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THE POSITION OF MEASUREMENT AND VERIFICATION IN DEMAND-SIDE

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					Domestic use of Energy Conference 2002                                                                                   1




      THE POSITION OF MEASUREMENT AND VERIFICATION IN DEMAND-
             SIDE MANAGEMENT PROJECTS IN SOUTH AFRICA
                                    Prof. L J Grobler and W.l.R den Heijer
                                            Potchefstroom University for CHE


 ABSTRACT                                                      DSM projects. This process is known as (M&V).

 Measurement and verification (M&V) form a crucial part
 of any demand-side management (DSM) project. It                                  DSM Implementation
                                                                                   Project environment
 enables the quantification and assessment of the savings
 that result from the DSM intervention. M&V provide all
                                                                        Client                             ESCO
 the stakeholders involved in the DSM project with an
 impartial determination of the savings. International
 measurement and verification protocols were utilised to
 develop a M&V system for South African DSM.
                                                                                                         Eskom Bank
 A process for M&V was developed in such a way as to
 facilitate agreement between the stakeholders and the
 M&V team. M&V plans and M&V baseline reports need
 to be submitted before any measurement activities begin.                        M&V Team environment
 These reports form the basis of project buy-in from the                              Project level
 DSM stakeholders.                                             Figure 1: Stakeholders in Demand-Side Management

 1.    INTRODUCTION                                            This article will describe the importance of measurement and
                                                               verification during demand-side management. The basic
 Eskom has embarked on a national demand-side                  concept behind M&V will be described and how experience
 management (DSM) initiative in the industrial-,               was gained from international M&V protocols and adjusted to
 commercial- and residential sectors. The projects that fall   contribute towards the South African DSM market. The
 under the scope of DSM form part of Eskom’s long-term         principal stages in a DSM project are provided. The article
 strategy to reduce South Africa’s electricity demand          then describes the position of measurement and verification as
 during peak periods.                                          it applies to the life cycle of DSM projects, especially to the
                                                               South African situation and local energy market.
 The other stakeholders in DSM, apart from Eskom, are
 the end-users, the financial institutions and the Energy      2.   THE IMPORTANCE OF M&V
 Service Companies (ESCOs). The end-users want to
 reduce their energy costs when they reduce their peak         The importance of M&V for the success of DSM in South
 demand. The financial institutions want to protect their      Africa is becoming more apparent. The whole process is
 investments in DSM projects. The Energy Service               designed to quantify and assess the savings that result from
 Companies wants to share in the energy cost savings           DSM projects in an impartial manner. If the DSM impacts are
 when they implement DSM under risk.                           known, one can track and evaluate (T&E) the performance
                                                               and progress of all the DSM activities, which will help to
 The principal questions that all DSM stakeholders want        identify focus areas for DSM, as well as potential problems.
 answered are: How much are we saving and how long             M&V will enable Eskom to evaluate the verified savings
 will the savings continue to last? The dynamics in DSM        against their DSM targets and help with proper
 projects make it difficult, and certainly not advisable, to   implementation of DSM projects. M&V is therefore an
 assign any one of the stakeholders to deliver an objective    essential step to follow any DSM activity
 assessment of the savings. The quantification and
 assessment of the savings must remain impartial and the       Measurement and verification encourage investment in the
 process transparent. The long-term success of many            DSM industry and reduce the risk for financial investors.
 DSM projects is often hampered by the inability of            M&V helps to overcome barriers to DSM implementation. It
 project partners to agree on the quantity of savings that     will also become a crucial requirement when participating in
 has been obtained. It is for this reason that another party   international markets such as the Clean Development
 needs to be included in the DSM process to determine and      Mechanism, which allow countries to benefit financially from
 verify the savings.                                           emission reductions that result from DSM activities. The
                                                               process of M&V provides credibility and broadbased
 Accurate measurement, a replicable methodology, as well       acceptance to the energy market.
 as a consistent and reliable process are some of the
 requirements to determine the savings that result from        The process of M&V provides valuable feedback to
Domestic use of Energy Conference 2002                                                                                                                    2




