M&V Fundamentals

& the
International Performance Measurement
and Verification Protocol
 What is M&V?

“Measurement & Verification (M&V) is

the process of using measurements to
reliably determine actual saving created
within an individual facility by an energy
management program.”

Ref: IPMVP Vol I, 2007, Section 9

Introduction 2
 EVO

Efficiency Valuation Organization (EVO)

www.evo-world.org

– The home of the IPMVP

– A non-profit U.S. corporation
– Led by volunteers around the world
– Administrative office in Sofia, Bulgaria.

Introduction 3
 EVO
• Protocols
– M&V, Financing

• Training, Certification
– Certification (CMVP) is joint with
the Association of Energy Engineers

• Building Community, Promoting Efficiency

– Subscriber services through www.evo-world.org: industry
newsletter, blog, library, discounts, pre-release access to
public documents
– World wide partnerships for communication, training and
development
Introduction 4
 IPMVP - Overview
• Presents a framework and defines terms used in
determining ‘savings’ after implementation of a
project.
• Specifies the topics to be addressed in an M&V Plan
for a specific project.
• Allows flexibility in creating M&V Plans, while
adhering to the principles of: accuracy,
completeness, conservativeness, consistency,
relevance and transparency.
Introduction 5
Why M&V?
•The Spectrum of M&V
•Purposes of M&V
•Your reasons?
 The M&V Spectrum
No M&V Full M&V
• No extra cost (or more • Maximize savings
left to spend on • Savings persistence
retrofits)
• Energy users needing
• Most energy retrofits
since 1975 performance
demonstration or
• K.I.S.S. (Low cost
M&V without the M, guarantee (mostly
just the V) utilities & public
buildings) - since 1990
• emission traders
Introduction 7
 The Purpose of M&V

Simply

M&V provides

PROOF

of the effectiveness of energy management

Introduction 8
 M&V Fundamentals
& the
International Performance Measurement
and Verification Protocol

For Energy Managers and Emission Traders

Key Concepts
 Key Concepts - Program

• Measurement?
• IPMVP’s basic equation
• Four Options
• Common M&V issues

Key Concepts 10
 The “M” in M&V

The M in M&V stands for:

Measurement

Not Monitoring

(Monitoring is an activity which takes place

after the Measurement of savings.
Monitoring is the evaluation of the savings
and taking any necessary action.)
Key Concepts 11
 Measure Savings?

• Savings are the absence of energy use.

• We can not measure what we do not have.
• We do not ‘measure’ savings!

• We do measure energy use.

• We analyze measured energy use to determine
savings.

Key Concepts 12
 A Notional Baseline

Baseline + Adjustments

1,000,000

750,000
Energy

500,000 Savings
Baseline Period Reporting Period
250,000

Metered Energy

Key Concepts 13
 IPMVP Basic Equation

The Basic IPMVP Savings Equation #1:

Savings reported for any period

= Baseline Period energy
- Reporting Period energy
+/- Adjustments

Ref: IPMVP Volume I, 2007, Chapter 4.1

Key Concepts 14
 Adjustments

An example of why we need Adjustments:

An energy retrofit was performed but plant

production was also lower this year than last.

How much of the resultant cost reduction was due

to the retrofit, and how much was due to the
production change?

Key Concepts 15
 Adjustments (continued)
Performance measurement requires an “apples to
apples” comparison.

Baseline Period Reporting Period

We adjust baseline and reporting period energy use
to the same set of conditions, for valid comparisons.
Key Concepts 16
 ‘Savings’ or ‘Avoidance’?
• Energy users usually want to know how much
their bills would have been if they had not taken
energy efficiency action. They want to know how
much energy or cost they avoided.
• To report avoided cost, M&V engineers adjust
baseline period energy use to the conditions of
the reporting period. They sometimes simply call
cost avoidance ‘savings,’ at risk of confusion
with accountant reports.

Key Concepts 17
Ref: IPMPV Vol I, 2007, Chapter 4.6.1
 Accounting Savings

Accountants often use the word ‘savings’ to

describe ‘cost reductions.’ They make no
adjustments.

So, when talking about ‘savings’ we have to be

very careful to explain our meaning.

We must report the common set of conditions

(apples) we are using for stating “savings.”
Key Concepts 18
 Adjustments
• The Adjustments can be trivial, simple or
complex.
• M&V budgets usually determine how simple
or complex the Adjustments are.
• The extent of the Adjustments depends on:
– the need for accuracy,
– the complexity of factors driving energy use, and
– the amount of equipment having its performance
assessed (i.e. ‘measurement boundary’).

