Transcript Practical Experiences in Applying Savings M&V

Practical Experiences in
Applying Savings M&V
By
Thomas K. Dreessen
CEO, EPS Capital Corp.
EVO Board Member
and
Pierre Langlois
President, Econoler International
EVO Board member
October 19, 2005
Program
13:00-13:10
13:10-13:25
13:25-14:00
14:00-14:45
Introduction
Presentation of EVO
Overview of the International Performance
Measurement & Verification Protocol (IPMVP)
How to apply IPMVP’s Options in practical ways
14:45-15:00
Break
15:00-15:45
ESCO Strategies for Valuing Savings and
Mitigating Related Performance Risks
Actual Project Examples in Applying Savings M&V
Q&A and Conclusion
15:45-17:00
17:00-17:30
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Introduction
Your Trainers:
• Tom Dreessen CEO, EPC Capital Corp.
www.epscapital.com
• Pierre Langlois President, Econoler
International
www.econolerint.com
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Introduction
Why Measure and Verify?
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Accurately assess energy savings for a project
Allocate risks to the appropriate parties
Reduce uncertainties to reasonable levels
Monitor equipment performance
Find additional savings
Improve operations and maintenance (O&M)
Verify cost savings guarantee is met
Allow for future adjustments, as needed
Introduction
• M&V is an evolving science, although common
practices exist
• These practices are documented in several
guidelines, including
– The International Performance Measurement &
Verification Protocol (IPMVP 2001)
– FEMP M&V Guidelines: Measurement and Verification
for Federal Energy Projects Version 2.2 (2000)
– ASHRAE Guideline 14: Measurement of Energy and
Demand Savings (2002)
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EVO
• Efficiency Value Organization (EVO)
www.efficiencyvaluation.org
• Formed in 2004, formerly IPMVP Inc, a
non-profit US corporation
• Provides tools to help energy efficiency
projects be valued equivalently to new
energy supply projects
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EVO
• EVO Vision
A global marketplace that correctly values the
efficient use of natural resources and utilizes end-use
efficiency options as a viable alternative to supply
options
• EVO Mission
To develop and promote the use of standardized
protocols, methods and tools to quantify and manage
the performance risks and benefits associated with
end-use energy efficiency, renewable energy, and
water efficiency business transactions
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EVO
• Protocols
– Industry Standards
•
Training, Certification
– Under development
•
Building Community, Promoting Efficiency
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–
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USGBC - US Green Building Council - LEED
Metering International
Power Measurement - Webinars
APEC - IEEFP
Coming soon - EVO subscriber services
IPMVP - Overview
• IPMVP stands for International
Performance M&V Protocol
• Created by an international committee
seeking to reduce uncertainty in M&V
• Developed and managed by EVO, inc.
available free
www.ipmvp.org
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IPMVP - Overview
• IPMVP is a framework of definitions and methods for
assessing energy savings.
• IPMVP framework was designed to allow users to
develop an M&V plan for a specific project.
• IPMVP was written to allow maximum flexibility in
creating M&V plans that meet the needs of
individual projects, but also adhere to the principles
of accuracy, transparency and repeatability.
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IPMVP - Benefits
• Defines standard approaches to “measuring
savings” to reassure clients
• Leads clients and ESCOs to discuss the trade-off
between measurement “accuracy” and
measurement cost
• Legitimized ESCO projects though International
recognition
• Updates M&V state of the art practices through
constant evolution
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IPMVP
What IPMVP does not cover
• Operations and Maintenance
• Detailed Metering Specifications, or instrumentation
guidance.
• Calculating the Cost of M&V (Balancing the cost and
benefits)
• Scientific/Engineering Rationale for adjusting the
baseline for non-statistical changes
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IPMVP – Added Value
• Savings verification framework for commercial
and industrial energy conservation measures
• Standardizes M&V terminology and defines
various M&V options
• Risk management tool that allocates risks
between buyer and seller of energy services
• Allows parties to create transparent, repeatable
contract terms governing savings settlement
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IPMVP – Other Characteristics
• Translated in more than 10 languages
over the last five years
• First Published 1996, and updated
frequently
• Broad International Support and
Adoption
• World standard
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IPMVP - Documents
• IPMVP Vol. I —Concepts and Options for Determining Energy
Savings.
