EE Energy/Environmental Life-Cycle Assessments

Prepared by:
Pacific Northwest Laboratory, and National Renewable Energy Laboratory

Prepared for:
U.S. Department of Energy, Office of Energy Efficiency (EE) and Renewable Energy

Application:
Financial analysis: ---
Environmental impact analysis:
Waste management/P2: ---
Environmental cost listing/database: ---
Cost estimation: ---
Alternative product/process comparison:

Total Energy Cycle Assessments (TECAs): A specialized form of energy/environmental life-cycle assessment that facilitates the evaluation of the supply and demand sides of energy systems. This handbook addresses the management, methodology, and tools being developed by EE to support TECAs. Discusses basic approaches for evaluating life-cycle environmental impacts associated with technologies. Applications can extend to non-DOE projects as well.

Development date and updates:
July 1993. Several other follow-up studies have been done, including the development of computer models for LCA.

Public availability:
Available

Purpose and current use:
Developed as part of the DOE's on-going efforts to respond to the National Energy Policy Act of 1992 which required that energy decisions should include costs of health and ecological impacts. Public distribution of the report was not an objective. The primary purpose was to present LCA methodologies for potential use by the EE office.

Cost information:
Available free of charge, in a limited manner.

Contents and system requirements:
Worksheets, guidelines

Summary of methodology

A TECA examines the environmental impacts of energy systems, considering various life-cycle stages. The near-term focus of TECAs is the accounting of inputs and outputs of material, energy, and environmental residuals associated with each unit of "use" service.

The method consists of first conducting an environmental inventory analysis. TECA worksheets are provided to aid in identifying the following inputs and outputs.

Data quality is assessed through indicators and a recommended matrix format.

The inventory items are then translated into an inventory of impacts. Two steps are involved in the estimation of impacts:

  1. the estimation of changes in ambient environmental conditions and
  2. the estimation of health, ecological, and other impacts.

Step 1 predicts the level of exposures that will be realized for the specific environmental conditions being considered. Step 2 is used in conjunction with Step 1 and dose-response relationships to determine the associated impacts.

Finally, an economic valuation of the impacts is performed. This is done by measuring the changes in well-being of those either "damaged" or "benefiting"from the environmental or health impacts.

Life-cycle stages covered

Raw material acquisition
Manufacturing stage
Use/reuse/maintenance
Recycle/waste management

The following life-cycle information is considered:

Assumptions about the waste management and pollution control methods used can be factored into the analysis.

Type of costs considered

Conventional ---
Potentially hidden ---
Contingent ---
External

The methodology discusses various methods for estimating non-market goods, but does not actually perform the valuation in any examples. It is suggested that capital and O&M costs be included in the technology characterization database, as part of an integrated TEC tool.

Method of cost estimation

The economic valuation suggested is in terms of "willingness-to-pay" (WTP) for or "willingness-to-accept" the changes in well being. WTP is defined as the maximum amount of money a consumer would be willing to pay to avoid the change, before it happened. Travel cost techniques and hedonic techniques are also discussed.

Generation of financial indicators

Net present value (NPV) ---
Payback period ---
Internal rate of return (IRR) ---
Benefits cost ratio ---
Other ---

Attributes

The report discusses various energy and fuel cycles and other elements of TECAs. Various methodological and data issues are discussed. The method attempts to identify and value environmental impacts. Examples of objectives and environmental impact issues are discussed from EE's perspective.

Limitations

There are no case-study examples of non-market valuation. The document does not attempt to provide a complete description of all the methods used to estimate these costs. The focus is on environmental impact analysis rather than full cost accounting.

Basis for evaluation:
The information provided here is based on a profile of the tool presented in Weitz et al. (1994

Contact information:
Pacific North-west Laboratory
MSIN K8-15, 3230 O Avenue
Richland, WA-99352

Ken Humphreys (PNL)
509-372-4279
509-372-4378 (FAX)

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