Key Concepts 19
 How Much to Measure?

Motors
+ VSDs

Retrofit
Isolation
Boundary

Whole Facility
Measurement
Boundary
Key Concepts 20
 Two Basic Methods
Whole Facility Method:
Measures all effects in the facility:
• Retrofits AND other changes (intended and unintended)
• Often uses the utility meter
• Adjustments can be complex

Retrofit Isolation Method:

Measures the effect of the retrofit, only
• Savings are unaffected by changes beyond the
measurement boundary
• Usually needs a new meter
• Adjustments can be simple
Key Concepts 21
 Selecting a Method

Decide what you are concerned about!

If you want to manage your total energy use:

• select the Whole Facility Method.

If you want to assess a particular retrofit:

• select the Retrofit Isolation Method.

Key Concepts 22
 Terminology:

• Retrofit Isolation – Option A or B

• Whole Facility – Option C or D

Two flavours of each method – to allow

flexibility for various situations

Key Concepts 23
 Retrofit Isolation

Select between Options A and B:

Option A – Retrofit Isolation: Key

Parameter Measurement

Option B – Retrofit Isolation: All

Parameter Measurement

Key Concepts 24
 Retrofit Isolation (A and B)
Option A Option B
Baseline period measurement 400 kW 200,000 kWh
Reporting period measurement 300 kW
150,000 kWh
Estimated operating hours 500 hrs
100kw x 500hrs 50,000 kWh
Avoided Energy
= 50,000 kWh
A – measure only the key part of the energy computation, for
example: a contractor is only responsible for a load reduction (or only
responsible for a reduction in operating hours, but not both)
B – measure all factors governing energy use, for example: a
contractor is responsible for controls which dim lights automatically and
control operating periods.
Key Concepts 25
 Option A - Uncertainty

Option A (called Retrofit Isolation: Key Parameter

Measurement) allows a possible reduction in
measurement cost, but introduces some
uncertainty in the estimated quantity.

All parties must accept the uncertainty associated

with the estimate.

The choice between Options A and B allows

flexibility to suit the situation.
Key Concepts 26
 Whole Facility

Select Option C or D, based data availability:

C – Whole Facility
Need both baseline and reporting period data

D – Calibrated Simulation
When there is no meter (or facility) in the baseline,
baseline data can be ‘manufactured’ under
controlled circumstances.
Key Concepts 27
 Option C - Example

• Baseline period electricity bill

July 1999 (29 days) = 800,000 kWh
• Reporting period electricity bill
July 2001 (31 days) = 600,000 kWh
Raw difference = 200,000 kWh
• Adjustment of baseline for meter
reading period length & weather = +100,000 kWh
Avoided Energy = 300,000 kWh

Key Concepts 28
 Option D - Example
Consider the case of a new building, designed to be
more efficient than some Standard.

To prove how much better actual energy performance

is than the standard:
1. After full occupancy begins, gather actual utility
metered data (= “calibration data”).
2. Prepare a computer simulation of the energy use of
the same as built conditions.
3. Compare simulated and actual energy use.

Key Concepts 29
 Option D - Example

4. “Calibrate” (or adjust) the simulation until the

differences are acceptable.
5. The “CALIBRATED SIMULATION” now shows
actual energy use of: 5,000,000 kWh
6. Modify this Calibrated Simulation to remove the
energy efficiency enhancements (to reflect a
building built to the Standard). Simulated
“Standard” energy use is: 7,000,000 kWh
7. Avoided Energy = 2,000,000 kWh

Key Concepts 30
 Summary of IPMVP Options

• The IPMVP has four M&V Options:

A, B, C, and D
• The Options are generic M&V approaches for
energy and water saving projects.
• Four Options provide a range of approaches for
determining energy savings, to suit the
characteristics of the ECMs being implemented
and the desired balance between reporting
accuracy and cost.

Key Concepts 31
Common M&V Issues:
• M&V Cost
• Performance Contracts
 M&V Cost

Key factors affecting M&V Cost:

• Meter quality
• Number of independent variables to be monitored
• Frequency of measurement and reporting
• Length of the baseline and reporting periods
• Sample size, if all equipment is not measured
• Other uses for meter information, to share costs

Key Concepts 33
 How Much M&V Is Enough?

