Capacity Building of Banks and Financial Institutions for
Capacity Building of Banks and Financial Institutions for Energy Efficiency Project Financing Module 5 Measurement and Verification Partnership to Advance Clean Energy-Deployment (PACE-D) Technical Assistance Program September 2014 Capacity Building of Banks/FIs For EE Project Financing Page 1 July 2014
Presentation Outline • • Why Measurement and Verification (M&V)? Key Considerations in M&V Basic Concept of M&V Methodologies M&V Protocols Common Issues The M&V Document Case Studies Capacity Building of Banks/FIs For EE Project Financing Page 2 July 2014
Why M&V Measurement and verification: • Is needed to confirm project energy savings and validate that anticipated or guaranteed performance has been achieved • Presents common definitions, terminology and procedures for energyefficiency projects • Improves communication and understanding among project implementing partners • • • Provides a risk management tool to financing entities Minimizes disagreements and disputes Facilitates persistence of energy savings Capacity Building of Banks/FIs For EE Project Financing Page 3 July 2014
Key Considerations in M&V Capacity Building of Banks/FIs For EE Project Financing Page 4 July 2014
Who Should Conduct M&V? Capacity Building of Banks/FIs For EE Project Financing Page 5 July 2014
How much does M&V cost? • The costs of M&V depend on the energy efficiency technologies and measures to be implemented and the approach and methodology to be utilized • • M&V costs 5 to 10% of project investments Trade off between § accuracy of the M&V § cost of M&V • Simple approaches are preferred to reduce costs and minimize potential for disputes Capacity Building of Banks/FIs For EE Project Financing Page 6 July 2014
Who Pays for M&V Costs? • If the project host conducts or engages a third party to conduct M&V, the host directly pays the M&V costs • If the ESCO conducts or engages a third party to conduct M&V, the M&V costs are part of ESCO’s costs • In either case, the M&V costs are an integral element of project cost and an allowance needs to be made in the project budget and financing plan for these costs • While the M&V is specified in the Energy Services Agreement between the ESCO and host, the lender needs to understand approve the M&V approach and costs Capacity Building of Banks/FIs For EE Project Financing Page 7 July 2014
Key Elements of an M&V Plan Capacity Building of Banks/FIs For EE Project Financing Page 8 July 2014
Basic M&V Concept Capacity Building of Banks/FIs For EE Project Financing Page 9 July 2014
Assessing Energy Savings Capacity Building of Banks/FIs For EE Project Financing Page 10 July 2014
M&V Methodologies Capacity Building of Banks/FIs For EE Project Financing Page 11 July 2014
M&V methodologies Capacity Building of Banks/FIs For EE Project Financing Page 12 July 2014
M&V Protocols Capacity Building of Banks/FIs For EE Project Financing Page 13 July 2014
IPMVP International Performance Measurement and Verification Protocol • • • Developed by a coalition of researchers and practitioners Managed by independent organization (EVO) dedicated to provision of tools to quantify the results of EE projects and programs. Provides flexible framework of M&V options that allows practitioners to craft the right M&V Plan for their project Internationally recognized and accepted Certification program for M&V professionals Implemented in India by Alliance for Energy-Efficient Economy (AEEE) Capacity Building of Banks/FIs For EE Project Financing Page 14 July 2014
M&V Training and Certification in India • • • First M&V Seminar Delhi April 2005, PCRA hosted for EVO • CMVP Certification Training & Exams in Delhi – Nine rounds completed more than 100 professionals certified • • • EVO has Certified 5 Indian Trainers as CMVP Trainers M&V Fundamentals trainings in various cities of India Application of M&V to Government Schemes – Building Codes, PAT, DSM AEEE has conducted M&V Training in Manila and Bangkok Opportunity to widen M&V capacity building to South & West Asia Capacity Building of Banks/FIs For EE Project Financing Page 15 July 2014
India has over 100 CMVPs Capacity Building of Banks/FIs For EE Project Financing Page 16 July 2014
M&V Approaches in IPMVP • Retrofit Isolation Methods § Option A – Partially measured or one time measurement § Option B – Longer or continuous measurements • Whole Facility Methods § Option C – Whole facility energy analysis § Option D – Computer simulation Capacity Building of Banks/FIs For EE Project Financing Page 17 July 2014
Illustration of IPMVP Options Capacity Building of Banks/FIs For EE Project Financing Page 18 July 2014
Adjusting for Changes in Baseline Capacity Building of Banks/FIs For EE Project Financing Page 19 July 2014
Adjusting for Changes in Baseline Facility Use or Operating Conditions Occupancy Possible Changes in Baseline Equipment Operating Schedules Environmental Conditions Additions to Energy-Using Equipment Facility Refurbishment or Rehabilitation Capacity Building of Banks/FIs For EE Project Financing Page 20 July 2014
