1. OnLocation, Inc., Energy Systems Consulting Estimating Benefits of Publicly Funded Energy Technology Research: U.S. GPRA Benefits Analysis Brian Unruh, U.S. DOE Chip Friley, BNL Frances Wood, OnLocation, Inc. Mary Beth Zimmerman, Formerly U.S. DOE November 25, 2004

2. OnLocation, Inc., Energy Systems Consulting Why Benefits Analysis? Portfolio management –Select a mix of R&D, deployment that achieves desired results –Keep R&D portfolio aligned with evolving needs Congress wants to buy benefits, not technologies or activities –Public health, national defense, a clean environment It’s required –1992 Government Performance & Results Act (GPRA) –2001 President’s Management Agenda (PMA)

3. OnLocation, Inc., Energy Systems Consulting The Ground Rules Benefit estimates based on stated program output goals that are achievable with current funding levels. For the budget, benefits are counted for only future program activities. One baseline for all Programs –Energy prices, demographics, GDP, industrial output –Demands for energy services –Improvements in competing technologies Assesses value of realizing Program goals Benefits = difference between how energy system evolves with and without realizing the program goal. No new policies

4. OnLocation, Inc., Energy Systems Consulting If you give me some $$, I’ll do something with it, making some progress each year until I produce a product which will provide the benefits you want Budget, resources, inputs Key activities Targets, milestones Outputs, program goals, end points Outcomes, impacts, Benefits The GPRA Simple “logic chain” Program performance Portfolio benefits

5. OnLocation, Inc., Energy Systems Consulting EERE GPRA Benefits Logic Chain The GPRA process uses the outputs developed by the Program Offices to project technology adoption rates and resulting benefits. Source: John Mortensen

6. OnLocation, Inc., Energy Systems Consulting Modeling Tools Technology and sector specific models –Buildings Energy Analysis Modeling System (BEAMS) –Powertrain Systems Analysis Toolkit (PSAT) –Green Power Market Model (GPMM) Integrated energy economic models –National Energy Modeling System (NEMS) for mid-term benefits estimates (to 2025) –Market Allocation Model (MARKAL) for long-term benefits estimates (to 2050) Integrated models provide a consistent economic framework for assessing all of EERE’s Program portfolio and for performing scenario and sensitivity analyses –Important to capture interactions where technologies target similar markets and to include price feedback effects

7. OnLocation, Inc., Energy Systems Consulting NAS/NRC Benefits Framework Realized Retrospective Expected Prospective Option Economic Environ- mental Security/ Reliability Knowledge

8. OnLocation, Inc., Energy Systems Consulting The Current Metrics Economic –Energy expenditure savings (mid-term) –Total energy system savings (long-term) Environment –Primary non-renewable energy savings –Carbon emission reductions Security/Reliability –Oil savings –Natural gas savings –Reductions in conventional, central power capacity additions

9. OnLocation, Inc., Energy Systems Consulting Sample GPRA Metrics FY2005 Budget Request The full documentation of the GPRA benefits estimates for the FY2005 budget request can be found at http://www.eere.energy.gov/office_eere/gpra_estimates_fy05.html

10. OnLocation, Inc., Energy Systems Consulting Proposed Metrics and Areas for Improvement Proposed metrics for development –Power reliability –Local air quality and heath impacts Areas for improvement –Develop alternative scenarios for option column –Develop methodology to incorporate risk –Improve model representation of market features that matter significantly to resulting market share Regional variation Niche markets Consumer preferences

11. OnLocation, Inc., Energy Systems Consulting Estimating Benefits of Publicly Funded Energy Technology Research: U.S. GPRA Benefits Analysis Brian Unruh, U.S. DOE Chip Friley, BNL Frances Wood, OnLocation, Inc. Mary Beth Zimmerman (Formerly U.S. DOE) November 25, 2004

12. OnLocation, Inc., Energy Systems Consulting Extra Slides

13. OnLocation, Inc., Energy Systems Consulting EERE Reorganization Streamlined (re)organization facilitates performance management –TD: Clearly defined programs provide basis for measuring program performance. –BA: Integrated planning & budget formulation provide basis for linking budget decisions to corporate results. Geo EERE SolarWind TD BA HydrogenVehicles Ind Bldgs WxDEER BioFEMP Planning Budget & Analysis Program Execution Information & Management Systems