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Life-Cycle Cost Analysis Framework for Water Efficiency Measures

Life-Cycle Cost Analysis Framework for Water Efficiency Measures: Guidance Designed for Federal Agencies (hereafter referred to as “this report”) provides a technical framework for federal agencies to conduct a life-cycle cost analysis (LCCA) for water efficiency projects in accordance with 42 U.S.C. § 8253. This report leverages insights from the 2023 report, PNNL-34006, Water and Wastewater Annual Price Escalation Rates for Selected Cities Across the United States: 2023 Edition (Unger et al. 2023). The primary objective of this report is to provide a framework to assist federal agencies with evaluating the full economic impact of water efficiency projects by assessing both initial investments and long-term operational benefits. An LCCA can provide a comprehensive view of all costs associated with a water efficiency project, including initial investment, ongoing operations and maintenance (O&M), and eventual disposal or replacement, ensuring the most cost-effective solution is selected. The LCCA methodology outlined in this report enables users to compare base case scenarios with potential alternatives using a standardized present value approach. It incorporates key cost components such as energy, water and wastewater, installation, O&M, and equipment replacement. Additionally, the framework introduces relevant evaluation metrics, such as the net savings and the savings-to-investment ratio, to ensure that water efficiency measures are economically justified over the lifespan of the project. To support practical application, this report also describes various water efficiency strategies that may be analyzed using an LCCA, including plumbing retrofits, irrigation upgrades, alternative water use, and cooling system improvements. By applying this framework, federal agencies can ensure compliance with regulatory mandates while maximizing the return on investment and contributing to resilient water management practices. The information provided in this report is aligned with the Federal Energy Management Program (FEMP) life-cycle cost (LCC) methodology, as conveyed in National Institute of Standards and Technology (NIST) Handbook 135 (Kneifel and Webb 2022). This report is intended to provide relatively high-level guidance, acting as a complement to, rather than a substitute for, that resource.

32 ENERGY CONSERVATION, CONSUMPTION, AND UTILIZATI↗

Water and Wastewater Annual Price Escalation Rates for Selected Cities Across the United States: 2023 Edition

This report builds on the 2016 Water and Wastewater Annual Price Escalation Rates for Selected Cities across the United States report prepared by Pacific Northwest National Laboratory (PNNL) for the U.S. Department of Energy’s (DOE) Federal Energy Management Program (FEMP). The 2017 report examined annual water and wastewater price escalation rate trends across the U.S. Annual water and wastewater price escalation rates are an important factor when conducting life-cycle cost analyses (LCCA) of water efficiency measures, which is required for Federal agencies. Following the framework of the 2017 report, PNNL used the American Water Works Association (AWWA) water and wastewater rate surveys to gather historical rate data for water and wastewater utilities in the US, which were used to calculate a sample set of water and wastewater annual price escalation rates (Figure E.1). An annual price escalation rate was calculated for 113 water utilities and 76 wastewater utilities that reported at least two AWWA surveys across the past 13 years (i.e., 2008 to 2021) and at least a five-year range between those two surveys. Statistical trends in the annual price escalation rates are also provided by the seven regions identified in Figure E.1. In the 2017 report, the average annual price escalation for the surveyed sample of water and wastewater rates were 3.0% and 3.2%, respectively. This report also calculated aggregate average annual price escalation rates for the surveyed sample of water and wastewater utilities to be 3.1% and 2.7%, respectively. These escalation rates were based on 87 water utilities and 46 wastewater utilities that reported data in at least two AWWA surveys with at least a five-year range between those two surveys and reported at least one AWWA survey in 2019 or 2021. Among water utilities, the highest average annual price escalation rate was 8.8%, and the highest average annual water de-escalation rate was -2.0%. And for wastewater utilities, the highest average annual wastewater price escalation rate was 10.2%, and the highest average annual wastewater de-escalation rate was -2.3%.

29 ENERGY PLANNING, POLICY, AND ECONOMY↗

Life Cycle Inventories and Data Gap Analysis for Rare Earth Elements: Neodymium and Dysprosium from Mining to Magnets

The United States demand for Neodymium-Iron-Boron (NdFeB) magnets, produced from rare earth elements (REEs) such as (Nd) and Dysprosium (Dy), far exceeds its nascent domestic production capacity, rendering it reliant on vulnerable global supply chains dominated by China. To guide research and development investments in securing U.S. REE supply, defensible benchmark metrics across environmental, economic, and social dimensions are needed. In this study, we built globally-representative, process-based cradle-to-cradle life cycle inventories for Nd and Dy in NdFeB magnets lifecycles, encompassing primary material acquisition, beneficiation, smelting and refining, metal processing, specialty alloy and chemical transformation, subcomponent manufacturing, consumer application (use phase) and end-of-life management. We carried out detailed literature review, and applied process engineering principles to build industry-representative upscaled life cycle inventories for both metals. We used these models to conduct bottom-up literature review and gap analysis on existing literature, compilation of data sources for each life cycle stage (and transformations where necessary), and a preliminary technoeconomic analysis (TEA)/life cycle costing analysis (LCCA). Findings from this work emphasize the need for metal specific, representative REE LCIs to establish robust benchmarks for advancing sustainable REE technologies and guiding R&D in REE supply chains.

29 ENERGY PLANNING, POLICY, AND ECONOMY↗

Evaluating alternative steam generation pathways in the food industry

Steam generation in the food sector requires substantial energy and cost expenditures, requiring nearly half of its energy intake. Here, we used life cycle assessment and life cycle cost assessment to investigate the cost and energy impacts of steam generating alternatives: NG, biomass and hydrogen boilers and grid-supplied and self-generated electric steam generation systems (electric boilers, renewable thermal energy storage and industrial heat pumps). The analysis starts with a set of average U.S. conditions, where biomass boilers are the most cost-competitive alternative to NG. In a series of scenarios beyond average conditions, the analysis shows energy procurement costs dominate the total life cycle cost for all technologies and, unfortunately, are highly variable geographically and temporally, significantly affecting the viability of the alternatives. Results show that site-energy consumption ranges from 0.3 MMBtu/klb for industrial heat pumps to 1.6 MMBtu/klb for biomass boilers, with heat pumps achieving up to 78% lower energy use compared to natural gas systems. For the steam costs, the results show a range between $\$$8 and $\$$50/klb for NG, with biomass following closely ($\$$11 – $\$$44/klb) and grey hydrogen and IHP next ($\$$13 – $\$$33/klb and $\$$6 - $\$$78/klb), with cost reductions if IHP's cooling is utilized. Factors like operating hours, the need for cooling, and the ability to negotiate utility rates complicate the decision, making site-specific analyses critical. Therefore, we present a decision-making matrix to help manufacturers identify which steam generating technology is the best business decision for their situation. Overall, these results highlight the importance of steam generation for the facility's organizational goals, as well as the criticality of conducting individual site analyses.

Biomass boilers↗