Track 5: Project Financing Session 5: M&V: High- and Low-Level Perspectives

M&V: What and Why?

Phil Coleman Lawrence Berkeley National Lab August 12, 2015

Phoenix Convention Center • Phoenix, Arizona

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What is Measurement & Verification ?

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M&V refers to any activities aimed at assessing the degree to which a project’s savings are being met

– For instance, measuring baselines is part of M&V

M&V is distinct from – but related to – “evaluation”

– Evaluation is term used to refer to the assessment of broader energy initiatives (like utility DSM programs)

M&V is heavily used in “performance” contracts – both retrofit and new construction – but can (and should?) be used for other energy-saving projects

– EISA calls for M&V on all federal energy-saving projects

Energy Exchange : Federal Sustainability for the Next Decade

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Why M&V?

1) To determine the degree to which estimated savings are being achieved 2) To increase the likelihood that estimated savings will actually materialize

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When M&V is planned and executed well, it will:

– Reduce uncertainty of savings estimates – Allocate risks appropriately between the customer and contractor (if contractor is used) – Potentially identify operations & maintenance issues

And when it’s not … it still probably helps!

– Somebody’s watching the ship …

Energy Exchange : Federal Sustainability for the Next Decade

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Basic M&V Concepts

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M&V methods should balance savings assurance against added cost

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The degree of M&V should be proportional to:

1) the energy conservation measure’s savings; and 2) the ECM’s performance risk •

Good M&V plans include the measurement of the key performance parameter(s) of ECMs

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If the M&V plan is weak, the savings may be met only on paper

Energy Exchange : Federal Sustainability for the Next Decade

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Determining the Savings

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The two components of energy consumption:

– Rate of energy use (e.g., wattage) – Length of use (time)

Energy consumption is the product of the two

– Example: 40 kW  10 hours = 400 kWh

Reducing the rate or time (hours) of energy use reduces the total energy consumption

Energy Exchange : Federal Sustainability for the Next Decade

Achieving Energy Savings

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Savings Uncertainty

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We can’t measure savings directly

– Because it’s the absence of something – i.e., it’s energy use that’s not there any more!

We measure energy use before and after the ECM

– The savings is the difference (roughly)

We usually don’t know the exact energy use before and after

– There’s almost always some uncertainty in each

And even when we do, we can’t know for sure what’s responsible for all the change

Energy Exchange : Federal Sustainability for the Next Decade

Achieving Savings (the real picture)

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M&V “Options” (from IPMVP)

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Each ECM is assigned an M&V option

– A, B, C, or D

Measurements differ by:

– Level – individual system vs. whole building – Duration – spot, short-term, periodic, continual – Stipulation – whether key values are held constant without performance period measurement • Example: Hours of lighting are assessed in audit and then fixed for purposes of savings calculation – Expense • More complex, interactive ECMs justify more M&V effort

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Options A/B vs. C/D

Options A&B are retrofit isolation methods.

Options C&D are whole facility methods.

The difference is where the boundary lines are drawn.

Energy Exchange : Federal Sustainability for the Next Decade

The IPMVP Options

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Energy Exchange : Federal Sustainability for the Next Decade