How Measurement & Verification Improves Performance of Energy Efficiency Projects 

Improving energy efficiency is a critical aspect of decarbonisation. With the built environment accounting for roughly 40% of global greenhouse gas (GHG) emissions, there exists an extensive opportunity for energy efficiency improvements to strengthen building performance while using existing infrastructure. For businesses, implementing Energy Efficiency Measure (EEM) serves as a way to progress toward corporate emissions targets and reduce operational expenses. The allure of savings is enticing, but how can an organisation be certain of an EEM’s impact on energy and cost savings? That is where the measurement and verification (M&V) process comes into play.

Without measurement, it is impossible to track progress; without verifiable outcomes, it is less appealing to pursue improvement projects. With a strong M&V process, a business has a transparent and reliable system to determine the energy savings — and therefore the cost savings — provided by an EEM. Having the system in place to quantify these savings often boosts EEM performance and enhances the business case for pursuing energy efficiency projects.

What is M&V

Measurement and verification (M&V) is a set of best practices and principles for planning, tracking, and analyzing data to verify and report on the energy savings of an individual facility resulting from implementing an EEM. Formed to promote energy efficiency measures as a means to decarbonise, the M&V methodology is a flexible and living system that has expanded over the decades to incorporate a wider audience and a greater variety of efficiency investments.

In 1997, an international collaboration of national organisations, industry, and individual experts led to the creation of the International Performance Measurement and Verification Protocol (IPMVP), which established an internationally recognised set of guidelines and procedures for M&V. Emerging as the gold standard for M&V, the IPMVP presents a set of principles that are critical for any significant M&V process:

• accuracy
• completeness
• conservativeness
• consistency
• relevance
• transparency

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Following IPMVP principles and guidelines, each project must have a tailored M&V plan that encompasses the fundamental principles and is well-suited to provide reliable reporting on its energy-saving initiatives.

How Does The M&V Process Work

A reliable measurement of energy savings calculates the difference between baseline energy use and post-retrofit energy while also factoring in any meaningful adjustments:

Energy Savings = Baseline Energy Use – Post-retrofit Energy Use +/- Adjustments

Therefore, determining savings from an EEM requires a clear understanding of the energy use before and after project implementation. To gain this clarity, the M&V process begins well before project installation.

Once an energy efficiency project is determined (often after an energy audit to identify areas of opportunity for improved energy efficiency), the scope and boundary of the M&V process are defined to align with the EEM and the purpose for reporting.

There are four M&V options under the IMPVP:

• Option A – Retrofit isolation: key parameters: used to determine energy savings from a singular system, such as a lighting upgrade or single piece of equipment, where the energy performance can be measured and other stable parameters like operations can be specified (i.e., standard business hours apply before and after EEM installation)
• Option B – Retrofit isolation: all parameters measured: used to determine energy savings from a singular system, such as replacing a boiler, where the energy performance and operations can be measured
• Option C – Whole facility: used for a whole facility approach where one or multiple energy efficiency measures may affect the whole site, or where only site-level energy data is available
• Option D – Calibrated simulation: a calibrated simulation that applies Option C for situations when no historical energy use data is available (i.e., new development)

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Homing in on the M&V option involves consideration of data availability and quality of the measurement boundary — whether it be around a single piece of equipment or the entire facility — as well as the interactive effects that may arise from the efficiency improvement measure.

In addition, it is critical to collect accurate baseline data. This ensures that the post-retrofit energy performance can be compared to a pre-installation data set to reliably determine EEM savings. The baseline energy use should be derived from a time period immediately before project implementation, and it should reflect a normal operating period that considers all operational modes of the facility. The post-retrofit period should also be determined prior to EEM implementation to ensure the reporting length, frequency, and scope align with the M&V process and provide accurate measurements for comparison against baseline conditions. 

Considering external factors that impact energy use, it is also important to incorporate adjustments into the energy savings calculation that may have had a significant impact on energy use and demand. For instance, if post-retrofit reporting for an HVAC installation is conducted during an uncharacteristically hot year, then this weather factor needs to be considered as an adjustment to show that energy efficiency improved despite the rising utility costs resulting from increased HVAC use. Other adjustments to consider include changes in building occupancy, changes to the amount of space being heated or cooled and changes made to indoor environmental settings, etc.

How Does M&V Benefit Business

The M&V process instills best energy management practices that often translate to enhanced savings and improved financial opportunity. A well-established M&V process ensures proper performance measurement and also outlines how improved performance should look. This creates cohesion around the project and embeds a protocol for effective project design, operation, and maintenance that often leads to greater energy savings than would be experienced without an intact M&V process. Ultimately, this reduces risk around the project, strengthening the business case for the EEM.

Reduced risk from a strong M&V process makes it easier to secure financing, a pivotal aspect of implementing energy-efficient improvements. A strong, verifiable M&V process improves financial credibility. This instills confidence that savings will incur and increases the likelihood for an investor to consider such an energy project for their debt portfolios.

The energy savings from verifiable M&V processes can be rewarded with energy certificates. Depending on the location of an accredited project, Victorian Energy Efficiency Certificates (VEECs), NSW’s Energy Savings Certificates (ESCs), and Australian Carbon Credit Units (ACCUs) can be created from the project’s delivered energy savings. 

How Northmore Gordon Can Help

At the heart of Northmore Gordon is a large team of Certified Measurement & Verification Professionals (CMVP®) who are eager to guide Australian businesses through the impactful M&V process so they can optimise the environmental and financial benefits associated with their energy efficiency projects. Our CMVPs are critical to successful compliant M&V modelling, statistical analysis, and detailed reports that are required for M&V under the ERF, ESS, & VEU and numerous international programs.  

Coupling our M&V expertise, regulatory knowledge, and our in-depth understanding of energy usage in C&I environments allows our consultants to identify the parameters that drive energy usage or carbon emissions. This allows us to build the highest quality compliant models and maximise the savings or abatement. 

A partnership with Northmore Gordon removes the stress and hassle of establishing an M&V process, helping businesses streamline their energy management approach, strengthen business performance, and create energy certificates from their project’s delivered energy savings.