stakeholders regarding the savings and how it is                                             longer satisfied.
influenced. Efforts can thus be focussed to optimise the
impacts of DSM. The fact that the savings are measured                                       The use of baselines to M&V makes the M&V process a
and verified encourages better design and management of                                      negotiated process. The reason for this is that baselines
DSM projects. M&V not only gives demand and cost                                             describe a hypothetical scenario, which cannot be measured.
savings, but can also reduce energy consumption and                                          All the involved stakeholders (the client, Esco and financier)
emission impacts as well.                                                                    must agree on the method of savings calculation. The quantity
                                                                                             of savings should reflect the detail level of the M&V efforts.
3.             HOW DOES M&V WORK?                                                            Small savings will be measured and verified by a simple
                                                                                             M&V process. The detail level of the M&V process will
The 2000 International Performance Measurement and                                           increase with the quantity of savings.
Verification Protocol (IPMVP) and the Measurement and
Verification for Federal Energy Project guidelines                                           4.   DSM PROJECT STAGES
(FEMP) were used to gain experience in the M&V field.
These protocols were adjusted for the South African                                          Project identification: The potential for DSM and energy
situation. The M&V process was streamlined and                                               efficiency savings is identified during this stage.
structured in a more focussed manner for each type of
project.                                                                                     Energy audit and assumptions: An energy audit is
                                                                                             conducted of the building and/or its systems to determine the
The M&V process is implemented at various levels of                                          type, quantity and rating of all energy using systems. This
complexity and effort. This depends on the project                                           information is used to determine the potential savings that can
complexity, the budget available to M&V and the                                              be achieved from the DSM activities. The audit usually
accuracy level required by the various parties involved.                                     consists of a preliminary walk-through followed by a detailed
                                                                                             audit.    Assumptions are also stated regarding system
Any DSM project has three basic stages. These stages are                                     information that isn’t available. Factors that could influence
the pre-implementation phase, the implementation phase                                       the potential to generate savings with DSM are identified.
and lastly the post-implementation phase. The timeline
for each of these phases may vary according to the project
complexity and a range of other factors. These stages can                                                  Project Identification
be seen in Figure 2 as the “Actual” designated line.

                                                                                                       Energy Audit / Assumptions
                                 Savings = [ Baseline – Actual ] ± Adjustments

                                                         Adjustment to Baseline
                                         Baseline
     Maximum demand [kW]




                                                                                                          Recommendations for
                                                                                   Savings                  Implementation



                                                                          Actual                           Approval for Funding

                           Pre-implementation       Post-implementation


                                 Implementation of DSM                               Time                        Detail Design

Figure 2: Rationale of M&V saving calculation process.
                                                                                                              Implementation
A system has a specific energy demand before any DSM
intervention. This energy demand is reduced by a certain
amount. In order to determine what the savings are, we                                                        Commissioning
need to establish what the energy demand after
implementation would have been, had DSM intervention
not taken place. This is achieved through the use of
                                                                                                        Operation & Maintenance
baselines that describe the energy consumption based on
certain known input variables or patterns.

Baselines enable the calculation of the savings that were
achieved by the DSM intervention by obtaining the                                            Figure 3: DSM Project stages
difference between the baseline and the actual energy
demand. All baselines are based on certain assumptions                                       Recommendations for implementation: A better estimate of
and criteria. Adjustments are made to the baseline when                                      the potential savings can be calculated once building and
any of these assumptions become invalid or criteria is no                                    system information has been gathered. Upon evaluation of the
Domestic use of Energy Conference 2002                                                                                     3




various potential DSM activities, and a feasibility study,   Develop M&V plan: The M&V plan states the activities and
the DSM activities that show the greatest potential are      procedures that will be followed to M&V the DSM activities.
recommended, based on their individual and combined          The plan should include a description of the project and state
feasibility.                                                 the assumptions and variables that could influence the saving
                                                             potential of the DSM activities. The M&V activities are
Approval for funding: Approval for project funding is        clearly stated as well as the manner in which a baseline will be
granted once it has been established that the                obtained and under which circumstances it will be adjusted.
recommended DSM activities will deliver satisfactory
results within a feasible budget and timeframe.              A metering plan must be included to state the equipment and
                                                             schedule that will be used during metering. An overall
Detail design: A detail design is made of the                schedule for the project must be provided as well as the costs
recommended DSM activities once project funding has          to M&V. A description is included of every deliverable for
been approved.                                               the M&V project.

Implementation: The DSM activities are implemented           Develop M&V baseline report: The M&V baseline report
based on the detail design.                                  must include all information relevant to the development of
                                                             the baselines. The complete procedure must be included as
Commissioning: Commissioning of the installed                well as the variables that would be used to characterise the
equipment is necessary to ensure that actual                 baseline. Baseline adjustments, and how these will be done,
implementation has been done in the correct manner and       also need to be stated in this report. The baseline report is
the equipment and systems are performing to the              critical to the M&V project since it is a key contributor to
specified requirements.                                      M&V project buy-in.




