Are you looking to implement an energy savings project in your business as recommended by an energy consultant or supplier? Are you being tasked with implementing an energy savings project internally, with your manager asking you to determine the savings? Do you want to implement energy savings projects in your business and enjoy possible government incentives including the SARS 12L rebate?
If yes to any of the above; then you need to hire a Measurement & Verification Professional or get the specialist training required to ensure that the savings claimed are real and verifiable.
Measurement and Verification (M&V) is a methodology used to address the above question. In fact, one could not apply for a SARS 12L rebate for energy efficiency without having undertaken the M&V of the project. Furthermore, depending on the nature and size of the project, the M&V process can be highly complex and costly. The time and cost depend on the amount and type of measurement needed, along with engineering man-hours required to complete the analysis.
The international best practice standard for M&V is the IPMVP (International Performance for Measurement and Verification Protocol). The South African equivalent is SANS 50010, which is required by SARS for any 12L application.
A typical M&V, ESCo and client relationship is described below:
- The client employs an ESCo (Energy Services Company) to identify energy savings projects.
- Depending on the complexity and nature of the energy efficiency implementation required, the client might require some form of guarantee of the estimated savings from the ESCo.
- The M&V Professional is then employed to develop an M&V Plan which outlines among other things, how the energy savings are going to be quantified so that both the ESCo and client can agree on the results.
Aside from the regulatory requirements for M&V and 3rd party M&V Professionals, there is also a need for internal M&V to be undertaken by large manufacturing and industrial facilities for energy projects being implemented.
To break it down into bite-size chunks, the main 9 reasons for M&V are as follows:
1) Accurately assess energy savings for a project
Going through the M&V process allows one to accurately quantify energy consumption before and after an energy savings project is implemented. The difference between these time periods equate to energy savings, taking into account any required adjustments.
2) Substantiation of payments for performance
For some energy efficiency projects, the ESCo might offer certain performance guarantees, or enter into a shared savings model with the client. This gives the client some comfort in undertaking the project knowing that the supplier has a vested interest in the success of the project. What is then of critical importance is a common understanding and agreement of how the energy savings are quantified. This will aid in avoiding payment disputes.
3) Allocate risks to the appropriate parties
By undertaking the M&V process, it allocates responsibilities accordingly between all parties to ensure that the savings that were originally identified are achieved. Should savings not be achieved due to one of the parties not fulfilling their obligations, the M&V process will outline the steps required for remediation which helps in reducing the risk to all parties.
4) Reduce uncertainties to reasonable levels
The more detailed the M&V Plan, the greater the certainty of the project meeting the savings expectations. This, of course, must be balanced against the additional cost this could incur in meeting the M&V Plan requirements.
5) Monitor equipment performance
Once M&V is performed at a facility, energy consuming devices would have been measured as part of the process before and after the implementation of the efficiency project. This would allow for equipment performance to be monitored going forward.
6) Find additional savings
Undertaking M&V not only determines the savings of an energy efficiency project being implemented but could also identify additional savings as a result of the original project being implemented, that would not have been identified otherwise.
7) Improve operations and maintenance
Poor operation and maintenance of energy consuming devices can result in equipment utilising more energy than required. The M&V process incentivizes improved operation and maintenance of equipment so that the energy savings goals are met.
8) Verify that the cost savings guarantee is met
Post implementation of the energy savings project, verification is required to formalize that the savings have been achieved. Once the savings have been verified, the payments due to the relevant parties can be made.
9) Allow for future adjustments as needed
As energy consumption is typically not static, the M&V Plan allows for adjustments to be made to the savings calculations, and to take variations into account as to accurately calculate savings ongoingly.
Considering the complexity and high capital costs of some energy-efficiency projects, employing an external M&V Professional is highly recommended as is developing this capacity within one’s own organisation. Contact us to find out more about our M&V Professional course and how it could help you (and your business) have greater certainty when deciding on energy projects and the potential savings to be enjoyed.