Cost Avoidance 1: M&V Fundamentals Steve Heinz, PE, CEM, CMVP

Transcription

1 Cost Avoidance 1: M&V Fundamentals Steve Heinz, PE, CEM, CMVP Founder & CEO EnergyCAP, Inc. AEE International Energy Engineer of the Year (2013)

2 Webinar #1 in a series of four: Session #1: M&V Fundamentals Session #2: Calendarization & Normalization Session #3: Basics of EnergyCAP Cost Avoidance Session #4: Cost Avoidance Reports

3 What is M&V and why is it important? M&V is Measurement & Verification of energy and cost savings resulting from an energy savings initiative.

4 It s important! M&V is one of the six foundational pillars of energy management: Manufacturer Contractor (Installer) Designer (Engineer/specifier) Building owner (Savings beneficiary) Financer (Owner or third party) M&V

5 Manufacturer Financer (Owner or third party) M&V ties it all together! Contractor (Installer) Building Owner (Savings beneficiary) Designer (Engineer/specifier)

6 Quiz In 2014 we spent $3M on electric bills. We hired an Energy Manager on 1/1/2015 who implemented a comprehensive energy management program. In 2015 we spent $4M. We should: A. Fire our Energy Manager B. Praise our Energy Manager C. We need more information before making a decision

7 In 2014 we spent $3M on electric bills. We hired an Energy Manager on 1/1/2015 who implemented a comprehensive energy management program. In 2015 we spent $4M. But we also added 75,000 sq ft, increased occupant count by 7%, increased weekly operating schedule 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

8 In 2014 we spent $3M on electric bills. We hired an Energy Manager on 1/1/2015 who implemented a comprehensive energy management program. In 2015 we spent $4M. But we also added 75,000 sq ft, increased number of occupants by 7%, increased operating hours by 9% and absorbed a 5% electric price increase. Oh, and we had a record-setting hot summer. Based on the 2014 baseline, our M&V software calculated that without our energy management program we would have spent $4.8M in It looks like we avoided a cost of $800,000 in We should: B. Praise our Energy Manager

9 This illustrates a key concept: Measurement and verification of energy savings is necessary because you can t simply compare year-toyear out of pocket expenditures. You have to compare what you did spend with how much you would have spent in the absence of energy efficiency, in other words how much you avoided spending.

10 IPMVP The U.S. Department of Energy and other impartial agencies funded the development of the IPMVP (The International Performance Measurement and Verification Protocol) beginning in the mid-1990 s.

11 IPMVP (cont d) Today it is managed by an international nonprofit agency called The Efficiency Valuation Organization. The Federal Government uses a version of it to value the savings for all Federal energy projects.

12 IPMVP Options for M&V A. Retrofit isolation. Measure and estimate parameters. ( Key Parameter Measurement ) Example: Lighting retrofit B. Retrofit isolation. Submeter actual energy use. ( All Parameter Measurement ) Example: Chiller replacement

13 IPMVP Options for M&V (con t) C. Compare before/after utility bills. ( Whole Facility ) Example: Behavior-based program D. Comprehensive computer modeling. ( Calibrated Simulation ) Example: HVAC controls retrofit

14 EnergyCAP uses only Option C IPMVP Option C Baseline cost: $1,000 Current cost: $1,200 KWH: 10,000 ($0.10/kWh) KWH: 8,000 ($0.15/kWh) BATCC cost: $1,500 (10,000 kwh x $0.15/kWh) (Baseline Adjusted to Current Conditions) Cost Avoidance=BATCC Cost Current Cost Cost avoidance: $1,500 - $1,200 = $300

15 Adjust the baseline to current conditions Degree days imported from AccuWeather (see Energy unit price Floor area Changes in length of billing period Occupants, hours, production New equipment

16 WARNING! Cost avoidance calculations are seldom as simple as plug and play. Adjusting the baseline to current conditions for significant changes in occupancy and equipment requires high skill level engineering analysis plus accurate details about what changed and when.

17 Savings: Adjusted baseline minus today s actual bill

18 Savings: Adjusted baseline minus today s actual bill

19 Savings: Adjusted baseline minus today s actual bill

20 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. When peak demand charges are a major cost driver, there are valuation complexities. Non-standard baseline adjustments require engineering analysis, high skill level and substantial time commitment.

21 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.

22 All calculation formulas are documented and flow charted

23 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 (over 20,000 buildings currently in EnergyCAP Online have active cost avoidance reporting)

24 ISO (Measurement and Verification of Energy Performance) says: The purpose of M&V is to provide confidence to interested parties that reported results are credible... [including] appropriate accuracy and management of uncertainty

25 But I don t want appropriate accuracy or any uncertainty. I want a 100% accurate, 100% certain cost avoidance report.

26 Reports will always have an element of uncertainty and less than 100% accuracy because you can t measure the absence of energy usage. We must estimate it using a consistently-applied recognized methodology.

27 We must accept a certain level of accuracy and uncertainty.

28 Resources: Become a member of EVO ( Download IPMVP from EVO CMVP Certified Measurement & Verification Professional ( M&V Software: EnergyCAP w/cost avoidance

29 Q&A