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M&V Part 4: M&V Plan Review

M&V Part 4: M&V Plan Review. M&V Plan Review. FEMP Documents M&V Overview Checklist (Phase 2) Final M&V Plan Checklist (Phase 3) Risk & Responsibility Allocation Option A and Stipulation Detailed Guidelines Options B / C / D. Phase 1. Phase 2. Phase 3. Phase 4.

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M&V Part 4: M&V Plan Review

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  1. M&V Part 4: M&V Plan Review

  2. M&V Plan Review • FEMP Documents • M&V Overview Checklist (Phase 2) • Final M&V Plan Checklist (Phase 3) • Risk & Responsibility Allocation • Option A and Stipulation • Detailed Guidelines • Options B / C / D

  3. Phase 1 Phase 2 Phase 3 Phase 4 Phase 2: Project Development • Contractor Responsibilities • Develop M&V approach (M&V Overview). • Explain and justify approach. • Agency Responsibilities • Review M&V approach and provide feedback.

  4. Phase 1 Phase 2 Phase 3 Phase 4 M&V Overview Checklist • The following items should be described: • Project site and measures. • What savings will be claimed. • M&V approach for each measure. • Baseline equipment and conditions. • Proposed equipment and conditions. • Annual measurement and verification activities.

  5. Phase 1 Phase 2 Phase 3 Phase 4 Phase 3: Negotiation and Award • Contractor Responsibilities • Perform Detailed Energy Survey (DES) and document baseline information. • Modify M&V plan to satisfy agency needs and desires. • Agency Responsibilities • Review and Approve M&V Plan. • Witness and observe DES.

  6. Phase 1 Phase 2 Phase 3 Phase 4 Final M&V Plan Checklist • The following items should be described: • Project site and measures. • What savings will be claimed. • M&V approach for each measure. • Details of how calculations will be made, including equations. • Baseline equipment and conditions (from DES).

  7. Phase 1 Phase 2 Phase 3 Phase 4 Final M&V Plan Checklist • continued... • Post-Installation equipment and conditions. • What metering equipment will be used. • What annual verification and measurement activities will be performed. • Initial and annual M&V costs.

  8. Risk & Responsibility Allocation • How to allocate Risks & Responsibilities? Typically: • Performance: Contractor. • Usage: Agency. • Financial: Shared. • M&V approach should focus on: • Verifying performance. • Characterizing usage. • Minimizing uncertainty cost-effectively.

  9. Need to balance M&V rigor with project risk. Measure things that need measuring. Consider required precision. Law of Diminishing Returns applies. Typically, initial M&V costs will be 3% to 15% of the capital cost; annual M&V costs will be 3 – 15% of the savings. Cost Effectiveness

  10. M&V Costs M&V Cost $ Value of information M&V Rigor

  11. Western Region SuperESPC

  12. Selection Matrix Warning: This is a gross generalization!

  13. Option A Option B Option C Option D Simple: Option A • Option A is intended to be simple and low-cost. • Verifies savings of individual components. • Equipment performance is measured. • Usage may be measured or stipulated. • In some cases, FEMP allows performance stipulation.

  14. Option A Option B Option C Option D Option A and Stipulation • Not ‘stipulated savings’! • Stipulations shift risk to agency. • OK for usage. • Not OK for performance (some exceptions).

  15. Option A Option B Option C Option D Option A Guidelines • Option A most common in SuperESPC. • Potential for misapplication. • Discusses how to use Option A. • Discusses how to apply stipulations. • See Detailed Guidelines For FEMP M&V Option A (2002)

  16. Option A Option B Option C Option D Example: LE-A-01 • FEMP method for Lighting Efficiency, Option A, method #1 • Allows using ‘standard fixture tables’ to determine lighting power instead of measurements (stipulated performance). • Usage (operating hours) stipulated. • Good for small projects (<$10,000/year)

  17. Option A Option B Option C Option D Stipulation Risk • LE-A-01 allows stipulation of both usage and performance parameters. • If the stipulated values are wrong, the savings estimates will be wrong. • The agency assumes all risk, contrary to the intent of a performance contract.

  18. Option A Option B Option C Option D Stipulation Problem

  19. Option A Option B Option C Option D Stipulation Lessons • Guaranteed savings $50,000; $24,000 observed in utility bill. • Poorly-defined baseline prevents adequate after-the-fact analysis. • Option C methods are not sufficiently accurate to support or reject savings claims.

  20. Option A Option B Option C Option D Example: LE-A-02 • FEMP method for Lighting Efficiency, Option A, method #2 • Common fixture types measured using a statistically-valid number of measurements (3-6). • Operating hours usually stipulated, but can be measured. • Good for large projects (>$100,000/yr)

  21. Option A Option B Option C Option D Option A Risk Allocation • The contractor should measure performance since they control this. • The operating hours may be stipulated. Measuring the operating hours reduces uncertainty and risks to both parties. • The agency bears the risk of unrealized savings due to changing schedule or incorrect operating hours.

  22. Option A Option B Option C Option D More Rigorous: Option B • Verifies at component level. • Requires periodic performance measurements- annual to hourly. • Usage can be stipulated or measured.

  23. Option A Option B Option C Option D Option B Risk Allocation • Energy use and claimed savings will vary from year to year. • The contractor assumes all project risk (performance & usage) since savings are based on measured energy use. • The contractor would be wise to include in the M&V plan: • limits on their exposure • methods of adjusting the baseline or usage

  24. Option A Option B Option C Option D Simple: Option C • Regression method using existing utility meters. • Captures interactions between measures to find total savings. • Requires collecting and tracking information that affects energy use: • weather • occupancy • production

  25. Option A Option B Option C Option D Option C Risk Allocation • The contractor may not find the savings if less than 15% of the baseline use. • The contractor bears all project risk. • The agency bears the responsibility of tracking changes that affect energy use. • It may take 1 year to determine savings. • Weather and other factors will influence savings estimates.

  26. Option A Option B Option C Option D More Rigorous: Option D • Computer simulation method of evaluating total building performance. • Requires calibration to be useful. • Requires measurements to calibrate model. • Weather data usually ‘typical’, not real.

  27. Option A Option B Option C Option D Option D Risk Allocation • Contractor bears performance risk. • Agency bears usage risk (stipulated hours and weather). • M&V costs may be high. • Short-term measurements and long-term verification still needs to be performed.

  28. Option A Option B Option C Option D Results Warning: These are gross generalizations! It is possible to shift risks and changes costs.

  29. Review & Discussion • Performance must be verified if guarantee is to have value. • Agency often assumes usage risk. • Uncertainty is inherent in M&V. • M&V costs need to be balanced against project risks.

  30. Review Questions • How do we measure savings? • When might an agency accept performance risk?

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