Alliance Unveils Reports on Energy Saving Measurement and Energy Saving Credits Challenges

Evaluation, measurement and verification (EM&V) of energy savings is a hot topic these days. Funding, development and implementation of new energy efficiency programs have increased rapidly.  A growing number of states have enacted energy efficiency rules and financial incentives for their energy utilities.

Why EM&V?

Taxpayers, utility ratepayers, and other stakeholders want to know if these programs are working, how much energy they are saving, if other benefits (such as reduced air pollution and improved electric grid reliability) are being delivered and whether the upfront costs are worth the investment.

It is the role of EM&V to ascertain if programs are delivering energy savings and associated benefits. EM&V is critically important to the credibility of such programs and to the trading of energy savings credits (ESCs) and of carbon credits and offsets.

The Reports

The Alliance has completed two reports “Energy Savings Credits: Are Potential Benefits Being Realized?” and “Scaling-Up Energy Efficiency Programs: The Measurement Challenges” examining trading in energy savings credits and EM&V challenges.  The work was performed under a U.S. Department of Energy, State Energy Program – Special Projects grant with the Pennsylvania Department of Environmental Protection, with additional support from the Kresge Foundation. Both reports were researched and written by Joe Loper, Steve Capanna, Rodney Sobin and Tom Simchak.

“Energy Savings Credits: Are Potential Benefits Being Realized?” examines issues associated with ESCs, including potential benefits of trading, current experience and impediments.  In our research we found that ESC trading offers potential benefits of lower cost energy efficiency deployment, increased energy efficiency investment and targeting of energy efficiency investment where it provides greatest value. However, it is worth noting that the American experience with ESC trading is very limited.

The report also shows that most ESC trading is compliance-driven, and that its greatest potential lies in compliance markets, such as for meeting energy-efficiency resource standards (EERS), renewable electricity standards (which sometimes have energy efficiency components), or carbon offset requirements.

The stringency of EERS or other requirements is critical to the value of ESCs and trading.  Some states’ EERS provide little motivation for additional energy savings beyond business-as-usual improvements in energy efficiency.   Also, if states or other jurisdictions vary in EERS stringency; use inconsistent EM&V definitions, assumptions and methods; or define eligible energy efficiency measures differently, it is difficult to compare their energy savings consistently.  This can then be a problem for interstate or national trading of ESCs. 

In the second report, “Scaling-Up Energy Efficiency Programs: The Measurement Challenges” we discuss the issues and challenges of performing EM&V for energy efficiency programs. The report argues that engaging various stakeholders in EM&V design and review can improve the transparency and credibility of energy efficiency programs.

Moreover, the report also suggests that while it is important to increase evaluation precision, it is even more important to reduce systematic bias in order to enhance credibility and reliability of evaluation results.  And, as previously mentioned, we note the challenges posed by inconsistent EM&V assumptions, methods, and protocols.

Recommendations

We recommend a few things to enhance the credibility and reliability of energy efficiency program savings measurement. Specifically, federal and state governments, along with various stakeholders, should

• institute processes for EM&V design and review that encourage transparency and thorough debate over EM&V methods, data and assumptions;
• improve EM&V methods, data and assumptions;
• increase consistency of methods and assumptions between regions and program types;
• assure EM&V practitioner professional competency and integrity;
• manage stakeholder expectations of what EM&V can and cannot do; and
• allow reasonable budget allocations for EM&V.

Existing Efforts

Fortunately there are various efforts already underway that comport with the Alliance's recommendations. These include:

• the Northeast Energy Efficiency Partnerships' (NEEP) EM&V Forum’s efforts to harmonize definitions and protocols among some of the Northeastern states;
• the National Action Plan for Energy Efficiency’s (NAPEE) work on EM&V and model program evaluation guidance; 
• the establishment of an energy efficiency EM&V work group by the North American Energy Standards Board (NAESB);
• the Efficiency Valuation Organization (EVO) [developer of the International Performance Measurement and Verification Protocol (IPMVP)] and Association of Energy Engineers (AEE) development of training and certification for EM&V professionals; and
• open public information and participation provisions in some states’ energy efficiency program development and evaluation processes.

The Alliance collaborates with these organizations and participates in their EM&V efforts.

Resources

• Guidelines for the Monitoring, Evaluation, Reporting, Verification, and Certification of Energy-Efficiency Projects for Climate Change Mitigation (PDF file), LBNL, Environmental Energy Technologies Division.
• NEEP EM&V Forum
• Efficiency Valuation Organization oversees the International Performance Measurement and Verification Protocol (IPMVP) and, in cooperation with the Association of Energy Engineers, has established the Certified Measurement and Verification Professional (CMVP) program.
• North American Energy Standards Board DSM/EE Subcommittee has established workgroups to address EM&V topics for demand response and energy efficiency.
• Compilation of links to documents on FEMP-related M&V from Lawrence Berkeley National Laboratory (LBNL)
• EPA EM&V webinar series