Corporate Services Division Assurance and Forensic Department

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1 Crprate Services Divisin Assurance and Frensic Department Cntracted the Nrth-West University t execute this prject The Measurement and Verificatin Guideline fr Energy Efficiency and Demand-Side Management (EEDSM) Prjects and Prgrammes Prject Name: Measurement and Verificatin Guideline Prject Number: N/A Reprt Type: M&V Guideline dcument Reprting Perid: N/A Reprt Issue Date: 3 February 2009 Versin number: Versin 10 Revisin number: Revisin 3

2 Cmpiled by: Date: 2009/02/03 W.L.R den Heijer M&V Team member Nrth-West University Authrized by: Date: 2009/02/03 LJ Grbler M&V Team leader Nrth-West University Submitted t: Crprate Services Divisin Assurance and Frensic Department Eskm Page ii

3 Measurement & Verificatin Guideline Dcument, v10r3 EXECUTIVE SUMMARY The fllwing dcument prvides a guideline n the general issues surrunding Measurement and Verificatin (M&V), and the applicatin theref in the cntext f Eskm s demand-side management prgramme. The first chapter f this guideline gives an verview f the M&V prcess, why M&V plays an imprtant rle in the DSM prgramme and explains the basic principles fllwed. It then describes the benefits that M&V add t DSM prjects. Chapter tw f this guideline dcument prvides an verview f the stages assciated with a DSM prject and hw each f these stages influences the prject s energy use. The third chapter prvides a detail lk at the varius stages assciated with the M&V prcess and describe what each f these stages entail. A sectin n cndnable days is als included in this sectin and hw these ccurrences shuld be handled in the Suth African cntext. The furth chapter describes hw the M&V prcess and its varius stages interact with the actual DSM prjects. The fifth and sixth chapters describe the basic respnsibilities f the Energy Services Cmpany (ESC) and the Clients f DSM prject and what they can d t ensure maximum effectiveness f the M&V prcess. Chapter seven prvides a basic apprach that M&V teams can fllw t derive data when cnfrnted with data lss. The chapters that fllw deals with lessns learnt frm varius M&V prjects and then cver a sectin n safety during the M&V prcess. The M&V guideline is the result f years f effrt t ultimately result in an M&V prcess and related methdlgies t deliver transparent, accurate and repeatable results in the quantificatin f DSM prject impacts, as well as the evaluatin f the sustainability f these results. The guideline is cntinuusly updated and any feedback, cmments and cntributins that will ultimately benefit the M&V prcess and the EEDSM prgramme is welcme, and can be frwarded t the authrs whse cntact details are included in the last chapter f this dcument. Page i

4 Measurement & Verificatin Guideline Dcument, v10r3 Table f Cntents Chapter 1: Intrductin Backgrund What is Measurement and verificatin? Why shuld we measure and verify? Hw des ne measure and verify? What is the ratinale behind the saving determinatin? Advantages f M&V Chapter 2: DSM prject stages Intrductin Prject Stages fr DSM and energy-efficiency Prject identificatin Energy audit and assumptins Recmmendatins fr implementatin Apprval fr funding Detail design Implementatin Cmmissining Operatin and maintenance Chapter 3: M&V Prject Stages Intrductin Prject stages fr M&V Scping study and scping reprt Develp M&V plan Develp M&V baseline and M&V baseline reprt Pst-implementatin reprt Perfrmance assessment Perfrmance tracking reprts (Agreed submittal interval) Perfrmance tracking reprts (Annual) Cndnable perids What are Cndnable/Frce Majur Perids? Data lss and cndnable perids Full perfrmance including cndnable days Interactin between Prjects and/r Prgrammes Chapter 4: Interactin f DSM and M&V Chapter 5: Respnsibilities f the ESC during M&V Intrductin Interactin between the ESC and the M&V team Chapter 6: Respnsibilities f the Client during M&V Intrductin Page ii

5 Measurement & Verificatin Guideline Dcument, v10r3 6.2 Interactin between the client and the M&V team Chapter 7: Derived Data Backgrund What the IPMVP says? What happened t the DSM prject during data lss? Using derived data General Cmments Chapter 8: Lessns learnt Intrductin Lessns learnt Prject assumptins Prject implementatin Prject testing and perfrmance assessment perid Prject testing and perfrmance assessment perid Chapter 9: Safety during Measurement & Verificatin Intrductin The steps f safety Persnal prtective equipment Cmpetency and training Hazard and risk assessments Safety respnsibility Prtectin Safety devices Health and safety standards Electrical Installatins and Equipment General safety Chapter 10: References Chapter 11: Cntact details Page iii

6 Measurement & Verificatin Guideline Dcument, v10r3 NOMENCLATURE DMP DSM EEDSM ESC EVO FEMP IPMVP M&E M&V MW MWh NERSA PAR PCP PTR RLM SLA T&E R Demand Market Participatin Demand side management Energy Efficiency and Demand-Side Management Energy Service Cmpany Energy Valuatin Organisatin M&V guidelines fr federal energy management prjects Internatinal Perfrmance Measurement and Verificatin Prtcl Mnitring and evaluatin Mnitring / measurement and verificatin Megawatt Megawatt-hur Natinal Electricity Regulatr f Suth Africa Perfrmance Assessment Reprt Pwer Cnservatin Prgram Perfrmance Tracking Reprt Residential Lad Management Service Level Adjustment Tracking and evaluating Rand Page iv