• IPMVP Vol. II — Concepts and Practices for Improved Indoor
Environmental Quality
• IPMVP Vol. III
– M&V Guidelines for New Construction (under development)
– M&V of Renewable Energy Systems
– Standard Protocol for Determining Baseline for Demand
Response Programs (Draft)
– Emissions Reduction
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IPMVP – M&V Options
• The IPMVP M&V guidelines group M&V
methodologies into four categories : Options A,
B, C, and D
• The options are generic M&V approaches for
energy and water saving projects.
• Having four options provides a range of
approaches to determine energy savings
depending on the characteristics of the ECMs
being implemented and balancing accuracy in
energy savings estimates with the cost of
conducting M&V.
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IPMVP – M&V Options
Type #1 Retrofit isolation and whole facility
Looks only at the affected equipment or
system independent of the rest of the facility;
whole-facility methods consider the total
energy use while ignoring specific equipment
performance.
• OPTION A - Retrofit isolation with measured
performance and stipulated operation
• OPTION B - Retrofit isolation with measured
performance and measured operation
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IPMVP – M&V Options
Type # 2 : Whole-facility method
Looks globally at the savings of a
whole facility
• OPTION C - Whole building or utility
bill comparison
• OPTION D - Calibrated simulation
(using simulation tools as Trace, DOE-2,
etc.)
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IPMVP – M&V Options
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M&V Option
Performance1 and Usage2 Factors
Savings Calculation
Option A –
Stipulated and
Short-Term
Measured
Factors
Based on a combination of measured and
stipulated factors.
Engineering calculations,
component or system
models.
Option B –
Continuously
Measured and
Stipulated
Factors
Based on continuous measurements taken at
the component or system level when
variations in factors are expected.
Option C – Utility
Billing Data
Analysis
Based on long-term whole-building utility
meter, facility level, or sub-meter data.
Based on regression
analysis of utility billing
meter data.
Option D –
Calibrated
Computer
Simulation
Computer simulation inputs may be based on
several of the following: reasonable
assumptions based on historical data
gathered at facilities, performance
specifications of equipment or system being
installed, engineering estimates, spot-, shortterm, or long-term measurements of system
components, and long-term whole-building
utility meter data.
Based on computer
simulation model calibrated
with whole-building or enduse metered data or both.
Measurements are spot or short-term taken at
the component or system level. Stipulated
factors are supported by historical or
manufacturer’s data.
Engineering calculations,
component or system
models.
Spot or short-term measurements may suffice
when variations in factors are not expected.
M&V Options - Practical Application
Regardless of the Option followed, similar steps are taken
to verify the potential for the installed Energy
Conservation Measures (ECMs) to achieve savings
• Step 1: Define the baseline conditions were
accurately defined.
• Step 2: Develop Project Specific Measurement &
Verification Plan
• Step 3: Verify the proper equipment/systems were
installed and are performing to specification.
• Step 4: Verify the equipment/systems continue to
have the potential to achieve the predicted savings.
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Basics of M&V
WWHH
Energy
Baseline
Post-Retrofit
Time
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Basics of M&V
WWHH?
Energy
Baseline
Post-Retrofit
Time
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M&V Options - Practical Application
Step 1
Define the Baseline
• Baseline are define as part of the detailed energy survey
(DES)
• Baseline physical conditions (such as equipment
inventory and conditions, occupancy, nameplate data,
energy consumption rate, control strategies, and so on)
are typically determined during the DES through surveys,
inspections, spot measurements, and short term
metering activities
• Deciding what needs to be monitored, and for how long,
depends on factors such as the complexity of the
measure and the stability of the baseline, including the
variability of equipment loads and operating hours, and
the other variables that affect the load
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M&V Options - Practical Application
Step 1 Define the Baseline (continued)
• Baseline data are used to account for any changes that
may occur during the performance period, which may
require baseline energy use adjustments
• In almost all cases, after the measure has been installed,
one cannot go back and re-evaluate the baseline. It no
longer exists!
It is very important to properly define and
document the baseline conditions before
the measure is implemented.
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M&V Options - Practical Application
Step 2 Develop Project Specific M&V Plan
The project specific M&V plan includes project-wide
items as well as details for each ECM, including:
• Details of baseline conditions and data collected
• Documentation of all assumptions and sources of
data
• What will be verified
• Who will conduct the M&V activities
• Schedule for all M&V activities
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M&V Options - Practical Application
Step 2 Develop Project Specific M&V Plan
(continued)
The project specific M&V plan includes project-wide items as well as
details for each ECM, including:
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•
•
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Details of engineering analysis performed
How energy savings will be calculated
Utility rates and how they will be used to calculate cost savings
Detail any operations & maintenance (O&M) cost savings
claimed
• Define O&M reporting responsibilities
• Define content and format of all M&V reports (Post-Installation,
Commissioning, and periodic M&V)
• How & why the baseline may be adjusted
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M&V Options - Practical Application
Step 3: Verify the proper equipment/ systems were
installed and are performing to specification.
