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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
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

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

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

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

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

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
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
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
M&V Costs

M&V Cost

$

Value of information

M&V Rigor

selection matrix
Selection Matrix

Warning: This is a gross generalization!

simple option a

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

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

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

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

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

Option A

Option B

Option C

Option D

Stipulation Problem
stipulation lessons

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

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

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

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

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

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

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

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

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

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