7 Measurement & Verificatin Guideline Dcument, v10r3 CHAPTER 1: INTRODUCTION 1.1 Backgrund Demand-side management (DSM) prjects are implemented t achieve energy cnsumptin and energy demand savings, and ultimately cst savings. DSM prjects cver a wide range f electricity related activities and strategies, which may cnsist f energy efficiency, lad shifting, lad shedding, r cmbinatins f the abve. The basis f successful DSM prjects rests n the fact that impacts can be determined t a degree f accuracy and trust that is acceptable t all stakehlders. This prcess is knwn as measurement and verificatin (M&V). The bjectives f M&V are t prvide an impartial, credible transparent and replicable prcess that can be used t quantify and assess the impacts and sustainability f DSM prjects. The M&V prcess is designed t prvide an impartial quantificatin and assessment f prject impacts and savings that result frm DSM activities. Once the prject impacts are knwn, the utility (Eskm) can mnitr and evaluate (M&E) the perfrmance and prgress f all the DSM prject activities. This will help t identify present and future fcus areas fr DSM, as well as ptential prblems with implementatin. M&V therefre makes a critical cntributin twards the successful implementatin f DSM in Suth Africa. This chapter describes the cncept f M&V. This chapter will answer the fllwing questins: 1. What is measurement and verificatin? 2. Why shuld we measure and verify? 3. Hw des ne measure and verify? 4. What is the ratinale behind the savings determinatin? The aim f this guideline dcument is t prvide guidance t the varius DSM stakehlders and assist in the successful deplyment and capacity building f DSM in Suth Africa. The purpse f this guideline is t prvide a basic and standardized understanding f the M&V prcess and hw it fits int the scpe f a DSM prject. This guideline will firstly describe what M&V is, why M&V is necessary and hw M&V is cnducted. The ratinale behind M&V is discussed and hw it is structured t cmplement the effrts f DSM prjects. The guideline then prceeds t explaining the basic stages assciated with DSM prjects and M&V prjects. The interactin between DSM and M&V is discussed. The Page 1

8 Measurement & Verificatin Guideline Dcument, v10r3 guideline describes what is expected frm bth the ESC and the Client by the M&V team in terms f assistance during the M&V f the DSM prject. The guideline dcument als includes a sectin n lessns learnt n issues that either facilitated better implementatin r affected the M&V f DSM prjects. Previus versins f the M&V Guideline included varius sectins n a prpsed methdlgy n under-perfrmance penalties and ver-perfrmance banking. The draft methdlgy that was riginally prpsed fr the banking f ver-perfrmance and penalties incurred during underperfrmance f DSM prjects prvided a gd kick-ff pint fr the issue f banking and penalties. Hwever, the draft methdlgy was nt sufficient t be used in its current frm since it cntained a number f deficiencies that limited it practicality and applicability in the Suth African DSM market. These sectins have cnsequently been remved frm the M&V Guideline until a wrkable methdlgy has been drafted, tested and finalised. A number f appendices were als included in previus versins f the M&V Guideline that cntained examples f the varius M&V deliverables (M&V scping reprt, M&V plan, M&V Baseline reprt, etc.). These appendices have als been remved t firstly shrten the M&V Guideline dcument and secndly fr the reasn that the M&V teams are in the prcess f standardizing the layut and cntents f these dcuments. The Assurance and Frensic Department and the authrs can be cntacted t btain cpies f these dcuments. Cntact details are available at the end f this guideline. The energy efficiency and demand-side management industry in Suth Africa is extremely dynamic. This guideline aim t prvide guidance n the methdlgies and standardised apprach twards the measurement and verificatin methdlgies fr these industries. The Measurement and Verificatin guideline cnsequently needs t be updated cnstantly with new develpments and prcedures. The apprach that is fllwed is the fllwing: Stakehlder suggestins, cmments, inputs, additins and prcedural changes t this guideline is nted thrughut the year; All M&V Practitiners is frmally cnsulted befre apprval is prvided t update the M&V Guideline. Their cmments, feedback and additinal inputs based n their perspective and experience, as well as best practices (EVO, IPMVP, etc) are taken int cnsideratin when perfrming any updates. The updates that will imprve and cntribute twards the verall M&V methdlgies and the prcesses is made t the guideline. The updated guideline is then shared with the EEDSM prject and prgramme implementers and stakehlders fr their feedback and cmments; Page 2

9 Measurement & Verificatin Guideline Dcument, v10r3 The M&V Practitiners will then cnsider and incrprate the cmments and feedback int the M&V Guideline where necessary; The M&V Guideline is then issued t plicy makers and stakehlder parties such as NERSA, DME and NEEA fr cmments, feedback and additins which is again cnsidered and incrprated int the guideline. The final dcument is then published t the Assurance and Frensic Department Energy Audit Website where stakehlders have free access t it: Updates t this dcument is made at least twice a year (February and Nvember) and n an ad hc basis; The fact that the abve prcess is fllwed during the develpment and updating f the M&V Guideline ensures that the EEDSM industry and regulating bdies agree and accepts the guideline and the verall M&V prcess. 1.2 What is Measurement and verificatin? There are a number f stakehlders in any DSM prject. These stakehlders include the utility, the client and the ESC. The clients want t reduce their mnthly energy csts when they reduce their peak demand and/r energy cnsumptin. The DSM funding party (Eskm) needs t prtect its investment in the DSM prject. The ESC wants t implement the DSM and energyefficiency prjects and get paid fr their services (Figure 1.1). This situatin makes it necessary that the prject impacts be determined t a certain level f accuracy that is acceptable t all stakehlders. The ESC r the client usually identifies the need r a ptential fr a prject and perfrms savings calculatins as part f the preliminary Figure 1.1: DSM Prject stakehlders. and design phases f the DSM prject. A letter f intent is then prvided by the client t the ESC. A prpsal is then submitted t Eskm fr DSM funding. Once prject funding is apprved, the ESC can prceed and implement the prject n the client s site. After the DSM interventin has been fully implemented, these impacts and savings need t be quantified t determine the effectiveness f the interventin fr the stakehlders. Since the cntractual agreements rely n accurate and impartial savings and Page 3

