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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 plan review l.jpg
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 2 project development l.jpg

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.


M v overview checklist l.jpg

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.


Phase 3 negotiation and award l.jpg

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.


Final m v plan checklist l.jpg

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).


Final m v plan checklist7 l.jpg

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.


Risk responsibility allocation l.jpg
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.


Cost effectiveness l.jpg

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


M v costs l.jpg
M&V Costs

M&V Cost

$

Value of information

M&V Rigor



Selection matrix l.jpg
Selection Matrix

Warning: This is a gross generalization!


Simple option a l.jpg

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.


Option a and stipulation l.jpg

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).


Option a guidelines l.jpg

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)


Example le a 01 l.jpg

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)


Stipulation risk l.jpg

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.


Stipulation problem l.jpg

Option A

Option B

Option C

Option D

Stipulation Problem


Stipulation lessons l.jpg

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.


Example le a 02 l.jpg

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)


Option a risk allocation l.jpg

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.


More rigorous option b l.jpg

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.


Option b risk allocation l.jpg

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


Simple option c l.jpg

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


Option c risk allocation l.jpg

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.


More rigorous option d l.jpg

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.


Option d risk allocation l.jpg

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.


Results l.jpg

Option A

Option B

Option C

Option D

Results

Warning: These are gross generalizations!

It is possible to shift risks and changes costs.


Review discussion l.jpg
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.


Review questions l.jpg
Review Questions

  • How do we measure savings?

  • When might an agency accept performance risk?


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