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The goal of this project was to estimate the net benefits that cost-effective improvements in energy efficiency can bring to developing countries. The study focused on four major electrical products in the world's second largest developing country, India. These products -refrigerators, room air conditioners, electric motors, and distribution transformers -are important targets for efficiency improvement in India and in other developing countries. India is an interesting subject of study because of it's size and rapid economic growth. Implementation of efficient technologies in India would save billions in energy costs, and avoid hundreds of megatons of greenhouse gas emissions. India also serves as an example of the kinds of improvement opportunities that could be pursued in other developing countries.iii iv

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In 2001, the U.S. Department of Energy (DOE) initiated a rulemaking process to consider whether to amend the existing energy efficiency standards for furnaces and boilers. A key factor in DOE's consideration of new standards is the economic impacts on consumers of possible revisions to energy-efficiency standards. Determining cost-effectiveness requires an appropriate comparison of the additional first cost of energy efficiency design options with the savings in operating costs. DOE's preferred approach involves comparing the total life-cycle cost (LCC) of owning and operating a more efficient appliance with the LCC for a baseline design. This study describes the method used to conduct the LCC analysis and presents the estimated change in LCC associated with more energy-efficient equipment. The results indicate that efficiency improvement relative to the baseline design can reduce the LCC in each of the product classes considered. LIST OF TABLES LIST OF FIGURES INTRODUCTIONThe National Appliance Energy Conservation Act of 1987 (NAECA) requires the U.S. Department of Energy (DOE) to consider amendments to the energy conservation standards to increase efficiency in residential furnaces and boilers. This equipment represents a large opportunity for savings because it accounts for 25-30 percent of the total primary energy used in U.S. residential buildings, which was around 21 quads in 2001).Regulations that took effect in 1992 set the initial Federal energy conservation standard in terms of the Annual Fuel Utilization Efficiency (AFUE) descriptor at a minimum value of 78% for most furnaces, at 75% for manufactured home furnaces, and at 75% for gas steam boilers and 80% for other boilers. In 2001, DOE initiated a rulemaking process to consider whether to amend the existing energy efficiency standards for furnaces and boilers. The rulemaking process used by DOE consists of a number of interrelated analytical steps. The authors are part of the group at LBNL that coordinated and conducted the technical analysis for DOE. 1A key factor in DOE's consideration of new standards is the economic impacts on consumers of possible revisions to U.S. residential furnace and boiler energy-efficiency standards. Determining cost-effectiveness requires an appropriate comparison of the additional first cost of energy efficiency design options with the savings in operating costs. DOE's preferred approach involves comparing the total life-cycle cost (LCC) of owning and operating a more efficient appliance with the LCC for a basecase design. The basecase represents the typical type of equipment that consumers would be likely to use in the absence of new standards.The LCC calculated in this analysis expresses the costs of installing and operating a furnace or boiler for its lifetime starting in the year 2012-the year a new standard would take effect.The analysis also calculated the payback period (PBP) for energy-efficiency design options. The PBP represents the number of years of operation required to pay for the increased effi...