10 Measurement & Verificatin Guideline Dcument, v10r3 impact infrmatin, the task f saving assessment and quantificatin need t be perfrmed by a party utside the grup f principal prject stakehlders. The primary questins that all prject stakehlders want answered are: Hw much are we saving and are the savings being sustained? The dynamics in DSM prjects make it difficult, and certainly nt preferable, t assign any ne f the principal stakehlders t deliver an bjective assessment f the savings. The quantificatin and assessment f the savings must remain impartial and the cmplete prcess transparent. The lng-term success f many prjects is ften hampered by the inability f prject partners t agree n the quantity f savings that have been btained. It is fr this reasn that anther party needs t be included in the prcess t determine and verify the savings, hence the M&V Team. M&V is the vehicle t prvide all the DSM prject stakehlders with an impartial quantificatin f the savings. Figure 1.1 shws a schematic representatin f the interactin between the principal stakehlders and the M&V team. It can be seen that the M&V team is active n all the levels between the varius prject stakehlders. The M&V team, hwever, stands apart frm the prject envirnment in rder t ensure impartiality. Hwever, the prject parameters are measured, baselines are develped and the savings calculated by the M&V team within the prject envirnment. The purpse f M&V is thus t facilitate agreement between the stakehlders n the prject utcmes thrugh accurate reprting f results. Accurate measurement, a replicable methdlgy, as well as a cnsistent and reliable prcess are sme f the requirements t determine the savings that result frm DSM prjects. 1.3 Why shuld we measure and verify? The Suth African utility Eskm, has embarked n a natinal DSM initiative in the industrial, cmmercial and residential sectrs. The prjects that fall under the scpe f DSM frm part f Eskm s lng-term strategy t reduce Suth Africa s electricity demand during peak perids and t increase the level f electricity efficiency [1]. The imprtance f M&V t the success f DSM in Suth Africa is bvius. Large financial investments are being made and an increasing number f clients are realizing the need fr DSM t maintain sustainability in their peratins. An increasing number f agreements are als being frged between prject stakehlders. M&V is designed t quantify and assess the savings that result frm prjects in an impartial manner. If the prject impacts are knwn, stakehlders can identify fcus areas fr DSM, as well as ptential prblems. M&V will als help with the prper implementatin f prjects. M&V is therefre an essential part f any energy-related prject. Page 4

11 Measurement & Verificatin Guideline Dcument, v10r3 M&V encurages investment in the DSM industry and reduces the risk fr investrs. M&V thus help t vercme barriers t the implementatin f energy and demand-reducing prjects. The prcess f M&V prvides credibility and brad based acceptance t the energy market. The prcess f M&V als prvides valuable feedback t stakehlders regarding the way in which savings are influenced. Effrts can thus be fcussed t ptimise the prject impacts. The fact that the savings are measured and verified encurages better design and management f prjects. M&V nt nly prvides energy cnsumptin (MWh) and demand (MW) impacts, but als prvide the mnthly and annual cst savings, tgether with a number f envirnmental impacts. 1.4 Hw des ne measure and verify? The Suth African energy market has had limited experience with regards t M&V prir t The fcus was cnsequently placed n internatinal measurement and verificatin prtcls in rder t gain an understanding f M&V and its requirements. These prtcls were the Internatinal Perfrmance Measurement and Verificatin Prtcl (IPMVP) [2], as well as the M&V Guidelines fr Federal Energy Management Prjects (FEMP) [3]. These prtcls have been in use internatinally fr a number f years and have prved t be a valuable surce f infrmatin n the requirements f M&V. These prtcls were adjusted and in sme cases expanded fr the Suth African situatin [4]. The M&V prcess was streamlined and structured in a mre fcussed manner fr each type f prject since the inceptin f the DSM initiative with the help f valuable experience gained frm the actual DSM prjects. Substantial wrk and research has als been cnducted by the Suth African M&V teams n the develpment f M&V methdlgies and baseline develpment, which is a critical cmpnent f the quantificatin f the prject impacts. The basic principle f M&V is t cmpare the measured electricity cnsumptin and demand after implementatin with what it was befre implementatin in rder t determine the impacts [2]. This is demnstrated in Equatin 1. Electricity savings = (Pre-implementatin electricity use) (Pst-implementatin electricity use) ± Adjustments (Eq. 1) This pre-implementatin electricity use cnditins is described by a baseline. The baseline represents the electricity use linked t a set f cnditins under which the system in questin was perating prir t implementatin. This culd include factrs such as prductin, weather, building ccupancy, system use, and electricity tariff structure. If the abve factrs remain unchanged, the pst-implementatin electricity use can be directly cmpared t that f the Page 5