• Total annual cost to determine savings should

normally be less than 10% of the annual savings. (Ref:
IPMVP Vol I, 2007 Chapter 8.5) (This maximum might be
exceeded for special situations.)
• 3-5% is a more common expenditure (for ESCO
projects)
• 0% is often chosen (= “deemed savings”). No
measurement means uncertain savings. This is NOT
an IPMVP method

The cost/accuracy tradeoff is made for each project

Key Concepts 34
 Performance Contracts

• M&V plays a critical role in performance contracts:

– maximizes the savings and the persistence of savings over
the contract term
– documents what savings were achieved and acts as the cash
register for the exchange of value
• Performance contracts allocate the costs and benefits
of M&V accuracy between the ESCO and Owner.
• Carefully consider contract motivations of all parties
before designing the M&V. Append the M&V Plan to
the contract.
Key Concepts 35
 M&V Fundamentals
& the
International Performance Measurement
and Verification Protocol

For Energy Managers and Emission Traders

Short Examples
 Short Examples - Program

• Multiple ECM Building Retrofit (Option C)

• Lighting Efficiency Improvement (Option A)

Short Examples 37
 Sample M&V Project
Commercial Building in Canada

Energy Conservation Simple Payback

Measures (years)

Lighting retrofit 4.5

Energy efficient motors 5.6
HVAC modifications 5.4
Control system 3.4
Building leakage reduction 2.1
Training and awareness 0.5

Short Examples 38
 Option C - Whole Facility

Selected Option C to assess total performance

• Use data from utility meters (gas and electric).

• Analyze baseline gas meter data relative to
weather, to determine the correct weather
adjustments. Weather will be expressed in
heating degree days (HDD).

You will compute savings for two months.

Short Examples 39
 Sample Option C
Baseline Data
Meter Reading Gas Heating
Date Consumption Degree
February 5, 2004 units Days
March 5, 2004 210,692 650
April 7, 2004 208,664 440
May 6, 2004 157,886 220
June 5, 2004 120,793 150
July 7, 2004 116,508 50
August 7, 2004 107,272 20
September 5, 2004 95,411 14
October 6, 2004 126,423 29
November 6, 2004 149,253 125
December 4, 2004 166,202 275
January 6, 2005 221,600 590
February 5, 2005 224,958 723
Total 1,905,662 3,286
Short Examples 40
 Sample Option C
Baseline Model
The Gas vs Heating Degree Day relationship was
found by regression analysis to be:
250,000

200,000

150,000
Gas

100,000
y = 173.27x + 111358
50,000

0
0 200 400 600 800
HDD

Gas = 173.27 * HDD + 111,358

(Regression analysis techniques are not part of this course.)
Short Examples 41
 Sample Option C
Method
1. Record the current weather (HDD)
2. For each month after retrofit, compute what the
baseline gas use would have been for those HDD
by plugging HDD into the baseline model:
Gas = 173.27 * HDD + 111,358
3. Compare the computed baseline gas with actual
reporting period gas, to determine ‘avoided gas.’
4. Apply the current utility price to both baseline
and actual to calculate cost avoidance.
Short Examples 42
 Sample Option C
Graphical View Of Savings

Baseline model
250,000

200,000

150,000
Gas

100,000

50,000
Reporting period gas
0
0 200 400 600 800
HDD

Short Examples 43
 Sample Option C
Computations
Projected Baseline
Actual Post- Savings
Meter Reading Weather
Date
Retrofit Data Baseload
Sensitive Value
Total Gas
Consumption HDD Factors Price =
(units)
Units 111,358 173.27 $ 6.232
March 6, 2006 151,008 601 111,358 104,135 215,493 64,485 $ 401,871
April 4, 2006 122,111 420 ? ? ? ? ?
May 6, 2006 102,694 188 111,358 32,575 143,933 41,239 $ 257,001
June 5, 2006 111,211 250 111,358 43,318 154,676 43,465 $ 270,874
July 5, 2006 80,222 41 111,358 7,104 118,462 38,240 $ 238,312
August 6, 2006 71,023 15 111,358 2,599 113,957 42,934 $ 267,565
September 8, 2006 65,534 5 111,358 866 112,224 46,690 $ 290,972
October 9, 2006 77,354 12 ? ? ? ? ?
November 4, 2006 103,000 190 111,358 32,921 144,279 41,279 $ 257,251
December 10, 2006 115,112 300 111,358 51,981 163,339 48,227 $ 300,551
January 7, 2007 160,002 700 111,358 121,289 232,647 72,645 $ 452,724
February 4, 2007 145,111 612 111,358 106,041 217,399 72,288 $ 450,499