IPMVP M&V Options Capacity Building of Banks/FIs For EE Project Financing Page 21 July 2014
Option A • • Simple approach (and low cost) • Used where the “potential to perform” needs to be verified but accurate savings estimation is not necessary • Key features Performance parameters are measured (before and after), usage parameters may be estimated § Low cost § Simple procedure § Requires agreement among parties Capacity Building 22 of Banks/FIs For EE Project Financing Page 22 July 2014
Option B • Under Option B, some or all parameters are measured periodically or continuously • Applicable where accurate savings estimation is necessary and longterm performance needs tracking • • Reduced uncertainty, but requires more effort Key features § “Real” M&V § Improved O&M § Ongoing Commissioning § Remote monitoring Capacity Building 23 of Banks/FIs For EE Project Financing Page 23 July 2014
Option C • Option C looks at energy use and cost of entire facility, not at specific equipment • • Conceptually simple, may be difficult in practice Key features: § Can consider weather, occupancy, etc. § Useful where total savings need to be valued but component savings do not § Commercial software is available that simplifies implementation § May require baseline adjustments Capacity Building 24 of Banks/FIs For EE Project Financing Page 24 July 2014
Option D • • • Option D treats building as computer model Flexible, but requires significant effort Applications: § New construction § Energy management & control systems § Building use changes § Building envelope modifications & additions • • Uses specialized software that requires substantial experience Requires measurements for calibration Capacity Building 25 of Banks/FIs For EE Project Financing Page 25 July 2014
Example of Lighting Project M&V - Option A • Baseline is 100 W light bulb and new lamp is 25 Watt compact fluorescent • • Wattage verified by measurements/specifications • Assume 3, 000 operating hours per year: § Previous experience § Estimate by owner Calculated Savings are: 3, 000 hr/yr * (0. 1 - 0. 025 k. W) = 225 k. Wh/year Capacity Building of Banks/FIs For EE Project Financing Page 26 July 2014
Lighting Project M&V - Option B • Install meters on lighting circuits (before lighting retrofit is implemented) • Measure consumption before and after retrofit for a specified time period • Calculate savings Capacity Building of Banks/FIs For EE Project Financing Page 27 July 2014
Lighting Project M&V - Option C • Used when lighting is the dominant load • Document baseline utility bill • Obtain post-installation utility Bills • Calculate savings Capacity Building of Banks/FIs For EE Project Financing Page 28 July 2014
Lighting Project -Option D • Used when interactive effects need to be estimated • Input lighting and HVAC system into simulation program. • Calibrate model and calculate pre- and post-installation lighting and interactive HVAC energy use for determining savings. Capacity Building of Banks/FIs For EE Project Financing Page 29 July 2014
M&V Options with Multiple End-Uses Capacity Building of Banks/FIs For EE Project Financing Page 30 July 2014
Common M&V Issues • • Factors affecting saving performance § Predictability, measurability, factors such as weather, occupancy, equipment intensity, ability of EEMs to deliver savings, implementation effectiveness, occupant – operator cooperation, equipment deterioration and life Evaluating saving uncertainty § Instrumentation error, modeling error, sampling error, planned and unplanned changes Minimum energy Standards Minimum operating conditions Capacity Building of Banks/FIs For EE Project Financing Page 31 July 2014
Common M&V Issues (continued) • Energy Prices § For simplification, price is specified • Verification by a third party § Third party can resolve issues • Baseline adjustments § Routine and non-routine • Cost § Cost to owner against benefits Capacity Building of Banks/FIs For EE Project Financing Page 32 July 2014
M&V Information Document 1. 2. 3. 4. Project site and measures M&V option selected - Options B or C Details for calculations § Data collection plans § Assumptions § Energy rates Baseline equipment and conditions § Equipment, space conditions, assumptions, energy use relative to production, adjustments – how and when Capacity Building of Banks/FIs For EE Project Financing Page 33 July 2014
M&V Information Document (continued) 5. Post-installation equipment and conditions § 6. Metering § 7. Schedule of metering (duration/when), who will provide, data validation, sampling Measurement and verification activities § 8. Plan for defining new equipment and space conditions, assumptions and stipulations Who conducts M&V, analysis and prepare report, quality assurance, reports defined and post installation energy use relative to production Initial and annual cost Capacity Building of Banks/FIs For EE Project Financing Page 34 July 2014
Thank you Dilip R. Limaye Mahesh Patankar Finance Team USAID PACE-D Technical Assistance Program dlimaye@srcglobal. com mahesh@mpensystems. com www. pace-d. com
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