IDM incorporates three major industry categories: energy-intensive  manufacturing  industries, non-energy-intensive  manufacturing  industries, and nonmanufacturing industries (see Table 6 below). The level and type of modeling and detail is different for each. Manufacturing disaggregation is at the 3-digit North  American  Industrial  Classification  System (NAICS) level, with some further disaggregation of large and energy-intensive industries. Detailed industries include food, paper, chemicals, glass, cement, steel, and aluminum. Energy product demands are calculated independently for each industry. 

Each industry is modeled (where appropriate) as three  interrelated  components:  buildings (BLD), boilers/steam/cogeneration (BSC),  and  process/assembly (PA) activities. Buildings are estimated to account for 4 percent of energy consumption in manufacturing  industries (in  nonmanufacturing  industries, building energy consumption is not currently calculated). 

Consequently,  IDM  uses  a  simple  modeling  approach for the BLD component. Energy consumption in industrial buildings is assumed to grow at the same rate as the average growth rate of employment and output in that industry.  The BSC component consumes energy to meet the steam demands from and provide internally generated electricity to the other two components.  The boiler component consumes by-product fuels and fossil fuels to produce steam, which is passed to the PA and BLD components. 

IDM models “traditional” CHP based on steam demand from the BLD and the PA components. The “non-traditional” CHP units are represented in the electricity market module since these  units  are  mainly  grid-serving, electricity-price-driven entities. 

CHP capacity, generation, and fuel use are calculated from exogenous data on existing and planned capacity additions and new additions determined from an engineering and economic evaluation. Existing CHP capacity and planned additions are derived from Form EIA-860, “Annual Electric Generator  Report,”  formerly  Form  EIA-867, “Annual Nonutility Power Producer Report.” Existing CHP capacity is assumed to remain in service throughout the projection or, equivalently, to be refurbished or replaced with similar units of equal capacity. 

Calculation of unplanned CHP capacity additions begins in 2009. Modeling of unplanned capacity additions is done in two parts: biomass-fueled and fossil-fueled. Biomass CHP capacity is assumed to be added to the extent possible as additional biomass waste products are produced, primarily in the pulp and paper industry.  The amount of biomass CHP capacity added is equal to the quantity of new biomass available (in Btu), divided by the total heat rate from biomass steam turbine CHP. 

It is assumed that the technical potential for fossil-fuel source CHP is based primarily on supplying thermal requirements. First, the model assesses the amount of capacity that could be added to generate the industrial steam requirements not met by existing CHP. The second step is an economic evaluation of gas turbine prototypes for each steam load segment. Finally, CHP additions are projected based on a range of acceptable payback periods. 

The PA component accounts for the largest share of direct energy consumption for heat and power, 55 percent. For the seven most energy-intensive industries, process steps or end uses are modeled using engineering concepts. The production process is decomposed into the major steps, and the energy relationships among the steps are specified. 

The energy intensities of the process steps or end uses vary over time, both for existing technology and for technologies expected to be adopted in the future. In IDM, this variation is based on engineering judgement and is reflected in the parameters of technology possibility curves, which show the declining energy intensity of existing and new capital relative to the 2002 stock. 

IDM uses “technology bundles” to characterize technological change in the energy-intensive industries. These bundles are defined for each production process step for five of the industries and for end uses in the remaining two energy-intensive industries. The process step industries are pulp and paper, glass, cement, steel, and aluminum. The end-use industries are food and bulk chemicals (see Table 7 below). 

Machine drive electricity consumption in the food, bulk chemicals, metal-based durables, and balance of manufacturing sectors is calculated by a motor stock model. The beginning stock of motors is modified over the projection horizon as motors are added to accommodate growth in shipments for each sector, as motors are retired and replaced, and as failed motors are rewound.  When a new motor is added, either to accommodate growth or as a replacement, an economic choice is made between purchasing a motor that meets the EPACT minimum for efficiency or a premium efficiency motor.  There are seven motor size groups in each of the four industries.   The EPACT efficiency standards only apply to the five smallest groups (up to 200 horsepower). As the motor stock changes over the projection horizon, the overall efficiency of the motor population changes as well. 

The Unit Energy Consumption (UEC) is defined as the energy use per ton of throughput at a process step or as energy use per dollar of shipments for the end-use industries. The “Existing UEC” is the current average installed intensity as of 2002. The “New 2002 UEC” is the intensity assumed to prevail for a new installation in 2002. Similarly, the “New 2030 UEC” is the intensity expected to prevail for a new installation in 2030. For intervening years, the intensity is interpolated. 

The rate at which the average intensity declines is determined by the rate and timing of new additions to capacity. In IDM, the rate and timing of new additions are functions of retirement rates and industry growth rates. 

IDM uses a vintaged capital stock accounting framework that models energy use in new additions to the stock and in the existing stock. This capital stock is represented as the aggregate vintage of all plants built within an industry and does not imply the inclusion of specific technologies or capital equipment. 

The capital stock is grouped into three vintages: old, middle, and new. The old vintage consists of capital in production prior to 2002, which is assumed to retire at a fixed rate each year. Middle-vintage capital is that added after 2002. New production capacity is built in the projection years when the capacity of the existing stock of capital in IDM cannot produce the output projected by the NEMS regional submodule of the macroeconomic activity module. Capital additions during the projection horizon are retired in subsequent years at the same rate as the pre-2002 capital stock. 

The energy-intensive and/or large energy-consuming industries are modeled with a structure that explicitly describes the major process flows or “stages of production” in the industry (some industries have major consuming uses). 

Technology penetration at the level of major processes in each industry is based on a technology penetration curve relationship. A second relationship can provide additional energy conservation resulting from increases in relative energy prices.  Major process choices (where applicable) are determined by industry production, specific process flows, and exogenous assumptions.   

Recycling, waste products, and byproduct consumption are modeled using parameters based on off-line analysis and assumptions about the manufacturing processes or technologies applied within industry. These analyses and assumptions are mainly based upon environmental regulations such as government requirements about the share of recycled paper used in offices. IDM also accounts for trends within industry toward the production of more specialized products such as specialized steel which can be produced using scrap material versus raw iron ore.