Estimated Savings from Energy- Efficient Federal Purchasing

The Federal Energy Management Program (FEMP) of the Department of Energy (DOE) assists federal agencies in complying with energy-efficient procurement requirements of the Energy Policy Act of 1992 (EPACT) and Executive Order 13123 (Clinton 1999). The Executive Order directs all federal agencies to buy ENERGYSTAR® labeled products or products in the upper quartile of the market with respect to energy efficiency. FEMP issues Product Energy Efficiency Recommendations (PEERs) which establish energy performance levels consistent with the Executive Order for each type of product. The FEMP program on energy­efficient procurement also contributes to the federal goal of reducing energy intensity in buildings in 2010 by 35% compared to 1985 levels.

This report projects estimated annual energy and cost savings in 2010 from federal purchases of twenty-one energy-using products for which FEMP has issued efficiency recommendations to date. These products fall into five groups: residential equipment, residential appliances, office equipment, lighting, and water-saving products. The five product groups together account for approximately one-fourth to one-third of total federal energy use in buildings, although only selected products within each group—those most widely purchased by federal agencies—are covered by FEMP recommendations. Not included in this analysis are several important equipment categories: non-residential heating and cooling equipment, electric motors, transformers, additional lighting products, and windows and roofing. For several of these, PEERs were still in preparation as of early 1999 when this analysis was done; for others FEMP may develop energy-efficient criteria in the future.

The methodology for estimating savings is based on a detailed characterization of residential, office, and other buildings in the federal stock. Residential buildings are further divided into single-family housing (civilian and military) and military troop housing. The overall build­ing stock is assumed to remain largely unchanged over the analysis period, from now to 2010. Data for the years 1995-97 are used to characterize the installed equipment base. Equipment turnover estimates are based on end-of-life replacement plus an allowance for new construction and product replacement during build­ing renovation and refurbishment. Estimated energy savings per unit are based on assumptions used in the cost-effectiveness section of the PEERs (Table 7).

The data on actual purchasing patterns of federal agencies are limited to reporting of aggregate dollar amounts by broad category of purchases, and only for transactions over $25,000. There is virtually no reported information on equipment purchases by contractors for use in federal facilities. Absent reported data, to assess the impact of the FEMP program on energy-efficient purchasing we developed several scenarios based on the likely range of federal compliance with the FEMP-recommended energy efficiency levels. These scenarios range from a relatively conservative case (Scenario 3) which assumes that energy-efficient federal purchasing increases gradually, from a 20% (pre-program) base case today to 80% penetration by 2010, to a "Maximum Technical Potential" case, in which all federal purchases beginning immediately, are assumed to reflect the "best-available" level of efficiency identified in the FEMP purchasing recommendations. For all the scenarios we assume that, while most federal purchasers will buy a "base case" product (i.e., low first-cost and relatively inefficient), an average of20% of all federal purchases already represent the more efficient models that meet FEMP recommendations. This is the baseline from which future savings are calculated.

Estimated annual savings in 2010 for the twenty-one products together range from 8.2 to 30.8 TBtu (site energy) for the four scenarios, with corresponding energy cost savings of $1!9-426 million/year and reduced CO₂ emissions of about 0.3-1.2 million tons of carbon per year (Tables 8-10 and Figures 10-12). These savings amount to 2-9 % of annual energy use in federal buildings, and 3-12% of annual energy costs. They also represent between 6% and 21 % of the additional savings that federal agencies need to achieve, to meet the goals for 2010 set forth in Executive Order 13123. Purchases of energy-efficient fluorescent lighting products alone account for about one-third of the site energy savings in 2010. There are several important considerations in interpret­ing these results:

• The actual number of products purchased for use in federal facilities is itself uncertain, based on estimated equipment stock turnover rather than actual reported data on federal purchases.
• The savings reflect all new equipment purchases and replacement, as well as equipment installed during construction, renovation, and other capital projects in federal facilities, including projects financed by utilities and energy services companies (ESCOs).
• These savings represent only direct impacts within the federal sector. We believe that the FEMP program also produces important indirect (positive) impacts due to the "market-pull" effect of federal purchasing, since the federal government is the world's single largest purchaser of energy-using equipment.
• Interactions among some products and end­uses can affect the savings. For example, energy-efficient lighting lowers space cooling energy use and thus reduces savings from efficient air conditioners. Efficient lighting can also
• increase heating energy use and thus increase the savings from efficient boilers.
• We have not considered early replacement of products, which in some cases would be war­ranted by the significant savings to be achieved, and often occur as part of lighting retrofits and other federal projects.
• Finally, the estimated savings do not account for a significant number of energy-using products purchased for use in federal facilities that are not yet covered by FEMP efficiency recommendations and not included in this analysis.

In spite of these limitations, it is clear that the FEMP program for energy-efficient federal purchasing offers significant opportunities for energy and cost savings, and that the PEERs can make an important contribution to the federal goals for energy savings and reduced car­bon emissions, as well as encourage cost-effective purchasing practices by others who may follow the government's lead.