12 Measurement & Verificatin Guideline Dcument, v10r3 Baseline. Service level adjustments (SLA) are, hwever, necessary t bring the tw time perids under the same set f peratinal cnditins if any f the pre-implementatin cnditins were t change. Service level adjustments are thus made t restate baseline electricity use under pstimplementatin cnditins. Baseline adjustments are anther frm f adjustment as shwn in Equatin 1. This adjustment is dne in the case f equipment r scpe changes t prjects and is dne n an ad hc basis and nt peridically as in the case f service level adjustments. The M&V prcess is implemented in varius levels f cmplexity. This depends n the selected M&V Optin and the measurement equipment required t M&V, as well as the accuracy level required by the varius parties invlved. The M&V team uses fur Optins f which any ne can be adpted t a particular impact determinatin task. These ptins are the fllwing: Optin A - Partially Measured Retrfit Islatin: Optin A invlves islatin f the electricity use f the equipment affected by a prject frm the electricity use f the rest f the facility. Measurement equipment is used t islate all relevant electricity usage fr the preimplementatin and pst-implementatin perids. Only partial measurement is used under Optin A, with sme parameter(s) being stipulated rather than measured. Hwever, such stipulatin can nly be made where it can be shwn that the cmbined impact f the plausible errrs frm all such stipulatins will nt significantly affect verall reprted savings. Optin B - Retrfit Islatin: The savings determinatin techniques f Optin B are identical t thse f Optin A except that n stipulatins are allwed under Optin B. In ther wrds, full measurement is required. Shrt term r cntinuus metering may be used under Optin B. Cntinuus metering prvides greater certainty in reprted savings and mre data abut equipment peratin. Optin C - Whle Building: Optin C invlves use f utility meters r whle building sub-meters t assess the energy 1 perfrmance f a ttal building. Optin C assesses the impact f any type f prject, but nt individually if mre than ne is applied t an energy meter. This Optin determines the cllective savings f all DSM activities applied t the part f the facility mnitred by the energy meter. Als, since whle building meters are used, savings reprted under Optin C include the impact f any ther changes made in facility energy use (psitive r negative). Optin C may be used in cases where there is a high degree f interactin between implemented 1 This guideline fcuses n electricity usage during DSM prjects. The term energy is hwever als used thrughut this guideline, but refers t electrical energy in the cntext f this guideline and the DSM prgramme. Page 6

13 Measurement & Verificatin Guideline Dcument, v10r3 activities r between activities and the rest f the building, r the islatin and measurement f individual prject activities is difficult r t cstly. Optin D - Calibrated Simulatin: Optin D invlves the use f cmputer simulatin sftware t predict facility energy use fr ne r bth f the energy use terms in Equatin 1. Such a simulatin mdel must be "calibrated" s that it predicts an energy use and demand pattern that reasnably matches actual utility cnsumptin and demand data frm either the base year r a pst-implementatin year. Optin D may be used t assess the perfrmance f all prject activities in a facility, akin t Optin C. Hwever, different frm Optin C, multiple runs f the simulatin tl in Optin D allw estimates f the savings attributable t each prject activity within a multiple activity prject. The M&V prject has a ttal f six deliverables. They are the fllwing: M&V Scping reprt; M&V plan; M&V baseline reprt (draft and final); Pst-implementatin M&V reprt; Perfrmance assessment reprt(s); and Perfrmance tracking reprts (Mnthly, annual, r agreed interval). These deliverables and reprts are structured in such a way as t facilitate buy-in int the M&V prject prcedures and prvide all the prject participants with a clear understanding and layut f the way in which M&V will prceed. These reprts and deliverables are discussed in mre detail in the sectins that fllw in this guideline dcument. Example reprts in a standardized frmat are available frm the Assurance and Frensic Department and the authrs. Page 7

14 Maximum demand [kw] Measurement & Verificatin Guideline Dcument, v10r3 1.5 What is the ratinale behind the saving determinatin? A DSM prject cmprises f three basic stages. These stages are the pre-implementatin stage, the implementatin stage and lastly the pst-implementatin stage. The timeline fr each f these phases may vary accrding t the prject cmplexity and a range f ther factrs. These stages can be seen in Figure 1.2. Savings = [ Baseline Actual ] ± Adjustments Baseline Adjustment t Baseline Savings Actual Pre-implementatin Pst-implementatin Implementatin f DSM Time Figure 1.2: Basic prject stages and apprach f saving calculatin. A system has a characteristic energy usage befre a DSM interventin is implemented. After implementatin the energy usage is reduced by a certain amunt. In rder t determine what the savings are, we need t establish what the energy usage after implementatin wuld have been, had the DSM interventin nt taken place. This is achieved thrugh the use f a baseline that describes the energy usage based n certain knwn and/r measurable input variables r patterns. This enables calculatin f the savings that were achieved by the DSM interventin by btaining the difference between the baseline and the Page 8

15 Maximum demand [kw] Measurement & Verificatin Guideline Dcument, v10r3 actual energy usage. All baselines are based n certain assumptins and criteria. Adjustments are made t the baseline when any f these assumptins becme invalid r criteria are n lnger satisfied by the baseline. These adjustments are nt dne n a regular basis (daily, mnthly, etc.) as is the case with the Service Level Adjustments described earlier, but rather when they becme necessary. Baselines are critical t the prcess and care need t be taken during the develpment f baselines. It is nt sufficient just t lk at what happened the previus year and use it as a baseline. It culd ccur that energy csts increase after implementatin, and a baseline shuld be able t pick this up. Cnsider Baseline 2 Actual Baseline 1 X Time Pre-implementatin Pst-implementatin Implementatin f DSM Figure 1.3 where a DSM Figure 1.3: Baseline develpment issues. interventin is implemented, but sn afterwards the actual cst starts t rise. Saving wuld thus ccur nly t a pint X in time. This culd result in disputes if baseline 1 were used (simple extraplatin f previus behaviur). An accurate baseline (baseline 2) shws that the energy cst wuld have risen as well in the absence f the DSM interventin and that savings are actually still being achieved. This principle applies t all baselines and it is fr this reasn that all the M&V baselines are linked t a service level, be it prductin, ccupancy, etc. This means that the baseline shuld accurately reflect increased electricity use due t either increased prductin fr industrial sites, r due t increased ccupancy in cmmercial buildings fr instance. The fact that measurements are used during M&V t btain the baseline, actual (r pstimplementatin) energy cnsumptin and demand, makes the M&V prcess a negtiated prcess. The number f measurement pints is determined by the pssibility f measurement and the cst t measure. If it were pssible t measure everything, an almst perfect baseline and actual energy cnsumptin wuld be available. Hwever, the high cst t measure limits the number f measurements and the verall accuracy f the baseline. All the invlved stakehlders (the client, the ESC and Eskm) must agree n the methd f calculating the savings. The level f detail f the M&V effrts shuld be in prprtin t the size f the savings. Thus, prjects with small expected savings wuld be measured and verified by a simple M&V prcess (typically Page 9

