used the values from the
2013 interagency report (revised July 2015), adjusted to 2015$ using
the implicit price deflator for gross domestic product (GDP) from the
Bureau of Economic Analysis. For each of the four sets of SCC cases
specified, the values for emissions in 2015 were $12.2, $40.0, $62.3,
and $117 per metric ton avoided (values expressed in 2015$). DOE
derived values after 2050 based on the trend in 2010-2050 in each of
the four cases.
DOE multiplied the CO2 emissions reduction estimated for
each year by the SCC value for that year in each of the four cases. To
calculate a present value of the stream of monetary values, DOE
discounted the values in each of the four cases using the specific
discount rate that had been used to obtain the SCC values in each case.
2. Social Cost of Other Air Pollutants
As noted previously, DOE has estimated how the considered energy
conservation standards would decrease power sector NOX
emissions in those 22 States not affected by the CAIR.
DOE estimated the monetized value of net NOX emissions
reductions using benefit per ton estimates from the Regulatory Impact
Analysis for the Clean Power Plan Final Rule, published in August 2015
by EPA's Office of Air Quality Planning and Standards.\109\ The report
includes high and low values for NOX (as PM2.5)
for 2020, 2025, and 2030 discounted at 3 percent and 7 percent; these
values are presented in chapter 14 of the NOPR TSD. DOE primarily
relied on the low estimates to be conservative.\110\ DOE assigned
values for 2021-2024 and 2026-2029 using, respectively, the values for
2020 and 2025. DOE assigned values after 2030 using the value for 2030.
DOE developed values specific to the end-use category for compressors
using a method described in appendix 14-C.
---------------------------------------------------------------------------
\109\ Available at: http://www.epa.gov/cleanpowerplan/clean-power-plan-final-rule-regulatory-impact-analysis. See Tables 4A-3,
4A-4, and 4A-5 in the report.
\110\ For the monetized NOX benefits associated with
PM2.5, the related benefits are primarily based on an
estimate of premature mortality derived from the ACS study (Krewski
et al. 2009), which is the lower of the two EPA central tendencies.
Using the lower value is more conservative when making the policy
decision concerning whether a particular standard level is
economically justified. If the benefit-per-ton estimates were based
on the Six Cities study (Lepuele et al. 2012), the values would be
nearly two-and-a-half times larger. (See chapter 14 of the NOPR TSD
for citations for the studies mentioned above.)
---------------------------------------------------------------------------
DOE multiplied the emissions reduction (tons) in each year by the
associated $/ton values, and then discounted each series using discount
rates of 3-percent and 7-percent as appropriate. DOE will continue to
evaluate the monetization of avoided NOX emissions and will
make any appropriate updates of the current analysis for the final
rulemaking.
DOE is evaluating appropriate monetization of avoided
SO2 and Hg emissions in energy conservation standards
rulemakings. DOE has not included monetization of those emissions in
the current analysis.
M. Utility Impact Analysis
The utility impact analysis estimates several effects on the
electric power generation industry that would result from the adoption
of new or amended energy conservation standards. The utility impact
analysis DOE estimates the changes in installed electrical capacity and
generation that would result for each TSL. The analysis is based on
published output from the NEMS, associated with AEO 2015. NEMS produces
the AEO Reference case, as well as a number of side cases that estimate
the economy-wide impacts of changes to energy supply and demand. DOE
uses published side cases that incorporate efficiency-related policies
to estimate the marginal impacts of reduced energy demand on the
utility sector. These marginal factors are estimated based on the
changes to electricity sector generation, installed capacity, fuel
consumption and emissions in the AEO Reference case and various side
cases. Details of the methodology are provided in the appendices to
Chapters 13 and 15 of the NOPR TSD.
The output of this analysis is a set of time-dependent coefficients
that capture the change in electricity generation, primary fuel
consumption, installed capacity and power sector emissions due to a
unit reduction in demand for a given end use. These coefficients are
multiplied by the stream of electricity savings calculated in the NIA
to provide estimates of selected utility impacts of new or amended
energy conservation standards.
N. Employment Impact Analysis
DOE considers employment impacts in the domestic economy as one
factor in selecting a proposed standard. Employment impacts from new or
amended energy conservation standards include both direct and indirect
impacts. Direct employment impacts are any changes in the number of
employees of manufacturers of the equipment subject to standards, their
suppliers, and related service firms. The MIA addresses those impacts.
Indirect employment impacts are changes in national employment that
occur due to the shift in expenditures and capital investment caused by
the purchase and operation of more-efficient appliances. Indirect
employment impacts from standards consist of the net jobs created or
eliminated in the national economy, other than in the manufacturing
sector being regulated, caused by: (1) Reduced spending by end users on
energy; (2) reduced spending on new energy supply by the utility
industry; (3) increased consumer spending on new equipment to which the
new standards apply; and (4) the effects of those three factors
throughout the economy.
One method for assessing the possible effects on the demand for
labor of such shifts in economic activity is to compare sector
employment statistics developed by the Labor Department's Bureau of
Labor Statistics (BLS).\111\ BLS regularly publishes its estimates of
the number of jobs per million dollars of economic activity in
different sectors of the economy, as well as the jobs created elsewhere
in the economy by this same economic activity. Data from BLS indicate
that expenditures in the utility sector generally create fewer jobs
(both directly and indirectly) than expenditures in other sectors of
the economy.\112\ There are many reasons for these differences,
including wage differences and the fact that the utility sector is more
capital-intensive and less
[[Page 31736]]
labor-intensive than other sectors. Energy conservation standards have
the effect of reducing consumer utility bills. Because reduced consumer
expenditures for energy likely lead to increased expenditures in other
sectors of the economy, the general effect of efficiency standards is
to shift economic activity from a less labor-intensive sector (i.e.,
the utility sector) to more labor-intensive sectors (e.g., the retail
and service sectors). Thus, the BLS data suggest that net national
employment may increase due to shifts in economic activity resulting
from energy conservation standards.
---------------------------------------------------------------------------
\111\ Data on industry employment, hours, labor compensation,
value of production, and the implicit price deflator for output for
these industries are available upon request by calling the Division
of Industry Productivity Studies (202-691-5618) or by sending a
request by email to [email protected].
\112\ See Bureau of Economic Analysis, Regional Multipliers: A
User Handbook for the Regional Input-Output Modeling System (RIMS
II), U.S. Department of Commerce (1992).
---------------------------------------------------------------------------
DOE estimated indirect national employment impacts for the standard
levels considered in this NOPR using an input/output model of the U.S.
economy called Impact of Sector Energy Technologies version 3.1.1
(ImSET).\113\ ImSET is a special-purpose version of the ``U.S.
Benchmark National Input-Output'' (I-O) model, which was designed to
estimate the national employment and income effects of energy-saving
technologies. The ImSET software includes a computer-based I-O model
having structural coefficients that characterize economic flows among
187 sectors most relevant to industrial, commercial, and residential
building energy use.
---------------------------------------------------------------------------
\113\ J.M. Roop, M.J. Scott, and R.W. Schultz, ImSET 3.1: Impact
of Sector Energy Technologies, PNNL-18412, Pacific Northwest
National Laboratory (2009) (Available at: www.pnl.gov/main/publications/external/technical_reports/PNNL-18412.pdf).
---------------------------------------------------------------------------
DOE notes that ImSET is not a general equilibrium forecasting
model, and understands the uncertainties involved in projecting
employment impacts, especially changes in the later years of the
analysis. Because ImSET does not incorporate price changes, the
employment effects predicted by ImSET may over-estimate actual job
impacts over the long run for this rule. Therefore, DOE generated
results for near-term timeframes, where these uncertainties are
reduced. For more details on the employment impact analysis, see
chapter 16 of the NOPR TSD.
V. Analytical Results and Conclusions
The following section addresses the results from DOE's analyses
with respect to the considered energy conservation standards for
compressors. It addresses the TSLs examined by DOE, the projected
impacts of each of these levels if adopted as energy conservation
standards for compressors, and the standards levels that DOE is
proposing to adopt in this NOPR. Additional details regarding DOE's
analyses are contained in the NOPR TSD supporting this document.
A. Trial Standard Levels
DOE analyzed the benefits and burdens of six TSLs for compressors.
These TSLs were developed by combining specific efficiency levels for
each of the equipment classes analyzed by DOE. Table V.1 presents the
TSLs and the corresponding efficiency levels for compressors. DOE
presents the results for the TSLs in this document, while the results
for all efficiency levels that DOE analyzed are in the NOPR TSD.
For the rotary lubricated equipment classes, the TSLs increase
directly with the analyzed ELs, from EL 1 through max-tech (EL 6). TSL
3 is of significance for these equipment classes because it represents
a combination of efficiency levels that are equivalent to the draft EU
second tier minimum energy efficiency requirement for rotary lubricated
compressors.\114\
---------------------------------------------------------------------------
\114\ For more information regarding the draft regulation see:
http://www.regulations.gov/#!documentDetail;D=EERE-2013-BT-STD-0040-
0031.
---------------------------------------------------------------------------
For rotary lubricant-free equipment classes, DOE evaluated an
efficiency levels at the baseline for TSLs 1 through 5. This equipment
exhibits low potential for national energy savings, which is
demonstrated at TSL 6, the max-tech TSL for lubricant free equipment.
At this TSL, the equipment contributes 0.1 quad of energy savings,
which is less than 5-percent of the total energy savings for the TSL.
Low potential national energy savings were compounded by significant
burden to manufacturers at this TSL. Complete economic results for
lubricant free equipment are discussed further in section V.B of this
document and the TSD.
At the ``new standards at baseline'' efficiency level for rotary
lubricant-free equipment classes, which is evaluated in TSLs 1 through
5, DOE analyzed the impacts of establishing new standards for this
equipment at the baseline efficiency levels discussed and established
in section IV.C.5 of this document and chapter 5 of the NOPR TSD. In a
``new standards at baseline'' scenario, DOE expects no impacts to the
end user and no product redesign or capital conversion costs to the
manufacturing industry. DOE accounts for the testing and compliance
costs encountered by the manufacturers of this equipment in the MIA.
These costs are reflected in the results presented in section V.B.2 of
this document.
DOE notes that the ``new standards at baseline'' scenario will not
result in national energy savings that can be captured in the NIA. A
standard at baseline will, however, prevent potential new, less
efficient equipment from the entering the market and potentially
increasing future national energy consumption. As discussed previously,
the burdens on the manufacturing industry that result from such a
standard are assessed in the MIA.
For reciprocating equipment classes, the NPV of consumer benefits
was negligible or negative for at least one of the classes \115\ at all
efficiency levels; as such, DOE chose not to evaluate new standards for
this equipment in TSLs 1 through 5, and evaluated new standards only at
TSL 6, the max-tech level. Complete economic results for reciprocating
compressors are discussed further in section V.B, and chapters eight
and ten of the NOPR TSD.
---------------------------------------------------------------------------
\115\ When developing TSLs for reciprocating compressors, DOE
tied the efficiency levels of single-phase and three-phase equipment
classes together to avoid potential unnecessary market impacts.
Single- and three-phase reciprocating equipment are typically
identical, except for their motor; any changes made to one equipment
class will be pass through to the other. A standard established at
disparate ELs would essentially result in economic impacts similar
to the case where both equipment class are tied together at the
higher EL. As such, DOE found it appropriate to tie the efficiency
levels together when developing TSLs.
---------------------------------------------------------------------------
DOE notes that unlike rotary lubricant free, DOE did not evaluate a
``new standards at baseline'' scenario for its reciprocating TSLs. DOE
determined that a standard, regardless of level, would not be
economically justified because of the significant testing and
compliance burdens encountered by the manufacturers of this equipment.
Unlike rotary lubricant free, the overwhelming majority of
reciprocating compressors in the market do not currently make public
representation of efficiency, nor are they currently tested for
efficiency. As such, many manufacturers in the reciprocating industry
expressed concern over the availability and cost of third party test
labs. These concerns were discussed in detail in section IV.J.3.e.
Furthermore, DOE estimated that compared to rotary lubricant free,
there are significantly more reciprocating basic models in the market.
This results in significantly higher estimated industry testing and
compliance cost for reciprocating versus rotary lubricant free; $30.7
versus $2.2 million, respectively. These estimates are detailed in
section IV.J.2.b.i. In addition, whereas DOE is aware of only 1
domestic small manufacturer of rotary lubricant free compressors (out
of seven total), DOE is aware of 13 domestic small manufacturers of
reciprocating compressors (out of 33 total). Assuming
[[Page 31737]]
equal distribution of basic models per manufacturer, this equates to
$0.93 million in testing and compliance costs per reciprocating
manufacturer (including small manufacturers), versus $0.32 million per
rotary lubricant free manufacturer.
When DOE proposes to adopt a new standard for a type or class of
covered product, it must determine the maximum improvement in energy
efficiency or maximum reduction in energy use that is technologically
feasible for such product. (42 U.S.C. 6295(p)(1) and 6316(a)) As
discussed above, TSL 6 reflects that max-tech level for all product
classes.
Table V.1--Trial Standard Level to Efficiency Level Mapping
--------------------------------------------------------------------------------------------------------------------------------------------------------
Equipment class (EC) TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
RP_FS_L_AC.............................................. EL 1 EL 2 EL 3 EL 4 EL 5 EL 6
RP_FS_L_WC.............................................. EL 1 EL 2 EL 3 EL 4 EL 5 EL 6
RP_FS_LF_AC............................................. * EL 0 * EL 0 * EL 0 * EL 0 * EL 0 EL 6
RP_FS_LF_WC............................................. * EL 0 * EL 0 * EL 0 * EL 0 * EL 0 EL 6
RP_VS_L_AC.............................................. EL 1 EL 2 EL 3 EL 4 EL 5 EL 6
RP_VS_L_WC.............................................. EL 1 EL 2 EL 3 EL 4 EL 5 EL 6
RP_VS_LF_AC............................................. * EL 0 * EL 0 * EL 0 * EL 0 * EL 0 EL 6
RP_VS_LF_WC............................................. * EL 0 * EL 0 * EL 0 * EL 0 * EL 0 EL 6
R1_FS_L_XX.............................................. ** EL 0 ** EL 0 ** EL 0 ** EL 0 ** EL 0 EL 6
R3_FS_L_XX.............................................. ** EL 0 ** EL 0 ** EL 0 ** EL 0 ** EL 0 EL 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
* For the RP_FS_LF_AC, RP_FS_LF_WC, RP_VS_LF_AC, and RP_VS_LF_WC equipment classes, EL 0 represents a scenario in which a standard is set at the
baseline efficiency level.
** For R1_FS_L_XX, and R3_FS_L_XX, EL 0 represents a scenario in which no new standards are established.
B. Economic Justification and Energy Savings
1. Economic Impacts on Individual Consumers
DOE analyzed the economic impacts on compressor consumers by
looking at the effects potential standards at each TSL would have on
the LCC and PBP. DOE also examined the impacts of potential standards
on consumer subgroups. These analyses are discussed below.
a. Life-Cycle Cost and Payback Period
In general, higher-efficiency equipment affect consumers in two
ways: (1) Purchase price increases, and (2) annual operating costs
decrease. Inputs used for calculating the LCC and PBP include total
installed costs (i.e., product price plus installation costs), and
operating costs (i.e., annual energy use, energy prices, energy price
trends, repair costs, and maintenance costs). The LCC calculation also
uses equipment lifetime and a discount rate. Chapter 8 of the NOPR TSD
provides detailed information on the LCC and PBP analyses.
Table V.2 through Table V.21 show the LCC and PBP results for the
TSL efficiency levels considered for each compressor equipment class.
In the first of each pair of tables, the simple payback is measured
relative to the baseline equipment (EL 0). In the second table, the
impacts are measured relative to the efficiency distribution in the no-
new-standards case in the compliance year (see section IV.F.8 of this
document). Because some consumers purchase equipment with higher
efficiency in the no-new-standards case, the average savings are less
than the difference between the average LCC of EL 0 and the average LCC
at each TSL. The savings refer only to consumers who are affected by a
standard at a given TSL. Those who already purchase equipment with
efficiency at or above a given TSL are not affected. Consumers for whom
the LCC increases at a given TSL experience a net cost.
Table V.2--Average LCC and PBP Results by Efficiency Level for Rotary, Fixed-Speed, Lubricated, Air-Cooled Compressors
[RP_FS_L_AC]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2015$)
---------------------------------------------------------------- Simple Average
TSL EL First year's Lifetime payback Lifetime
Installed cost operating operating LCC (years) (years)
cost cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
0................... $14,808 $11,280 $88,269 $103,077 .............. 11.8
1................................. 1................... 15,022 11,115 87,028 102,050 1.3 11.8
2................................. 2................... 15,494 10,877 85,202 100,696 1.7 11.8
3................................. 3................... 16,379 10,547 82,673 99,052 2.1 11.8
4................................. 4................... 16,842 10,405 81,582 98,424 2.3 11.8
5................................. 5................... 17,725 10,165 79,732 97,457 2.6 11.8
6................................. 6................... 20,399 9,586 75,253 95,652 3.3 11.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use equipment at that efficiency level. The PBP is measured relative to the
baseline (EL 0) equipment.
[[Page 31738]]
Table V.3--Average LCC Savings Relative to the No-New-Standards Case for Rotary, Fixed-Speed, Lubricated, Air-
Cooled Compressors
[RP_FS_L_AC]
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
-------------------------------
% of
TSL EL consumers Average
that savings *
experience (2015$)
(net cost)
----------------------------------------------------------------------------------------------------------------
1............................................. 1............................... 0 $9,056
2............................................. 2............................... 0 8,902
3............................................. 3............................... 1 9,443
4............................................. 4............................... 3 7,579
5............................................. 5............................... 5 7,748
6............................................. 6............................... 14 7,817
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.
Table V.4--Average LCC and PBP Results by Efficiency Level for Rotary, Fixed-Speed, Lubricated, Water-Cooled Compressors
[RP_FS_L_WC]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2015$)
---------------------------------------------------------------- Simple Average
TSL EL First year's Lifetime payback Lifetime
Installed cost operating cost operating cost LCC (years) (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
0................... $37,958 $29,953 $248,854 $286,813 .............. 12.8
1................................. 1................... 38,504 29,685 246,653 285,157 2.0 12.8
2................................. 2................... 39,658 29,250 243,055 282,713 2.4 12.8
3................................. 3................... 41,699 28,622 237,909 279,608 2.8 12.8
4................................. 4................... 42,752 28,340 235,590 278,342 3.0 12.8
5................................. 5................... 44,716 27,856 231,614 276,330 3.2 12.8
6................................. 6................... 50,482 26,644 221,619 272,101 3.8 12.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use equipment at that efficiency level. The PBP is measured relative to the
baseline (EL 0) equipment.
Table V.5--Average LCC Savings Relative to the No-New-Standards Case for Rotary, Fixed-Speed, Lubricated, Water-
Cooled Compressors
[RP_FS_L_WC]
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
-------------------------------
% of
TSL EL consumers that Average
experience savings *
(net cost) (2015$)
----------------------------------------------------------------------------------------------------------------
1............................................. 1............................... 0 $14,396
2............................................. 2............................... 1 15,011
3............................................. 3............................... 3 16,538
4............................................. 4............................... 5 13,649
5............................................. 5............................... 7 14,397
6............................................. 6............................... 15 15,512
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.
Table V.6--Average LCC and PBP Results by Efficiency Level for Rotary, Fixed-Speed, Lubricant Free, Air-Cooled Compressors
[RP_FS_LF_AC]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2015$)
---------------------------------------------------------------- Simple Average
TSL EL First year's Lifetime payback lifetime
Installed cost operating cost operating cost LCC (years) (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
0................... $88,182 $21,714 $177,081 $265,263 n.a. 12.5
1................................. 0................... 88,182 21,714 177,081 265,263 n.a. 12.5
2................................. 0................... 88,182 21,714 177,081 265,263 n.a. 12.5
3................................. 0................... 88,182 21,714 177,081 265,263 n.a. 12.5
[[Page 31739]]
4................................. 0................... 88,182 21,714 177,081 265,263 n.a. 12.5
5................................. 0................... 88,182 21,714 177,081 265,263 n.a. 12.5
6................................. 6................... 92,064 20,622 168,270 260,334 3.6 12.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use equipment at that efficiency level. The PBP is measured relative to the
baseline (EL 0) equipment.