• Post-installation verification is conducted to ensure that proper
equipment/systems were installed, are operating correctly, and
have the potential to generate the predicted savings
• The verification is accomplished through commissioning and
M&V activities
• Commissioning of installed equipment and systems is required
• Commissioning assures that the building systems perform
according to the design intent.
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M&V Options - Practical Application
Step 3: Verify the proper equipment/ systems were
installed and are performing to specification.
• After commissioning is completed, the postinstallation measurement and verification activities
specified in the M&V plan are implemented
• Verification methods may include surveys, inspections,
spot measurements, and short-term metering
• The results of the commissioning and M&V activities
are presented in a Post-Installation M&V Report
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M&V Options - Practical Application
Step 4: Regular-Interval Verification During the
Performance Period
• Verify that the installed equipment/systems have been properly
maintained, continue to operate correctly, and continue to have
the potential to generate the predicted savings
• Frequent verification activities can be appropriate. This ensures
that the M&V monitoring and reporting systems are working
properly, it allows fine-tuning of measures throughout the year
based on operational feedback, and it avoids surprises at the
end of the year
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M&V Options - Practical Application
Higher precision means higher cost
• Sampling
Large quantity of equipment to measure means higher cost
• Approach
Measuring power and hours of operation need better equipment
• Frequency
Checking the savings monthly implies added cost
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M&V Options - Practical Application
Cost of M&V/Savings
Savings
Monthly
check
Simple
1 time
check
M&V cost
Complexity of the process
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ESCO Strategies - Valuing Savings &
Mitigating Related Performance Risks
• The primary purposes of M&V is to reduce performance
risk to an acceptable level, which is a subjective
judgment based on the parties’ priorities and
preferences.
• In performance contracts, risks are allocated between
the ESCO, Owner & Financier.
• In performance contracts, M&V:
– is critical to success of project
– maximizes the persistence of savings over contract term
– verifies the savings achieved and valued in contracts
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ESCO Strategies - Valuing Savings &
Mitigating Related Performance Risks
• The right level of M&V is determined by degree
of savings certainty:
– Projects with high degree of certainty require minimal M&V
– Projects with low degree of certainty require more M&V
• Factors that affect cost and level of M&V:
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Value and level of uncertainty of estimated savings
Complexity of efficiency equipment installed
Amount and value of equipment installed
Number of interactive effects
Availability and capability of an existing controls system
ESCO Strategies - Valuing Savings &
Mitigating Related Performance Risks
• Typical M&V procedures for an ESCO contract
are:
– Define general M&V approach for inclusion in the
contract
– Define site-specific M&V plan for project being
installed
– Define pre-installation baseline energy
– Define post-installation system and use
– Conduct M&V activities as set forth in contract
– Calculate energy & operating savings over term of the
contract
– Calculate dollar savings and payments due to ESCO
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ESCO Strategies - Valuing Savings &
Mitigating Related Performance Risks
• Calculating Energy Savings:
Baseline energy use
- Post-installation energy use
= Energy savings
• Baseline represents level of energy that would
have been used if new equipment had not been
installed - can be affected by a variety of factors:
– Changes in building equipment, schedule, occupancy,
operations or maintenance procedures, etc.
– Unusually mild or severe winter
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ESCO Strategies - Valuing Savings &
Mitigating Related Performance Risks
• The ESCO “Performance Risk” equates to a
Savings Guarantee to Owner or Financier that
the total cost to implement the project will be
“paid-from savings”.
• Key areas of the Performance Risk are:
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Savings shortfall
Savings persistence
Technical problems
Customer performance (data, maintenance, payment,
etc.)
