12/23/09

Scaling-Up Energy Efficiency Programs: The Measurement Challenge

Today the nation finally is dedicating the levels and types of resources to energy efficiency (EE) that have long been advocated by the Alliance to Save Energy and other efficiency advocates. In 2009, the federal government started pouring more than $25 billion in economic stimulus funding into energy efficiency initiatives, programs and projects. In addition, the investment by and through the electric utility sector reached a record high $4.4 billion and the number of states with energy efficiency resource standards (EERS) or similar requirements and EE components of renewable electricity standards rose to 21, which will drive even greater investments in energy efficiency in the years ahead.

The increasing financial stakes and regulatory fiats demand a rigorous level of scrutiny of EE projects and programs. Are taxpayers, ratepayers, shareholders, and property owners getting their money’s worth? Are EERS and related legally binding standards being met? Are energy savings and other benefits, such as air pollution and greenhouse gas reductions and enhanced reliability of electric grids, being delivered? These questions are being asked today, and likely will grow as the nation moves toward adoption of climate and energy legislation that may include energy efficiency as a compliance option and/or cost-containment mechanism.

It is the role of evaluation, measurement and verification (EM&V) to answer these questions. But this is a tough task since there is no way to connect a meter that measures the energy not consumed because a given EE project or program was implemented.

In Scaling-Up Energy Efficiency Programs: The Measurement Challenge, Alliance to Save Energy staff discuss the issues and challenges facing EM&V for energy efficiency programs, arguing that engagement of varied stakeholders in EM&V design and review can improve the transparency and credibility of energy efficiency programs. The report reinforces that while increasing evaluation precision is an important objective, reducing systematic bias ultimately is more important to the credibility and reliability of evaluation results.

The authors find that enhancing the credibility and reliability of EE program savings measurement will require that federal and state governments, along with various stakeholders:

  • institute processes for EM&V design and review that promote transparency;
  • ensure quality of EM&V methods, data, and assumptions;
  • increase consistency of methods and assumptions between regions and program types;
  • assure professional competency and integrity in evaluations: and,
  • manage stakeholder expectations.

Common or consistent EM&V protocols are critical as we see increased prospects for the regional, national, and perhaps international trading of energy savings credits (ESCs) and in any eventual trading of greenhouse gas offsets. It is important to note, therefore, that this report was prepared in conjunction with a second report, Energy Savings Credits: Are Potential Benefits Being Realized? which examines issues associated with ESCs, including potential benefits of trading, current experience, and impediments.

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 funding from the Kresge Foundation. The Alliance is grateful to these organizations for their generous support of this project and we appreciate the dedication, creativity and hard work of all involved in the research and writing of this report.

 

The following presentation summarizes key points of this report: