Regional analysis of building distributed energy costs and CO2 abatement: A U.S.–China comparison

Abstract

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-CAMs suggested investments is 17%, while in Chinese buildings is 12%. 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 19% in the U.S. as a result of significant investments in PV, whereas in China, it is 20% and driven by investments in CHP.