Guam is an island economy that depends entirely on imported oil for its energy. The cost of producing electricity is high and the island is very susceptible to oil price increases. For these and other reasons, a program to save energy in new buildings is being considered as a means to curb growth in energy use. The central elements of the program are a building code and an appliance standard. Such codes and standards are already very common in Europe, the U.S. mainland and in Hawaii. They are also under development in New Zealand, Australia and a number of other countries.
This report is an analysis of the impact of the energy programs proposed for Guam. The purpose is to estimate the energy savings, peak demand reductions, and the expected costs of compliance. Data is presented for use by the general public as well as the Senate in their consideration of the proposal. The recommended energy program consists of an appliance standard, a code for residential buildings, a code for nonresidential buildings, government/utility policies for the development of energy efficient buildings, and procurement guidelines for energy efficient products. This impact analysis addresses the appliance standard for air conditioners and water heaters, the residential code, and the nonresidential code. It does not address the procurement guidelines or the government/utility building policies.
In addition to this report, two other documents have been prepared which may be of interest to the reader. These are:
- Draft Code: for consideration by the Senate.
- Life-Cycle Cost Analysis: to assure that the value of energy savings is adequate to cover the costs of complying with the code.
The impact of the energy code and appliance standard are estimated by (1) identifying a series of prototypical buildings on each of the islands such as offices, hotels, retail stores, etc.; (2) for each building type, identifying the physical characteristics that effect energy efficiency such as glass type, air conditioner efficiency and lighting levels; (3) applying the code or appliance standard requirements to each building type; (4) estimating the energy savings, peak demand reductions and compliance costs for each requirement; and (5) using projections of expected construction activity to estimate island wide energy savings.
The expected impacts of implementing the proposed code and appliance standard are summarized in Table 1. The impact is separated between the proposed code and appliance standard. If the proposed Guam building code and appliance standard were implemented with 100% compliance, energy use would be reduced by approximately 48 million kWh/year, 28 million kWh/year attributed to the building code and 19 million kWh/year attributed to the appliance standard.
As Guam continues to grow, there will be new demands for energy resources which must be met through the construction of new electric generating facilities or alternatively through energy efficiency measures such as those required by the proposed building code and appliance standard. The proposed building code and appliance standard is expected to curb yearly growth in electricity by about 8 MW and 7.9 MW respectively. This would significantly reduce the need to build new power plants and help provide a more stable and reliable electricity network.
The estimated cost of compliance with the proposed standard is about $7.1 million each year, $5.1 million for the building code and $2.0 million for the appliance standard. Consumers would save about $7.2 million per year in utility bills, $4.3 million for the building code and $2.9 million for the appliance standard. This results in a simple payback on investment of about 1 year, 1.2 years for the building code and 0.7 year for the appliance standard. Looking at it another way, the cost to save energy through the building code and appliance standard is only about 0.02¢ per kWh over an eight year period. This is about 7 times less expensive than the current average cost of approximately $0.15 per kWh. The cost to build new generating capacity is in the range of $733 to $825 per kW while the cost of curbing demand through the proposed energy code and appliance standard is only about $500 per kW.
Since electricity is produced with oil fired generators, there would be significant reductions in air emissions. Carbon dioxide emissions (a cause of global warming) would be reduced by about 46,000 tons/year, 28,000 for the building code and 18,000 for the appliance standard. Sulphur dioxide emissions would be reduced by 178,000 kilograms/year, 107,000 for the building code and 71,000 for the appliance standard. Nitrogen oxide emissions would be reduced by 72,000 kilograms/year, 43,000for the building code and 29,000 for the appliance standard.
The remainder of this report is organized as follows.
- Energy Savings. This chapter shows the energy savings by the energy program (building code and appliance standard). It also breaks down the savings by building type and requirement set, e.g. envelope measures, lighting measures, air conditioner measures and water heating.
- Demand Reductions. This chapter shows reductions in peak demand that are attributed to each energy program, requirement set, and building type.
- Cost Effectiveness. This section shows the overall cost effectiveness of the proposed code and appliance standard.
- Appendices. Detailed numerical data on projected construction activity, existing building stock and other information is summarized in Appendix A. Appendix B describes the technical methodology used to make the projections and estimates contained in this report.
This project is being carried out jointly by Guam and AS, with funding from the U.S. Department of Energy. Eley Associates of San Francisco is the prime contractor.