16 Measurement & Verificatin Guideline Dcument, v10r3 Optin A). The level f detail f the M&V prcess wuld increase as the size (quantity) f the savings increases. It is als imprtant t nte at this stage that the M&V teams require at least 3 mnths wrth f data fr the develpment f prject baselines (in a 30-minute interval at the least). When seasnal variance is expected, the baseline shuld be develped frm data spanning ver 12- mnths. Data suitable fr baseline develpment include electricity use and peratinal data frm histrian systems, SCADA systems and metering equipment (permanent, temprary r prtable). The purpse f the baseline is t represent system electricity use that is representative f energy use befre the DSM interventin. It has been fund in many instances that the interventin cmmenced the mment when the ESC disclsed cntrl strategies and methdlgies t the client, which then pr-actively adpt these DSM measures befre the ESC actually implement. This made it necessary fr the M&V team t btain data fr a perid f 3 mnths (r 12 mnths) prir t the ESC becming active n the prject site. Care shuld als be taken in instances where data is available fr lng perids f time. It has been fund that data that reach back further than 12 mnths can include peratinal practices and electricity use patterns that are n lnger valid, which will result in baselines nt representing the actual case just prir t the DSM interventin. If seasnal impacts are expected it is suitable t use 12 mnths wrth f data fr baseline develpment. Baseline develpment data gathered ver a perid f a tariff change n the client s side will be truncated and nly the available data after the tariff change will be used in the develpment f the M&V baseline. Metering equipment can be installed by the ESC n the prject site. It is hwever imprtant that the M&V Team be actively invlved in this prcess if this data is t be used fr M&V baseline develpment. Prtable metering equipment installed by the ESC withut M&V Team invlvement r verificatin is nt acceptable fr baseline develpment purpses. It is als essential that all metering equipment used shuld be calibrated every 12 mnths and the certificate kept a prf. The Suth African M&V prcess is designed t be extremely adaptable. Statistical sampling techniques can be used t reduce the number f measurements withut cmprmising the accuracy f the infrmatin r jepardising prject buy-in [5]. Mre infrmatin n acceptable statistical sampling techniques can be btained frm Eskm s Assurance and Frensic Department. Page 10

17 Measurement & Verificatin Guideline Dcument, v10r3 1.6 Advantages f M&V There are a number f advantages t perfrming M&V n a prject. It nt nly adds value fr Eskm, but als fr the clients and the ESC. If the DSM impacts are knwn, ne can track and evaluate (T&E) the perfrmance and prgress f all the DSM activities, which will help t identify fcus areas fr DSM, as well as ptential prblems. M&V will enable Eskm t evaluate the verified savings against their DSM targets and help with prper implementatin f DSM prjects. M&V is therefre an essential part t integrate int any DSM prject. M&V encurage investment in the DSM industry and reduce the risk fr financial investrs. M&V helps t vercme barriers t DSM implementatin and prvides a level f cnfidence in the ESC s DSM effrts. It will als becme a crucial requirement when participating in internatinal markets such as the clean develpment mechanism, which allw cuntries t benefit financially frm emissin reductins that result frm DSM prjects that deliver electricity cnsumptin reductins. The prcess f M&V prvides valuable feedback t stakehlders regarding the savings and hw it is influenced. This feedback is dne n a mnthly basis t Eskm s Assurance and Frensic Department in the frm f a standardised status reprt frm the varius M&V teams. Effrts can thus be fcussed t ptimise the impacts f DSM. The fact that the savings are measured and verified encurages better design and management f DSM prjects. M&V nt nly give demand and energy cnsumptin impacts, but als prvide cst savings and emissin impacts. Page 11

18 Measurement & Verificatin Guideline Dcument, v10r3 CHAPTER 2: DSM PROJECT STAGES 2.1 Intrductin This chapter describes the different stages that are assciated with DSM a prjects. The stakehlders in these prject stages are the client, Eskm and the ESC. The prject stages are shwn in Figure 2.1 tgether with a cnceptual representatin f the impact n a system s electricity demand in Figure 2.2. Figure 2.1: DSM prject stages. 2.2 Prject Stages fr DSM and energy-efficiency This sectin will describe the basic stages that are adhered t when an ESC implement a DSM prject. The detail and timelines f these stages may vary between different types f DSM prjects, but shuld include ne r anther frm f the stages included in this sectin. Page 12

