Energy Savings on the Way for Commercial and Industrial Compressors, Water Heaters, and Packaged Boilers, but More Savings Are Possible

The Department of Energy proposed the first-ever efficiency standards for commercial and industrial compressors late last week which, once finalized, will save an estimated 0.2 quadrillion BTU ("quads") and $620 million in net savings for businesses and consumers over the next 30 years. That's enough energy savings to offset the carbon pollution emissions from over 1 million homes for one year. And while DOE found that even higher standards would be cost-effective and more than double these energy and consumer savings—their current proposal leaves these potential savings on the table.

This rule is one of a series of recent proposals from DOE for commercial and industrial products, including commercial water heaters and commercial packaged boilers. In total, savings from all three proposals would add up to 2.4 quads of energy, up to $9 billion in net savings for the equipment owners, and reduce carbon pollution emissions by 130 million metric tons over 30 years—enough to offset the emissions for over 13 million homes for one year.

While it's great to see DOE moving forward on energy efficiency standards for these types of commercial equipment, in all three cases even higher standards would be cost-effective and lead to additional energy savings. If DOE were to increase the proposed efficiency for each product to the next level considered, savings would increase to 3.7 quads, $12.7 billion in utility bill savings above the cost of the equipment, and 201 million metric tons of carbon pollution avoided over 30 years. That's enough to offset the emissions from over 21 million homes for one year!

Commercial and Industrial Compressors

Commercial and industrial compressors pressurize air and other gases to serve a variety of purposes, such as pneumatic control systems in buildings, manufacturing processes, and other industrial uses. DOE is in the process of developing test procedures as well as the standards for commercial and industrial compressors which do not currently have to meet federal standards.

The standards proposed last week, which would be the first-ever federal standards for compressors, are expressed as a percentage of maximum theoretical efficiency and vary based on the compressor type and size. In addition to the energy and dollar savings mentioned earlier, the proposed standards would cut carbon pollution emissions by 10.6 million metric tons over 30 years.

DOE notes that it is strongly considering higher standards than those proposed, which would more than double the savings, leading to 0.49 quads of energy savings, $1.6 billion in net consumer savings, and 29 million metric tons of carbon pollution reductions, over 30 years. DOE should adopt these higher standards which are cost-effective and would lead to increased energy and consumer benefits.

Commercial Packaged Boilers

Commercial packaged boilers are large steam and hot water boilers used to heat a quarter of the commercial floor space in the United States, as well as multifamily buildings. They run using oil or natural gas and generally serve buildings and facilities with central distribution systems that circulate the steam or hot water from the boiler to other parts of the building.

DOE's proposed rule would require boilers to meet thermal efficiencies of 81 to 88 percent (meaning at least 88 percent of the energy used is converted to useful heat), an improvement of 2 to 6 percent compared to today's standards, depending on the boiler size and fuel type. Average savings for an individual boiler range from $500 to $36,000 over its lifetime, depending on the size and type of the boiler.

As proposed, the standards would save 0.4 quads of energy, enough energy to heat all the natural gas-heated homes in New England for two years, and save consumers up to $1.7 billion above the cost of the new equipment. Similar to compressors, even higher standards would lead to greater benefits for consumers and the environment. Increased standards would more than double energy savings to 1 quad and increase consumer benefits to $2.6 billion in net savings over 30 years.

Commercial Water Heaters

Commercial water heaters are large water heaters that serve a variety of commercial end-uses with high hot water loads, such as restaurants, hotels, and food-processing facilities.

The proposed rule would raise the required efficiency for natural gas water heaters from the current standards of 80 percent thermal efficiency to 94 to 95 percent. This would save 0.8 quads of energy and up to $6.3 billion in net savings for consumers, while reducing carbon pollution emissions by 100 million metric tons over 30 years of shipments. Similar to boilers and compressors, DOE's analysis found even higher standards would be cost-effective and lead to additional savings.

For all three types of equipment, DOE is scheduled to finalize standards by the end of the year. Standards would apply to equipment manufactured 3 to 5 years later, depending on the product category. All three standards would help meet President Obama's goal of 3 billion metric tons of carbon emissions savings from standards by 2030, saving over 19 million metric tons cumulatively by 2030 at the currently proposed levels.

We commend DOE for moving forward on standards for these product categories and urge them to set standards at higher levels than proposed, providing cost-effective savings for consumers and reducing harmful carbon pollution emissions. 

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