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To assist the federal government in meeting its energy reduction goals, President Clinton's Executive Order 12902 established the Procurement Challenge, which directed all federal agencies to purchase equipment within the top 25~ percentile of efficiency. Under the direction of DOE's Federal Energy Management Program (FEMP), the Procurement Challenge's goal is to create efficiency recommendations for all energy-using products (e.g. commercial boilers, chillers, motors) that could substantially impact the government's energy reduction goals. When establishing efficiency recommendations, FEMP looks at standardized performance ratings for products sold in the U.S. marketplace. Currently, the commercial boiler industry uses combustion efficiency and, sometimes, thermal efficiency as metrics when specifying boiler performance. For many years, the industry has used both metrics interchangeably, causing confusion in the market place about boiler performance. This paper discusses the method used to establish FEMP's efficiency recommendation for commercial boilers in lieu of the various, and somewhat confusing, efficiency ratings currently available. The paper also discusses potential energy cost savings for federal agencies that improve the efficiency of boilers specified and purchased.

To assist the federal government in meeting its energy reduction goals, President Clinton's Executive Order 12902 established the Procurement Challenge, which directed all federal agencies to purchase equipment within the top 25th percentile of efficiency. Under the direction of DOE's Federal Energy Management Program (FEMP), the Procurement Challenge's goal is to create efficiency recommendations for all energy-using products that could substantially impact the government's energy reduction goals, like commercial boilers. A typical 5,000,000 Btuh boiler, with a thermal efficiency of 83.2 percent, can have lifetime energy cost savings of $40,000 when compared to a boiler with a thermal efficiency of 78 percent. For the federal market, which makes up 2 percent of the boiler market, this means lifetime energy cost savings of over $25,600,000. To establish efficiency recommendations, FEMP uses standardized performance ratings for products sold in the marketplace. Currently, the boiler industry uses combustion efficiency and, sometimes, thermal efficiency performance measures when specifying a commercial boiler. For many years, the industry has used these efficiency measures interchangeably, causing confusion about boiler performance measurements, and making it difficult for FEMP to establish the top 25th percentile of efficiency. This paper will illustrate the method used to establish FEMP's recommendation for boilers. The method involved defining a correlation between thermal and combustion efficiency among boiler classifications; using the correlation to model a data set of all the boiler types available in the market; and identifying how the correlation affected the top 25th percentile analysis. The paper also will discuss the applicability of this method for evaluating other equipment for which there are limited data on performance ratings.

Although the government sector represents only 10 to 15 percent of the economy in most countries, carefully targeted public procurement can play a significant role in market transformation through its influence on both buyers and suppliers. Government leadership in energy-efficient purchasing can set an example for other buyers, while creating opportunities for leading manufacturers and distributors to increase their sales and market share by offering energy-efficient products at competitive prices. Under proper circumstances, a highly visible government purchasing policy can have a disproportionately large influence on the market for efficient products. In the United States, President Bush signed an Executive Order in 2001 directing all federal agencies to buy products with low standby power (1 watt or less where possible). This represents a deliberate choice to use government purchasing - rather than regulations or incentives - as a market-based strategy to encourage energy savings. It also builds upon existing efforts to encourage Federal purchase of energy-efficient products (Energy Star products and others in the top 25th percentile of efficiency). This paper summarizes the Federal Energy Management Program s first 18 months of experience in implementing this Executive Order, including analysis of data on standby power, interactions with manufacturers and industry groups, and the relationship between these efforts and other federal programs concerning product labelling, testing, rating, and efficiency standards. After five years of implementing low-standby power purchasing, we estimate energy savings for federal agencies alone at about 230 GWh/year (worth US$14 million), with spillover effects on the broader market that will save all US consumers nearly 4000 GWh/year (US$300 million).