ESCO Strategies - Valuing Savings &
Mitigating Related Performance Risks
Possible Solutions:
• Savings shortfall
– Utilize multi-level savings estimate review process
– Fix long-term maintenance, M&V and other ESCO
costs
• Savings Persistence:
– Establish calculation methodology during feasibility
stage
– Implement M&V plan at beginning of construction
– Isolate Savings Measures from total bill
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ESCO Strategies - Valuing Savings &
Mitigating Related Performance Risks
Possible Solutions (continued):
• Technical Problems:
– Ensure proper pass-through to contractors and
vendors
• Customer Risk – include in contract:
– Clearly defined baseline, savings calculation methods,
M&V protocol, and maintenance responsibilities
– Short timeline for providing energy bills
– ESCO’s ability to bill estimated savings if bills not
provided
– ESCO’s ability to self-perform maintenance and
charge owner for work and any related lost savings
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Actual M&V Project – Commercial Building in
Canada – Econoler International
PROJECT SUMMARY (US$)
#
Savings Measure
1
2
3
4
Lighting System
Energy Efficient Motors
Ventilation & Cooling System Controls
Energy management & training
TOTALS
Cost to
Annual
Payback
Savings
Years
Implement
$ 900,000 $ 202,000
4.5
350,000
62,000
5.6
1,000,000
296,000
3.4
55,000
40,000
1.4
$ 2,305,000 $ 600,000
3.8
Training and energy management were also part of the project.
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Actual M&V Project – Commercial Building in
Canada – Econoler International
• Project implemented in 2000
• Annual use of the building constant for the
baseline duration and for the duration of the
project
• The energy bill of year 1999
$2.5 million
• The energy bill of year 2001
$1.9 million
• Savings
$0.6 million
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Actual M&V Project – Commercial Building in
Canada – Econoler International
M&V Approach (OPTION C)
• Whole building/plant approach using main electric utility
meter data
• Measurement done based on the baseline developed
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Actual M&V Project – Commercial Building in
Canada – Econoler International
This approach is appropriate:
• Large-scale project
• Important energy saving (20% or more)
• All parameters affecting energy usage can be clearly
identified (baseline and after implementation)
• Adjustments factors are simple
• Individual measurement not required
• Soft savings measures included (training, awareness)
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Actual M&V Project – Commercial Building in
Canada – Econoler International
Advantages of using OPTION C
• The entire installation
• Interactive effects between EE measures
Disadvantages of using OPTION C
• More expensive than option A or B because
based on monthly calculation
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Actual M&V Project – Commercial Building in
Canada – Econoler International
Accuracy/Cost:
• % of project cost: 5-15%
• Accuracy: ± 5-10% (annual)
• Accuracy: ± 20% (monthly)
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Actual M&V Project – Hospital
in USA - EPS Capital Corp.
PROJECT SUMMARY (US$)
#
1
2
3
4
5
6
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Savings
Cost to
Annual
Payback
Measure
Savings
Years
Implement
Water
$ 559,000 $ 254,000
2.2
Lighting
1,076,000
406,000
2.7
Steam System
419,000
329,000
1.3
Power Factor
25,000
11,000
2.3
Sterilizers/DHW
26,000
4,000
6.5
Chiller Plant
2,381,000
246,000
9.7
TOTALS
$ 4,486,000 $ 1,250,000
3.6
Actual M&V Project – Hospital
in USA - EPS Capital Corp.
M&V Approach = OPTION “A”
• Actual Before/After Measurements at
Installation
• Stipulated Usage Factors
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Actual M&V Project – Hospital
in USA - EPS Capital Corp.
Savings Measure
Item
Measured
Level
Measured
Item(s) Stipulated (based
on post actual)
Water
Gallons
Sample
Toilets = # Flushes
Showers = # & Time
Lighting
kW
Sample
Hours of Use (based on
actual logged use)
Steam Traps
Steam Loss
Sample
Extrapolated Actual
Power Factor
Utility Bill
100%
Annual Savings
Sterilizer
Steam Loss
100%
Annual Savings
Chiller Plant
kW/Ton
100%
Ton Hours
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Actual M&V Project – Hospital
in USA - EPS Capital Corp.
Appropriateness of M&V Approach:
•
•
•
•
Large facility with continuous variable conditions
Actual Before/After Measurements verify savings
Control system in place verified stipulated usage
On-going measurement not required – verified
equipment in place and operating.
• High-level reconciliation to utility and system
usage
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Actual M&V Project – Hospital
in USA - EPS Capital Corp.
