Measuring and Verifying Energy Cost Savings in EnergyCAP

©2013 EnergyCAP, Inc. @energycap www.EnergyCAP.com

Analysis Track

Measuring and Verifying

Energy and Cost Savings

Presented by Steve Heinz, PE, CEM


Quiz

In 2010 we spent $3M on electric bills. We hired

an Energy Manager on 1/1/2011 who implemented

a comprehensive energy management program.

In 2011 we spent $4M.

We should:

A. Fire our Energy Manager

B. Praise our Energy Manager

C. We need more information before making a

decision


In 2010 we spent $3M on electric bills. We hired an

Energy Manager on 1/1/2011 who implemented a

comprehensive energy management program. In 2011

we spent $4M.

But we also added 75,000 sq ft, increased enrollment by

7%, increased community rentals by 9% and absorbed

a 5% electric price increase. Oh, and we had a record-

setting hot summer.

We should:

A. Fire our Energy Manager

B. Praise our Energy Manager

C. We need more information before making a decision


In 2010 we spent $3M on electric bills. We hired an

Energy Manager on 1/1/2011 who implemented a

comprehensive energy management program.

In 2011 we spent $4M. But we also added 75,000 sq

ft, increased enrollment by 7%, increased community

rentals by 9% and absorbed a 5% electric price increase.

Oh, and we had a record-setting hot summer.

Based on the 2010 baseline, our EnergyCAP software

calculated that without our energy management program

we would have spent $4.8M in 2011. It looks like we

avoided a cost of $800,000 in 2011.

We should:

A. Praise our Energy Manager

©2013 EnergyCAP, Inc. @energycap www.EnergyCAP.com©2013 EnergyCAP, Inc. @energycap www.EnergyCAP.com

M&V Fundamentals


“Measurement and verification” of

energy savings

Necessary because you can’t simply

compare year-to-year out of pocket

expenditures

www.EnergyCAP.com/products/energycap-enterprise-

videos/why-cost-avoidance-matters


IPMVP

The U.S. Department of Energy and

other impartial agencies funded the

development of the IPMVP (The

International Performance

Measurement and Verification Protocol)


IPMVP (continued)

Today it is managed by an

international nonprofit agency called

The Efficiency Valuation Organization

www.EVO-World.org

The Federal Government uses a

version of it to value the savings for all

Federal energy projects.


www.EVO-World.org


IPMVP Options for M&V

A. Retrofit isolation. Estimate it.

B. Retrofit isolation. Submeter it.

C. Compare before/after utility bills.

D. Computer modeling.


IPMVP Option C

1. Establish a baseline year

2. Adjust the baseline year to current

conditions. This is an estimate of what

you would have used without an energy

management program in place. BATCC–

Baseline adjusted to Current Conditions

3. Compare today’s actual bills with the

BATCC adjusted baseline


IPMVP Option C

Cost Avoidance=BATCC Cost–Current

Cost

Baseline cost: $1,000 KWH: 10,000

Current cost: $1,200 KWH: 8,000

BATCC cost: $1,500 (10,000 x .15)

Cost avoidance: $300


Adjust the baseline to current conditions

Degree days imported from AccuWeather®

Energy unit price

Floor area

Changes in length of billing period

Enrollment, occupancy

New equipment


Savings Reports can be:

1. Ongoing. Calculate and report savings

periodically throughout the life of the

contract or program. EnergyCAP

approach.

2. One-Time Stipulated. All parties agree to a

one-time calculation; no further reporting is

needed. This approach is favored by most

ESCOs for most retrofit projects.


Savings: adjusted baseline minus

today’s actual bill


With weather adjustment, $78 savings


Without weather adjustment (for

unusually mild winter), $352 savings


EnergyCAP’s Cost Avoidance M&V module:

Adheres to the calculation requirements of IPMVP

Has been used with essentially the same format & calculations since 1985

Cost avoidance has been calculated for tens of thousands of buildings


All calculation formulas are documented

and flow charted


Vs. Normalization, Only Cost

Avoidance has:

Special adjustments to baseline

“No loss/no gain” treatment of missing

bills, new accounts, inactive accounts

Fuel switch and dual fuel scenarios

Calculation: valuation of avoided

usage using today’s pricing


Only Cost Avoidance has: (continued)

“Tuning” of weather regression results

Manual calculation of savings when

needed due to unique circumstances

Meter-by-meter configuration of

baseline period and savings start date


Limitations of Option C M&V

When you have implemented several

projects, it’s difficult to discern the

results of each individually.

The further back the base year, the

less reliable the calculations due to

many changes in occupancy, equipment, etc.


Limitations of Option C M&V

When peak demand charges are a

major cost driver, there are valuation complexities.


If Your Job is M&V:

Become a member of EVO ($100/yr)

Take the Association of Energy

Engineers “Certified M&V

Professional” course

A less-intensive alternative is the AEE

“Business Energy Professional” course

Questions

Visit the Ace Place to learn more!


Technology

Measuring and Verifying Energy Cost Savings in EnergyCAP