By Tamer Adel
An important development on the energy efficiency frontier took place last month when the California Legislature passed Assembly Bill 802 (AB 802). One of the main mandates of AB 802 requires California Public Utility Commission (CPUC) to update the rules for measuring energy efficiency to start using normalized metered energy consumption as the basis for measurement.[1] In other words, to calculate the savings achieved by any energy efficiency program, this new rule mandates that pre-enrollment meter readings be compared to post-enrollment readings, after adjusting for external factors that could impact readings from period to period such as weather conditions.
You might be wondering: so how is it measured today? There are three methods of measuring energy savings: Deemed Savings (DS), Measurement and Verification (M&V), and Large-Scale Consumption Data Analysis: [2]
1. The DS method estimates the energy savings of any program by using algorithms that predict the average savings per energy efficiency measure, and then multiply these averages by the number of measures installed in a given program. These algorithms use historical market research data and buildings simulation models to predict the average savings per measure, taking into consideration other input variables such as weather conditions and buildings schedules.[3]
For the most part, no actual measurement happens in the DS method; it relies mainly on estimates, which makes it more suitable for simple projects that have historical precedents with well-documented results.
2. The M&V method is usually used for more complex programs with high uncertainty or large expected savings. In this method, the baseline energy consumption that would have occurred in absence of the efficiency program is calculated. This baseline is then compared to the actual energy usage during the efficiency program. To come up with the net savings, the difference between the baseline and actual energy usage is adjusted for any external factors. These are factors that occurred during the reporting period and weren’t part of the baseline period, but are not caused by the program, such as weather conditions.[2]
The M&V method usually calculates the energy savings of a program based on a sample of the program participants, not the whole group. This is because M&V is a rigorous method that involves daunting activities, such as field data collection and meter calibration and installation,[4] which adds to the cost of the evaluation process.[2]
3. The large-scale consumption data analysis method compares the energy use of the participants of an energy saving program in a specific period to that of a non-participant group over the same period. The two groups have to be similar demographically and in usage patterns. The difference in usage between these two groups roughly represents the net energy savings of the program.[2]
The common feature among the three methods is that none of them collect actual readings from the whole population participating in an efficiency program. They either use predetermined average savings per measure, or collect data from samples of the participating group for a limited time and extrapolate the data for the rest of the group. Due to administrative and financial barriers, it is hard to run these methods for longer periods and to include actual readings from the whole participating group. AB 802 is about to change this.
The new mandate of the AB 802 in California will pave the way for more efficient, accurate, and timely energy efficiency measurements. As normalized meter results will be readily available for all facilities, it will be cheaper to collect field data. These readings will be available for the whole population, not just a sample of it; and for the whole duration of the programs, not just for the evaluation period. This, in turn, will make the large-scale application of higher quality measurement methods, such as M&V, more affordable. These improvements will result in more thorough and enduring savings measurements.
With such improvements in the accuracy of energy efficiency measurements, the door will be wide open for faster adoption of performance-based energy programs. Energy utilities and companies usually hire third party vendors to help them plan and implement efficiency programs. Typically, payments for these vendors are based on the implementation of the programs. While there has already been a shift towards performance-based payments, the improved measurements infrastructure will speed up this trend, allowing energy providers to better manage their energy efficiency budgets, and motivating vendors to optimize the impact of their programs.
As valuable as the AB 802 mandate could be, there are still many details that need to be sorted out by the CPUC to realize the potential of that change. Issues such as how to identify the different impacts of different programs installed at the same facility, how to normalize meter readings, and what factors will be taken into consideration in the normalization process are just a few of the issues that the CPUC has yet to figure out. However, this rule still represents a big step in the right direction.
California has always been a leader in energy efficiency initiatives and it is likely that we will see more states following California’s steps and adopting similar policies in the near future. AB 802 could be instrumental in establishing a robust infrastructure for better energy efficiency measurement nationwide.
Sources:
[1] AB 802
[2] SEE ACTION – Energy Efficiency Program Impact Evaluation Guide
[3] Texas Technical Reference Manual
[4] International Performance Measurement and Verification Protocol Guide