Figure 4: Position of M&V in DSM
                                                             Get buy-in on M&V plan and M&V baseline report: As
Operation and maintenance: The building and systems          was mentioned, M&V deals with negotiated savings. The
need to be maintained to ensure that the DSM activities      process and procedures need to be mutually acceptable to all
deliver the optimum level of performance and continue to     the parties involved in the process (Esco, Client, M&V team).
save energy and energy costs.                                Upon delivery of the M&V plan and the M&V baseline report,
                                                             all parties need to review the plan and report and state any
5.   POSITION OF M&V IN DSM                                  changes that should be made to the plan.
Domestic use of Energy Conference 2002                                                                                    4




Once they all are satisfied and buy-in is obtained, M&V       International M&V protocols were used as a basic framework
can proceed. If this is not the case, the M&V plan and/or     to develop a M&V protocol for the South African DSM
the M&V baseline report must be refined and submitted         activities and energy market. The M&V process was
again until buy-in is obtained.                               developed with a number of basic steps that allow for
                                                              measurement before and after DSM intervention.
Delivery of final M&V plan and M&V baseline
report: The final M&V plan and M&V baseline report is         Baselines are used during the savings calculation process. The
delivered only after all parties have met mutual agreement    use of baselines for M&V makes the M&V process a
on all the issues involved with the M&V of the savings.       negotiated process. All the stakeholders involved must agree
                                                              on the method of savings calculation. In order to facilitate
Pre-implementation measurement: Pre-implementation            agreement between the various stakeholders, a number of
measurement is required to determine a baseline against       reports are submitted to obtain buy-in into the project. The
which the new energy performance after implementation         first of these reports is the M&V plan. The next document is
can be compared to calculate the savings.                     the M&V baseline report. Acceptance and stakeholder buy-in
                                                              into the method to M&V will depend on these two reports.
Post-implementation audit: The post-implementation go
hand-in-hand with the commissioning of the equipment          7.    REFERENCES
and systems after implementation. This forms part of the
M&V team’s responsibility to verify that the                  [1]    U.S. Department of Energy, Office of energy efficiency
implementation have indeed taken place to specification.             and renewable energy. International Performance
This stage usually consists of a walkthrough audit.                  Measurement and Verification Protocol: Concepts and
                                                                     options for determining energy savings. October 2000.
Post-implementation measurement: This stage is
extremely important because it helps to determine the         [2]    U.S. Department of Energy, Office of energy efficiency
actual energy performance of the building or system after            and renewable energy. M&V Guidelines: Measurement
implementation.                                                      and Verification for Federal Energy Projects. Federal
                                                                     Energy Management Program. September 2000.
Calculate savings and adjust baselines: The data
obtained from post-implementation measurement is used         [3]    Radloff, F.G.T. Monitoring and Verification
in calculations and compared to the baseline energy                  Framework Document: Existing / Retrofit projects.
performance to determine the savings due to the                      September 2001. Report developed for Eskom under the
implemented ECMs.                                                    Measurement and Verification Steering Committee.

M&V report: The M&V report is basically a report              8.    AUTHOR(S)
containing all the information relevant to the project and
most importantly, the findings. The various impacts of        Principal Author: Prof. LJ Grobler holds a PhD degree in
the implementation ECMs are reported.                         Mechanical Engineering from the University of Pretoria. He
                                                              is presently a professor specializing in energy engineering
Monthly and annual savings report: Data need to be            and energy management at the Potchefstroom University for
submitted to the regional M&V Centres in a set format         CHE, where he is an associate professor. He has been
each month. This is the responsibility of the M&V teams.      certified as an Energy Manager by the Association of Energy
This data is then transferred to the National M&V Centre      Engineers in the USA. His address is:
where it is then used to generate a monthly savings report.   The School for Mechanical and Materials Engineering
The monthly savings report is then distributed to all the     Potchefstroom University for CHE, PO Box X6001,
relevant stakeholders for each DSM project. An annual         Potchefstroom. 2520
savings report is generated once a year.
                                                              Co-author: Willem den Heijer holds an M.Eng. degree in
This report is generated from all the monthly data that are   Mechanical Engineering from the Potchefstroom University
received from the regional M&V Centre and the M&V             for CHE. At present he is busy with his Ph.D. degree and is
teams. Both the monthly- and annual savings reports are       senior project engineer for Energy Cybernetics, specialising
required for the duration of the M&V project.                 in energy performance services and project management. His
                                                              address is:
6.   CONCLUSIONS                                              The School for Mechanical and Materials Engineering
                                                              Potchefstroom University for CHE, PO Box X6001,
M&V is a critical part of demand-side management              Potchefstroom. 2520
projects. It enables the quantification and assessment of
the savings that result from the DSM activities. This is      Presenter: Prof. LJ Grobler will present this paper.
done in an objective and impartial manner to protect all
the stakeholders in the DSM process.

				
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