Table V.7--Average LCC Savings Relative to the No-New-Standards Case for Rotary, Fixed-Speed, Lubricant Free,
Air-cooled compressors
[RP_FS_LF_AC]
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
-------------------------------
% of
TSL EL consumers that Average
experience savings *
(net cost) (2015$)
----------------------------------------------------------------------------------------------------------------
1............................................. 0............................... n.a. n.a.
2............................................. 0............................... n.a. n.a.
3............................................. 0............................... n.a. n.a.
4............................................. 0............................... n.a. n.a.
5............................................. 0............................... n.a. n.a.
6............................................. 6............................... 8 $5,182
----------------------------------------------------------------------------------------------------------------
Note: n.a. indicates that there is no increased in efficiency in the proposed standards case, therefore there
are no LCC Savings or Simple Payback.
* The savings represent the average LCC for affected consumers.
Table V.8--Average LCC and PBP Results by Efficiency Level for Rotary, Fixed-Speed, Lubricant Free, Water-Cooled Compressors
[RP_FS_LF_WC]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2015$)
---------------------------------------------------------------- Simple Average
TSL EL First year's Lifetime payback lifetime
Installed cost operating cost operating cost LCC (years) (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
0................... $103,931 $29,608 $246,435 $350,366 n.a. 13.0
1................................. 0................... 103,931 29,608 246,435 350,366 n.a. 13.0
2................................. 0................... 103,931 29,608 246,435 350,366 n.a. 13.0
3................................. 0................... 103,931 29,608 246,435 350,366 n.a. 13.0
4................................. 0................... 103,931 29,608 246,435 350,366 n.a. 13.0
5................................. 0................... 103,931 29,608 246,435 350,366 n.a. 13.0
6................................. 6................... 109,110 28,324 235,882 344,992 4.0 13.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use equipment at that efficiency level. The PBP is measured relative to the
baseline (EL 0) equipment.
``n.a.'' indicates that there is no increased in efficiency in the proposed standards case, therefore there are no LCC Savings or Simple Payback.
Table V.9--Average LCC Savings Relative to the No-New-Standards Case for Rotary, Fixed-Speed, Lubricant Free,
Water-Cooled Compressors
[RP_FS_LF_WC]
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
-------------------------------
% of
TSL EL consumers that Average
experience savings *
(net cost) (2015$)
----------------------------------------------------------------------------------------------------------------
1............................................. 0............................... n.a. n.a.
2............................................. 0............................... n.a. n.a.
[[Page 31740]]
3............................................. 0............................... n.a. n.a.
4............................................. 0............................... n.a. n.a.
5............................................. 0............................... n.a. n.a.
6............................................. 6............................... 10 $5,686
----------------------------------------------------------------------------------------------------------------
Note: n.a. indicates that there is no increased in efficiency in the proposed standards case, therefore there
are no LCC Savings or Simple Payback.
* The savings represent the average LCC for affected consumers.
Table V.10--Average LCC and PBP Results by Efficiency Level for Rotary, Variable-Speed, Lubricated, Air-Cooled Compressors
[RP_VS_L_AC]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs 2015$
---------------------------------------------------------------- Simple payback Average
TSL EL First year's Lifetime (years) lifetime
Installed cost operating cost operating cost LCC (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
0................... $24,181 $12,574 $97,620 $121,801 .............. 11.8
1................................. 1................... 24,398 12,473 96,845 121,243 2.1 11.8
2................................. 2................... 24,981 12,258 95,215 120,196 2.5 11.8
3................................. 3................... 26,025 11,955 92,920 118,945 3.0 11.8
4................................. 4................... 26,843 11,757 91,415 118,258 3.3 11.8
5................................. 5................... 28,864 11,344 88,263 117,128 3.8 11.8
6................................. 6................... 34,034 10,559 82,265 116,299 4.9 11.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use equipment at that efficiency level. The PBP is measured relative to the
baseline (EL 0) equipment.
``n.a.'' indicates that there is no increased in efficiency in the proposed standards case, therefore there are no LCC Savings or Simple Payback.
Table V.11--Average LCC Savings Relative to the No-New-Standards Case for Rotary, Variable-Speed, Lubricated,
Air-Cooled Compressors
[RP_VS_L_AC]
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
-------------------------------
% of consumers
TSL EL that Average
experience savings *
(net cost) (2015$)
----------------------------------------------------------------------------------------------------------------
1............................................. 1............................... 0 $5,073
2............................................. 2............................... 1 6,061
3............................................. 3............................... 4 6,746
4............................................. 4............................... 8 5,732
5............................................. 5............................... 13 6,408
6............................................. 6............................... 31 5,784
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.
Table V.12--Average LCC and PBP Results by Efficiency Level for Rotary, Variable-Speed, Lubricated, Water-Cooled Compressors
(RPp_VS_L_WC)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs 2015$
---------------------------------------------------------------- Simple payback Average
TSL EL First year's Lifetime (years) lifetime
Installed cost operating cost operating cost LCC (years)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
0 $61,242 $31,544 $259,506 $320,748 .............. 13.0
[[Page 31741]]
1................................................................. 1 61,990 31,281 257,385 319,375 2.8 13.0
2................................................................. 2 64,077 30,717 252,831 316,908 3.4 13.0
3................................................................. 3 67,766 29,945 246,533 314,299 4.1 13.0
4................................................................. 4 69,662 29,605 243,752 313,414 4.3 13.0
5................................................................. 5 74,247 28,872 237,732 311,979 4.9 13.0
6................................................................. 6 86,230 27,315 224,949 311,179 5.9 13.0
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use equipment at that efficiency level. The PBP is measured relative to the baseline (EL 0) equipment.
Table V.13--Average LCC Savings Relative to the No-New-Standards Case for Rotary, Variable-Speed, Lubricated,
Water-Cooled Compressors
[RP_VS_L_WC]
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
-------------------------------
% of consumers
TSL EL that Average
experience savings *
(net cost) (2015$)
----------------------------------------------------------------------------------------------------------------
1............................................. 1............................... 1 $12,017
2............................................. 2............................... 3 13,865
3............................................. 3............................... 8 14,922
4............................................. 4............................... 14 11,996
5............................................. 5............................... 21 12,055
6............................................. 6............................... 40 10,082
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.
Table V.14--Average LCC and PBP Results by Efficiency Level for Rotary, Variable-Speed, Lubricant-Free, Air-Cooled Compressors
[RP_VS_lf_ac]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2015$)
---------------------------------------------------------------- Simple payback Average
TSL EL First year's Lifetime (years) lifetime
Installed cost operating cost operating cost LCC (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
0................... $115,579 $29,125 $238,450 $354,029 n.a. 13.0
1................................. 0................... 115,579 29,125 238,450 354,029 n.a. 13.0
2................................. 0................... 115,579 29,125 238,450 354,029 n.a. 13.0
3................................. 0................... 115,579 29,125 238,450 354,029 n.a. 13.0
4................................. 0................... 115,579 29,125 238,450 354,029 n.a. 13.0
5................................. 0................... 115,579 29,125 238,450 354,029 n.a. 13.0
6................................. 6................... 121,730 27,060 221,747 343,478 3.0 13.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use equipment at that efficiency level. The PBP is measured relative to the
baseline (EL 0) equipment.
`` n.a.'' indicates that there is no increased in efficiency in the proposed standards case, therefore there are no LCC Savings or Simple Payback.
[[Page 31742]]
Table V.15--Average LCC Savings Relative to the No-New-Standards Case for Rotary, Variable-Speed, Lubricant-
Free, Air-Cooled Compressors
[RP_VS_Lf_AC]
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
-------------------------------
% of
TSL EL consumers that Average
experience savings *
(net cost) (2015$)
----------------------------------------------------------------------------------------------------------------
1............................................. 0............................... n.a. n.a.
2............................................. 0............................... n.a. n.a.
3............................................. 0............................... n.a. n.a.
4............................................. 0............................... n.a. n.a.
5............................................. 0............................... n.a. n.a.
6............................................. 6............................... 6 $11,104
----------------------------------------------------------------------------------------------------------------
Note: n.a. indicates that there is no increased in efficiency in the proposed standards case, therefore there
are no LCC Savings or Simple Payback.
* The calculation excludes households with zero LCC savings (no impact).
Table V.16--Average LCC and PBP Results by Efficiency Level for Rotary, Variable-Speed, Lubricant-Free, Water-Cooled Compressors
[RP_VS_LF_WC]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2015$)
---------------------------------------------------------------- Simple payback Average
TSL EL First year's Lifetime (years) lifetime
Installed cost operating cost operating cost LCC (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
0................... $93,159 $19,555 $155,255 $248,414 n.a. 12.2
1................................. 0................... 93,159 19,555 155,255 248,414 n.a. 12.2
2................................. 0................... 93,159 19,555 155,255 248,414 n.a. 12.2
3................................. 0................... 93,159 19,555 155,255 248,414 n.a. 12.2
4................................. 0................... 93,159 19,555 155,255 248,414 n.a. 12.2
5................................. 0................... 93,159 19,555 155,255 248,414 n.a. 12.2
6................................. 6................... 97,524 17,922 142,583 240,107 2.7 12.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use equipment at that efficiency level. The PBP is measured relative to the
baseline (EL 0) equipment.
``n.a.'' indicates that there is no increased in efficiency in the proposed standards case, therefore there are no LCC Savings or Simple Payback.
Table V.17--Average LCC Savings Relative to the No-New-Standards Case for Rotary, Variable-Speed, Lubricant-
Free, Water-Cooled Compressors
[RP_VS_LFf_WC]
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
-------------------------------
% of consumers
TSL EL that Average
experience savings *
(net cost) (2015$)
----------------------------------------------------------------------------------------------------------------
1............................................. 0............................... n.a. n.a.
2............................................. 0............................... n.a. n.a.
3............................................. 0............................... n.a. n.a.
4............................................. 0............................... n.a. n.a.
5............................................. 0............................... n.a. n.a.
6............................................. 6............................... 5 $8,748
----------------------------------------------------------------------------------------------------------------
Note: n.a. indicates that there is no increased in efficiency in the proposed standards case, therefore there
are no LCC Savings or Simple Payback.
* The calculation excludes households with zero LCC savings (no impact).
[[Page 31743]]
Table V.18--Average LCC and PBP Results by Efficiency Level for Reciprocating, Single-Phase, Fixed-Speed, Lubricated Compressors
[R1_FS_L_XX]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2015$)
---------------------------------------------------------------- Simple Average
TSL EL First year's Lifetime payback lifetime
Installed cost operating cost operating cost LCC (years) (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
0................... $1,281 $240 $1,606 $2,888 n.a. 9.5
1................................. 0................... 1,281 240 1,606 2,888 n.a. 9.5
2................................. 0................... 1,281 240 1,606 2,888 n.a. 9.5
3................................. 0................... 1,281 240 1,606 2,888 n.a. 9.5
4................................. 0................... 1,281 240 1,606 2,888 n.a. 9.5
5................................. 0................... 1,281 240 1,606 2,888 n.a. 9.5
6................................. 6................... 2,209 139 946 3,155 9.2 9.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use equipment at that efficiency level. The PBP is measured relative to the
baseline (EL 0) equipment.
``n.a.'' indicates that there is no increased in efficiency in the proposed standards case, therefore there are no LCC Savings or Simple Payback.
Table V.19--Average LCC Savings Relative to the No-New-Standards Case for Reciprocating, Single-Phase, Fixed-
Speed, Lubricated Compressors
[R1_FS_L_XX]
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
-------------------------------
% of
TSL EL consumers that Average
experience savings *
(net cost) (2015$)
----------------------------------------------------------------------------------------------------------------
1............................................. 0............................... n.a. n.a.
2............................................. 0............................... n.a. n.a.
3............................................. 0............................... n.a. n.a.
4............................................. 0............................... n.a. n.a.
5............................................. 0............................... n.a. n.a.
6............................................. 6............................... 78 -$282
----------------------------------------------------------------------------------------------------------------
Note: n.a. indicates that there is no increased in efficiency in the proposed standards case, therefore there
are no LCC Savings or Simple Payback.
* The calculation excludes households with zero LCC savings (no impact).
Table V.20--Average LCC and PBP Results by Efficiency Level for Reciprocating, Three-Phase, Fixed-Speed, Lubricated Compressors
[R3_FS_L_XX]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2015$)
---------------------------------------------------------------- Simple Average
TSL EL First year's Lifetime payback lifetime
Installed cost operating cost operating cost LCC (years) (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
0................... $2,200 $406 $2,997 $5,197 n.a. 9.8
1................................. 0................... 2,200 406 2,997 5,197 n.a. 9.8
2................................. 0................... 2,200 406 2,997 5,197 n.a. 9.8
3................................. 0................... 2,200 406 2,997 5,197 n.a. 9.8
4................................. 0................... 2,200 406 2,997 5,197 n.a. 9.8
5................................. 0................... 2,200 406 2,997 5,197 n.a. 9.8
6................................. 6................... 3,802 274 2,055 5,857 12.1 9.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use equipment at that efficiency level. The PBP is measured relative to the
baseline (EL 0) equipment.
``n.a.'' indicates that there is no increased in efficiency in the proposed standards case, therefore there are no LCC Savings or Simple Payback.
[[Page 31744]]
Table V.21--Average LCC Savings Relative to the No-New-Standards Case for Reciprocating, Three-Phase, Fixed-
Speed, Lubricated Compressors
[RP_FS_L_XX]
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
-------------------------------
% of
TSL EL consumers that Average
experience savings *
(net cost) (2015$)
----------------------------------------------------------------------------------------------------------------
1............................................. 0............................... n.a. n.a.
2............................................. 0............................... n.a. n.a.
3............................................. 0............................... n.a. n.a.
4............................................. 0............................... n.a. n.a.
5............................................. 0............................... n.a. n.a.
6............................................. 6............................... 83 -$693
----------------------------------------------------------------------------------------------------------------
* The calculation excludes households with zero LCC savings (no impact).
* n.a. indicates that there is no increased in efficiency in the proposed standards case, therefore there are no
LCC Savings or Simple Payback.
b. Consumer Subgroup Analysis
In the consumer subgroup analysis, described in section IV.I of
this document, DOE estimated the impact of the considered TSLs on small
businesses that purchase compressors. Table V.22 and Table V.23
compares the average LCC savings and PBP at each efficiency level for
the ``small business'' consumer subgroup, along with the average LCC
savings for the entire sample. In most cases, the average LCC savings
and PBP for the small business consumer subgroup at the considered
efficiency levels are not substantially different from the average for
all consumers. Chapter 11 of the NOPR TSD presents the complete LCC and
PBP results for the subgroups.
Table V.22--Comparison of LCC Savings for the Small Business Subgroup and All Consumers
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average life-cycle cost savings (2015$)
Equipment class Scenario -----------------------------------------------------------------------------
TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
RP_FS_L_AC................................. All Consumers................ $9,056 $8,902 $9,443 $7,579 $7,748 $7,817
Small Businesses............. 7,837 7,577 7,939 6,341 6,421 6,309
RP_FS_L_WC................................. All Consumers................ 14,396 15,011 16,538 13,649 14,397 15,512
Small Businesses............. 12,046 12,498 13,601 11,160 11,677 12,194
RP_FS_LF_AC................................ All Consumers................ n.a. n.a. n.a. n.a. n.a. 5,182
Small Businesses............. n.a. n.a. n.a. n.a. n.a. 4,098
RP_FS_LF_WC................................ All Consumers................ n.a. n.a. n.a. n.a. n.a. 5,686
Small Businesses............. n.a. n.a. n.a. n.a. n.a. 4,386
RP_VS_L_AC................................. All Consumers................ 5,073 6,061 6,746 5,732 6,408 5,784
Small Businesses............. 4,438 5,141 5,591 4,703 5,108 4,181
RP_VS_L_WC................................. All Consumers................ 12,017 13,865 14,922 11,996 12,055 10,082
Small Businesses............. 9,975 11,269 11,717 9,253 8,841 6,130
RP_VS_LF_AC................................ All Consumers................ n.a. n.a. n.a. n.a. n.a. 11,104
Small Businesses............. n.a. n.a. n.a. n.a. n.a. 9,185
RP_VS_LF_WC................................ All Consumers................ n.a. n.a. n.a. n.a. n.a. 8,748
Small Businesses............. n.a. n.a. n.a. n.a. n.a. 7,317
R1_FS_L_XX................................. All Consumers................ n.a. n.a. n.a. n.a. n.a. (282)
Small Businesses............. n.a. n.a. n.a. n.a. n.a. (332)
R3_FS_L_XX................................. All Consumers................ n.a. n.a. n.a. n.a. n.a. (693)
Small Businesses............. n.a. n.a. n.a. n.a. n.a. (790)
--------------------------------------------------------------------------------------------------------------------------------------------------------
* n.a. indicates that there is no increased in efficiency in the proposed standards case, therefore there are no LCC Savings or Simple Payback.
Table V.23--Comparison of Simple Payback Period for the Small Business Subgroup and All Consumers
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average simple payback period (years)
Equipment class Scenario -----------------------------------------------------------------------------
TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
RP_FS_L_AC................................. All Consumers................ 1.3 1.7 2.1 2.3 2.6 3.3
Small Businesses............. 1.3 1.7 2.2 2.4 2.7 3.3
RP_FS_L_WC................................. All Consumers................ 2.0 2.4 2.8 3.0 3.2 3.8
Small Businesses............. 2.0 2.4 2.8 3.0 3.2 3.8
RP_FS_LF_AC................................ All Consumers................ n.a. n.a. n.a. n.a. n.a. 3.6
Small Businesses............. n.a. n.a. n.a. n.a. n.a. 3.6
RP_FS_LF_WC................................ All Consumers................ n.a. n.a. n.a. n.a. n.a. 4.0
Small Businesses............. n.a. n.a. n.a. n.a. n.a. 4.0
RP_VS_L_AC................................. All Consumers................ 2.1 2.5 3.0 3.3 3.8 4.9
[[Page 31745]]
Small Businesses............. 2.1 2.5 3.0 3.3 3.8 4.9
RP_VS_L_WC................................. All Consumers................ 2.8 3.4 4.1 4.3 4.9 5.9
Small Businesses............. 2.9 3.5 4.1 4.4 4.9 5.9
RP_VS_LF_AC................................ All Consumers................ n.a. n.a. n.a. n.a. n.a. 3.0
Small Businesses............. n.a. n.a. n.a. n.a. n.a. 3.0
RP_VS_LF_WC................................ All Consumers................ n.a. n.a. n.a. n.a. n.a. 2.7
Small Businesses............. n.a. n.a. n.a. n.a. n.a. 2.7
R1_FS_L_XX................................. All Consumers................ n.a. n.a. n.a. n.a. n.a. 9.2
Small Businesses............. n.a. n.a. n.a. n.a. n.a. 9.2
R3_FS_L_XX................................. All Consumers................ n.a. n.a. n.a. n.a. n.a. 12.1
Small Businesses............. n.a. n.a. n.a. n.a. n.a. 12.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use equipment at that efficiency level. The PBP is measured relative to the
baseline (EL 0) equipment.
* n.a. indicates that there is no increased in efficiency in the proposed standards case, therefore there are no LCC Savings or Simple Payback.
c. Rebuttable Presumption Payback
As discussed in section III.G.2, EPCA establishes a rebuttable
presumption that an energy conservation standard is economically
justified if the increased purchase cost for equipment that meets the
standard is less than three times the value of the first-year energy
savings resulting from the standard. In calculating a rebuttable
presumption payback period for each of the considered TSLs, DOE used
discrete values, and, as required by EPCA, based the energy use
calculation on the DOE test procedure for compressors. In contrast, the
PBPs presented in section V.B.1.a were calculated using distributions
for input values, with energy use based on the methodology described in
section IV.E.
Notwithstanding this more limited analysis, DOE routinely conducts
a full economic analysis that considers the full range of impacts to
the consumer, manufacturer, Nation, and environment. See 42 U.S.C.
6295(o)(2)(B)(i) and 6316(a). The results of that analysis serve as the
basis for DOE to definitively evaluate the economic justification for a
potential standard level, thereby supporting or rebutting the results
of any preliminary determination of economic justification. Table V.24
shows the rebuttable presumption PBPs for the considered TSLs for the
considered compressors equipment classes.
Table V.24--Rebuttable Presumption Payback Periods by TSL
----------------------------------------------------------------------------------------------------------------
Equipment class TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6
----------------------------------------------------------------------------------------------------------------
RP_FS_L_AC........................ 1.1 1.5 1.9 2.0 2.3 2.8
RP_FS_L_WC........................ 1.7 2.0 2.4 2.5 2.7 3.2
RP_FS_LF_AC....................... n.a. n.a. n.a. n.a. n.a. 3.0
RP_FS_LF_WC....................... n.a. n.a. n.a. n.a. n.a. 3.4
RP_VS_L_AC........................ 2.3 2.8 3.3 3.6 4.2 5.4
RP_VS_L_WC........................ 3.2 3.8 4.5 4.8 5.4 6.5
RP_VS_LF_AC....................... n.a. n.a. n.a. n.a. n.a. 3.3
RP_VS_LF_WC....................... n.a. n.a. n.a. n.a. n.a. 3.0
R1_FS_L_XX........................ n.a. n.a. n.a. n.a. n.a. 7.2
R3_FS_L_XX........................ n.a. n.a. n.a. n.a. n.a. 9.4
----------------------------------------------------------------------------------------------------------------
Note: ``n.a.'' indicates that there is no increased in efficiency in the proposed standards case, therefore
there are no LCC Savings or Simple Payback.
2. Economic Impacts on Manufacturers
As noted previously, DOE performed an MIA to estimate the impact of
energy conservation standards on manufacturers of compressors. The
following section summarizes the expected impacts on manufacturers at
each considered TSL. Chapter 12 of the NOPR TSD explains the analysis
in further detail.
a. Industry Cash Flow Analysis Results
Table V.25 depicts the estimated financial impacts (represented by
changes in industry net present value, or INPV) of amended energy
conservation standards on manufacturers of compressors, as well as the
conversion costs that DOE expects manufacturers would incur for all
equipment classes at each TSL. DOE notes that the GRIM and resulting
industry cash flow analysis considered only rotary equipment classes,
as DOE is proposing not to establish standards for reciprocating
equipment. For further discussion on DOE's proposal for reciprocating
compressors, see section V.C.
As discussed in section IV.J.2, DOE modeled two different
conversion cost scenarios to evaluate the range of cash flow impacts on
the compressor industry: (1) A low conversion cost scenario; and (2) a
high conversion cost scenario.
The low conversion cost scenario assumes that manufacturers active
in the EU market will not face additional product conversion costs to
adapt to a U.S. standard that is at or below the draft EU level (EL 3
and TSL 3). If the U.S. standard is above the draft EU level, these
manufacturers would still incur full redesign costs. In the high
conversion cost scenario, all manufacturers face full product
[[Page 31746]]
conversion costs, regardless of an EU regulation. DOE notes that these
scenarios only impact lubricated rotary equipment, as lubricant-free
rotary equipment is not proposed for coverage in the EU. Each of the
conversion cost scenarios result in a unique set of cash flows and
corresponding industry values at each TSL.
In the following discussion, the INPV results refer to the
difference in industry value between the base case ``business as
usual'' and each standards case resulting from the sum of discounted
cash flows from the base year (2015) through the end of the analysis
period (2051). To provide perspective on the short-run cash flow
impact, DOE includes in the discussion of results a comparison of free
cash flow between the no-standards case and the standards case at each
TSL in the year before amended standards would take effect. This figure
provides an understanding of the magnitude of required conversion costs
relative to cash flows generated by the industry in the base case.
Table V.25 and Table V.26 present INPV results under the low and
high conversion cost scenarios. The low conversion cost scenario
represents the least severe set of impacts while the high conversion
cost scenario represents the most severe sets of impacts. Markups do
not vary with conversion cost scenario.
Table V.25--Manufacturer Impact Analysis Results for Compressors: Low Conversion Cost Scenario
--------------------------------------------------------------------------------------------------------------------------------------------------------
No new Trial standard level *
Units standard -----------------------------------------------------------------------------
case 1 2 3 4 5 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
INPV............................................ 2014$M 497.1 480.4 451.9 385.7 301.8 256.0 105.3
Change in INPV.................................. 2014$M (16.7) (45.2) (111.4) (195.3) (241.1) (391.8)
% (3.4) (9.1) (22.4) (39.3) (48.5) (78.8)
Product Conversion Costs........................ 2014$M 29.2 70.3 157.1 281.5 345.9 548.8
Capital Conversion Costs........................ 2014$M 7.6 28.7 72.9 92.4 112.7 181.3
Total Conversion Costs.......................... 2014$M 36.8 99.1 230.0 373.9 458.6 730.1
Free Cash Flow.................................. 2014$M 33.0 19.9 (3.2) (57.1) (120.7) (158.2) (278.6)
%Change (39.7) (109.7) (273.1) (465.9) (579.7) (944.5)
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Parentheses indicate negative values.
Table V.26--Manufacturer Impact Analysis Results for Compressors: High Conversion Cost Scenario
--------------------------------------------------------------------------------------------------------------------------------------------------------
No new Trial standard level *
Units standard -----------------------------------------------------------------------------
case 1 2 3 4 5 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
INPV............................................ 2014$M 497.1 476.8 439.3 345.8 301.8 256.0 105.3
Change in INPV.................................. 2014$M ........... (20.3) (57.8) (151.3) (195.3) (241.1) (391.8)
% ........... (4.1) (11.6) (30.4) (39.3) (48.5) (78.8)
Product Conversion Costs........................ 2014$M ........... 36.6 96.4 222.7 281.5 345.9 548.8
Capital Conversion Costs........................ 2014$M ........... 7.6 28.7 72.9 92.4 112.7 181.3
Total Conversion Costs.......................... 2014$M ........... 44.3 125.2 295.6 373.9 458.6 730.1
Free Cash Flow.................................. 2014$M 33.0 17.4 (11.8) (86.0) (120.7) (158.2) (278.6)
%Change ........... (47.1) (135.9) (360.7) (465.9) (579.7) (944.5)
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Parentheses indicate negative values.
At TSL 1, DOE estimates the impacts on INPV to range from -$20.3
million to -$16.7 million, or a change of -4.1 to -3.4 percent.
Industry free cash flow is estimated to decrease by $13.1 to $15.5
million, or a change of -47.1 to -39.7 percent compared to the base
case value of $33.0 million in the year before the compliance date
(2021).\116\ DOE estimates industry conversion costs of $36.8 to 44.3
million at TSL 1.
---------------------------------------------------------------------------
\116\ As noted previously, DOE estimates that a Final Rule will
publish in late 2016, and compliance would be required starting in
late 2021. As such, DOE's analysis begins in the first full year of
compliance with new standards, 2022. So for the purposes of DOE's
analysis, 2021 is considered the year before the compliance date.
---------------------------------------------------------------------------
At TSL 2, DOE estimates impacts on INPV to range from -$57.8
million to -$45.2 million, or a change in INPV of -11.6 percent to -9.1
percent. At this level, industry free cash flow is estimated to
decrease by $36.2 to 44.8 million, or a change of -135.9 to -109.7
percent compared to the base case value of $33.0 million in the year
before the compliance date (2021). DOE estimates industry conversion
costs of $99.1 to 125.2 million at TSL 2.
At TSL 3, DOE estimates impacts on INPV to range from -$151.3 to -
$111.4 million, or a change in INPV of -30.4 to -22.4 percent. At this
level, industry free cash flow is estimated to decrease by $90.1 to
119.0 million, or a change of -360.7 to -273.1 percent compared to the
base case value of $33.0 million in the year before the compliance date
(2021). DOE estimates industry conversion costs of $230.0 to 295.6
million at TSL 3.
At TSL 4, DOE estimates impacts on INPV of -$195.3 million, or a
change in INPV of -39.3 percent. At this level, industry free cash flow
is estimated to decrease by $153.7 million, or a change of 465.9
percent compared to the base case value of $33.0 million in the year
before the compliance date (2021). DOE estimates industry conversion
costs of $373.9 million at TSL 4.
At TSL 5, DOE estimates impacts on INPV of -$241.1 million, or a
change in INPV of -48.5 percent. Industry free cash flow is estimated
to decrease by $191.2 million, or a change of -579.7 percent compared
to the base case value of $33.0 million in the year before the
compliance date (2021). DOE estimates industry conversion costs of
$458.6 million at TSL 5.
At TSL 6, DOE estimates impacts on INPV of -$391.8 million, or a
change in INPV of -78.8 percent. Industry free cash flow is estimated
to decrease by $311.6 million, or a change of -944.5 percent compared
to the base case value of $33.0 million in the year before the
compliance date (2021). DOE estimates industry conversion costs of
$730.1 million at TSL 6.
[[Page 31747]]
b. Impacts on Employment
To quantitatively assess the potential impacts of energy
conservation standards on direct employment, DOE used the GRIM to
estimate the domestic labor expenditures and number of direct employees
in the base case and at each TSL from 2015 through 2051. DOE used
statistical data from the U.S. Census Bureau's 2013 Annual Survey of
Manufacturers,\117\ the results of the engineering analysis, and
interviews with manufacturers to determine the inputs necessary to
calculate industry-wide labor expenditures and domestic direct
employment levels. Labor expenditures related to producing the
equipment are a function of the labor intensity of producing the
equipment, the sales volume, and an assumption that wages remain fixed
in real terms over time. The total labor expenditures in each year are
calculated by multiplying the MPCs by the labor percentage of MPCs. DOE
estimates that 50 percent of rotary air compressors are produced
domestically.
---------------------------------------------------------------------------
\117\ Annual Survey of Manufacturers: General Statistics:
Statistics for Industry Groups and Industries, U.S. Census Bureau,
2011. Available at http://www.census.gov/manufacturing/asm/index.html.
---------------------------------------------------------------------------
The total labor expenditures in the GRIM were then converted to
domestic production employment levels by dividing production labor
expenditures by the annual payment per production worker (production
worker hours multiplied by the labor rate found in the U.S. Census
Bureau's 2013 Annual Survey of Manufacturers). The production worker
estimates in this section only cover workers up to the line-supervisor
level who are directly involved in fabricating and assembling equipment
within an OEM facility. Workers performing services that are closely
associated with production operations, such as materials handling tasks
using forklifts, are also included as production labor. DOE's estimates
only account for production workers who manufacture the specific
equipment covered by this rulemaking.
To estimate an upper bound to employment change, DOE assumes all
domestic manufacturers would choose to continue producing equipment in
the U.S. and would not move production to foreign countries. To
estimate a lower bound to employment, DOE considers the case where all
manufacturers choose to relocate production of failing rotary
compressors under 50-hp overseas rather than make the necessary
conversions at domestic production facilities. A complete description
of the assumptions used to generate these upper and lower bounds can be
found in chapter 12 of the NOPR TSD.
In the absence of energy conservation standards, DOE estimates that
the rotary air compressors industry would employ 1,417 domestic
production workers in 2022. Table V.27 shows the range of impacts of
potential energy conservation standards on U.S. production workers of
air compressors.
Table V.27--Potential Changes in the Total Number of Rotary Air Compressor Production Workers in 2022
--------------------------------------------------------------------------------------------------------------------------------------------------------
Trial standard level *
--------------------------------------------------------------------------------------------------------------------------
1 2 3 4 5 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
Potential Changes in Domestic (113) to 14........ (179) to 45........ (265) to 95........ (288) to 121...... (345) to 169...... (477) to 293.
Production Workers in 2022.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Parentheses indicate negative values.
[dagger] No-new-standards case assumes 1,417 domestic production workers in the rotary air compressor industry in 2022.
The upper end of the range estimates the maximum increase in the
estimated number of domestic production workers in the compressor
industry after implementation of amended energy conservation standards.
It assumes manufacturers would continue to produce the same scope of
covered equipment within the United States.
The lower end of the range represents the maximum decrease in the
total number of U.S. production workers that could result from an
energy conservation standard. In interviews, manufacturers stated that
the domestic compressor industry has seen limited migration to foreign
production facilities. While many compressors are currently
manufactured in foreign production facilities, this is more often the
result of the global operations of many manufacturers, rather than off-
shoring of former U.S. production. However, manufacturers that
currently produce in the U.S. have indicated they could potentially
shift some production of some covered equipment to foreign facilities
in order to take advantage of lower labor costs and/or global economies
of scale, if standards erode the economic benefits of manufacturing
domestically. Manufacturers also stated that smaller, lower horsepower
compressors, rather than larger, higher horsepower compressors, are
more likely to shift to foreign production. Given the uncertainty
surrounding potential off-shoring decisions, manufacturers were unable
to pinpoint a specific horsepower cutoff for ``lower horsepower
compressors.'' However, based on qualitative discussions with
manufacturers, DOE estimates that 50 horsepower is an appropriate
cutoff to represent ``lower horsepower compressors.'' As a result, the
lower bound of direct employment impacts assumes manufacturers choose
to relocate production of failing rotary compressors under 50-hp
overseas rather than make the necessary conversions at domestic
production facilities.
This conclusion is independent of any conclusions regarding
indirect employment impacts in the broader U.S. economy, which are
documented in chapter 15 of the TSD
DOE requests comments on the total annual direct employment levels
in the industry. This is identified as Issue 49 in section VIII.E,
``Issues on Which DOE Seeks Comment.''
c. Impacts on Manufacturing Capacity
In interviews, manufacturers of compressors did not indicate that
new energy conservation standards would significantly constrain
manufacturing production capacity. However, as discussed in section
IV.J.3.b, manufacturers expressed concern that they may face a
bottleneck in the redesign process. In other words, manufacturers felt
that if they could complete their redesigns within the compliance
period, then they would not have a problem obtaining sufficient floor
space, equipment, and manufacturing labor to meet the shipment demands
of the market, following an energy conservation standard.
[[Page 31748]]
Manufacturers indicated that most experienced compressor design
engineers are already employed within the industry, which limits their
ability to rapidly expand their research and development teams if faced
with a high volume of required compressor redesigns. Consequently,
manufacturers typically commented that standard levels at or above the
equivalent of TSL 3 could cause engineering constraints which might
create time delays in complying with new standards. DOE notes that
manufacturers typically discussed this constraint with respect to a
three-year compliance period. In this NOPR, however, DOE is proposing a
standard level at TSL 2, in conjunction with a five-year compliance
period.
DOE requests comment on potential bottlenecks in manufacturing
capacity or constraints in engineering resources that could result from
a new standard. This is identified as Issue 50 in section VIII.E,
``Issues on Which DOE Seeks Comment.''
d. Impacts on Subgroups of Manufacturers
As discussed previously, using average cost assumptions to develop
an industry cash flow estimate is not adequate for assessing
differential impacts among subgroups of manufacturers. Small
manufacturers, niche players, or manufacturers exhibiting a cost
structure that differs largely from the industry average could be
affected differently. DOE used the results of the industry
characterization to group manufacturers exhibiting similar
characteristics. Specifically, DOE identified small business
manufacturers as a subgroup for a separate impact analysis.
For the small business subgroup analysis, DOE applied the small
business size standards published by the Small Business Administration
(SBA) to determine whether a company is considered a small business.
(65 FR 30840, 30849 (May 15, 2000), as amended at 65 FR 53533, 53544
(September 5, 2000), and codified at 13 CFR part 121.) To be
categorized as a small business manufacturer of compressors under North
American Industry Classification System (NAICS) code 333912, ``Air and
Gas Compressor Manufacturing,'' a compressor manufacturer and its
affiliates may employ a maximum of 500 employees. The 500-employee
threshold includes all employees in a business's parent company and any
other subsidiaries. Based on this classification, DOE identified three
manufacturers of rotary air compressors and thirteen manufacturers of
reciprocating equipment that qualify as small businesses. The small
business subgroup analysis is discussed in section VII.B of this
document and in chapter 12 of the NOPR TSD.
e. Cumulative Regulatory Burden
While any one regulation may not impose a significant burden on
manufacturers, the combined effects of recent or impending regulations
may have serious consequences for some manufacturers, groups of
manufacturers, or an entire industry. Assessing the impact of a single
regulation may overlook this cumulative regulatory burden. In addition
to energy conservation standards, other regulations can significantly
affect manufacturers' financial operations. Multiple regulations
affecting the same manufacturer can strain profits and lead companies
to abandon product lines or markets with lower expected future returns
than competing equipment. For these reasons, DOE conducts an analysis
of cumulative regulatory burden as part of its rulemakings pertaining
to appliance efficiency.
For the cumulative regulatory burden analysis, DOE looks at
equipment-specific Federal regulations that could affect compressor
manufacturers and with which compliance is required approximately three
years before or after the 2021 compliance date of the standard proposed
in this document. The Department was not able to identify any
additional regulatory burdens that meet these criteria.
DOE requests comments on the cumulative regulatory burden facing
compressor manufacturers. Specifically, DOE seeks input on any
equipment-specific Federal regulations with which compliance is
required within three years of the proposed compliance date for any
final compressor standards, as well as on recommendations on how DOE
may be able to align varying regulations to mitigate cumulative burden.
This is identified as Issue 51 in section VIII.E, ``Issues on Which DOE
Seeks Comment.''
3. National Impact Analysis
a. Significance of Energy Savings
To estimate the energy savings attributable to potential standards
for compressors, DOE compared the energy consumption of those equipment
under the no-new-standards case to their anticipated energy consumption
under each TSL. The savings are measured over the entire lifetime of
equipment purchased in the 30-year period that begins in the year of
anticipated compliance with amended standards (2022-2051). Table V.28
present DOE's projections of the national energy savings for each TSL
considered for compressors. The savings were calculated using the
approach described in section IV.H of this document.
Table V.28--Cumulative National Energy Savings for Compressors Shipped in 2022-2051
----------------------------------------------------------------------------------------------------------------
Trial standard level
-----------------------------------------------------------------------------
1 2 3 4 5 6
----------------------------------------------------------------------------------------------------------------
Primary energy (quads)............ 0.04 0.17 0.47 0.67 1.06 4.37
FFC energy (quads)................ 0.04 0.18 0.49 0.70 1.11 4.57
----------------------------------------------------------------------------------------------------------------
OMB Circular A-4 \118\ requires agencies to present analytical
results, including separate schedules of the monetized benefits and
costs that show the type and timing of benefits and costs. Circular A-4
also directs agencies to consider the variability of key elements
underlying the estimates of benefits and costs. For this rulemaking,
DOE undertook a sensitivity analysis using nine, rather than 30, years
of equipment shipments. The choice of a nine-year period is a proxy for
the timeline in EPCA for the review of certain energy conservation
standards and potential revision of, and compliance with, such revised
standards.\119\ The review timeframe
[[Page 31749]]
established in EPCA is generally not synchronized with the equipment
lifetime, equipment manufacturing cycles, or other factors specific to
compressors. Thus, such results are presented for informational
purposes only and are not indicative of any change in DOE's analytical
methodology. The NES sensitivity analysis results based on a nine-year
analytical period are presented in Table V.29. The impacts are counted
over the lifetime of compressors purchased in 2022-2030.
---------------------------------------------------------------------------
\118\ U.S. Office of Management and Budget, ``Circular A-4:
Regulatory Analysis'' (Sept. 17, 2003) (Available at: http://www.whitehouse.gov/omb/circulars_a004_a-4/).
\119\ Section 325(m) of EPCA requires DOE to review its
standards at least once every 6 years, and requires, for certain
products, a 3-year period after any new standard is promulgated
before compliance is required, except that in no case may any new
standards be required within 6 years of the compliance date of the
previous standards. While adding a 6-year review to the 3-year
compliance period adds up to 9 years, DOE notes that it may
undertake reviews at any time within the 6 year period and that the
3-year compliance date may yield to the 6-year backstop. A 9-year
analysis period may not be appropriate given the variability that
occurs in the timing of standards reviews and the fact that for some
consumer products, the compliance period is 5 years rather than 3
years.
Table V.29--Cumulative National Energy Savings for Compressors; Nine Years of Shipments (2022-2030)
----------------------------------------------------------------------------------------------------------------
Trial standard level
-----------------------------------------------------------------------------
1 2 3 4 5 6
----------------------------------------------------------------------------------------------------------------
Primary energy (quads)............ 0.01 0.04 0.12 0.17 0.27 1.15
FFC energy (quads)................ 0.01 0.05 0.13 0.18 0.28 1.20
----------------------------------------------------------------------------------------------------------------
b. Net Present Value of Consumer Costs and Benefits
DOE estimated the cumulative NPV of the total costs and savings for
consumers that would result from the TSLs considered for compressors.
In accordance with OMB's guidelines on regulatory analysis,\120\ DOE
calculated NPV using both a 7-percent and a 3-percent real discount
rate.
---------------------------------------------------------------------------
\120\ U.S. Office of Management and Budget, ``Circular A-4:
Regulatory Analysis,'' section E, (Sept. 17, 2003) (Available at:
http://www.whitehouse.gov/omb/circulars_a004_a-4/).
---------------------------------------------------------------------------
Table V.30 shows the consumer NPV results for each TSL DOE
considered for compressors. The impacts are counted over the lifetime
of products purchased in 2022-2051.
Table V.30--Cumulative Net Present Value of Consumer Benefits for Compressors Shipped in 2022-2051
----------------------------------------------------------------------------------------------------------------
Trial standard level (billion 2015$)
Discount rate -----------------------------------------------------------------------------
1 2 3 4 1 6
----------------------------------------------------------------------------------------------------------------
3 percent......................... 0.14 0.63 1.62 2.21 3.28 -4.94
7 percent......................... 0.05 0.23 0.56 0.75 1.07 -4.71
----------------------------------------------------------------------------------------------------------------
The NPV results based on the aforementioned 9-year analytical
period are presented in Table V.31. The impacts are counted over the
lifetime of equipment purchased in 2022-2030. As mentioned previously,
such results are presented for informational purposes only and are not
indicative of any change in DOE's analytical methodology or decision
criteria.
Table V.31--Cumulative Net Present Value of Consumer Benefits for Compressors; Nine Years of Shipments (2022-
2030)
----------------------------------------------------------------------------------------------------------------
Trial standard level (billion 2015$)
Discount rate -----------------------------------------------------------------------------
1 2 3 4 5 6
----------------------------------------------------------------------------------------------------------------
3 percent......................... 0.04 0.20 0.50 0.67 0.99 -2.19
7 percent......................... 0.02 0.09 0.23 0.31 0.44 -2.32
----------------------------------------------------------------------------------------------------------------
The above results reflect the use of a default trend to estimate
the change in price for compressors over the analysis period (see
section IV.F.1 of this document). DOE also conducted a sensitivity
analysis that considered one scenario with a lower rate of price
decline than the reference case and one scenario with a higher rate of
price decline than the reference case. The results of these alternative
cases are presented in appendix 10B of the NOPR TSD. In the high-price-
decline case, the NPV of consumer benefits is higher than in the
default case. In the low-price-decline case, the NPV of consumer
benefits is lower than in the default case.
c. Indirect Impacts on Employment
DOE expects energy conservation standards for compressors to reduce
energy bills for consumers of those equipment, with the resulting net
savings being redirected to other forms of economic activity. These
expected shifts in spending and economic activity could affect the
demand for labor. As described in section IV.N of this document, DOE
used an input/output model of the U.S. economy to estimate indirect
employment impacts of the TSLs that DOE considered in this rulemaking.
DOE understands that there are uncertainties involved in projecting
employment impacts, especially changes in the later years of the
analysis. Therefore, DOE generated results for near-term timeframes
(2022-2027), where these uncertainties are reduced.
The results suggest that the proposed standards are likely to have
a negligible impact on the net demand for labor in the economy. The net
change in jobs is so small that it would be imperceptible in national
labor statistics and might be offset by other, unanticipated effects on
[[Page 31750]]
employment. Chapter 16 of the NOPR TSD presents detailed results
regarding anticipated indirect employment impacts.
4. Impact on Utility or Performance of Equipment
Based on testing conducted in support of this proposed rule,
discussed in section IV.C.1.b of this document, DOE has tentatively
concluded that the standards proposed in this NOPR would not reduce the
utility or performance of the compressors under consideration in this
rulemaking. This view is largely based on the fact that compressor
manufacturers currently offer units that meet or exceed the proposed
standards.
5. Impact of Any Lessening of Competition
As discussed in section III.G.1.e, the Attorney General determines
the impact, if any, of any lessening of competition likely to result
from a proposed standard, and transmits such determination in writing
to the Secretary, together with an analysis of the nature and extent of
such impact. To assist the Attorney General in making such
determination, DOE has provided DOJ with copies of this NOPR and the
accompanying TSD for review. DOE will consider DOJ's comments on the
proposed rule in determining whether to proceed to a final rule. DOE
will publish and respond to DOJ's comments in that document. DOE
invites comment from the public regarding the competitive impacts that
are likely to result from this proposed rule. In addition, interested
members of the public may also provide comments separately to DOJ
regarding these potential impacts. See the ADDRESSES section for
information on how to send comments to DOJ.
6. Need of the Nation To Conserve Energy
Enhanced energy efficiency, where economically justified, improves
the Nation's energy security, strengthens the economy, and reduces the
environmental impacts (costs) of energy production. Reduced electricity
demand due to energy conservation standards is also likely to reduce
the cost of maintaining the reliability of the electricity system,
particularly during peak-load periods. As a measure of this reduced
demand, chapter 15 in the NOPR TSD presents the estimated reduction in
generating capacity, relative to the no-new-standards case, for the
TSLs that DOE considered in this rulemaking.
Energy conservation from potential standards for compressors are
expected to yield environmental benefits in the form of reduced
emissions of air pollutants and greenhouse gases. Table V.32 provides
DOE's estimate of cumulative emissions reductions expected to result
from the TSLs considered in this rulemaking. The table includes both
power sector emissions and upstream emissions. The emissions were
calculated using the multipliers discussed in section IV.L. DOE reports
annual emissions reductions for each TSL in chapter 13 of the NOPR TSD.
Table V.32--Cumulative Emissions Reduction for Compressors Shipped in 2022-2051
----------------------------------------------------------------------------------------------------------------
Trial standard level
-----------------------------------------------------------------------------
1 2 3 4 5 6
----------------------------------------------------------------------------------------------------------------
Power Sector Emissions
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)......... 2.1 10.0 27.6 39.1 62.0 256.5
SO2 (thousand tons)............... 1.2 5.7 15.7 22.3 35.3 146.9
NOX (thousand tons)............... 2.3 11.2 30.8 43.7 69.4 286.5
Hg (tons)......................... 0.004 0.02 0.1 0.1 0.1 0.5
CH4 (thousand tons)............... 0.2 0.8 2.3 3.2 5.1 21.2
N2O (thousand tons)............... 0.0 0.1 0.3 0.5 0.7 3.0
----------------------------------------------------------------------------------------------------------------
Upstream Emissions
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)......... 0.1 0.6 1.6 2.3 3.6 14.8
SO2 (thousand tons)............... 0.0 0.1 0.3 0.4 0.7 2.7
NOX (thousand tons)............... 1.7 8.3 22.9 32.5 51.6 211.9
Hg (tons)......................... 0.0 0.0 0.0 0.0 0.0 0.0
CH4 (thousand tons)............... 9.6 45.9 126.7 179.5 285.0 1170.9
N2O (thousand tons)............... 0.0 0.0 0.0 0.0 0.0 0.1
----------------------------------------------------------------------------------------------------------------
Total FFC Emissions
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)......... 2.2 10.6 29.2 41.3 65.6 271.3
SO2 (thousand tons)............... 1.2 5.8 16.0 22.7 36.0 149.6
NOX (thousand tons)............... 4.1 19.5 53.8 76.2 121.0 498.4
Hg (tons)......................... 0.004 0.02 0.1 0.1 0.1 0.6
CH4 (thousand tons)............... 9.8 46.7 128.9 182.7 290.1 1192.1
CH4 (thousand tons CO2eq)*........ 275.0 1308.7 3609.9 5116.0 8123.3 33378.7
N2O (thousand tons)............... 0.0 0.1 0.3 0.5 0.8 3.1
N2O (thousand tons CO2eq)*........ 6.8 32.2 88.8 125.8 199.8 829.3
----------------------------------------------------------------------------------------------------------------
* CO2eq is the quantity of CO2 that would have the same global warming potential (GWP).
As part of the analysis for this proposed rule, DOE estimated
monetary benefits likely to result from the reduced emissions of
CO2 and NOX that DOE estimated for each of the
considered TSLs for compressors. As discussed in section IV.L of this
document, for CO2, DOE used the most recent values for the
SCC developed by an interagency process. The four sets of SCC values
for CO2 emissions reductions in 2015 resulting from that
process (expressed in 2015$) are represented by $12.2/metric ton (the
average value from a distribution that uses a 5-percent discount rate),
$40.0/metric ton (the average value from a distribution that uses a 3-
percent
[[Page 31751]]
discount rate), $62.3/metric ton (the average value from a distribution
that uses a 2.5-percent discount rate), and $117/metric ton (the 95th-
percentile value from a distribution that uses a 3-percent discount
rate). The values for later years are higher due to increasing damages
(public health, economic and environmental) as the projected magnitude
of climate change increases.
Table V.33 presents the global value of CO2 emissions
reductions at each TSL. For each of the four cases, DOE calculated a
present value of the stream of annual values using the same discount
rate as was used in the studies upon which the dollar-per-ton values
are based. DOE calculated domestic values as a range from 7 percent to
23 percent of the global values; these results are presented in chapter
14 of the NOPR TSD.
Table V.33--Estimates of Global Present Value of CO2 Emissions Reduction for Equipment Shipped in 2022-2051
----------------------------------------------------------------------------------------------------------------
SCC case * (million 2015$)
---------------------------------------------------------------
TSL 3% discount
5% discount 3% discount 2.5% discount rate, 95th
rate, average rate, average rate, average percentile
----------------------------------------------------------------------------------------------------------------
Power Sector Emissions
----------------------------------------------------------------------------------------------------------------
1............................................... 13.7 64.5 103.2 196.6
2............................................... 65.1 306.8 491.0 935.4
3............................................... 179.6 846.2 1354.1 2579.7
4............................................... 254.5 1199.1 1919.0 3655.7
5............................................... 404.1 1903.8 3046.7 5803.9
6............................................... 1738.1 8071.6 12866.2 24609.9
----------------------------------------------------------------------------------------------------------------
Upstream Emissions
----------------------------------------------------------------------------------------------------------------
1............................................... 0.8 3.7 5.9 11.3
2............................................... 3.7 17.6 28.3 53.8
3............................................... 10.3 48.6 77.9 148.3
4............................................... 14.5 68.9 110.5 210.2
5............................................... 23.1 109.4 175.4 333.7
6............................................... 98.6 461.0 735.9 1406.3
----------------------------------------------------------------------------------------------------------------
Total FFC Emissions
----------------------------------------------------------------------------------------------------------------
1............................................... 14.5 68.2 109.1 207.9
2............................................... 68.9 324.5 519.3 989.2
3............................................... 189.9 894.8 1432.1 2728.0
4............................................... 269.1 1268.1 2029.4 3865.9
5............................................... 427.2 2013.3 3222.1 6137.7
6............................................... 1836.7 8532.6 13602.1 26016.2
----------------------------------------------------------------------------------------------------------------
* For each of the four cases, the corresponding SCC value for emissions in 2015 is $12.2, $40.0, $62.3, and $117
per metric ton (2015$). The values are for CO2 only (i.e., not CO2eq of other greenhouse gases).
DOE is well aware that scientific and economic knowledge about the
contribution of CO2 and other GHG emissions to changes in
the future global climate and the potential resulting damages to the
world economy continues to evolve rapidly. Thus, any value placed on
reduced CO2 emissions in this rulemaking is subject to
change. DOE, together with other Federal agencies, will continue to
review various methodologies for estimating the monetary value of
reductions in CO2 and other GHG emissions. This ongoing
review will consider the comments on this subject that are part of the
public record for this and other rulemakings, as well as other
methodological assumptions and issues. However, consistent with DOE's
legal obligations, and taking into account the uncertainty involved
with this particular issue, DOE has included in this proposed rule the
most recent values and analyses resulting from the interagency review
process.
DOE also estimated the cumulative monetary value of the economic
benefits associated with NOX emissions reductions
anticipated to result from the considered TSLs for compressors. The
dollar-per-ton values that DOE used are discussed in section IV.L of
this document.
Table V.34 presents the cumulative present values for
NOX emissions for each TSL calculated using 7-percent and 3-
percent discount rates. This table presents values that use the low
dollar-per-ton values, which reflect DOE's primary estimate. Results
that reflect the range of NOX dollar-per-ton values are
presented in Table V.36.
Table V.34--Estimates of Present Value of NOX Emissions Reduction for
Compressors Shipped in 2022-2051
------------------------------------------------------------------------
(Million 2015$)
-------------------------
TSL 3% discount 7% discount
rate rate
------------------------------------------------------------------------
Power Sector Emissions
------------------------------------------------------------------------
1............................................. 4.1 1.5
2............................................. 19.3 7.2
3............................................. 53.1 19.8
4............................................. 75.3 28.0
5............................................. 119.5 44.5
6............................................. 515.8 200.4
------------------------------------------------------------------------
Upstream Emissions
------------------------------------------------------------------------
1............................................. 3.0 1.1
2............................................. 14.1 5.1
3............................................. 38.9 14.2
4............................................. 55.2 20.1
5............................................. 87.6 31.9
[[Page 31752]]
6............................................. 376.0 143.0
------------------------------------------------------------------------
Total FFC Emissions
------------------------------------------------------------------------
1............................................. 7.0 2.6
2............................................. 33.4 12.3
3............................................. 92.1 34.0
4............................................. 130.5 48.1
5............................................. 207.2 76.4
6............................................. 891.8 343.4
------------------------------------------------------------------------
7. Other Factors
The Secretary of Energy, in determining whether a standard is
economically justified, may consider any other factors that the
Secretary deems to be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII) and
6316(a)) No other factors were considered in this analysis.
8. Summary of National Economic Impacts
The NPV of the monetized benefits associated with emissions
reductions can be viewed as a complement to the NPV of the consumer
savings calculated for each TSL considered in this rulemaking. Table
V.35 presents the NPV values that result from adding the estimates of
the potential economic benefits resulting from reduced CO2
and NOX emissions in each of four valuation scenarios to the
NPV of consumer savings calculated for each TSL considered in this
rulemaking, at both a 7-percent and 3-percent discount rate. The
CO2 values used in the columns of each table correspond to
the four sets of SCC values discussed above.
Table V.35--Net Present Value of Consumer Savings Combined With Present Value of Monetized Benefits From CO2 and
NOX Emissions Reductions
----------------------------------------------------------------------------------------------------------------
Consumer NPV at 3% discount rate added with:
(billion 2015$)
---------------------------------------------------
SCC Case SCC Case SCC Case SCC Case
TSL $12.2/ $12.2/ $12.2/ $12.2/
metric ton metric ton metric ton metric ton
and 3% low and 3% low and 3% low and 3% low
NOX values NOX values NOX values NOX values
----------------------------------------------------------------------------------------------------------------
1........................................................... 0.2 0.2 0.3 0.4
2........................................................... 0.7 1.0 1.2 1.7
3........................................................... 1.9 2.6 3.1 4.4
4........................................................... 2.6 3.6 4.4 6.2
5........................................................... 3.9 5.5 6.7 9.6
6........................................................... -2.2 4.5 9.6 22.0
1........................................................... 0.1 0.1 0.2 0.3
2........................................................... 0.3 0.6 0.8 1.2
3........................................................... 0.8 1.5 2.0 3.3
4........................................................... 1.1 2.1 2.8 4.7
5........................................................... 1.6 3.2 4.4 7.3
6........................................................... -2.5 4.2 9.2 21.6
----------------------------------------------------------------------------------------------------------------
Note: The SCC case values represent the global SCC in 2015, in 2015$, for each case.
In considering the above results, two issues are relevant. First,
the national operating cost savings are domestic U.S. monetary savings
that occur as a result of market transactions, while the value of
CO2 reductions is based on a global value. Second, the
assessments of operating cost savings and the SCC are performed with
different methods that use different time frames for analysis. The
national operating cost savings is measured for the lifetime of
equipment shipped in 2022 to 2051. Because CO2 emissions
have a very long residence time in the atmosphere,\121\ the SCC values
in future years reflect future CO2-emissions impacts that
continue beyond 2100.
---------------------------------------------------------------------------
\121\ The atmospheric lifetime of CO2 is estimated of
the order of 30-95 years. Jacobson, MZ, ``Correction to `Control of
fossil-fuel particulate black carbon and organic matter, possibly
the most effective method of slowing global warming,' '' J. Geophys.
Res. 110. pp. D14105 (2005).
---------------------------------------------------------------------------
C. Conclusion
When considering new or amended energy conservation standards, the
standards that DOE adopts for any type (or class) of covered product
must be designed to achieve the maximum improvement in energy
efficiency that the Secretary determines is technologically feasible
and economically justified. (42 U.S.C. 6295(o)(2)(A) and 6316(a)) In
determining whether a standard is economically justified, the Secretary
must determine whether the benefits of the standard exceed its burdens
by, to the greatest extent practicable, considering the seven statutory
factors discussed previously. (42 U.S.C. 6295(o)(2)(B)(i) and 6316(a).)
The new or amended standard must also result in the significant
conservation of energy. (42 U.S.C. 6295(o)(3)(B) and 6316(a).)
For this NOPR, DOE considered the impacts of new standards for
compressors at each TSL, beginning with the maximum technologically
feasible level, to determine whether that level was economically
justified. Where the max-tech level was not justified, DOE then
considered the next most efficient level and undertook the same
evaluation until it reached the highest efficiency level that is both
technologically feasible and economically justified and saves a
significant amount of energy.
To aid the reader as DOE discusses the benefits and/or burdens of
each TSL, tables in this section present a summary of the results of
DOE's quantitative analysis for each TSL. In addition to the
quantitative results presented in the tables, DOE also considers other
burdens and benefits that affect economic justification. These include
the impacts on identifiable subgroups of
[[Page 31753]]
consumers who may be disproportionately affected by a national standard
and impacts on employment.
1. Benefits and Burdens of TSLs Considered for Compressor Standards
Table V.36 and Table V.37 summarize the quantitative impacts
estimated for each TSL for compressors. The national impacts are
measured over the lifetime of compressors purchased in the 30-year
period that begins in the anticipated first full year of compliance
with amended standards (2022-2051). The energy savings, emissions
reductions, and value of emissions reductions refer to full-fuel-cycle
results. The efficiency levels contained in each TSL are described in
section V.A of this document.
Table V.36--Summary of Analytical Results for Compressor TSLs: National Impacts
--------------------------------------------------------------------------------------------------------------------------------------------------------
Category TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
Cumulative FFC National Energy Savings (quads)
--------------------------------------------------------------------------------------------------------------------------------------------------------
0.04............... 0.18............... 0.49............... 0.70.............. 1.11.............. 4.57
--------------------------------------------------------------------------------------------------------------------------------------------------------
NPV of Consumer Costs and Benefits (2015$ billion)
--------------------------------------------------------------------------------------------------------------------------------------------------------
3% discount rate............. 0.1................ 0.6................ 1.6................ 2.2............... 3.3............... (4.9)
7% discount rate............. 0.1................ 0.2................ 0.6................ 0.7............... 1.1............... (4.7)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Cumulative FFC Emissions Reduction (Total FFC Emission)
--------------------------------------------------------------------------------------------------------------------------------------------------------
CO2 (million metric tons).... 2.2................ 10.6............... 29.2............... 41.3.............. 65.6.............. 271.3
SO2 (thousand tons).......... 1.2................ 5.8................ 16.0............... 22.7.............. 36.0.............. 149.6
NOX (thousand tons).......... 4.1................ 19.5............... 53.8............... 76.2.............. 121.0............. 498.4
Hg (tons).................... 0.0................ 0.0................ 0.1................ 0.1............... 0.1............... 0.6
CH4 (thousand tons).......... 9.8................ 46.7............... 128.9.............. 182.7............. 290.1............. 1192.1
CH4 (thousand tons CO2eq) *.. 275.0.............. 1308.7............. 3609.9............. 5116.0............ 8123.3............ 33378.7
N2O (thousand tons).......... 0.0................ 0.1................ 0.3................ 0.5............... 0.8............... 3.1
N2O (thousand tons CO2eq) *.. 6.8................ 32.2............... 88.8............... 125.8............. 199.8............. 829.3
--------------------------------------------------------------------------------------------------------------------------------------------------------
Value of Emissions Reduction (Total FFC Emissions)
--------------------------------------------------------------------------------------------------------------------------------------------------------
CO2 (2015$ million) **....... 0.01 to 0.21....... 0.07 to 0.99....... 0.19 to 2.73....... 0.27 to 3.87...... 0.43 to 6.14...... 1.84 to 26.02
NOX - 3% discount rate (2015$ 7.0 to 16.0........ 33.4 to 76.1....... 92.1 to 210.0...... 130.5 to 297.5.... 207.2 to 472.3.... 891.8 to 2033.4
million).
NOX - 7% discount rate (2015$ 2.6 to 5.8......... 12.3 to 27.8....... 34.0 to 76.6....... 48.1 to 108.5..... 76.4 to 172.3..... 343.4 to 774.2
million).
--------------------------------------------------------------------------------------------------------------------------------------------------------
Parentheses indicate negative (-) values.
* CO2eq is the quantity of CO2 that would have the same global warming potential (GWP).
** Range of the economic value of CO2 reductions is based on estimates of the global benefit of reduced CO2 emissions.
Table V. 37--Summary of Analytical Results for Compressors TSLs: Manufacturer and Consumer Impacts *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Category TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
Manufacturer Impacts
--------------------------------------------------------------------------------------------------------------------------------------------------------
Industry NPV (2014$ million) (No- 476.8 to 480.4.......... 439.3 to 451.9.......... 345.8 to 385.7.......... 301.8 256.0 105.3
new-standards case INPV = 497.1).
Industry NPV (% change)............ (4.1) to (3.4).......... (11.6) to (9.1)......... (30.4) to (22.4)........ (39.3) (48.5) (78.8)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Consumer Average LCC Savings (2015$)
--------------------------------------------------------------------------------------------------------------------------------------------------------
RP_FS_L_AC......................... $9,056.................. $8,902.................. $9,443.................. $7,579 $7,748 $7,817
RP_FS_L_WC......................... $14,396................. $15,011................. $16,538................. $13,649 $14,397 $15,512
RP_FS_LF_AC........................ n.a..................... n.a..................... n.a..................... n.a. n.a. $5,182
RP_FS_LF_WC........................ n.a..................... n.a..................... n.a..................... n.a. n.a. $5,686
RP_VS_L_AC......................... $5,073.................. $6,061.................. $6,746.................. $5,732 $6,408 $5,784
RP_VS_L_WC......................... $12,017................. $13,865................. $14,922................. $11,996 $12,055 $10,082
RP_VS_LF_AC........................ n.a..................... n.a..................... n.a..................... n.a. n.a. $11,104
RP_VS_LF_WC........................ n.a..................... n.a..................... n.a..................... n.a. n.a. $8,748
R1_FS_L_XX......................... n.a..................... n.a..................... n.a..................... n.a. n.a. ($282)
R3_FS_L_XX......................... n.a..................... n.a..................... n.a..................... n.a. n.a. ($693)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Consumer Simple PBP (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
RP_FS_L_AC......................... 1.3..................... 1.7..................... 2.1..................... 2.3 2.6 3.3
RP_FS_L_WC......................... 2.0..................... 2.4..................... 2.8..................... 3.0 3.2 3.8
[[Page 31754]]
RP_FS_LF_AC........................ n.a..................... n.a..................... n.a..................... n.a. n.a. 3.6
RP_FS_LF_WC........................ n.a..................... n.a..................... n.a..................... n.a. n.a. 4.0
RP_VS_L_AC......................... 2.1..................... 2.5..................... 3.0..................... 3.3 3.8 4.9
RP_VS_L_WC......................... 2.8..................... 3.4..................... 4.1..................... 4.3 4.9 5.9
RP_VS_LF_AC........................ n.a..................... n.a..................... n.a..................... n.a. n.a. 3.0
RP_VS_LF_WC........................ n.a..................... n.a..................... n.a..................... n.a. n.a. 2.7
R1_FS_L_XX......................... n.a..................... n.a..................... n.a..................... n.a. n.a. 9.2
R3_FS_L_XX......................... n.a..................... n.a..................... n.a..................... n.a. n.a. 12.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
Percent of Consumers that Experience Net Cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
RP_FS_L_AC......................... 0%...................... 0%...................... 1%...................... 3% 5% 14%
RP_FS_L_WC......................... 0%...................... 1%...................... 3%...................... 5% 7% 15%
RP_FS_LF_AC........................ n.a..................... n.a..................... n.a..................... n.a. n.a. 8%
RP_FS_LF_WC........................ n.a..................... n.a..................... n.a..................... n.a. n.a. 10%
RP_VS_L_AC......................... 0%...................... 1%...................... 4%...................... 8% 13% 31%
RP_VS_L_WC......................... 1%...................... 3%...................... 8%...................... 14% 21% 40%
RP_VS_LF_AC........................ n.a..................... n.a..................... n.a..................... n.a. n.a. 6%
RP_VS_LF_WC........................ n.a..................... n.a..................... n.a..................... n.a. n.a. 5%
R1_FS_L_XX......................... n.a..................... n.a..................... n.a..................... n.a. n.a. 78%
R3_FS_L_XX......................... n.a..................... n.a..................... n.a..................... n.a. n.a. 83%
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Parentheses indicate negative (-) values.
The entry ``n.a.'' means not applicable because no standards are being proposed for these equipment classes.
DOE first considered TSL 6, which represents the max-tech
efficiency level. TSL 6 would save 4.57 quads of energy, an amount DOE
considers significant. Under TSL 6, the NPV of consumer benefit would
be -$4.71 billion using a discount rate of 7 percent, and -$4.94
billion using a discount rate of 3 percent.
The cumulative emissions reductions at TSL 6 are 271.3 Mt of
CO2,149.6 thousand tons of SO2, 498.4 thousand
tons of NOX, 0.552 ton of Hg, 1192.1 thousand tons of
CH4, and 3.13 thousand tons of N2O. The estimated
monetary value of the CO2 emissions reduction at TSL 6
ranges from $1,837 million to $26,016 million.
At TSL 6, the average LCC impacts are savings that range from
$5,784 to $5,512 for rotary lubricated equipment classes, $5,182 to
$11,104 for rotary lubricant-free equipment classes, and -$282 to -$693
for reciprocating equipment classes. The simple payback periods range
from 3.3 to 5.9 years for rotary lubricated equipment classes, 2.7 to
4.0 years for rotary lubricant-free equipment classes, 9.2 to 12.1
years for reciprocating equipment classes. The fraction of consumers
experiencing a net LCC cost ranges from 14 to 40 percent for rotary
lubricated equipment classes, 5 to 10 percent for rotary lubricant-free
equipment classes, and 78- to 83-percent for reciprocating equipment
classes.
At TSL 6, DOE estimates a decrease in INPV of $391.8 million, which
represents a loss of 78.8 percent in INPV for manufacturers.
The Secretary tentatively concludes that at TSL 6 for compressors,
the benefits of energy savings, emission reductions, and the estimated
monetary value of the emissions reductions would be outweighed by the
negative NPV of consumer benefits, the economic burden on some
consumers, and the significant burden on the industry, including the
conversion costs and profit margin impacts that could result in a large
reduction in INPV. Consequently, the Secretary has tentatively
concluded that TSL 6 is not economically justified.
DOE then considered TSL 5, which would save 1.11 quads of energy,
an amount DOE considers significant. Under TSL 5, the NPV of consumer
benefit would be $1.07 billion using a discount rate of 7 percent, and
$3.28 billion using a discount rate of 3 percent.
The cumulative emissions reductions at TSL 5 are 65.6 Mt of
CO2,36.0 thousand tons of SO2, 121.0 thousand
tons of NOX, 0.133 ton of Hg, 290.1 thousand tons of
CH4, and 0.75 thousand tons of N2O. The estimated
monetary value of the CO2 emissions reduction at TSL 5
ranges from $427 million to $6,138 million.
At TSL 5 there is no projected increase in efficiency for rotary
lubricant-free and reciprocating equipment classes. At TSL 5 for rotary
lubricated equipment classes, the average LCC impact would result in
savings that range from $6,408 for RP_VS_L_AC to $14,397 for
RP_FS_L_WC. The simple payback period ranges from 2.6 years for
RP_FS_L_AC to 4.9 years for RP_VS_L_WC. The fraction of consumers
experiencing a net LCC cost ranges from 5-percent for RP_FS_L_AC to 21-
percent for RP_VS_L_WC.
At TSL 5, DOE estimates a decrease in INPV of $241.1 million, which
represents a loss of 48.5 percent in INPV for manufacturers.
Based on this analysis, DOE tentatively concludes that at TSL 5,
the benefits of energy savings, positive NPV of consumer benefits,
emission reductions, and the estimated monetary value of the emissions
reductions would be outweighed by the economic burden on some
consumers, and significant burden on the industry, including the
conversion costs and profit margin impacts that could result in a large
reduction in INPV. Consequently, DOE has tentatively concluded that TSL
5 is not economically justified.
DOE then considered TSL 4, which would save 0.70 quads of energy,
an amount DOE considers significant. Under TSL 4, the NPV of consumer
benefit would be $0.75 billion using a discount rate of 7 percent, and
$2.21 billion using a discount rate of 3 percent.
The cumulative emissions reductions at TSL 4 are 41.3 Mt of
CO2, 22.7 thousand tons of SO2, 76.2 thousand
tons of NOX, 0.084 ton of Hg, 182.7 thousand tons of
CH4, and 0.47 thousand tons of N2O. The estimated
monetary value of the CO2 emissions reduction at TSL 4
ranges from $269 million to $3,866 million.
At TSL 4 there is no projected increase in efficiency for rotary
[[Page 31755]]
lubricant-free and reciprocating equipment classes. At TSL 4 for rotary
lubricated equipment classes, the average LCC impact would result in
savings that range from $5,732 for RP_VS_L_AC to $13,649 for
RP_FS_L_WC. The simple payback period ranges from 2.3 years for
RP_FS_L_AC to 4.3 years for RP_VS_L_WC. The fraction of consumers
experiencing a net LCC cost ranges from 3 percent for RP_FS_L_AC to 14-
percent for RP_VS_L_WC.
At TSL 4, DOE estimates a decrease in INPV of $195.3 million, which
represents a loss of 39.3 percent in INPV for manufacturers.
Based on this analysis, DOE tentatively concludes that at TSL 4 the
benefits of energy savings, positive NPV of consumer benefits, emission
reductions, and the estimated monetary value of the emissions
reductions would be outweighed by the economic burden on some
consumers, and significant burden on the industry, including the
conversion costs and profit margin impacts that could result in a large
reduction in INPV. Consequently, DOE has tentatively concluded that TSL
4 is not economically justified.
DOE then considered TSL 3, which would save 0.49 quads of energy,
an amount DOE considers significant. Under TSL 3, the NPV of consumer
benefit would be $0.56 billion using a discount rate of 7 percent, and
$1.62 billion using a discount rate of 3 percent.
The cumulative emissions reductions at TSL 3 are 29.2 Mt of
CO2, 16.0 thousand tons of SO2, 53.8 thousand
tons of NOX, 0.059 ton of Hg, 128.9 thousand tons of
CH4, and 0.34 thousand tons of N2O. The estimated
monetary value of the CO2 emissions reduction at TSL 3
ranges from $190 million to $2,728 million.
At TSL 3 there is no projected increase in efficiency for rotary
lubricant-free and reciprocating equipment classes. At TSL 3 for rotary
lubricated equipment classes the average LCC impact would result in
savings that range from $6,746 for RP_VS_L_AC to $16,538 for
RP_FS_L_WC. The simple payback period ranges from 2.1 years for
RP_FS_L_AC to 4.1 years for RP_VS_L_WC. The fraction of consumers
experiencing a net LCC cost ranges from 1 percent for RP_FS_L_AC to 8-
percent for RP_VS_L_WC.
At TSL 3, the projected change in INPV ranges from a decrease of
$111.4 million to a decrease of $151.3 million, which represent
decreases of 22.4 percent and 30.4 percent, respectively.
Based on this analysis, DOE tentatively concludes that at TSL 3 for
compressors, the benefits of energy savings, positive NPV of consumer
benefits, emission reductions, and the estimated monetary value of the
emissions reductions would be outweighed by the economic burden on some
consumers, and significant burden on the industry, including the
conversion costs and profit margin impacts that could result in a large
reduction in INPV. Consequently, DOE has tentatively concluded that TSL
3 is not economically justified.
DOE then considered TSL 2, which would save 0.18 quads of energy,
an amount DOE considers significant. Under TSL 2, the NPV of consumer
benefit would be $0.23 billion using a discount rate of 7 percent, and
$0.63 billion using a discount rate of 3 percent.
The cumulative emissions reductions at TSL 2 are 10.6 Mt of
CO2, 5.8 thousand tons of SO2, 19.5 thousand tons
of NOX, 0.021 ton of Hg, 46.7 thousand tons of
CH4, and 0.12 thousand tons of N2O. The estimated
monetary value of the CO2 emissions reduction at TSL 2
ranges from $69 million to $989 million.
At TSL 2 there is no projected increase in efficiency for rotary
lubricant-free and reciprocating equipment classes. At TSL 2 for rotary
lubricated equipment classes, the average LCC impact would result in
savings that range from $6,061 for RP_VS_L_AC to $15,011 for
RP_FS_L_WC. The simple payback period ranges from 1.7 years for
RP_FS_L_AC to 3.4 years for RP_VS_L_WC. The fraction of consumers
experiencing a net LCC cost ranges from zero percent for RP_FS_L_AC to
3-percent for RP_VS_L_WC.
At TSL 2, the projected change in INPV ranges from a decrease of
$45.2 million to a decrease of $57.8 million, which represent decreases
of 9.1 percent and 11.6 percent, respectively.
After considering the analysis and weighing the benefits and
burdens, and based upon DOE's understanding of currently available
information, DOE has tentatively concluded that at TSL 2 for
compressors the benefits of energy savings, positive NPV of consumer
benefits, emission reductions, the estimated monetary value of the
emissions reductions, and positive average LCC savings would outweigh
the negative impacts on some consumers and the potential reduction in
INPV for manufacturers. Accordingly, DOE has tentatively concluded that
TSL 2 would offer the maximum improvement in efficiency that is
technologically feasible and economically justified, and would result
in the significant conservation of energy.
Therefore, based on the above considerations, DOE proposes to adopt
the energy conservation standards for compressors at TSL 2. The
proposed standards, expressed in package isentropic efficiency are
shown in Table V.38. Table V.39 through Table V.42 provide mathematical
coefficients required to calculate package isentropic efficiency in
Table V.38. For ``Fixed-speed compressor'' equipment classes, the
relevant Package Isentropic Efficiency is Full-Load Package Isentropic
Efficiency; for ``Variable-speed compressor'' equipment classes, the
relevant Package Isentropic Efficiency is Part-Load Package Isentropic
Efficiency. Both Full- and Part-Load Package Isentropic Efficiency are
determined in accordance with the proposed DOE test procedure. These
proposed standards, if adopted, would apply to all compressors listed
in Table V.38 and manufactured in, or imported into, the United States
starting on the proposed compliance date specified in this proposal.
Table V.38--Proposed Energy Conservation Standards for Compressors
----------------------------------------------------------------------------------------------------------------
[eta]Regr (package
Equipment class Minimum package isentropic isentropic efficiency d
efficiency reference curve)
----------------------------------------------------------------------------------------------------------------
Rotary; Lubricated; Air-cooled; [eta]Regr + (1- [eta]Regr) * -0.00928 * ln(.472 * V1)\2\ -15
Fixed-speed. (d/100). + 0.139 * ln(.472 * V1) +
0.271.
Rotary; Lubricated; Air-cooled; [eta]Regr + (1- [eta]Regr) * -0.0155 * ln(.472 * V1)\2\ + -10
Variable-speed. (d/100). 0.216 * ln(.472 * V1) +
0.00905.
Rotary; Lubricated; Water-cooled; .0235 + [eta]Regr + (1- -0.00928 * ln(.472 * V1)\2\ -15
Fixed-speed. [eta]Regr) * (d/100). + 0.139 * ln(.472 * V1) +
0.271.
Rotary; Lubricated; Water-cooled; .0235 + [eta]Regr + (1- -0.0155 * ln(.472 * V1)\2\ + -15
Variable-speed. [eta]Regr) * (d/100). 0.216 * ln(.472 * V1) +
0.00905.
[[Page 31756]]
Rotary; Lubricant-free; Air-cooled; [eta]Regr + (1- [eta]Regr) * A1 * ln(.472 * V1)\2\ + B1 * -11
Fixed-speed. (d/100). ln(.472 * V1) + C1.
Rotary; Lubricant-free; Air-cooled; [eta]Regr + (1- [eta]Regr) * A2 * ln(.472 * V1)\2\ + B2 * -13
Variable-speed. (d/100). ln(.472 * V1) + C2.
Rotary; Lubricant-free; Water- A3 * ln(.472 * V1)\2\ + B3 * A1 * ln(.472 * V1)\2\ + B1 * -11
cooled; Fixed-speed. ln(.472 * V1) + C3 + ln(.472 * V1) + C1.
[eta]Regr + (1- [eta]Regr)
* (d/100).
Rotary; Lubricant-free; Water- A4 * ln(.472 * V1)\2\ + B4 * A2 * ln(.472 * V1)\2\ + B2 * -13
cooled; Variable-speed. ln(.472 * V1) + C4 + ln(.472 * V1) + C2.
[eta]Regr + (1- [eta]Regr)
* (d/100).
----------------------------------------------------------------------------------------------------------------
Table V.39--Coefficients for Proposed Energy Conservation Standards for Rotary, Lubricant-Free, Air and Water-
Cooled, Fixed-Speed Air Compressors
----------------------------------------------------------------------------------------------------------------
Full-load actual volume flow rate range (acfm) A1 B1 C1
----------------------------------------------------------------------------------------------------------------
0<=V1[gteqt]161................................................. -0.00928 0.139 0.191
1612 and
NOX emission reductions.\122\
---------------------------------------------------------------------------
\122\ To convert the time-series of costs and benefits into
annualized values, DOE calculated a present value in 2016, the year
used for discounting the NPV of total consumer costs and savings.
For the benefits, DOE calculated a present value associated with
each year's shipments in the year in which the shipments occur
(2020, 2030, etc.), and then discounted the present value from each
year to 2016. The calculation uses discount rates of 3 and 7 percent
for all costs and benefits except for the value of CO2
reductions, for which DOE used case-specific discount rates. Using
the present value, DOE then calculated the fixed annual payment over
a 30-year period, starting in the compliance year that yields the
same present value.
---------------------------------------------------------------------------
Table V.43 shows the annualized values for compressors under TSL 2,
[[Page 31757]]
expressed in 2015$. The results under the primary estimate are as
follows.
Using a 7-percent discount rate for benefits and costs other than
CO2 reduction (for which DOE used a 3-percent discount rate
along with the average SCC series that has a value of $40.0/t in 2015),
the estimated cost of the standards proposed in this rule is 10.4
million per year in increased equipment costs, while the estimated
annual benefits are $36.0 million in reduced equipment operating costs,
$19.2 million in CO2 reductions, and $1.4 million in reduced
NOX emissions. In this case, the net benefit amounts to $46
million per year.
Using a 3-percent discount rate for all benefits and costs and the
average SCC series that has a value of $40.0/t in 2015, the estimated
cost of the proposed standards is $10.9 million per year in increased
equipment costs, while the estimated annual benefits are $48.4 million
in reduced operating costs, $19.2 million in CO2 reductions,
and $2.0 million in reduced NOX emissions. In this case, the
net benefit amounts to $59 million per year.
Table V.43--Annualized Benefits and Costs of Proposed Standards (TSL 2) for Compressors Sold in 2022-2051
--------------------------------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------------------------------
Discount rate Primary estimate * Low net benefits estimate High net benefits estimate
* *
-----------------------------------------------------------------------------------
million 2015$/year
--------------------------------------------------------------------------------------------------------------------------------------------------------
Benefits
--------------------------------------------------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings... 7%.............................. 36.0...................... 29.3...................... 43.7.
3%.............................. 48.4...................... 38.9...................... 60.4.
CO2 Reduction (using mean SCC at 5%.............................. 5.7....................... 4.8....................... 6.9.
5% discount rate)\**\.
CO2 Reduction (using mean SCC at 3%.............................. 19.2...................... 16.0...................... 23.2.
3% discount rate)\**\.
CO2 Reduction (using mean SCC at 2.5%............................ 28.1...................... 23.3...................... 33.9.
2.5% discount rate)\**\.
CO2 Reduction (using 95th 3%.............................. 58.5...................... 48.6...................... 70.6.
percentile SCC at 3% discount
rate )\**\.
NOX Reduction[dagger]............. 7%.............................. 1.4....................... 1.2....................... 3.7.
3%.............................. 2.0....................... 1.6....................... 5.4.
Total Benefits[dagger][dagger].... 7% plus CO2 range............... 43 to 96.................. 35 to 79.................. 54 to 118.
7%.............................. 57........................ 46........................ 71.
3% plus CO2 range............... 56 to 109................. 45 to 89.................. 73 to 136.
3%.............................. 70........................ 57........................ 89.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
Consumer Incremental Installed 7%.............................. 10.4...................... 8.9....................... 11.8.
Equipment Costs.
3%.............................. 10.9...................... 9.2....................... 12.4.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Net Benefits
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total[dagger][dagger]............. 7% plus CO2 range............... 33 to 85.................. 26 to 70.................. 42 to 106.
7%.............................. 46........................ 38........................ 59.
3% plus CO2 range............... 45 to 98.................. 36 to 80.................. 60 to 124.
3%.............................. 59........................ 47........................ 77.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* This table presents the annualized costs and benefits associated with compressors shipped in 2022-2051. These results include benefits to consumers
which accrue after 2051 from the equipment purchased in 2022-2051. The Primary, Low Benefits, and High Benefits Estimates utilize projections of
energy prices from the AEO 2015 Reference case, Low Economic Growth case, and High Economic Growth case, respectively. In addition, incremental
product costs reflect a constant trend in the Primary Estimate, an increasing trend in the Low Benefits Estimate, and a decreasing trend in the High
Benefits Estimate. The methods used to derive projected price trends are explained in section IV.H.1. Note that the Benefits and Costs may not sum to
the Net Benefits due to rounding.
** The CO2 reduction benefits are calculated using 4 different sets of SCC values. The first three use the average SCC calculated using 5%, 3%, and 2.5%
discount rates, respectively. The fourth represents the 95th percentile of the SCC distribution calculated using a 3% discount rate. The SCC values
are emission year specific. See section IV.L.1 for more details.
[dagger] DOE estimated the monetized value of NOX emissions reductions using benefit per ton estimates from the Regulatory Impact Analysis for the Clean
Power Plan Final Rule, published in August 2015 by EPA's Office of Air Quality Planning and Standards. (Available at: http://www.epa.gov/cleanpowerplan/clean-power-plan-final-rule-regulatory-impact-analysis.) See section IV.L.2 for further discussion. For DOE's Primary Estimate and Low
Net Benefits Estimate, the agency is using a national benefit-per-ton estimate for NOX emitted from the Electric Generating Unit sector based on an
estimate of premature mortality derived from the ACS study (Krewski et al., 2009). For DOE's High Net Benefits Estimate, the benefit-per-ton estimates
were based on the Six Cities study (Lepuele et al., 2011), which are nearly two-and-a-half times larger than those from the ACS study.
[dagger][dagger] Total Benefits for both the 3% and 7% cases are derived using the series corresponding to the average SCC with a 3-percent discount
rate ($40.0/t case). In the rows labeled ``7% plus CO2 range'' and ``3% plus CO2 range,'' the operating cost and NOX benefits are calculated using the
labeled discount rate, and those values are added to the full range of CO2 values.
VI. Certification Requirements
DOE proposes to adopt the reporting requirements in a new section
429.61(b) within subpart B of 10 CFR part 429. This section would also
include sampling requirements, which are discussed in the test
procedure NOPR. Consistent with other types of covered products and
equipment, the proposed section (10 CFR 429.61(b)) would specify that
the general certification report requirements contained in 10 CFR
429.12 apply to compressors. The additional requirements proposed in 10
CFR 429.61 would require manufacturers to supply certain additional
information to DOE in certification reports for compressors to
demonstrate compliance with any energy conservation standards
established as a result of this rulemaking.
Specifically, DOE proposes that the following data be included in
the
[[Page 31758]]
certification reports and be made public on DOE's Web site:
Full-load package isentropic efficiency or part-load
package isentropic efficiency, as applicable (dimensionless);
Full-load actual volume flow rate (in actual cubic feet
per minute);
Compressor motor nominal horsepower (in horsepower);
Full-load operating pressure (in pounds per square inch,
gauge);
Maximum full-flow operating pressure (in pounds per square
inch, gauge); and
Pressure ratio (dimensionless).
10 CFR 429.12(b) already requires reporting of manufacturer name,
model number(s), and equipment class for all covered products and
equipment.
With respect to reporting model number(s), a certification report
must include a basic model number and the manufacturer's (individual)
model number(s). A manufacturer's model number (individual model
number) is the identifier used by a manufacturer to uniquely identify
what is commonly considered a ``model'' in industry--all units of a
particular design. The manufacturer's (individual) model number
typically appears on the product nameplate, in product catalogs and in
other product advertising literature. In contrast, the basic model
number is a number used by the manufacturer to indicate to DOE how the
manufacturer has grouped its individual models for the purposes of
testing and rating; many manufacturers choose to use a model number
that is similar to the individual model numbers in the basic model, but
that is not required. The manufacturer's individual model number(s) in
each basic model must reference not only the bare compressor, but also
any motor and controls with which the compressor is being rated.
VII. Procedural Issues and Regulatory Review
A. Review Under Executive Orders 12866 and 13563
Section 1(b)(1) of Executive Order 12866, ``Regulatory Planning and
Review,'' 58 FR 51735 (Oct. 4, 1993), requires each agency to identify
the problem that it intends to address, including, where applicable,
the failures of private markets or public institutions that warrant new
agency action, as well as to assess the significance of that problem.
The problems that the proposed standards set forth in this NOPR are
intended to address are as follows:
(1) Insufficient information and the high costs of gathering and
analyzing relevant information leads some consumers to miss
opportunities to make cost-effective investments in energy efficiency.
(2) In some cases, the benefits of more-efficient equipment are not
realized due to misaligned incentives between purchasers and users. An
example of such a case is when the equipment purchase decision is made
by a building contractor or building owner who does not pay the energy
costs.
(3) There are external benefits resulting from improved energy
efficiency of appliances and equipment that are not captured by the
users of such equipment. These benefits include externalities related
to public health, environmental protection, and national energy
security that are not reflected in energy prices, such as reduced
emissions of air pollutants and greenhouse gases that impact human
health and global warming. DOE attempts to quantify some of the
external benefits through use of social cost of carbon values.
In addition, DOE has determined that this regulatory action is not
a ``significant regulatory action'' under section 3(f) of Executive
Order 12866. Section 6(a)(3)(A) of the Executive Order states that
absent a material change in the development of the planned regulatory
action, regulatory action not designated as significant will not be
subject to review under the aforementioned section unless, within 10
working days of receipt of DOE's list of planned regulatory actions,
the Administrator of OIRA notifies the agency that OIRA has determined
that a planned regulation is a significant regulatory action within the
meaning of the Executive order.
DOE has also reviewed this regulation pursuant to Executive Order
13563, issued on January 18, 2011. 76 FR 3281 (January 21, 2011).
Executive Order 13563 is supplemental to and explicitly reaffirms the
principles, structures, and definitions governing regulatory review
established in Executive Order 12866. To the extent permitted by law,
agencies are required by Executive Order 13563 to: (1) Propose or adopt
a regulation only upon a reasoned determination that its benefits
justify its costs (recognizing that some benefits and costs are
difficult to quantify); (2) tailor regulations to impose the least
burden on society, consistent with obtaining regulatory objectives,
taking into account, among other things, and to the extent practicable,
the costs of cumulative regulations; (3) select, in choosing among
alternative regulatory approaches, those approaches that maximize net
benefits (including potential economic, environmental, public health
and safety, and other advantages; distributive impacts; and equity);
(4) to the extent feasible, specify performance objectives, rather than
specifying the behavior or manner of compliance that regulated entities
must adopt; and (5) identify and assess available alternatives to
direct regulation, including providing economic incentives to encourage
the desired behavior, such as user fees or marketable permits, or
providing information upon which choices can be made by the public.
DOE emphasizes as well that Executive Order 13563 requires agencies
to use the best available techniques to quantify anticipated present
and future benefits and costs as accurately as possible. In its
guidance, OIRA has emphasized that such techniques may include
identifying changing future compliance costs that might result from
technological innovation or anticipated behavioral changes. For the
reasons stated in the preamble, DOE believes that this NOPR is
consistent with these principles, including the requirement that, to
the extent permitted by law, benefits justify costs and that net
benefits are maximized.
B. Review Under the Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires
preparation of an initial regulatory flexibility analysis (IRFA) for
any rule that by law must be proposed for public comment, unless the
agency certifies that the rule, if promulgated, will not have a
significant economic impact on a substantial number of small entities.
As required by Executive Order 13272, ``Proper Consideration of Small
Entities in Agency Rulemaking,'' 67 FR 53461 (August 16, 2002), DOE
published procedures and policies on February 19, 2003, to ensure that
the potential impacts of its rules on small entities are properly
considered during the rulemaking process. 68 FR 7990. DOE has made its
procedures and policies available on the Office of the General
Counsel's Web site (http://energy.gov/gc/office-general-counsel). DOE
has prepared the following IRFA for the equipment that are the subject
of this rulemaking.
For manufacturers of compressors, the Small Business Administration
(SBA) has set a size threshold, which defines those entities classified
as ``small businesses'' for the purposes of the statute. DOE used the
SBA's small business size standards to determine whether any small
entities would be
[[Page 31759]]
subject to the requirements of the rule. (65 FR 30840, 30849 (May 15,
2000), as amended at 65 FR 53533, 53544 (Sept. 5, 2000), and codified
at 13 CFR part 121.) The size standards are listed by North American
Industry Classification System (NAICS) code and industry description
and are available at http://www.sba.gov/sites/default/files/files/Size_Standards_Table.pdf. Manufacturing of compressors is classified
under NAICS 333912, ``Air and Gas Compressor Manufacturing.'' The SBA
sets a threshold of 500 employees or fewer for an entity to be
considered as a small business for this category.
1. Description on Estimated Number of Small Entities Regulated
a. Methodology for Estimating the Number of Small Entities
To estimate the number of small business manufacturers of equipment
within the scope of this rulemaking, DOE conducted a market survey
using available public information. DOE's research involved industry
trade association membership directories (including CAGI), individual
company and online retailer Web sites, and market research tools (e.g.,
Hoovers reports) to create a list of companies that manufacture
equipment covered by this rulemaking. DOE presented its list to
manufacturers in MIA interviews and asked industry representatives if
they were aware of any other small manufacturers during manufacturer
interviews and at DOE public meetings. DOE reviewed publicly-available
data and contacted select companies on its list, as necessary, to
determine whether they met the SBA's definition of a small business
manufacturer. DOE screened out companies that do not offer equipment
within the scope of this rulemaking, do not meet the definition of a
``small business,'' or are foreign-owned and operated.
b. Compressor Industry Structure and Nature of Competition
DOE identified a total of 37 manufacturers of compressor equipment
sold in the United States and within the scope of this rulemaking.
Seventeen of these manufacturers met the 500-employee threshold defined
by the SBA to qualify as a small business, but only 13 were domestic
companies. All 13 domestic small businesses manufacture reciprocating
air compressors, while only five of the 13 manufacture rotary air
compressors.
Within the compressor industry, manufacturers can be classified
into two categories; original equipment manufacturers (OEMs) and
compressor packagers. OEMs manufacture their own air-ends and assemble
them with other components to create complete package compressors.
Packagers assemble motors and other accessories with air-ends purchased
from other companies, resulting in a complete compressor.
Within the rotary air compressor industry, DOE identified 20
manufacturers; 15 are OEMs and five are packagers of compressors. Of
the 20 total manufacturers, seven large OEMs supply approximately 80-
percent of shipments and revenues. Of the five domestic small rotary
air compressor businesses identified, DOE's research indicates that two
are OEMs and three are packagers.
The reciprocating air compressor market has a significantly
different structure than the rotary market. The reciprocating market is
highly fragmented, consisting of approximately 16 large and 17 small
OEMs and packagers. Five of the 16 large businesses are members of
CAGI. Eight of the 16 large manufacturers are believed to be packagers.
Of the 18 identified small businesses, 13 are domestic. DOE notes that
some interviewed manufacturers stated that there are potentially a
large number of domestic small reciprocating air compressor
manufacturers who assemble compressor packages from nearly complete
components. These unidentified small manufacturers are not members of
CAGI and typically have a limited marketing presence. DOE was not able
to identify these small businesses. Based on this information, it is
possible that DOE's list of 13 small domestic players may not include
all small U.S. manufacturers in the industry. Of the 13 identified
domestic reciprocating air compressor manufacturers, three are believed
to be OEMs and 10 are believed to be packagers.
Table VII.1 presents both the total number of domestic small
businesses offering equipment in each equipment class grouping as well
as the breakdown between domestic small business OEMs and domestic
small business packagers.
Table VII.1--Number of Domestic Small Businesses Manufacturing Compressors by Equipment Class Grouping
----------------------------------------------------------------------------------------------------------------
Number of
domestic small Number of Total number
Equipment class grouping original domestic small of domestic
equipment packagers small
manufacturers businesses
----------------------------------------------------------------------------------------------------------------
Rotary Air Compressors.......................................... 2 3 5
Reciprocating Air Compressors................................... 3 10 13
Total........................................................... 3 10 13
----------------------------------------------------------------------------------------------------------------
DOE requests comment on the number and names of domestic small
manufacturers producing covered equipment. This is identified as Issue
53 in section VIII.E, ``Issues on Which DOE Seeks Comment.''
c. Manufacturer Participation
DOE reached out to all 13 identified domestic small businesses to
invite them to take part in manufacturer impact analysis interviews. As
mentioned previously, all thirteen domestic small businesses
manufacturer reciprocating air compressors, while only five of the
thirteen manufacturer rotary air compressors.
As a part of the domestic small business outreach process, DOE
attempted to obtain the best contact information possible for each
domestic small business. To do so, DOE directly solicited domestic
small business contact information from known industry participants. In
addition, DOE also researched domestic small business contact
information using publically available information. When these methods
were successful, DOE initiated contact with domestic small businesses
by emailing recommended, specific individuals within an organization.
When specific email addresses were not available, DOE contacted
manufacturers using general contact information provided on
manufacturer Web pages; this includes contact web forms, as well as
general sales, support, and information email addresses.
[[Page 31760]]
Of the five domestic small manufacturers of rotary compressors, two
responded to DOE's contact attempt and were willing to discuss
potential standards with DOE. These two manufacturers are the only
known domestic small OEMs of rotary compressor. The three that did not
respond are believed to be packagers.
Of the thirteen domestic small manufacturers of reciprocating
compressors, four responded to DOE's contact attempt and ultimately,
three were willing to discuss potential standards with DOE. DOE notes
that one of the three is a reciprocating compressor packager, while the
other two are OEMs of both reciprocating and rotary compressors. The
latter are the same manufacturers discussed in the previous paragraph.
DOE notes that no new standards for reciprocating compressors are
proposed in this document.
Finally, DOE also discussed information about small businesses and
potential impacts on small businesses while interviewing large
manufacturers.
2. Description and Estimate of Compliance Requirements
Because DOE proposes to establish standards for only rotary
equipment, this section will only focus on the estimated impacts to the
five domestic small manufacturers of rotary compressors.
Of the five domestic small rotary compressor manufacturers
identified, DOE's research indicates that two are OEMs and three are
packagers. Whereas OEMs would be expected to incur significant redesign
and capital conversion costs in order to comply with amended standards,
packagers would not. Unlike OEMs, packagers would not face significant
capital conversion costs, as the processes they use to assemble
completed packages from purchased air-ends and components is not
expected to change. Packagers are also not expected to face significant
product redesign costs, as the burden of engineering and redesigning
the air-end and other key components would reside with OEMs. However,
as manufacturers OEMs and packagers are both expected to incur new
compliance and testing costs, as any new energy conservation standard
would require their equipment to be tested and certified to the
standard, using a DOE test procedure.
As a result of these efforts, the following discussion of domestic
small business impacts considers capital, redesign, and compliance cost
impacts facing rotary OEMs, while only considering compliance cost
impacts for rotary packagers.
DOE estimates that domestic small rotary compressor OEMs account
for approximately 9 percent of models available in the market. As such,
DOE estimates that 9 percent of the total industry product and capital
conversion costs (excluding compliance costs) are attributed to
domestic small rotary compressor OEMs. At TSL 2, the level proposed in
this document, 9-percent of total conversion costs (excluding
compliance costs) equates to $7.9 to $10.3 million; the remaining $78.3
to $102.0 million is attributed to large OEMs. DOE's conversion cost
estimates were derived from total industry conversion costs discussed
previously in section IV.J.2.b.i. DOE notes that the ranges shown here
relate to the two conversion cost scenarios investigated in section
IV.J.2.b.i.
DOE also estimates that, combined, domestic small rotary compressor
OEMs and packagers account for approximately 15-percent of models
available in the market. As such, DOE estimates that 15-percent of the
total industry testing and compliance costs are attributed to domestic
small rotary compressor OEMs and packagers. At TSL 2, this equates to
$1.9 million for domestic small manufacturers and $10.9 million for
large OEMs. DOE notes that these costs represent those involved in
testing and ensuring compliance of both lubricated and non-lubricated
equipment with the proposed standards. DOE's testing and compliance
cost estimates were derived from total industry conversion costs
discussed previously in section IV.J.2.b.i.
Finally, DOE estimated revenues for the five domestic small rotary
manufacturers. To do so, DOE researched publicly available revenue
estimates from Hoovers \123\ and scaled those revenues to reflect only
the portion of a company's revenues attributable to rotary compressor
sales. DOE estimates the aggregate 2014 rotary compressor revenues for
the five domestic small manufacturers to be approximately $41.6
million. DOE's GRIM results estimate total industry 2014 revenues
(including small businesses) to be $583.8 million. Accordingly,
revenues from large rotary manufacturers are estimated to be $542.2
million. As such DOE estimates domestic small rotary manufacturers
account for approximately 7.1-percent of industry revenues and large
manufacturers account for 92.9-percent. Comparing costs to revenues for
each group, DOE estimates total conversion costs, including testing and
compliance, at TSL 2 are approximately 23.8-to 29.5-percent of revenues
for domestic small manufacturers and 16.4 to 20.8 percent of revenues
for large manufacturers. Table VII.2 summarizes domestic small and
large business conversion and compliance costs and shows the relative
impacts of conversion costs on domestic small manufacturers relative to
large manufacturers.
---------------------------------------------------------------------------
\123\ Hoovers Inc., Company Profiles, Various Companies
(Available at: www.hoovers.com/).
Table VII.2--Aggregated Impacts of Conversion Costs on a Domestic Small Manufacturers at the Proposed Standard,
TSL 2
----------------------------------------------------------------------------------------------------------------
Aggregate impact to domestic small Aggregate impact to large, rotary
rotary manufacturers manufacturers
----------------------------------------------------------------------------------------------------------------
Total Product and Capital Conversion $7.9 to $10.3...................... $78.3 to $102.0.
Costs, Excluding Compliance and
Testing Costs (Millions).
Total Testing and Compliance Costs $1.9............................... $10.9.
(Millions).
Total Conversion, Testing, and $9.9 to $12.3...................... $89.2 to $112.9.
Compliance Costs (Millions).
2014 Revenues (Millions).............. $41.6.............................. $542.2.
Total Conversion, Testing, and 23.8% to 29.5%..................... 16.4% to 20.8%.
Compliance Cost, as a Percentage of
Annual Revenue.
----------------------------------------------------------------------------------------------------------------
[[Page 31761]]
However, as noted in section V.B.2.a, the GRIM free cash flow
results in 2021 indicated that some manufacturers may need to access
the capital markets in order to fund conversion costs directly related
to the proposed standard. Given that small manufacturers may have
greater difficulty securing outside capital \124\ and that the
necessary conversion costs are not insignificant to the size of a small
business, it is possible the domestic small OEMs may be forced to
retire a greater portion of product models than large competitors.
Also, smaller companies often have a higher cost of borrowing due to
higher risk on the part of investors, largely attributed to lower cash
flows and lower per unit profitability. In these cases, small
manufacturers may observe higher costs of debt than larger
manufacturers.
