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Mechanism D: Measurement & Verification for Energy Efficiency Programs D.1 Introduction Utilities must be able to measure and verify the savings efficacy of their programs and projects in order to gain credits for their energy efficiency efforts and to prove the prudency of their programs to state regulators. The smart grid’s demand response controls/sensors and communication networks can be leveraged to measure end-use efficiency savings for every customer with greater certainty at lower cost, thereby making energy efficiency programs more valuable to utilities. This paper examines the role of measurement & verification (M&V) for energy efficiency programs, the benefits derived through M&V technology (including cost savings), and the costs of deploying M&V technology. The purpose of M&V is to improve the certainty of quantifying the energy and/or cost savings, allocating risk, and supporting any guaranteed savings. M&V technology results in numerous benefits to projects, including: • accurate determination of energy savings for a project • risk allocation • reduction in uncertainties • persistence of savings • monitoring of equipment performance • detection of areas where additional savings are feasible • enhancement of operations and maintenance • verification that cost guarantees are met • allowance for energy efficiency program adjustments and further monitoring (DOE/FEMP 2008). D.2 Review In 2005, M&V of end-use energy efficiency costs were estimated at between 3% and 15% of total utility capital costs by DOE/FEMP (2005). Within the past few years, however, more detailed assessments of M&V costs associated with projects undertaken through the Federal Energy Management Program’s (FEMP’s) Super Energy Savings Performance Contracts (ESPCs) program have resulted in more refined estimates that average 3% of total utility capital costs, with a range between 1% and 4% (DOE/FEMP 2009). Private-sector investment associated with energy efficiency projects undertaken through ESPCs program totaled $2.3 B from 1998 to 2007 ($230 M annually). That level of investment was estimated to be 50% of the nation’s investment in energy-efficiency-related M&V (Shonder 2009). The 3% estimated national investment in energy efficiency-related projects ($460 M annually) that require M&V indicates the annual investment in M&V to be approximately $13.8 M nationally. M&V is required of utilities by state regulators to show the prudency of expending ratepayer revenues to run energy efficiency programs. It is very difficult, if not impossible, to measure savings of most energy efficiency programs by comparing before-and-after data from 12 monthly billing periods due to D.1PDF Image | The Smart Grid: An Estimation of the Energy and CO2 Benefits
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