Short Examples 44
 Option C - Best Applications
• Significant energy saving (10% or more of
consumption measured by the utility meter)
• All parameters which significantly affect energy usage
can be clearly identified (during baseline and after
implementation)
• Adjustments factors are simple
• Individual ECM measurement is not required
• Multiple ECMs
• Complex ECMs
• Soft savings ECMs (eg. building leakage reduction,
operator training, occupant/user awareness)
Short Examples 45
 Option C
Advantages & Disadvantages
Advantages:
• Evaluates performance of the entire facility
• Includes interactive effects amongst ECMs, and
between ECMs and the rest of the facility
Disadvantages:
• No separation of the impact of different ECMs
• Not a saving control method, since normal
unexplained total facility energy variations may
obscure individual months’ savings. However the
method provides annual reconciliation.
Short Examples 46
 Sample M&V Project
Hospital

Energy Conservation Simple Payback

Measures (years)

Lighting power reduction 2.7

Water conservation 2.2
Steam system management 1.3
Power factor correction 2.3
Sterilizers and DHW 6.5
Chiller Plant 9.7

Short Examples 47
 Sample M&V Project
Retrofit Isolation
ECM Item Level Item Assumed
Measured Measured
Lighting Fixture Random Hours of Use (based on
power kW sample lighting logger data taken
reduction demand before retrofit)
Water Water flow Sample toilets Toilets: # Flushes
& showers Showers: # & Time
Steam Traps Steam Loss Sample Extrapolate to all
Power Factor Utility Bill 100% Annual avoided utility bill
cost penalty
Sterilizer Steam Use 100% Annual usage
Chiller Plant Efficiency 100% Ton Hours
kW/Ton
Short Examples 48
 Sample M&V Project
Retrofit Isolation

As an example, consider the M&V design for the

Lighting ECM, using Option A, Retrofit Isolation:
Key Parameter Measurement.

• Before and after sample load measurements

• Assumed operating hours of lights.

Short Examples 49
 Sample Option A
Lighting - Measurement Boundary

To set the measurement boundary, consider:

What affects energy use inside ?
– lamp efficiency improvement
– operating hours
– fraction of lamps burned out
What energy effects happen outside the boundary?
– less cooling
– more heating
– task lights added to un-measured circuits

Short Examples 50
 Sample Option A
Design
Measurement:
– measure at randomly selected light switches
– use clamp-on true RMS wattmeter, calibrated
– measure for 1 second before and 1 second after retrofit
Assumptions:
– 100 hrs/month of operation in the savings reporting
period, based on a measurement in the baseline.
– assume mechanical cooling adds 20% to savings
– ignore heating energy change and added task lights
– 5% of lamps/ballasts are burned out at any time
Short Examples 51
 Sample Option A
Observations

Pre-retrofit Post-retrofit
# Samples 73 30
Measured average 193.1 102.1
watts per operating
fixture
Number of fixtures 2,000 1,950

Short Examples 52
 Sample Option A
Computations

Pre-retrofit Post-retrofit
Total kW (95% of
fixtures operating)
Lighting load kW
reduction
Reduction adjusted for kW
cooling savings
Monthly energy kWh/month
savings

Short Examples 53
 Sample Option A
Notes
• Option A is known as “Retrofit Isolation: Key
Parameter Measurement.” The key parameter in this
example is power change in the fixtures, so it is
measured
• This sample was IPMVP 2007 “Option A” because we
Assumed the operating hours, even though we logged
operating hours in the baseline.
• Manufacturer supplied data is not field measured.
IPMVP treats it as assumed. To adhere to IPMVP
Option A the manufacturer data cannot be the key
parameter, but it can be another (non-key) parameter.
Short Examples 54
 Option A - Best Applications
• Operating conditions (eg occupancy) are
regularly changing.
• A contractor is not responsible for all
parameters affecting energy use.
• Able to Assume a parameter with a level of
certainty acceptable to all parties.
• On-going measurement is not required. But to
be sure savings are still happening in future,
regularly verify that equipment remains in place
and is operated properly.
Short Examples 55
 Option A
Retrofit Isolation: Key Parameter Measurement
Advantages:
• Cost effective where numerous energy
influencing factors cannot be tracked (such as
in a hospital or in a complex industrial process)
• Easy to administer

Disadvantages:
• Assumed factor may introduce error
• Not reconciled to total facility utility usage
• Does not track on-going facility performance
Short Examples 56