Baseline Definition for Measuring New Technology Benefits

1
Baseline Definition for Measuring New Technology
Benefits

• Frances Wood
• OnLocation, Inc./Energy System Consulting
• March 4, 2002
• Conference on Estimating the Benefits of
  Government-Sponsored Energy RD

2
Establishing A Credible Baseline

• The NRC study suggested several guidelines for
  benefits measurement regarding the baseline
• Use of next-best alternative, not existing
  average
• Relative to development without government RD,
  which meant acceleration of 5 years in most cases

3
Baseline Technology Assumptions

• Several possibilities for Baseline definition
• No new technologies beyond current
• Improved, but inferior, technology developed in
  absence of government program
• Same technology developed, but later, in absence
  of government program
• Selection of baseline related to methodology for
  calculating share of benefits attributed to
  government
• Either calculate full benefits of new technology
  and then compute government share, or
• Include industry impact in baseline and then
  measure impact of government program

4
Single Integrated Framework

• Consistent framework and set of assumptions
  needed across all programs
• Same economic conditions and policies assumed for
  all sectors
• Important for determining individual program and
  portfolio benefits
• Some programs may target similar markets and
  therefore interact
• Over last several years, the NEMS or IDEAS energy
  models have been used for the EERE GPRA
  integration

5
EERE GPRA Process

• EIAs Annual Energy Outlook (AEO) used as the
  Baseline for individual program benefit analyses
• Sector-specific models use fuel prices and other
  macroeconomic outputs (market size) from AEO
• Marginal fuel mix for electricity provided by
  NEMS
• NEMS used for integrated Baseline and calculation
  of integrated program benefits
• Programs evaluated individually or in groups and
  then all together
• Net result is range in estimated benefits

6
EERE GPRA Integrated Baseline

• The AEO Reference Case is modified to remove
  program impacts that appear to be incorporated
  already
• Technology characterizations and market programs
• Not always clear cut whether technologies are
  same or inferior versions of EERE sponsored ones
• Other advanced technologies are retained
• Requires full definition of programs at start or
  iterative approach
• Baseline used to attribute savings to government
  programs

7
Example Baseline

• Benefits are measured against a baseline derived
  from the AEO.

8
Alternative Baselines

• Scenarios of alternative market behavior may also
  be useful in determining uncertainty ranges for
  prospective benefits
• Scenarios using alternative assumptions regarding
  economic conditions, regulations, and policies
  are necessary for options analysis