Now that you’ve identified, analyzed and implemented certain measures the last step is to measure, verify and report the performance of the program. The purpose of a performance measurement plan is to provide ongoing accountability, to identify proper savings and measure goal and/or target achievements.

There are best practice documents available for different types of program results. An example in the field of energy reduction is the Efficiency Valuation Organization’s International Performance Measurement and Verification Protocol (IPMVP). The IPMVP offers best practices and procedures for measuring and verifying energy savings in a program. The IPMVP approach is focused on confirming reductions of energy and water use but its framework can be extended to other disciplines, such as verifying emission reductions associated with energy efficiency projects.

The IPMVP offers four approaches to measuring and verifying savings:

Retrofit Isolation: Key Parameter Measurement. Savings are determined by field measurement of the key performance parameter(s) which define the energy use of the energy conservation measure’s affected system(s) and/or the success of the project. Measurement frequency ranges from short-term to continuous, depending on the expected variations in the measured parameter and the length of the reporting period. Example: measuring the electrical demand of a retrofitted lighting system.

Retrofit Isolation: All Parameter Measurement. Savings are determined by field measurement of the energy use of the energy conservation measure-affected system. Measurement frequency ranges from short-term to continuous, depending on the expected variations in the savings and the length of the reporting period. Example: electrical sub-metering of retrofitted manufacturing equipment.

Whole Facility. Savings are determined by measuring energy use at the whole facility or sub-facility level. Continuous measurements of the entire facility’s energy use are taken throughout the reporting period. Example: examining the total annual natural gas consumption before and after an HVAC retrofit, using utility bills.

Calibrated Simulation. Savings are determined through simulation of the energy use of the whole facility or of a sub-facility. Simulation routines are demonstrated to model actual energy performance measured in the facility adequately. (This option usually requires considerable skill in calibrated simulation.) Example: creating a building simulation in Natural Resources Canada’s EE4 software, to model the effects of multiple retrofitted systems.

In the table below are some further examples of verification methods used in other areas of sustainability.

Identified in step one and reiterated here is the importance in having a solid reporting framework in place at your company. Data that is transparent, complete and accurate is crucial to effectively measure and verify program results.

Once data is available you can track and report against applicable key performance indicators and any additional metrics that your company deems relevant. It will be important to determine what to do in the instance that a target or goal is not achieved. You might consider a grace period, additional assistance or applying consequences to the business unit or facility that is out of compliance.

When establishing reporting you will need to contemplate the following:

• Frequency of Reporting. Will reporting be done monthly, quarterly or annually? You might consider a combination such as full annual reports with quarterly updates. There is a trend toward more frequent reporting to enhance transparency.
• Target Audience for Reporting. Which stakeholders are you reporting to? Possible audiences include shareholders, regulators, employees, customers and the community at large. Do you need to generate different reports for different audiences?

Running a successfully sustainability program is an on-going effort and does not end after completing monitoring and verification activities. Expect changes to happen, on-going updates and continuous reporting to ensure your company is meeting set goals and/or targets. It’s recommended to annually review and update the program depending on changes within your company, developments in the market place and evaluation of program success from the previous year.

How do you measure and verify something you can’t see? The task of convincing today’s skeptics that your actions have created energy use and cost savings can be a daunting one. Hopefully this article will shed some light on this topic.

Verifying savings is important for an organization for many valid reasons. In some cases, it is necessary to verify savings so that suppliers or ESCOs can get paid for their work. Many government agencies and utilities require monitoring and verification before releasing incentive payment. Finally, from an environmental perspective, monitoring and verification enables the creation of greenhouse gas emission reduction credits – a valuable asset once cap and trade systems are implemented.

Providing proof can be a painful experience as the comedian Rodney Dangerfield relates about his childhood, “I remember the time I was kidnapped and they sent a piece of my finger to my father. He said he wanted more proof.” Sometimes you just don’t get enough respect.

A Little History
Energy saving projects has been in demand since the oil embargo in the early 70s and the resulting savings verification has been an issue and an impediment since the beginning. In 1994, the DOE and Lawrence Berkeley National Labs joined forces to create a standard protocol for Monitoring and Verification (M&V) which was initially published in 1996. The International Performance Monitoring and Verification Protocol (IPMVP) have been updated several times since then with the most recent edition being released in 2007.

Basically the IPMVP provides four (4) options to verify energy savings:

1. Retrofit Isolation: Key Parameter Measurement – only key parameters are measured while others are assumed.
2. Retrofit Isolation: All Parameter Measurement – all of the parameters of an Energy Conservation Measure (ECM), are measured.
3. Whole Facility – Utility meters are used. Individual ECMs are not metered. It is generally used when energy savings are substantial and the adjustments are excessively complex for Options 1 & 2.
4. Calibrated Simulation – A simulation model estimates the amount of energy used by a facility when there is no data available for the baseline.

Routine vs. Non-Routine Adjustments
It is said that the only real constant in life is change. As a result, changes occur during the implementation of an ECM that needs to be considered in the savings calculation. The IPMVP divides these into Routine Adjustments and Non-Routine Adjustments.

Routine Adjustments are the factors expected to change routinely during the reporting period, such as weather, production volume, occupancy etc. Non-Routine Adjustments are those factors which are not usually expected to change, such as facility size, the design and operation of installed equipment, the number of weekly production shifts, or the type of occupants.

Avoided Energy Use vs. Normalized Savings
Two different models, Avoided Energy Use, or Normalized Savings are used to calculate savings based on these adjustments. In the Avoided Energy Use model, the routine and non routine adjustments are made to the baseline. The actual measured energy use is subtracted from the adjusted baseline to determine savings. This is illustrated in the following graph:

In the Normalized Savings model, the baseline energy use is adjusted to reflect “normal” operating conditions. The reporting period energy use is adjusted to reflect what would have occurred if the facility had been equipped and operated as it was in the baseline period under the same “normal” set of conditions. These normal conditions may be a long term average, or those of any other chosen period of time, other than the reporting period.

My preference is to use the Avoided Energy Use model as the adjustments are only made to one data set i.e. the baseline energy use.

The M&V Plan
The M&V Plan should be prepared and accepted by all parties before the project starts. This plan should provide a clear description of the IPMVP option being used as well as all the parameters that will be used to calculate savings.

The plan should account for the many obstacles that can affect a successful M&V project. These include:

• Impractical contract clauses;
• Budget and staff constraints;
• Unreliable utility data (content and supply);
• Misunderstanding of obligations and expectations;
• Wrong monitoring option or duration;
• Changes in building equipment and operation; and
• Smoke and mirrors.

To avoid these obstacles, a qualified, independent third party should be engaged to oversee this process.

“Trust, but verify” was a favourite expression of the late President of the United States, Ronald Reagan. It is likely a favourite saying of many senior executives. Once you have verified your energy savings, what should you do next? I would recommend greenhouse gas emission reduction credits, the topic of my next article.