19 Maximum demand [kw] Prject identificatin Energy audit \ Assumptins Recmmendatins fr implementatin Apprval fr funding Detail design Implementatin Cmmissining Operatin & Maintenance Measurement & Verificatin Guideline Dcument, v10r Prject identificatin Either the Client r the ESC identifies the need, ptential r pprtunity fr DSM savings during this stage. On mst ccasins an ESC wuld be cntracted t determine the ptential impacts and savings that can be achieved as part f evaluating a prject s financial viability. A letter f intent is prvided by the client t the ESC, which accmpanies the applicatin and prpsal fr DSM funding Energy audit and assumptins An energy audit is cnducted t determine the type, quantity and rating f all relevant energy using systems. This infrmatin is used t determine the ptential savings that can be achieved with DSM activities. The audit usually cnsists f a preliminary walk-thrugh audit fllwed by a detailed audit. Assumptins are als stated regarding system infrmatin that isn t available. Factrs that culd influence the ptential t generate savings are identified. Actual Pre-implementatin Pst-implementatin Time Implementatin f DSM Figure 2.2: Basic DSM prject stages transpsed n prject impacts Recmmendatins fr implementatin A better estimate f the ptential savings can be calculated nce building and/r system infrmatin has been gathered. Upn evaluatin f the varius ptential DSM activities tgether Page 13

20 Measurement & Verificatin Guideline Dcument, v10r3 with a feasibility study, the DSM activities are selected that shw the greatest ptential, based n their individual and cmbined feasibility. The ESC then submits these recmmendatins t the client. The client then evaluates the feasibility f the prject and decides whether t g ahead with the prject r nt. If the prject is apprved by the client, the prpsal can then be submitted t Eskm t qualify fr DSM funding. M&V plays an imprtant rle during this phase since it will reduce the risk fr the stakehlders. It is during this stage that Eskm will ntify the M&V t cmmence with measurement and verificatin activities Apprval fr funding Apprval fr DSM prject funding is granted (by the Utility) nce it has been established that the recmmended DSM activities will deliver satisfactry results within an acceptable budget, timeframe and risk level Detail design A detail design is made by the ESC f the recmmended DSM activities nce prject funding has been apprved Implementatin The DSM activities are then implemented based n the detail design. This phase is characterised by fluctuatins in energy usage (see Figure 2.2). The Utility (Eskm) and the M&V Team is ntified during this stage and a cmpletin certificate is issued by Eskm. This stage is the beginning f the perfrmance assessment stage f the M&V prcess Cmmissining Cmmissining f the installed equipment is necessary after implementatin t ensure that actual implementatin has been dne in the crrect manner and the equipment and systems are perfrming t the specified requirements. The cmmissining is usually dne by the ESC r by the cntractrs that the ESC used during the prject. A cmmissining reprt is cmpiled and submitted t the client. Page 14

21 Measurement & Verificatin Guideline Dcument, v10r Operatin and maintenance The implemented DSM measure needs t be maintained t ensure that the DSM activities deliver the same level f perfrmance as during cmmissining and cntinue t reduce maximum demand, cnsumptin and energy csts. Operatin and maintenance fr the system can be the respnsibility f either the ESC r the client, depending n the cntractual agreement that exists between the tw parties. It is hwever critical that such an agreement is in place since the client will be held liable fr the applicable perfrmance penalties frm three mnths nwards after implementatin up t the end f the cntractual agreement with Eskm. The ESC will be held liable fr prject under-perfrmance during the first three mnths after implementatin. Page 15

22 Measurement & Verificatin Guideline Dcument, v10r3 CHAPTER 3: M&V PROJECT STAGES 3.1 Intrductin The stakehlders in the M&V prcess are the M&V team, the client, the utility (Eskm) and the ESC. These stakehlders prvide valuable infrmatin t the M&V prcess and need t give buy-in fr M&V t cntinue thrugh its varius stages. The M&V prject has a ttal f six deliverables, which are the fllwing: M&V Scping reprt; M&V plan (which requires acceptance frm bth ESC and Client); M&V baseline reprt (which must be signed by the ESC); Pst-implementatin M&V reprt; Perfrmance assessment reprt(s) & perfrmance certificate; and Perfrmance tracking reprts (Mnthly, annual, r agreed interval). These deliverables and reprts are structured in such a way as t facilitate buy-in int the M&V prject prcedures and prvide all the prject participants with a clear understanding and layut f the way in which M&V will be cnducted. The M&V plan is distributed between the ESC and the Client. Bth need t cnfirm receival f this reprt via . The M&V plan then needs t be reviewed by them. If bth parties are satisfied, they must bth accept the M&V plan as suitable via an t the relevant M&V team. The same prcess is fllwed fr the M&V baseline reprt, but here nly the ESC need t sign the reprt and return the riginal t the relevant M&V team. The prject stages and varius deliverables are discussed in mre detail in the sectins that fllw. 3.2 Prject stages fr M&V This sectin describes the varius stages assciated with the measurement and verificatin f a DSM prject. The basic layut f the M&V prject can be seen in Figure 3.1 whilst the M&V prject stages are transpsed n the DSM impacts in Figure 3.2. Page 16

