Capacity Building of Banks and Financial Institutions for Energy Efficiency Project Financing

Page 1 July 2014Capacity Building of Banks/FIsFor EE Project Financing

Capacity Building of Banks and Financial Institutionsfor Energy Efficiency Project Financing

Module 5 Measurement and Verification

Partnership to Advance Clean Energy-Deployment (PACE-D)Technical Assistance Program

September 2014


• Why Measurement and Verification (M&V)?

• Key Considerations in M&V

• Basic Concept of M&V

• M&V Methodologies

• M&V Protocols

• Common Issues

• The M&V Document

• Case Studies

Presentation Outline


Measurement and verification:• Is needed to confirm project energy savings and validate that

anticipated or guaranteed performance has been achieved

• Presents common definitions, terminology and procedures for energy-efficiency projects

• Improves communication and understanding among project implementing partners

• Provides a risk management tool to financing entities

• Minimizes disagreements and disputes

• Facilitates persistence of energy savings

Why M&V


Key Considerations in M&V


Who Should Conduct M&V?


• The costs of M&V depend on the energy efficiency technologies and measures to be implemented and the approach and methodology to be utilized

• M&V costs 5 to 10% of project investments

• Trade off between

accuracy of the M&V

cost of M&V

• Simple approaches are preferred to reduce costs and minimize potential for disputes

How much does M&V cost?


• If the project host conducts or engages a third party to conduct M&V, the host directly pays the M&V costs

• If the ESCO conducts or engages a third party to conduct M&V, the M&V costs are part of ESCO’s costs

• In either case, the M&V costs are an integral element of project cost and an allowance needs to be made in the project budget and financing plan for these costs

• While the M&V is specified in the Energy Services Agreement between the ESCO and host, the lender needs to understand and approve the M&V approach and costs

Who Pays for M&V Costs?


Key Elements of an M&V Plan


Basic M&V Concept


Assessing Energy Savings


M&V Methodologies


M&V methodologies


M&V Protocols


IPMVP

• Developed by a coalition of researchers and practitioners• Managed by independent organization (EVO) dedicated to

provision of tools to quantify the results of EE projects and programs.

• Provides flexible framework of M&V options that allows practitioners to craft the right M&V Plan for their project

• Internationally recognized and accepted• Certification program for M&V professionals• Implemented in India by Alliance for Energy-Efficient Economy

(AEEE)

International Performance Measurement and Verification Protocol


• First M&V Seminar Delhi April 2005, PCRA hosted for EVO

• M&V Fundamentals trainings in various cities of India

• Application of M&V to Government Schemes – Building Codes, PAT, DSM

• CMVP Certification Training & Exams in Delhi – Nine rounds completed more than 100 professionals certified

• EVO has Certified 5 Indian Trainers as CMVP Trainers

• AEEE has conducted M&V Training in Manila and Bangkok

• Opportunity to widen M&V capacity building to South & West Asia

M&V Training and Certification in India


India has over 100 CMVPs


• Retrofit Isolation Methods

Option A – Partially measured or one time measurement

Option B – Longer or continuous measurements

• Whole Facility Methods

Option C – Whole facility energy analysis

Option D – Computer simulation

M&V Approaches in IPMVP


Illustration of IPMVP Options


Adjusting for Changes in Baseline


Adjusting for Changes in Baseline

Possible Changes

in Baseline

Possible Changes

in Baseline

Facility Use or Operating ConditionsFacility Use or Operating Conditions

OccupancyOccupancy

Equipment Operating SchedulesEquipment Operating Schedules

Environmental ConditionsEnvironmental Conditions

Additions to Energy-Using EquipmentAdditions to Energy-Using Equipment

Facility Refurbishment or RehabilitationFacility Refurbishment or Rehabilitation


IPMVP M&V Options


• Simple approach (and low cost)

• Performance parameters are measured (before and after), usage parameters may be estimated

