P6-6. Impact Assessment Framework
Approach

Objectives:

Develop and demonstrate an impact assessment framework that explicitly identifies the assumptions and inputs to the assessment process and evaluates technologies for energy savings and electric peak demand reduction potential.

Approach:

The project methodology and framework was designed for assessing the energy-related benefits of products that may emerge from the Commission's PIER Program research for the commercial buildings sector. The methodology defines a process that starts with the initial product characterization and identification of the product's market segment, determines the market penetration trajectory as a function of time, and concludes with estimating the impacts on electricity use, electricity demand, and monetary expenditures on electricity.

The key features of the assessment framework are, in summary:

• General applicability to all energy efficiency products for commercial buildings. The framework has been developed specifically for analyzing impacts of energy efficiency products relevant for the commercial buildings sector in California. It provides a generic product characterization schema that allows the user to adjust the level of specificity of the product characterization based on the current level to which the characteristics of future energy efficiency products are known. It is sufficiently flexible to enable the user to analyze very specific products such as a 25-ton high energy efficient air-conditioner system on the one hand, as well as a less defined product such as, advanced controls software that will enable utilization of natural ventilation systems in buildings.
  
• Market penetration models. Two approaches were provided for estimating market penetration of new products. The first approach requires expert judgment applied to a generic "S"-shaped market penetration model to achieve a specific "S"-shaped market penetration trajectory. This approach is recommended for estimating impacts of single products or a set of aggregated products for which competing technologies either do not exist or are difficult to characterize. The second market penetration approach uses the Peterka multi-competitor market penetration model to explicitly model market competition. It requires estimates of specific capital cost and O&M costs for the new products competing in the same marketplace. It is often difficult to assign values of cost to future products that currently do not exist. The uncertainties associated with this may be high and, thus, the user should be aware of the inherent uncertainties of the input data to the penetration model and then judge the output of the model accordingly. The largest value of this market penetration model lies in its use as an instrument to gain insights into the market dynamics by conducting sensitivity analyses and evaluating relative competitiveness between competing products.
  
• Exposure of Assumptions. The guiding principal in designing the assessment framework was to provide transparency of all assumptions made during the assessment process. Several assumptions are generally employed for postulating future growth trajectories for prices, energy consumption, building stock, and other trends that impact the results of an assessment. To this end, the framework was designed such that it exposes key variables explicitly rather than aggregating and lumping them together to represent many mechanisms. As a result, this method requires the user to explicitly assign values to variables and be prepared to substantiate them through defensible sources and logical arguments, so that peers can review them.

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