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
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
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
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.