Lawrence Berkeley National Laboratory

The following paper conducts a regional analysis of the U.S. and Chinese buildings? potential for adopting Distributed Energy Resources (DER). The expected economics of DER in 2020-2025 is modeled for a commercial and a multi-family residential building in different climate zones. The optimal building energy economic performance is calculated using the Distributed Energy Resources Customer Adoption Model (DER CAM) which minimizes building energy costs for a typical reference year of operation. Several DER such as combined heat and power (CHP) units, photovoltaics, and battery storage are considered. The results indicate DER have economic and environmental competitiveness potential, especially for commercial buildings in hot and cold climates of both countries. In the U.S., the average expected energy cost savings in commercial buildings from DER CAM?s suggested investments is 17percent, while in Chinese buildings is 12percent. The electricity tariffs structure and prices along with the cost of natural gas, represent important factors in determining adoption of DER, more so than climate. High energy pricing spark spreads lead to increased economic attractiveness of DER. The average emissions reduction in commercial buildings is 19percent in the U.S. as a result of significant investments in PV, whereas in China, it is 20percent and driven by investments in CHP. Keywords: Building Modeling and Simulation, Distributed Energy Resources (DER), Energy Efficiency, Combined Heat and Power (CHP), CO2 emissions 1. Introduction The transition from a centralized and fossil-based energy paradigm towards the decentralization of energy supply and distribution has been a major subject of research over the past two decades. Various concerns have brought the traditional model into question; namely its environmental footprint, its structural inflexibility and inefficiency, and more recently, its inability to maintain acceptable reliability of supply. Under such a troubled setting, distributed energy resources (DER) comprising of small, modular, electrical renewable or fossil-based electricity generation units placed at or near the point of energy consumption, has gained much attention as a viable alternative or addition to the current energy system. In 2010, China consumed about 30percent of its primary energy in the buildings sector, leading the country to pay great attention to DER development and its applications in buildings. During the 11th Five Year Plan (FYP), China has implemented 371 renewable energy building demonstration projects, and 210 photovoltaics (PV) building integration projects. At the end of the 12th FYP, China is targeting renewable energy to provide 10percent of total building energy, and to save 30 metric tons of CO2 equivalents (mtce) of energy with building integrated renewables. China is also planning to implement one thousand natural gas-based distributed cogeneration demonstration projects with energy utilization rates over 70percent in the 12th FYP. All these policy targets require significant DER systems development for building applications. China?s fast urbanization makes building energy efficiency a crucial economic issue; however, only limited studies have been done that examine how to design and select suitable building energy technologies in its different regions. In the U.S., buildings consumed 40percent of the total primary energy in 2010 [1] and it is estimated that about 14 billion m2 of floor space of the existing building stock will be remodeled over the next 30 years. Most building?s renovation work has been on building envelope, lighting and HVAC systems. Although interest has emerged, less attention is being paid to DER for buildings. This context has created opportunities for research, development and progressive deployment of DER, due to its potential to combine the production of power and heat (CHP) near the point of consumption and delivering multiple benefits to customers, such as cost