23 Measurement & Verificatin Guideline Dcument, v10r Scping study and scping reprt The scping study is the first stage in the M&V prcess. Once Eskm has apprved the DSM prject, the M&V team is instructed t prceed with their measurement and verificatin activities. The purpse f the scping study is t enable the M&V team t gather all relevant and available data n the prject and t btain a clear understanding f what the DSM prject will entail. The scping study starts with a kick-ff meeting between the M&V team and the client and/r the ESC. A site visit is als cnducted during this r the next stage, depending n the availability f infrmatin and time cnstraints. The scping reprt is the deliverable fr this stage and need t clearly state the fllwing: Prject infrmatin This sectin must cntain the cntact details f the invlved parties and the persns that represent them. The cntact detail f the M&V team is stated as well as the cntact details f persns representing the ESC and the client; Prject bjective The bjective states which prject impacts the stakehlders require t be quantified and verified by the M&V team; Site descriptin The descriptin f the site prvides infrmatin n the size and utilisatin f the system r facility under investigatin. Als included is infrmatin n the typical annual energy cnsumptin, maximum demand and electricity accunt. The cntrl f the system / facility is described as well as the layut. Tariff structure The tariff structure under which the system r facility perates need t be stated and described in detail in this sectin; Audit f system This sectin prvides detailed infrmatin and data n the system(s) that are affected by the prpsed DSM measure. It is als imprtant t include a descriptin f the layut f the system s electrical supply fr reference frm the M&V plan that will eventually cntain a sectin n measurement f the system. If the prject is cncerned with a lighting retrfit, ne needs t state the layut and quantities f the current lighting system, as well as the current mde f peratin. This sectin is critical in establishing the base year (and thus the baseline) fr the system r facility; Prpsed activities by the ESC This sectin prvides a descriptin f the activities that the ESC prpse t implement. This infrmatin must be btained frm the ESC and the client; Expected results The ESC shuld supply the M&V team with an estimate f the expected impacts n the system. This data need t be supplied fr the mnthly maximum demand, the energy cnsumptin and the electricity cst impacts. This sectin shuld als cntain an Page 17

24 Measurement & Verificatin Guideline Dcument, v10r3 estimate f the expected impacts as determined by the M&V team if the prcess is repeatable (which is nt pssible in the case f simulatin mdels develped by the ESC). The ESC shuld als clearly specify if they expect their DSM prject t deliver nly demand impacts r whether it will result in efficiency impacts as well. This will determine the apprach twards the rutine service level adjustments that the M&V team will fllw; and Cnclusins and cmments This sectin cntains a summary f the expected results fr the prject and must cntain cmments and cncerns raised by the M&V team. The M&V teams are hwever nt allwed t make any recmmendatins r advise the ESC r client twards prject implementatin if any cncerns are identified. The scping reprt is an imprtant dcument fr the Utility as the financing party f the prjects in the sense that it prvides them with the expected impacts f the prject as assessed by the M&V Team. The scping reprt is als f value t the client and the ESC since it ften utline misunderstandings and discrepancies that exist between the client and the ESC in terms f prpsed DSM prject activities. Examples f standardised M&V scping reprts are available upn request fr varius prject types frm the authrs f the M&V Guideline. Page 18

25 Measurement & Verificatin Guideline Dcument, v10r Develp M&V plan The M&V plan frms the backbne f the whle M&V prcess and utlines the cmplete prcess that is expected fr the prject. The M&V plan is the first deliverable n which the ESC and client must give acceptance befre M&V activities can prceed. The reprt is distributed t the ESC and the client by the M&V Team and they must bth cnfirm receival via . They then need t review the reprt and prvide cmments and feedback. They must then accept the reprt by means f an stating the fact t the M&V Team. This stage f the prject is assciated with a site visit. If the stakehlders give apprval they are agreeing with the prpsed M&V activities that will be fllwed and are satisfied with the manner in which the baseline and savings will be determined. The M&V plan is updated with the negtiated recmmendatins f the stakehlders if apprval is nt btained with the first submittal. As mentined, the M&V plan describes the activities and prcedures that will be fllwed t M&V the DSM activities. The first part f the M&V plan repeat the first few sectins f the scping reprt. This is dne t ensure that the M&V plan frms a stand-alne reprt that prvides a cmplete verview f the prject. The plan shuld include the fllwing sectins: Prject infrmatin This sectin must cntain the cntact details f the invlved parties and the persns that represent them. The cntact detail f the M&V team is stated as well as the cntact details f persns representing the ESC and the client; Prject bjective The bjective states which prject impacts the stakehlders require t be quantified and verified by the M&V team; Site descriptin The descriptin f the site prvides infrmatin n the size and utilisatin f the system r facility under investigatin. Als included is infrmatin n the typical annual energy cnsumptin, maximum demand and electricity accunt. The cntrl and layut f the system / facility is described. Tariff structure The tariff structure under which the system r facility perates need t be stated and described in detail in this sectin; Audit f system This sectin prvides detailed infrmatin and data n the system(s) that will be affected by the DSM measure. It is als imprtant t include a descriptin f the layut f the system s electrical supply fr reference frm the M&V plan that will eventually cntain a sectin n measurement f the system. This sectin is critical in establishing the base year fr the system r facility; Page 19

26 Measurement & Verificatin Guideline Dcument, v10r3 Prpsed activities by the ESC This sectin prvides a descriptin f the activities that the ESC prpse t implement. This infrmatin must be btained frm the ESC; Assumptins This sectin prvides the assumptins that were made by the ESC r implementing party when they estimated/calculated the expected prject impacts; Expected results The expected prject impacts as calculated by the ESC is nce again prvided in the M&V plan as in the case with the scping reprt; Evaluatin An evaluatin f the expected impacts is given by the M&V team where cmments and cncerns are raised n the assumptins and calculatin methdlgy f the expected prject impacts; M&V Optin selectin This sectin is cncerned with the selectin f the M&V Optin that will be utilised t determine the prject baseline and ultimately the prject savings. There are fur M&V-ptins that can be used t determine the baseline. These fur ptins are: Optin A - Partially Measured Retrfit Islatin: Optin A invlves islatin f the electricity use f the equipment affected by a prject frm the electricity use f the rest f the facility. Measurement equipment is used t islate all relevant electricity usage fr the preimplementatin and pst-implementatin perids. Only partial measurement is used under Optin A, with sme parameter(s) being stipulated rather than measured. Hwever, such stipulatin can nly be made where it can be shwn that the cmbined impact f the plausible errrs frm all such stipulatins will nt significantly affect verall reprted savings. Optin B - Retrfit Islatin: The savings determinatin techniques f Optin B are identical t thse f Optin A except that n stipulatins are allwed under Optin B. In ther wrds, full measurement is required. Shrt term r cntinuus metering may be used under Optin B. Cntinuus metering prvides greater certainty in reprted savings and mre data abut equipment peratin. Optin C - Whle Building: Optin C invlves use f utility meters r whle building submeters t assess the energy perfrmance f a ttal building. Optin C assesses the impact f any type f prject, but nt individually if mre than ne is applied t an energy meter. This Optin determines the cllective savings f all DSM activities applied t the part f the facility mnitred by the energy meter. Als, since whle building meters are used, savings reprted under Optin C include the impact f any ther changes made in facility energy use (psitive r negative). Optin C may be used in cases where there is a high degree f interactin between implemented activities r between activities and the rest f the building, r the islatin and measurement f individual prject activities is difficult r t cstly. Page 20