---------------------------------------------------------------------------
\124\ Simon, Ruth, and Angus Loten, ``Small-Business Lending Is
Slow to Recover,'' Wall Street Journal, August 14, 2014. Accessed
August 2014, available at http://online.wsj.com/articles/small-business-lending-is-slow-to-recover-1408329562.
---------------------------------------------------------------------------
DOE notes that this conversion cost analysis assumes that
compressors sold by domestic small manufacturers are of the same
efficiency distribution as those sold by large manufacturers. DOE
requests comment and data on the relative efficiency of equipment sold
by domestic small manufacturers, as compared to equipment sold by large
manufacturers. This is identified as Issue 54 in section VIII.E,
``Issues on Which DOE Seeks Comment.''
DOE requests comment and data on the impact of the proposed
standard on domestic small business manufacturers. Specifically, DOE
requests comment on the magnitude of conversion costs for a domestic
small manufacturers and the number or percent of models produced by
domestic small manufacturers. DOE also requests data on the cost of
capital for domestic small manufacturers to better quantify how
domestic small manufacturers might be disadvantaged relative to large
competitors. This is identified as Issue 55 in section VIII.E, ``Issues
on Which DOE Seeks Comment.''
3. Duplication, Overlap, and Conflict With Other Rules and Regulations
DOE is not aware of any rules or regulations that duplicate,
overlap, or conflict with the rule being considered today.
4. Significant Alternatives to the Rule
The discussion above analyzes impacts on small businesses that
would result from DOE's proposed rule. In addition to the other TSLs
being considered, the NOPR TSD includes an analysis of the following
policy alternatives: (1) No change in standards; (2) consumer rebates;
(3) consumer tax credits; (4) manufacturer tax credits; and (5)
voluntary energy efficiency targets. While these alternatives may
mitigate to some varying extent the economic impacts on small entities
compared to the proposed standards, DOE does not intend to consider
these alternatives further because in several cases, they would not be
feasible to implement without authority and funding from Congress, and
in all cases, DOE has determined that the energy savings of these
alternatives are significantly smaller than those that would be
expected to result from adoption of the proposed standard levels
(ranging from approximately 11-percent to 66-percent of the energy
savings from the proposed standards). Accordingly, DOE is declining to
adopt any of these alternatives and is proposing the standards set
forth in this rulemaking. (See chapter 17 of the NOPR TSD for further
detail on the policy alternatives DOE considered.)
Additional compliance flexibilities may be available through other
means. For example, individual manufacturers may petition for a waiver
of the applicable test procedure. Further, EPCA provides that a
manufacturer whose annual gross revenue from all of its operations does
not exceed $8,000,000 may apply for an exemption from all or part of an
energy conservation standard for a period not longer than 24 months
after the effective date of a final rule establishing the standard.
Additionally, Section 504 of the Department of Energy Organization Act,
42 U.S.C. 7194, provides authority for the Secretary to adjust a rule
issued under EPCA in order to prevent ``special hardship, inequity, or
unfair distribution of burdens'' that may be imposed on that
manufacturer as a result of such rule. Manufacturers should refer to 10
CFR part 430, subpart E, and Part 1003 for additional details.
DOE continues to seek input from businesses that would be affected
by this rulemaking and will consider comments received in the
development of any final rule.
C. Review Under the Paperwork Reduction Act
Manufacturers of compressors must certify to DOE that their
equipment complies with any applicable energy conservation standards.
In certifying compliance, manufacturers must test their equipment
according to the DOE test procedures for compressors, including any
amendments adopted for those test procedures. DOE has established
regulations for the certification and recordkeeping requirements for
covered consumer products and commercial equipment. See generally 10
CFR part 429. The collection-of-information requirement for the
certification and recordkeeping is subject to review and approval by
OMB under the Paperwork Reduction Act (PRA). This requirement has been
approved by OMB under OMB control number 1910-1400. Public reporting
burden for the certification is estimated to average 30 hours per
response, including the time for reviewing instructions, searching
existing data sources, gathering and maintaining the data needed, and
completing and reviewing the collection of information.
Notwithstanding any other provision of the law, no person is
required to respond to, nor shall any person be subject to a penalty
for failure to comply with, a collection of information subject to the
requirements of the PRA, unless that collection of information displays
a currently valid OMB Control Number.
D. Review Under the National Environmental Policy Act of 1969
Pursuant to the National Environmental Policy Act (NEPA) of 1969,
DOE has determined that the proposed rule fits within the category of
actions included in Categorical Exclusion (CX) B5.1 and otherwise meets
the requirements for application of a CX. See 10 CFR part 1021, App. B,
B5.1(b); 1021.410(b) and App. B, B(1)-(5). The proposed rule fits
within this category of actions because it is a rulemaking that
establishes energy conservation standards for consumer products or
industrial equipment, and for which none of the exceptions identified
in CX B5.1(b) apply. Therefore, DOE has made a CX determination for
this rulemaking, and DOE does not need to prepare an Environmental
Assessment or Environmental Impact Statement for this proposed rule.
DOE's CX determination for this proposed rule is available at http://energy.gov/nepa/categorical-exclusion-cx-determinations-cx.
E. Review Under Executive Order 13132
Executive Order 13132, ``Federalism,'' 64 FR 43255 (August 10,
1999), imposes certain requirements on Federal agencies formulating and
implementing policies or regulations that preempt State law or that
have Federalism implications. The Executive Order requires agencies to
examine the constitutional and statutory authority supporting any
action that would limit the policymaking discretion of the States and
to carefully assess the
[[Page 31762]]
necessity for such actions. The Executive Order also requires agencies
to have an accountable process to ensure meaningful and timely input by
State and local officials in the development of regulatory policies
that have Federalism implications. On March 14, 2000, DOE published a
statement of policy describing the intergovernmental consultation
process it will follow in the development of such regulations. 65 FR
13735. DOE has examined this proposed rule and has tentatively
determined that it would not have a substantial direct effect on the
States, on the relationship between the national government and the
States, or on the distribution of power and responsibilities among the
various levels of government. EPCA governs and prescribes Federal
preemption of State regulations as to energy conservation for the
products that are the subject of this proposed rule. States can
petition DOE for exemption from such preemption to the extent, and
based on criteria, set forth in EPCA. (42 U.S.C. 6297) Therefore, no
further action is required by Executive Order 13132.
F. Review Under Executive Order 12988
With respect to the review of existing regulations and the
promulgation of new regulations, section 3(a) of Executive Order 12988,
``Civil Justice Reform,'' imposes on Federal agencies the general duty
to adhere to the following requirements: (1) Eliminate drafting errors
and ambiguity; (2) write regulations to minimize litigation; (3)
provide a clear legal standard for affected conduct rather than a
general standard; and (4) promote simplification and burden reduction.
61 FR 4729 (February 7, 1996). Regarding the review required by section
3(a), section 3(b) of Executive Order 12988 specifically requires that
Executive agencies make every reasonable effort to ensure that the
regulation: (1) Clearly specifies the preemptive effect, if any; (2)
clearly specifies any effect on existing Federal law or regulation; (3)
provides a clear legal standard for affected conduct while promoting
simplification and burden reduction; (4) specifies the retroactive
effect, if any; (5) adequately defines key terms; and (6) addresses
other important issues affecting clarity and general draftsmanship
under any guidelines issued by the Attorney General. Section 3(c) of
Executive Order 12988 requires Executive agencies to review regulations
in light of applicable standards in section 3(a) and section 3(b) to
determine whether they are met or it is unreasonable to meet one or
more of them. DOE has completed the required review and determined
that, to the extent permitted by law, this proposed rule meets the
relevant standards of Executive Order 12988.
G. Review Under the Unfunded Mandates Reform Act of 1995
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA)
requires each Federal agency to assess the effects of Federal
regulatory actions on State, local, and Tribal governments and the
private sector. Public Law 104-4, sec. 201 (codified at 2 U.S.C. 1531).
For a proposed regulatory action likely to result in a rule that may
cause the expenditure by State, local, and Tribal governments, in the
aggregate, or by the private sector of $100 million or more in any one
year (adjusted annually for inflation), section 202 of UMRA requires a
Federal agency to publish a written statement that estimates the
resulting costs, benefits, and other effects on the national economy.
(2 U.S.C. 1532(a), (b)) The UMRA also requires a Federal agency to
develop an effective process to permit timely input by elected officers
of State, local, and Tribal governments on a proposed ``significant
intergovernmental mandate,'' and requires an agency plan for giving
notice and opportunity for timely input to potentially affected small
governments before establishing any requirements that might
significantly or uniquely affect them. On March 18, 1997, DOE published
a statement of policy on its process for intergovernmental consultation
under UMRA. 62 FR 12820. DOE's policy statement is also available at
http://energy.gov/sites/prod/files/gcprod/documents/umra_97.pdf.
DOE has concluded that this proposed rule is not expected to
require expenditures of $100 million or more on the private sector. As
a result, the analytical requirements of UMRA described above are not
applicable.
H. Review Under the Treasury and General Government Appropriations Act,
1999
Section 654 of the Treasury and General Government Appropriations
Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family
Policymaking Assessment for any rule that may affect family well-being.
This proposed rule would not have any impact on the autonomy or
integrity of the family as an institution. Accordingly, DOE has
concluded that it is not necessary to prepare a Family Policymaking
Assessment.
I. Review Under Executive Order 12630
Pursuant to Executive Order 12630, ``Governmental Actions and
Interference with Constitutionally Protected Property Rights,'' 53 FR
8859 (March 15, 1988), DOE has determined that this proposed rule would
not result in any takings that might require compensation under the
Fifth Amendment to the U.S. Constitution.
J. Review Under the Treasury and General Government Appropriations Act,
2001
Section 515 of the Treasury and General Government Appropriations
Act, 2001 (44 U.S.C. 3516 note) provides for Federal agencies to review
most disseminations of information to the public under information
quality guidelines established by each agency pursuant to general
guidelines issued by OMB. OMB's guidelines were published at 67 FR 8452
(Feb. 22, 2002), and DOE's guidelines were published at 67 FR 62446
(Oct. 7, 2002). DOE has reviewed this NOPR under the OMB and DOE
guidelines and has concluded that it is consistent with applicable
policies in those guidelines.
K. Review Under Executive Order 13211
Executive Order 13211, ``Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use,'' 66 FR 28355
(May 22, 2001), requires Federal agencies to prepare and submit to OIRA
at OMB, a Statement of Energy Effects for any proposed significant
energy action. A ``significant energy action'' is defined as any action
by an agency that promulgates or is expected to lead to promulgation of
a final rule, and that: (1) Is a significant regulatory action under
Executive Order 12866, or any successor order; and (2) is likely to
have a significant adverse effect on the supply, distribution, or use
of energy, or (3) is designated by the Administrator of OIRA as a
significant energy action. For any proposed significant energy action,
the agency must give a detailed statement of any adverse effects on
energy supply, distribution, or use should the proposal be implemented,
and of reasonable alternatives to the action and their expected
benefits on energy supply, distribution, and use.
DOE has tentatively concluded that this regulatory action, which
proposes new energy conservation standards for compressors, is not a
significant energy action because the proposed standards are not likely
to have a significant adverse effect on the supply, distribution, or
use of energy, nor has it been designated as such by the Administrator
at OIRA. Accordingly, DOE has not prepared a Statement of Energy
Effects on this proposed rule.
[[Page 31763]]
L. Review Under the Information Quality Bulletin for Peer Review
On December 16, 2004, OMB, in consultation with the Office of
Science and Technology Policy (OSTP), issued its Final Information
Quality Bulletin for Peer Review (the Bulletin). 70 FR 2664 (January
14, 2005). The Bulletin establishes that certain scientific information
shall be peer reviewed by qualified specialists before it is
disseminated by the Federal Government, including influential
scientific information related to agency regulatory actions. The
purpose of the bulletin is to enhance the quality and credibility of
the Government's scientific information. Under the Bulletin, the energy
conservation standards rulemaking analyses are ``influential scientific
information,'' which the Bulletin defines as ``scientific information
the agency reasonably can determine will have, or does have, a clear
and substantial impact on important public policies or private sector
decisions.'' Id. at FR 2667.
In response to OMB's Bulletin, DOE conducted formal in-progress
peer reviews of the energy conservation standards development process
and analyses and has prepared a Peer Review Report pertaining to the
energy conservation standards rulemaking analyses. Generation of this
report involved a rigorous, formal, and documented evaluation using
objective criteria and qualified and independent reviewers to make a
judgment as to the technical/scientific/business merit, the actual or
anticipated results, and the productivity and management effectiveness
of programs and/or projects. The ``Energy Conservation Standards
Rulemaking Peer Review Report'' dated February 2007 has been
disseminated and is available at the following Web site: http://energy.gov/eere/buildings/downloads/energy-conservation-standards-rulemaking-peer-review-report.
VIII. Public Participation
A. Attendance at the Public Meeting
The time, date, and location of the public meeting are listed in
the DATES and ADDRESSES sections at the beginning of this document. If
you plan to attend the public meeting, please notify Ms. Brenda Edwards
at (202) 586-2945 or [email protected].
Please note that foreign nationals visiting DOE Headquarters are
subject to advance security screening procedures which require advance
notice prior to attendance at the public meeting. If a foreign national
wishes to participate in the public meeting, please inform DOE of this
fact as soon as possible by contacting Ms. Regina Washington at (202)
586-1214 or by email ([email protected]) so that the
necessary procedures can be completed.
DOE requires visitors to have laptops and other devices, such as
tablets, checked upon entry into the Forrestal Building. Any person
wishing to bring these devices into the building will be required to
obtain a property pass. Visitors should avoid bringing these devices,
or allow an extra 45 minutes to check in. Please report to the
visitor's desk to have devices checked before proceeding through
security.
Due to the REAL ID Act implemented by the Department of Homeland
Security (DHS), there have been recent changes regarding identification
(ID) requirements for individuals wishing to enter Federal buildings
from specific States and U.S. territories. As a result, driver's
licenses from several States or territory will not be accepted for
building entry, and instead, one of the alternate forms of ID listed
below will be required. DHS has determined that regular driver's
licenses (and ID cards) from the following jurisdictions are not
acceptable for entry into DOE facilities: Alaska, American Samoa,
Arizona, Louisiana, Maine, Massachusetts, Minnesota, New York,
Oklahoma, and Washington. Acceptable alternate forms of Photo-ID
include: U.S. Passport or Passport Card; an Enhanced Driver's License
or Enhanced ID-Card issued by the States of Minnesota, New York, or
Washington (Enhanced licenses issued by these States are clearly marked
Enhanced or Enhanced Driver's License); a military ID or other Federal
government-issued Photo-ID card.
In addition, you can attend the public meeting via webinar. Webinar
registration information, participant instructions, and information
about the capabilities available to webinar participants will be
published on DOE's Web site at https://www1.eere.energy.gov/buildings/appliance_standards/product.aspx/productid/87 Participants are
responsible for ensuring their systems are compatible with the webinar
software.
B. Procedure for Submitting Prepared General Statements for
Distribution
Any person who has plans to present a prepared general statement
may request that copies of his or her statement be made available at
the public meeting. Such persons may submit requests, along with an
advance electronic copy of their statement in PDF (preferred),
Microsoft Word or Excel, WordPerfect, or text (ASCII) file format, to
the appropriate address shown in the ADDRESSES section at the beginning
of this document. The request and advance copy of statements must be
received at least one week before the public meeting and may be
emailed, hand-delivered, or sent by mail. DOE prefers to receive
requests and advance copies via email. Please include a telephone
number to enable DOE staff to make follow-up contact, if needed.
C. Conduct of the Public Meeting
DOE will designate a DOE official to preside at the public meeting
and may also use a professional facilitator to aid discussion. The
meeting will not be a judicial or evidentiary-type public hearing, but
DOE will conduct it in accordance with section 336 of EPCA. (42 U.S.C.
6306) A court reporter will be present to record the proceedings and
prepare a transcript. DOE reserves the right to schedule the order of
presentations and to establish the procedures governing the conduct of
the public meeting. There shall not be discussion of proprietary
information, costs or prices, market share, or other commercial matters
regulated by U.S. anti-trust laws. After the public meeting, interested
parties may submit further comments on the proceedings, as well as on
any aspect of the rulemaking, until the end of the comment period.
The public meeting will be conducted in an informal, conference
style. DOE will present summaries of comments received before the
public meeting, allow time for prepared general statements by
participants, and encourage all interested parties to share their views
on issues affecting this rulemaking. Each participant will be allowed
to make a general statement (within time limits determined by DOE),
before the discussion of specific topics. DOE will allow, as time
permits, other participants to comment briefly on any general
statements.
At the end of all prepared statements on a topic, DOE will permit
participants to clarify their statements briefly and comment on
statements made by others. Participants should be prepared to answer
questions by DOE and by other participants concerning these issues. DOE
representatives may also ask questions of participants concerning other
matters relevant to this rulemaking. The official conducting the public
meeting will accept additional comments or questions from those
attending, as time permits. The presiding official will announce any
further procedural rules or modification of the above procedures that
may be
[[Page 31764]]
needed for the proper conduct of the public meeting.
A transcript of the public meeting will be included in the docket,
which can be viewed as described in the Docket section at the beginning
of this document and will be accessible on the DOE Web site. In
addition, any person may buy a copy of the transcript from the
transcribing reporter.
D. Submission of Comments
DOE will accept comments, data, and information regarding this
proposed rule before or after the public meeting, but no later than the
date provided in the DATES section at the beginning of this proposed
rule. Interested parties may submit comments, data, and other
information using any of the methods described in the ADDRESSES section
at the beginning of this document.
Submitting comments via www.regulations.gov. The
www.regulations.gov Web page will require you to provide your name and
contact information. Your contact information will be viewable to DOE
Building Technologies staff only. Your contact information will not be
publicly viewable except for your first and last names, organization
name (if any), and submitter representative name (if any). If your
comment is not processed properly because of technical difficulties,
DOE will use this information to contact you. If DOE cannot read your
comment due to technical difficulties and cannot contact you for
clarification, DOE may not be able to consider your comment.
However, your contact information will be publicly viewable if you
include it in the comment itself or in any documents attached to your
comment. Any information that you do not want to be publicly viewable
should not be included in your comment, nor in any document attached to
your comment. Otherwise, persons viewing comments will see only first
and last names, organization names, correspondence containing comments,
and any documents submitted with the comments.
Do not submit to www.regulations.gov information for which
disclosure is restricted by statute, such as trade secrets and
commercial or financial information (hereinafter referred to as
Confidential Business Information (CBI)). Comments submitted through
www.regulations.gov cannot be claimed as CBI. Comments received through
the Web site will waive any CBI claims for the information submitted.
For information on submitting CBI, see the Confidential Business
Information section below.
DOE processes submissions made through www.regulations.gov before
posting. Normally, comments will be posted within a few days of being
submitted. However, if large volumes of comments are being processed
simultaneously, your comment may not be viewable for up to several
weeks. Please keep the comment tracking number that www.regulations.gov
provides after you have successfully uploaded your comment.
Submitting comments via email, hand delivery/courier, or mail.
Comments and documents submitted via email, hand delivery/courier, or
mail also will be posted to www.regulations.gov. If you do not want
your personal contact information to be publicly viewable, do not
include it in your comment or any accompanying documents. Instead,
provide your contact information in a cover letter. Include your first
and last names, email address, telephone number, and optional mailing
address. The cover letter will not be publicly viewable as long as it
does not include any comments
Include contact information each time you submit comments, data,
documents, and other information to DOE. If you submit via mail or hand
delivery/courier, please provide all items on a CD, if feasible, in
which case it is not necessary to submit printed copies. No
telefacsimiles (faxes) will be accepted.
Comments, data, and other information submitted to DOE
electronically should be provided in PDF (preferred), Microsoft Word or
Excel, WordPerfect, or text (ASCII) file format. Provide documents that
are not secured, that are written in English, and that are free of any
defects or viruses. Documents should not contain special characters or
any form of encryption and, if possible, they should carry the
electronic signature of the author.
Campaign form letters. Please submit campaign form letters by the
originating organization in batches of between 50 to 500 form letters
per PDF or as one form letter with a list of supporters' names compiled
into one or more PDFs. This reduces comment processing and posting
time.
Confidential Business Information. Pursuant to 10 CFR 1004.11, any
person submitting information that he or she believes to be
confidential and exempt by law from public disclosure should submit via
email, postal mail, or hand delivery/courier two well-marked copies:
One copy of the document marked ``confidential'' including all the
information believed to be confidential, and one copy of the document
marked ``non-confidential'' with the information believed to be
confidential deleted. Submit these documents via email or on a CD, if
feasible. DOE will make its own determination about the confidential
status of the information and treat it according to its determination.
