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Measurement and Verification Practices in ESPC projects – A Brief Communication

posted Jul 9, 2012, 9:47 AM by Unknown user   [ updated Jul 25, 2012, 10:50 AM by Shankar Earni ]

Measurement and verification is the process of ensuring that the savings proposed by ESPC projects are being generated with a certain degree of confidence. Since the savings cannot be measured, the M&V methodology is essentially based on developing a plan to gather measurements on variables that are affected by implementation of the project or measure. The M&V strategy, based on the energy efficiency project and magnitude of savings, can focus on a sub-system or entire building or facility impacted by the energy efficiency project. The levels of M&V depend on tolerable risk and associated costs. The “true” savings from an energy efficiency project or an ECM may never be assessed until one expends tremendous amount of effort and resources. M&V strategy involved tries to strike an optimal balance between the M&V effort (data gathering, analysis and reporting) and costs involved for these efforts. M&V does not save any energy or related costs, in addition adds costs to the project. Given that M&V costs money, the question arises as to how much M&V do ESPC projects really need? For that matter do we need M&V at all? This document is intended to assess the current state of the M&V practices in ESPC projects and also present some of the alternatives along with a brief discussion on advantages and disadvantages of each of these approaches.

1.      Business as Usual

M&V is conducted mainly by the ESCO to document the actual performance of an ESPC. The M&V plan is developed in accordance with FEMP M&V Guidelines 3.0. These guidelines, not intended to be prescriptive, provide general framework for M&V for energy efficiency projects and measures. These guidelines are intended to develop a project specific M&V strategy to ensure that the project is performing and demonstrating the proposed level of guarantee. A carefully designed M&V strategy/plan tries to identify various risk parameters associated with an ECM or project and develops a metering strategy to attain the necessary confidence regarding the proposed energy savings.  This strategy might also identify other variables or parameters that may not be affected by the ECM or project and estimates of which can be based on surveys or short term data gathering to reduce costs.

The overall perception state of M&V practices in ESPC projects is considered to be weak by the agencies. Based on the M&V plans reviewed from the recent ESPC projects, a large number of projects and measures excessively rely on M&V Option A (Retrofit Isolation with key parameter measurement). Even for most of these ECMs that propose to use M&V Option A, it is unclear based on the M&V description to understand what “key parameter” is being measured to ensure its compliance with FEMP M&V guidelines. Some of the M&V plans resort to vague noncommittal description of M&V activities, so that it is hard to clearly identify if the proposed activities have been conducted or not. Lot of the FEMP M&V guidelines and other resources that were developed to alleviate some of these issues are not adequately being used.

2.      No M&V at all

The other possible option is completely eliminate M&V from the project. Although this might be a cost effective option, this puts the entire performance risk on the agency and very much undermines the very nature of a performance contract. M&V in ESPC projects not only measures and verifies the proposed savings associated with an ESPC but also provide an important quality assurance function for the project. This important quality assurance step provides the necessary balance between the project development team (who is assessed on how big of a project they can secure) and project management team (who are assessed on how much margin they can secure). An actively engaged M&V engineer, working with a project development engineer, can help to ensure that the energy savings estimates and underlying assumptions are valid that the project has the proposed savings potential. Also M&V engineer, working in conjunction with project manager, can inspect and gather measurements and verification data during the project implementation and post installation, to ensure that the project is performing as per design intent (ensuring the commissioning is performed and check the supporting documentation) and has the necessary savings potential guaranteed by the ESCO.  By not having an active M&V step in the process, a wide variety of issues related to the entire project cannot be identified, e.g. savings estimates from the project development might be based on assumption which may not be valid, or the project manager not installing less than the proposed number of VAV boxes.


3.      Rigorous post installation M&V combined with commissioning:

Another possible option is to mostly conduct a thorough M&V and commissioning during the post-installation phase and during the first year to ensure that the project is capable of generating the proposed savings. So once the projects have been identified to be performing as proposed and savings are being generated based on the data collected, the performance of the project from then on is considered to be “stipulated.” During the later years of the project, performance period M&V activities will be replaced by commissioning of the equipment or system so that the issues associated with these systems can be identified and fixed as and when they arise.

Also providing specific M&V guidance, given a project or ECM,  and standardizing the M&V plans can also help to cut down some of the associated M&V costs while helping to reduce some of the ambiguity associated with M&V. The idea is to provide prescriptive guidance on M&V strategies for common ECMs and standardize the process as much as possible. However, since all the ECMs cannot be standardized, there always “new” ECMs for which M&V plans have to be crafted from scratch and thereby potentially can cause the same problem we are encountering now.

4.      Towards a more Integrated pro-active M&V approach

The other possible option is to make use of the data from the advanced meters (EPAct 2005 requires all Federal buildings to be metered by October 1, 2012. These metering devices are intended to provide data at least daily and measure the consumption of electricity at least hourly) and develop a closed loop M&V strategy that effectively combines high resolution utility data and data from EMCS to identify and possibly rectify issues, through building commissioning activities that cause increase in energy consumption. This proactive M&V strategy will help to identify issues as and when they happen so that the maintenance personal or ESCO can attend to these.

The unprecedented proliferation of smart sensors, advanced meters and control systems in buildings and data that they generate can be used to detect or sense various conditions and design responses to mitigate some of the problems. However using all this data from disparate sources to develop a picture of overall health of building or systems is very difficult, as most building systems and devices operate independently, through a mix of vendors, and have different protocols and transport mechanisms. 

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