‹ Analysis & Projections

Annual Energy Outlook 2011

Release Date: April 26, 2011   |  Next Early Release Date: January 23, 2012  |   Report Number: DOE/EIA-0383(2011)

Commercial Sector Energy Demand

End-use efficiency improvements could lower energy consumption per capita

The AEO2011 Reference case shows minimal change in commercial energy use per capita between 2009 and 2035 (Figure 62). While growth in commercial floorspace (1.2 percent per year) is faster than growth in population (0.9 percent per year), energy use per capita remains relatively steady due to efficiency improvements in equipment and building shells. Efficiency standards and the addition of more efficient technologies account for a large share of the improvement in the efficiency of end-use services, notably in space cooling, refrigeration, and lighting.

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Three alternative cases use different assumptions about technology and energy efficiency to examine uncertainty in the projections of commercial energy consumption per capita. The 2010 Technology case limits equipment and building shell technologies to the options available in 2010. The High Technology case assumes lower costs, higher efficiencies for equipment and building shells, and earlier availability of some advanced equipment than in the Reference case, with commercial consumers placing greater importance on the value of future energy savings. The Best Available Technology case limits future equipment choices to the most efficient model for each technology available in the year of replacement and assumes more improvement in the efficiency of building shells for new and existing buildings than in the High Technology case.

Commercial energy consumption per capita in 2035 is 3.9 percent higher in the 2010 Technology case than in the Reference case. In contrast, it is 12.5 percent lower in the High Technology case and 17.9 percent lower in the Best Available Technology case than in the Reference case.

Growth in electricity use dominates the outlook for commercial energy demand

Electricity use increases 1.4 percent per year, from 53 percent of total commercial delivered energy consumption in 2009 to 58 percent in 2035, in the AEO2011 Reference case. Growth in electricity demand for new electronic equipment more than offsets improvements in equipment and building shell efficiency and growth in CHP.

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Average annual growth in commercial sector electricity use for PCs and related devices slows between 2009 and 2035, as the market penetration of ENERGY STAR qualified products increases, and laptops gain market share relative to desktop PCs, which use more energy than laptops.

Electricity use for "other" office equipment—including servers and mainframe computers—increases by 2.5 percent per year as demand for high-speed networks and internet connectivity grows, surpassing electricity demand for commercial refrigeration by 2019.

End uses such as space heating and cooling, water heating, and lighting are covered by Federal and State efficiency standards, which have the effect of limiting growth in energy consumption to less than the average of 1.2 percent per year for growth in commercial floorspace (Figure 63). "Other" electric end uses, some of which are not subject to Federal standards, account for much of the growth in commercial electricity consumption. Electricity demand for those other end uses, which include distribution transformers, vertical transport, and medical imaging equipment, increases by an average of 2.4 percent per year and accounts for 39 percent of total commercial electricity consumption in 2035.

Core technologies lead efficiency gains in the commercial sector

Delivered energy consumption for core space heating, ventilation, air conditioning, water heating, lighting, cooking, and refrigeration uses grows at an average annual rate of 0.6 percent in the AEO2011 Reference case, compared with 1.2 percent annual growth in commercial floorspace. These core end uses, which frequently have been targets of energy efficiency standards, accounted for just over 60 percent of commercial delivered energy demand in 2009 and are projected to fall to 55 percent of delivered energy in 2035. Energy consumption for the remaining end uses together grows by 1.5 percent per year, led by other electric end uses and by office equipment other than computers.

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The percentage gains in efficiency in the Reference case are highest for refrigeration, as a result of provisions in Energy Policy Act of 2005 (EPACT2005) and EISA2007. Electric space heating shows the next-largest percentage improvement, followed by lighting and cooling (Figure 64).

The Best Available Technology case demonstrates the significant potential for further improvement—especially in electric equipment, led by lighting, space heating, and water heating. In the Best Available Technology case, the share of total commercial delivered energy use accounted for by the core end uses falls to 49 percent in 2035, with significant efficiency gains coming from LED lighting, GSHPs, high-efficiency rooftop heat pumps, centrifugal chillers, and solar water heaters. Those technologies are relatively costly, however, and thus are unlikely to gain wide adoption in commercial applications without improved economics or additional incentives. Additional efficiency improvements could also come from an expansion of standards to include some of the rapidly growing miscellaneous electric applications.

Improved interconnection supports growth in distributed generation

More than 40 States have some form of interconnection standard or guideline that governs the installation of DG capacity and its incorporation into the electricity grid. Current limits on the maximum capacity that can be interconnected are expected to decrease with improvements in technology and the spread of RPS policies and goals over time.

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In addition to declining limits on DG interconnection, ITCs for various renewable and nonrenewable DG technologies continue through 2016. With the exception of a permanent 10-percent credit following the expiration of the current 30-percent credit for solar PVs, the AEO2011 Reference case assumes no ITCs for DG after 2016. The Extended Policies case, on the other hand, assumes that current tax credits continue through 2035.

Total commercial DG capacity in the Reference case increases from 1.9 gigawatts in 2009 to more than 6.8 gigawatts in 2035. In the Extended Policies case, capacity increases to 9.8 gigawatts in 2035. Microturbines show the fastest capacity growth among the DG technologies in the Reference case, averaging 16 percent per year. Commercial sector wind capacity grows by 11 percent per year in the Extended Policies case, more than double the annual growth in the Reference case, as a result of continued tax credits. In 2035, renewable energy accounts for 50 percent of all commercial DG capacity in the Extended Policies case, as compared with less than 35 percent in the Reference case (Figure 65).

Reference Case Tables
Table 2. Energy Consumption by Sector and Source - United States XLS
Table 2.1. Energy Consumption by Sector and Source - New England XLS
Table 2.2. Energy Consumption by Sector and Source - Middle Atlantic XLS
Table 2.3. Energy Consumption by Sector and Source - East North Central XLS
Table 2.4. Energy Consumption by Sector and Source - West North Central XLS
Table 2.5. Energy Consumption by Sector and Source - South Atlantic XLS
Table 2.6. Energy Consumption by Sector and Source - East South Central XLS
Table 2.7. Energy Consumption by Sector and Source - West South Central XLS
Table 2.8. Energy Consumption by Sector and Source - Mountain XLS
Table 2.9. Energy Consumption by Sector and Source - Pacific XLS
Table 5. Commercial Sector Key Indicators and Consumption XLS
Table 17. Renewable Energy Consumption by Sector and Source XLS
Table 18. Carbon Dioxide Emissions by Sector and Source - United States XLS
Table 18.1. Carbon Dioxide Emissions by Sector and Source - New England XLS
Table 18.2. Carbon Dioxide Emissions by Sector and Source - Middle Atlantic XLS
Table 18.3. Carbon Dioxide Emissions by Sector and Source - East North Central XLS
Table 18.4. Carbon Dioxide Emissions by Sector and Source - West North Central XLS
Table 18.5. Carbon Dioxide Emissions by Sector and Source - South Atlantic XLS
Table 18.6. Carbon Dioxide Emissions by Sector and Source - East South Central XLS
Table 18.7. Carbon Dioxide Emissions by Sector and Source - West South Central XLS
Table 18.8. Carbon Dioxide Emissions by Sector and Source - Mountain XLS
Table 18.9. Carbon Dioxide Emissions by Sector and Source - Pacific XLS
Table 19. Energy-Related Carbon Dioxide Emissions by End Use XLS
Table 23. Commercial Sector Energy Consumption, Floorspace, and Equipment Efficiency XLS