Factors of interest to DOE when evaluating requests to treat
submitted information as confidential include: (1) A description of the
items; (2) whether and why such items are customarily treated as
confidential within the industry; (3) whether the information is
generally known by or available from other sources; (4) whether the
information has previously been made available to others without
obligation concerning its confidentiality; (5) an explanation of the
competitive injury to the submitting person that would result from
public disclosure; (6) when such information might lose its
confidential character due to the passage of time; and (7) why
disclosure of the information would be contrary to the public interest.
It is DOE's policy that all comments may be included in the public
docket, without change and as received, including any personal
information provided in the comments (except information deemed to be
exempt from public disclosure).
E. Issues on Which DOE Seeks Comment
Although DOE welcomes comments on any aspect of this proposal, DOE
is particularly interested in receiving comments and views of
interested parties concerning the following issues:
1. DOE invites comments on whether DOE should adopt standards for
compressors at TSL 3 instead of at TSL 2.
2. DOE seeks comment on its proposal to limit the scope of energy
conservation standard proposed in this document to only equipment that
is made up of a compression element (bare compressor), driver(s),
mechanical equipment to drive the compressor element, and any ancillary
equipment (i.e., a ``packaged compressor''), through the use of the
defined term, ``air compressors.''
3. DOE seeks comment on its proposal to limit the scope of energy
conservation standard proposed in this document to only compressors
that are designed to compress air and that have inlets open to the
atmosphere or other source of air, through the use of the defined term,
``air compressors.''
4. DOE requests comment on its proposal to consider standards for
both single- and three-phase compressor equipment. DOE also requests
comment on any market trends that may affect the efficiency of such
equipment in the future. DOE requests data that may aid in
characterizing the relative cost and performance of equipment of
different
[[Page 31765]]
motor phase counts, so that DOE can better evaluate whether a
substitution incentive is likely to be created.
5. DOE requests comment on the proposal to include only compressors
with a compressor motor nominal horsepower of greater than or equal to
1 and less than or equal to 500 within the scope of this energy
conservation standard.
6. DOE requests comment on its proposal to establish separate
equipment classes for rotary and reciprocating equipment, and on
whether and why utility or performance differences exist between the
two types of equipment. DOE requests comment on its proposal to
establish separate equipment classes for rotary and reciprocating
equipment, and on whether and why utility or performance differences
exist between the two types of equipment.
7. DOE requests comment on separating equipment classes by
lubricant presence, and specifically on whether ISO 8573-1:2010 is
suitable for characterizing compressors on that basis. DOE also
requests comments on the proposed definitions for lubricated
compressor, lubricant-free compressors, and auxiliary substance.
8. DOE requests comment on its proposal to establish separate
equipment classes for air- and water-cooled equipment. DOE also
requests comments on the proposed definitions for air- and water-cooled
compressor.
9. DOE requests comment on the establishment of separate equipment
classes, by motor phase count, for reciprocating equipment.
10. DOE also requests comment on the proposal to combine single-
and three-phase rotary equipment in each rotary equipment class.
11. DOE also requests comment specifically on IE4 or ``super
premium'' electric motors, their suitability for compressors, and on
any efforts to incorporate them into newly developed equipment.
12. DOE seeks comment on whether sufficient resources would be
available such that criterion 2 of the screening analysis is satisfied.
13. DOE requests comment on the use of 125 and 175 psig as
representative pressures to establish absolute MSPs for rotary and
reciprocating equipment classes, respectively.
14. DOE requests comment on DOE's proposal to establish efficiency
levels that are independent of pressure.
15. DOE also requests comment on DOE's proposal to establish
incremental MSPs that are independent of pressure.
16. DOE requests additional data which can be used to refine its
current baseline, max-tech, and efficiency level assumptions.
17. DOE requests comment on the use of the EU Lot 31 regression
curve for piston standard air compressors to define the regression
curve of the R3_FS_L_XX equipment class.
18. DOE requests comment and supporting data on the efficiency
levels established for the RP_FS_L_AC, RP_VS_L_AC, and R3_FS_L_XX
equipment classes.
19. DOE requests comment on the proposed efficiency levels selected
for the RP_VS_LF_AC equipment class regarding their representation of
the market, and any data that could improve the analysis.
20. DOE requests comment on the proposed efficiency levels selected
for the RP_VS_LF_WC equipment class regarding their representation of
the market, and any data that could improve the analysis.
21. DOE requests comment and supporting data on the proposed
efficiency levels established for the R1_FS_L_XX equipment class.
22. DOE requests comment on the use of Lot 31 MSP-Flow-Efficiency
Relationships to develop MSP-flow-efficiency relationships for the
proposed RP_FS_L_AC and RP_VS_L_AC equipment classes.
23. DOE requests comment on the methods used to develop RP_FS_LF_AC
(lubricant-free) incremental MSP. Specifically, DOE requests comment on
the use of RP_FS_L_AC (lubricated) incremental MSP relationship to
develop a lubricant-free incremental MSP relationship.
24. DOE requests comment and supporting data on the MSPs
established for the RP_FS_LF_AC equipment class.
25. DOE requests comment on the methods used to develop RP_VS_LF_AC
(lubricant-free) incremental MSP. Specifically, DOE requests comment on
the use of RP_VS_L_AC (lubricated) incremental MSP relationship to
develop a lubricant-free incremental MSP relationship.
26. DOE requests comment and supporting data on the MSPs
established for the RP_VS_LF_AC equipment class.
27. DOE requests comment on the use of incremental MSP for air-
cooled equipment classes to represent incremental MSP for water-cooled
equipment classes.
28. DOE requests comment and supporting data on the MSPs
established for the R3_FS_L_XX equipment class.
29. DOE requests comment on the use of incremental MSP for the
R3_FS_L_XX equipment classes to represent incremental MSP for the
R1_FS_L_XX equipment classes.
30. DOE requests comment on its estimates for manufacturer markups,
as well as material, labor, depreciation, and overhead breakdowns.
31. DOE seeks input on its analysis of market channels listed above
in Table IV.28, particularly related to whether the channels include
all necessary intermediate steps, and the estimated market share of
each channel.
32. Table IV.29 shows the distribution of air compressor
application for both rotary and reciprocating air compressors. DOE
seeks comment on its distribution of air compressors application.
33. DOE requests comment and information on average annual
operating hours for the compressor types and applications in the scope
of this rulemaking.
34. DOE requests comment and information on typical load profiles
for the air compressor types and applications in the scope of this
rulemaking.
35. DOE seeks data on the degree that compressors are over- or
under-sized for an intended application. Specifically, DOE requests
data on the degree that air compressors are operated at duty points
other than their intended design point.
36. DOE requests information and data on the degree that a
compressor's pressure can be set above or below its design point.
Additionally, DOE requests information and data on air compressor
efficiency when it is operated above the design point pressure.
37. DOE requests comments on the most appropriate trend to use for
real (inflation-adjusted) compressor prices.
38. DOE requests comment on whether any of the efficiency levels
considered in this NOPR might lead to an increase in installation costs
and, if so, data regarding the magnitude of the increased cost for each
relevant efficiency level.
39. DOE seeks comment on these minimum, average, and maximum
equipment lifetimes, and whether or not they are appropriate for all
equipment classes.
40. DOE seeks comment on the total 2013 shipments by equipment
class.
41. DOE seeks comment on its assumption that air compressors with a
capacity of no more than 50 ACFM are used in commercial applications,
and air compressors greater than 50 ACFM are used in industrial
applications.
42. DOE seeks comment on the share of shipments by equipment class,
and how these shares may change over time.
[[Page 31766]]
43. DOE seeks comment on whether the assumed price elasticities are
reasonable for air compressors.
44. DOE seeks comment on its assumption of no change over time in
the market share of more efficient equipment in the no-new-standards
case.
45. DOE seeks information on any projected change in equipment
efficiencies over time, specifically whether or not the market shares
of air compressors by efficiency would change after the publication of
a new standard.
46. DOE requests comment on its estimates of average industry
financial parameters.
47. DOE requests comment on the use of failure rates for rotary
compressor equipment as a proxy for reciprocating equipment failure
rates.
48. DOE requests feedback on its conversion cost methodology,
including quantitative estimates and qualitative descriptions of the
capital and product conversion costs manufacturers would incur in order
to comply with amended energy conservation standards.
49. DOE requests comments on the total annual direct employment
levels in the industry.
50. DOE requests comment on potential bottlenecks in manufacturing
capacity or constraints in engineering resources that could result from
a new standard.
51. DOE requests comments on the cumulative regulatory burden
facing compressor manufacturers. Specifically, DOE seeks input on any
equipment-specific Federal regulations with which compliance is
required within three years of the proposed compliance date for any
final compressor standards, as well as on recommendations on how DOE
may be able to align varying regulations to mitigate cumulative burden.
DOE requests comments and data that will aid in the refinement of
its analysis of the calculated reduction to the industry's net present
value at the TSL 3 level (see section V.B.2.a). These impacts are
captured in the Manufacturing Impact Analysis, and in particular within
the DOE's Government Regulatory Impact Model (see section V.B.2).
Comments are also requested on DOE's inputs to the product and capital
conversion costs, including the lack of available skilled design
engineers (see section V.B.2.c) and product production costs (see
section V.B.2.a), as well as DOE's assumptions regarding mark-up
scenarios, specifically the assumption regarding the percentage of
costs that will be passed on to consumers (see section IV.C.7).
52. DOE requests comment on the number and names of domestic small
manufacturers producing covered equipment.
53. DOE notes that this conversion cost analysis assumes that
compressors sold by domestic small manufacturers are of the same
efficiency distribution as those sold by large manufacturers. DOE
requests comment and data on the relative efficiency of equipment sold
by domestic small manufacturers, as compared to equipment sold by large
manufacturers.
54. DOE requests comment and data on the impact of the proposed
standard on domestic small business manufacturers. Specifically, DOE
requests comment on the magnitude of conversion costs for a domestic
small manufacturers and the number or percent of models produced by
domestic small manufacturers. DOE also requests data on the cost of
capital for domestic small manufacturers to better quantify how
domestic small manufacturers might be disadvantaged relative to large
competitors.
IX. Approval of the Office of the Secretary
The Secretary of Energy has approved publication of this notice of
proposed rulemaking.
List of Subjects
10 CFR Part 429
Confidential business information, Energy conservation, Household
appliances, Imports, Reporting and recordkeeping requirements.
10 CFR Part 430
Administrative practice and procedure, Confidential business
information, Energy conservation, Household appliances, Imports,
Incorporation by reference, Intergovernmental relations, Small
businesses.
Issued in Washington, DC, on April 29, 2016.
David Friedman,
Principal Deputy Assistant Secretary, Energy Efficiency and Renewable
Energy.
For the reasons set forth in the preamble, DOE proposes to amend
parts 429 and 430 of chapter II, subchapter D, of title 10 of the Code
of Federal Regulations, as set forth below:
PART 429--CERTIFICATION, COMPLIANCE, AND ENFORCEMENT FOR CONSUMER
PRODUCTS AND COMMERCIAL AND INDUSTRIAL EQUIPMENT
0
1. The authority citation for part 429 continues to read as follows:
Authority: 42 U.S.C. 6291-6317.
0
2. Section 429.12 is amended by revising paragraph (b)(13) to read as
follows:
Sec. 429.12 General requirements applicable to certification reports.
* * * * *
(b) * * *
(13) Product specific information listed in Sec. Sec. 429.14
through 429.61 of this chapter.
* * * * *
0
3. Section 429.61 [proposed at 81 FR 27219, (May 5, 2016)] is amended
by adding paragraph (b) to read as follows:
Sec. 429.61 Compressors.
* * * * *
(b) Certification reports. (1) The requirements of Sec. 429.12 are
applicable to compressors; and
(2) Pursuant to Sec. 429.12(b)(13), a certification report will
include the following public product-specific information:
(i) Full- or part-load package isentropic efficiency, as applicable
(dimensionless);
(ii) Full-load actual volume flow rate (in actual cubic feet per
minute);
(iii) Compressor motor nominal horsepower (in horsepower);
(iv) Full-load operating pressure (in pounds per square inch,
gauge);
(v) Maximum full-flow operating pressure (in pounds per square
inch, gauge); and
(vi) Pressure ratio (dimensionless).
PART 431--ENERGY CONSERVATION PROGRAM FOR CERTAIN COMMERCIAL AND
INDUSTRIAL EQUIPMENT
0
4. The authority citation for part 431 continues to read as follows:
Authority: 42 U.S.C. 6291-6317.
0
5. Section 431.342 [proposed at 81 FR 27219 (May 5, 2016)] is amended
by adding, in alphabetical order, definitions for the terms ``Air-
cooled compressor,'' ``Auxiliary substance,'' ``Lubricant-free
compressor,'' ``Lubricated compressor,'' and ``Water-cooled
compressor.''
The additions read as follows:
Sec. 431.342 Definitions concerning compressors.
* * * * *
Air-cooled compressor means a compressor that utilizes air to cool
both the compressed air and, if present, any auxiliary substances used
to facilitate compression.
* * * * *
Auxiliary substance means any substance deliberately introduced
into a
[[Page 31767]]
compression process to aid in compression of a gas by any of the
following: lubricating, sealing mechanical clearances, or absorbing
heat.
* * * * *
Lubricant-free compressor means a compressor that does not
introduce any auxiliary substance into the compression chamber at any
time during operation.
Lubricated compressor means a compressor that introduces an
auxiliary substance into the compression chamber during compression.
* * * * *
Water-cooled compressor means a compressor that utilizes chilled
water provided by an external system to cool both the compressed air
and, if present, any auxiliary substance used to facilitate
compression.
0
6. Section 431.345 is added to read as follows:
Sec. 431.345 Energy conservation standards and effective dates.
(a) Each compressor that is manufactured starting on [date five
years after date of publication in the Federal Register] and that:
(1) Is an air compressor;
(2) Is a rotary compressor;
(3) Is driven by a brushless electric motor;
(4) Is distributed in commerce with a compressor motor nominal
horsepower greater than or equal to 1 and less than or equal to 500
horsepower (hp);
(5) Has a full-load operating pressure greater than or equal to 31
pounds per square inch gauge (psig) and less than or equal to 225 psig;
(6) Is manufactured alone or as a component of another piece of
equipment; and
(7) Is in one of the equipment classes listed in the Table 1, must
have a full-load package isentropic efficiency or part-load package
isentropic efficiency that is not less than the appropriate ``Minimum
Package Isentropic Efficiency'' value listed in Table 1.
Table 1--Energy Conservation Standards for Certain Compressors
----------------------------------------------------------------------------------------------------------------
[eta]Regr (package d (percentage
Equipment class Minimum package isentropic isentropic efficiency loss
efficiency reference curve) reduction)
----------------------------------------------------------------------------------------------------------------
Rotary; Lubricated; Air-cooled; [eta]Regr + (1- [eta]Regr) * -0.00928 * ln(.472 * V1)\2\ -15
Fixed-speed Compressor. (d/100). + 0.139 * ln(.472 * V1) +
0.271.
Rotary; Lubricated; Air-cooled; [eta]Regr + (1- [eta]Regr) * -0.0155 * ln(.472 * V1)\2\ + -10
Variable-speed Compressor. (d/100). 0.216 * ln(.472 * V1) +
0.00905.
Rotary; Lubricated; Water-cooled; .0235 + [eta]Regr + (1- -0.00928 * ln(.472 * V1)\2\ -15
Fixed-speed Compressor. [eta]Regr) * (d/100). + 0.139 * ln(.472 * V1) +
0.271.
Rotary; Lubricated; Watercooled; .0235 + [eta]Regr + (1- -0.0155 * ln(.472 * V1)\2\ + -15
Variable-speed Compressor. [eta]Regr) * (d/100). 0.216 * ln(.472 * V1) +
0.00905.
Rotary; Lubricant-free; Air-cooled; [eta]Regr + (1- [eta]Regr) * A1 * ln(.472 * V1)\2\ + B1 * -11
Fixed-speed Compressor. (d/100). ln(.472 * V1) + C1.
Rotary; Lubricant-free; Air-cooled; [eta]Regr + (1- [eta]Regr) * A2 * ln(.472 * V1)\2\ + B2 * -13
Variable-speed. (d/100). ln(.472 * V1) + C2.
Rotary; Lubricant-free; Water- A3 * ln(.472 * V1)\2\ + B3 * A1 * ln(.472 * V1)\2\ + B1 * -11
cooled; Fixed-speed Compressor. ln(.472 * V1) + C3 + ln(.472 * V1) + C1.
[eta]Regr + (1- [eta]Regr)
* (d/100).
Rotary; Lubricant-free; Water- A4 * ln(.472 * V1)\2\ + B4 * A2 * ln(.472 * V1)\2\ + B2 * -13
cooled; Variable-speed Compressor. ln(.472 * V1) + C4 + ln(.472 * V1) + C2.
[eta]Regr + (1- [eta]Regr)
* (d/100).
----------------------------------------------------------------------------------------------------------------
Instructions for the use of Table 1:
(1) To determine the standard level a compressor must meet, the
correct equipment class must be identified. The descriptions are in the
first column (``Equipment Class''); definitions for these descriptions
are found in Sec. 431.342.
(2) The second column (``Minimum Package Isentropic Efficiency'')
contains the applicable energy conservation standard level, provided in
terms of package isentropic efficiency.
(3) For ``Fixed-speed compressor'' equipment classes, the relevant
Package Isentropic Efficiency is Full-Load Package Isentropic
Efficiency. For ``Variable-speed compressor'' equipment classes, the
relevant Package Isentropic Efficiency is Part-Load Package Isentropic
Efficiency. Both Full- and Part-Load Package Isentropic Efficiency are
determined in accordance with the test procedure in Sec. 431.344.
(4) The second column (``Minimum Package Isentropic Efficiency'')
references the third column (``[eta]Regr''), also a function
of full-load actual volume flow rate, and the fourth column (``d'').
The equations are provided separately to maintain consistency with the
language of the preamble and analysis.
(5) The second and third columns contain the term V1,
which denotes compressor full-load actual volume flow rate, given in
terms of actual cubic feet per minute (``acfm'') in inlet air
conditions and determined in accordance with the test procedure in
Sec. 431.344.
(6) The second and third columns contain the mathematical
coefficients A1, A2, A3,
A4, B1, B2, B3,
B4, C1, C2, C3, and
C4. Refer to Tables 1A, 1B, 1C, and 1D for the values of
these coefficients.
Table 1A--Certain Coefficients
----------------------------------------------------------------------------------------------------------------
Full-load actual volume flow rate range (acfm) A1 B1 C1
----------------------------------------------------------------------------------------------------------------
0 < V1 <= 161................................................... -0.00928 0.139 0.191
161 < V1 <= 2125................................................ 0.00281 0.0344 0.417
2125 < V1....................................................... -0.00928 0.139 0.271
----------------------------------------------------------------------------------------------------------------
[[Page 31768]]
Table 1B--Certain Coefficients
----------------------------------------------------------------------------------------------------------------
Full-load actual volume flow rate range (acfm) A2 B2 C2
----------------------------------------------------------------------------------------------------------------
0 < V1 <= 102................................................... -0.0155 0.216 -0.0984
102 < V1 <= 1426................................................ 0.000 0.0958 0.134
1426 < V1....................................................... -0.0155 0.216 0.00905
----------------------------------------------------------------------------------------------------------------
Table 1C--Certain Coefficients
----------------------------------------------------------------------------------------------------------------
Full-load actual volume flow rate range (acfm) A3 B3 C3
----------------------------------------------------------------------------------------------------------------
0 < V1 < 102.................................................... 0 0 0
102 <= V1....................................................... -0.00924 0.117 -0.315
----------------------------------------------------------------------------------------------------------------
Table 1D--Certain Coefficients
----------------------------------------------------------------------------------------------------------------
Full-load actual volume flow rate range (acfm) A4 B4 C4
----------------------------------------------------------------------------------------------------------------
0 < V1 < 74..................................................... 0 0 0
74 <= V1........................................................ 0.000173 0.00783 -0.0300
----------------------------------------------------------------------------------------------------------------
(b) [Reserved]
[FR Doc. 2016-11337 Filed 5-18-16; 8:45 am]
BILLING CODE 6450-01-P