• Used where the “potential to perform” needs to be verified but accurate savings estimation is not necessary

• Key features Low cost

Simple procedure

Requires agreement among parties

Option A

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• Under Option B, some or all parameters are measured periodically or continuously

• Applicable where accurate savings estimation is necessary and long-term performance needs tracking

• Reduced uncertainty, but requires more effort

• Key features

“Real” M&V

Improved O&M

Ongoing Commissioning

Remote monitoring

Option B

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• Option C looks at energy use and cost of entire facility, not at specific equipment

• Conceptually simple, may be difficult in practice

• Key features: Can consider weather, occupancy, etc.

Useful where total savings need to be valued but component savings do not

Commercial software is available that simplifies implementation

May require baseline adjustments

Option C

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• Option D treats building as computer model

• Flexible, but requires significant effort

• Applications:

New construction

Energy management & control systems

Building use changes

Building envelope modifications & additions

• Uses specialized software that requires substantial experience

• Requires measurements for calibration

Option D

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• Baseline is 100 W light bulb and new lamp is 25 Watt compact fluorescent

• Wattage verified by measurements/specifications

• Assume 3,000 operating hours per year: Previous experience Estimate by owner

• Calculated Savings are:

3,000 hr/yr * (0.1 - 0.025 kW) = 225 kWh/year

Example of Lighting Project M&V - Option A


• Install meters on lighting circuits (before lighting retrofit is implemented)

• Measure consumption before and after retrofit for a specified time period

• Calculate savings

Lighting Project M&V - Option B


• Used when lighting is the dominant load

• Document baseline utility bill

• Obtain post-installation utility Bills

• Calculate savings

Lighting Project M&V - Option C


• Used when interactive effects need to be estimated

• Input lighting and HVAC system into simulation program.

• Calibrate model and calculate pre- and post-installation lighting and interactive HVAC energy use for determining savings.

Lighting Project -Option D


1. Lighting Efficiency and Controls 2. Motor and Drive Efficiency Improvements 3. Variable-Speed Drives 4. Boiler Improvements 5. Chiller Improvements 6. Air, Water, and Steam Distribution

Systems 7. Thermal Energy Recovery 8. Controls

Option A: One-time metering ○ ○ ○ ○ Option B: Continuous metering Option C: Utility Bill Analysis Option D: Computer Simulation 1 2 3 4 5 6 7 8

M&V Options with Multiple End-Uses


• Factors affecting saving performance Predictability, measurability, factors such as weather, occupancy,

equipment intensity, ability of EEMs to deliver savings, implementation effectiveness, occupant – operator cooperation, equipment deterioration and life

• Evaluating saving uncertainty Instrumentation error, modeling error, sampling error, planned and

unplanned changes

• Minimum energy Standards• Minimum operating conditions

Common M&V Issues


• Energy Prices

For simplification, price is specified

• Verification by a third party

Third party can resolve issues

• Baseline adjustments

Routine and non-routine

• Cost

Cost to owner against benefits

Common M&V Issues (continued)


1. Project site and measures

2. M&V option selected - Options B or C

3. Details for calculations

Data collection plans

Assumptions

Energy rates

4. Baseline equipment and conditions

Equipment, space conditions, assumptions, energy use relative to production, adjustments – how and when

M&V Information Document


5. Post-installation equipment and conditions Plan for defining new equipment and space conditions, assumptions

and stipulations

6. Metering Schedule of metering (duration/when), who will provide, data

validation, sampling7. Measurement and verification activities

Who conducts M&V, analysis and prepare report, quality assurance, reports defined and post installation energy use relative to production

8. Initial and annual cost

M&V Information Document (continued)

Thank you

Dilip R. LimayeMahesh Patankar

Finance TeamUSAID PACE-D Technical Assistance Program

[email protected]@mpensystems.com

www.pace-d.com

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Capacity Building of Banks and Financial Institutions for Energy Efficiency Project Financing