27 Measurement & Verificatin Guideline Dcument, v10r3 Optin D - Calibrated Simulatin: Optin D invlves the use f cmputer simulatin sftware t predict facility energy use fr ne r bth f the energy use terms in Equatin 1. Such a simulatin mdel must be "calibrated" s that it predicts an energy use and demand pattern that reasnably matches actual utility cnsumptin and demand data frm either the base year r a pst-implementatin year. Optin D may be used t assess the perfrmance f all prject activities in a facility, akin t Optin C. Hwever, different frm Optin C, multiple runs f the simulatin tl in Optin D allw estimates f the savings attributable t each prject activity within a multiple activity prject. Bundaries This sectin states the bundaries f the saving impact determinatin in detail. It states whether the savings will be determined t include r exclude interactive system effects, etc. This sectin must als clearly state all the bundaries and/r assumptins that were used by the ESC t develp the prject, its prpsal t Eskm and t define and develp the prject baseline. If any f the bundaries and/r assumptins becmes invalid, the cmplete baseline prcess needs t be repeated by the M&V team. The M&V baseline must als be renegtiated in instances where it can be justified and/r prven that the bundary cnditins and/r assumptins cause errrs larger than 10% during the determinatin f the prject impacts. This stage is extremely imprtant in rder t prtect the ESC, the client and Eskm. Baseline characterisatin A descriptin is prvided in this sectin n the means by which the baseline will be determined. The independent variables are stated that will be used t quantify the dependent variables (which will ultimately be the demand and/r energy cnsumptin f the system). A cmplete descriptin must be prvided in this sectin whether baselines will be develped fr each separate system r fr the cmplete facility; Baseline adjustments All the envisaged variables and situatin that will necessitate adjustments t the prject baseline need t be stated and described in this sectin; Pre-implementatin metering plan A cmplete layut and descriptin f the electrical supply t the system r facility must be prvided in this sectin. It is als imprtant t state all the data requirements, variables and measurement pints that will be metered, as well as the equipment that will be used. This sectin must state the interval f the measurements as well as the duratin f the pre-implementatin metering activities. It is imprtant t nte that all metering equipment needs t be calibrated at least nce per year and the calibratin certificated need t be filed by the M&V Team fr later reference if needed. Pst-implementatin metering plan This sectin prvides the same infrmatin as in the case f the pre-implementatin metering plan, but is adjusted t describe the pst- Page 21

28 Measurement & Verificatin Guideline Dcument, v10r3 implementatin data requirements, variables, metering intervals, equipment and metering psitins; Saving calculatin methdlgy The methdlgy that will be used t determine the savings in demand, electricity cnsumptin and cst is stated in this sectin with all the relevant equatins describing the prcess. This sectin must als cntain the methdlgy and emissin factrs t calculate the envirnmental impacts fr the prject; Cndnable perids This sectin must give a detail descriptin f what incidents will qualify as cndnable perids. These cndnable perids need t crrespnd with thse included in the DSM agreement between Eskm, the ESC and the client. Mre detail n cndnable perids can be btained frm Sectin 3.3 f this guideline. The M&V team must specify hw instances f lst data will be handled during the perfrmance assessment and perfrmance tracking phases. An agreed methdlgy needs t be stipulated here and the methdlgy needs t be negtiated with the ESC and/r the client. The schedule t perfrm M&V is clsely linked t the implementatin schedule f the DSM prject, which is usually determined by the ESC and r the client. Enugh time must, hwever, be scheduled by the ESC t allw the M&V Team t perfrm baseline measurements fr at least a three-mnth t 12-mnth perid. The M&V Plan is submitted t the ESC and the client fr apprval. They review the M&V Plan and make recmmendatins n any f the cntents. Once the ESC, client and M&V Team are satisfied, M&V may frmally prceed. If apprval is nt btained, the M&V Plan is refined and submitted again. Measurements shuld cmmence nce apprval has been received n the M&V Plan. These measurements will be used fr the develpment f the M&V Baseline. An additinal but separate deliverable t accmpany the final submittal f the M&V plan is the M&V Cst and Scheduling dcument. This dcument needs t be submitted t Eskm nly nce the final M&V plan is submitted t Eskm. This dcument must cntain the fllwing sectins: Prject cst A cst breakdwn need t be prvided in this sectin fr each f the M&V activities tgether with their expected submittal dates. This deliverable is submitted t Eskm nly; and Prject schedule An M&V activity schedule need t be included in the M&V plan t prvide a detailed breakdwn f all the activities assciated with each M&V deliverable and their Page 22