Advantages of using Option A:
• Cost effective for hospital variables
• Actual savings verified with statistically valid
samples
• Easy to administer
Disadvantages of using Option A:
• Not 100% accurate
• Not reconciled to total utility usage
• Does not track on-going facility changes
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Actual M&V Project – Textile Mill
in India - EPS Capital Corp
PROJECT SUMMARY (US$)
#
1
Savings
Measure
Pocket Ventilation Pre-heat
Cost to
Annual
Payback
Savings
Years
Implement
$ 100,000 $ 45,000
2.2
Pumping Power Reduction
892,000
318,000
2
Refining Power Reduction
882,000
267,000
3
110,000
33,000
4 Wastewater Aeration Power Reduction
Steam Condensate Optimization
696,000
312,000
5
On-site Power Generation Upgrade
2,320,000
790,000
6
TOTALS
$ 5,000,000 $ 1,765,000
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2.8
3.3
3.3
2.2
2.9
2.8
Actual M&V Project – Textile Mill
in India - EPS Capital Corp
M&V Approach = OPTION “B”
• Before/After Measurements
• Continuous Monitoring based on actual
usage
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Actual M&V Project – Textile Mill
in India - EPS Capital Corp
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Savings
Measure
Item
Measured
Level
Measured
How often Item
Measured
Pocket Ventilation Pre-heat
Steam
100%
Continuous
Pumping Power Reduction
kW/kWh
100%
Continuous
Refining Power Reduction
kW/kWh
100%
Continuous
Wastewater Aeration
kW/kWh
100%
Continuous
Steam Condensate
Steam
100%
Continuous
On-site Power Generation
kW/kWh
100%
Continuous
Actual M&V Project – Textile Mill
in India - EPS Capital Corp
Appropriateness of M&V Approach:
•
•
•
•
Large facility with continuous variable conditions
Actual Before/After Measurements verify savings
Savings isolated from total energy costs
On-going measurement required to verify
savings based on changing process operations
• High-level reconciliation to utility and system
usage
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Actual M&V Project – Textile Mill
in India - EPS Capital Corp
Advantages of using Option B:
• Savings correlate with process changes
• Actual savings verified with metered usage
• Less performance risk for customer
Disadvantages of using Option B:
• Expensive to install and monitor meters
• Not reconciled to total energy costs
• Difficult to establish baseline loads for varying process
and energy consumption levels
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Actual M&V Project – Steel Mill
in Russia - EPS Capital Corp
PROJECT SUMMARY (US$)
#
1
2
3
4
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Savings
Cost to
Annual
Payback
Measure
Savings
Years
Implement
Variable Speed Drives on Slurry Pumps $ 1,000,000 $ 300,000
3.3
Dry Magnetic Separators
2,500,000
1,225,000
2.0
Furnace Burner and Control Upgrades
4,500,000
1,800,000
2.5
New Roller Screen Technology
1,000,000
175,000
5.7
TOTALS
$ 9,000,000 $ 3,500,000
2.6
Actual M&V Project – Steel Mill
in Russia - EPS Capital Corp
M&V Approach = OPTION “B”
• Before/After Measurements
• Continuous Monitoring based on actual
usage
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Actual M&V Project – Steel Mill
in Russia - EPS Capital Corp
Savings
Measure
Item
Measured
VSDs on Slurry Pumps
kW/kWh
100%
Continuous
Dry Magnetic Separators
Iron Ore Yield
& kW/kWh
100%
Continuous
Furnace Burner & Controls
Fuel/MT of
steel
100%
Continuous
Ore Separation Roller
Screens
kW/kWh
100%
Continuous
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Level
How often Item
Measured
Measured
Actual M&V Project – Steel Mill
in Russia - EPS Capital Corp
Appropriateness of M&V Approach:
•
•
•
•
Large facility with continuous variable conditions
Actual Before/After Measurements verify savings
Savings isolated from total energy costs
On-going measurement required to verify
savings based on changing process operations
• High-level reconciliation to utility and system
usage
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Actual M&V Project – Steel Mill
in Russia - EPS Capital Corp
Advantages of using Option B:
• Savings correlate with process changes
• Actual savings verified with metered usage
• Less performance risk for customer
Disadvantages of using Option B:
• Expensive to install and monitor meters
• Not reconciled to total energy costs
• Difficult to establish baseline loads for varying process
and energy consumption levels
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Conclusions
• EVO’s IPMVP can play an important role in
the development of the ESCO concept in
Asia, in order to provide expertise and
credibility to M&V activities.
• Measurement of savings is key because it
is the “ROI” (Return On Investment)
for energy efficiency.
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Conclusions
• Carefully crafted M&V strategies are a key tool
to managing performance risks in projects.
• The final M&V selected should balance need for
accuracy with cost to install/perform.
– More complex measures may require more complex
and expensive M&V methods to determine energy
savings
– M&V costs should not exceed 3-5% of project cost
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EVO
Join us today:
www.efficiencyvaluation.org
Download IPMVP Volumes:
www.ipmvp.org
Contact us:
Tom Dreesen
CEO EPS Capital Corp
[email protected]
Pierre Langlois
President Econoler International
[email protected]
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