What is M&V? And why is it needed?
A well-structured Measurement & Verification (M&V) process brings transparency to reported savings, providing clear evidence of energy and carbon reductions and supports the risk management of performance-based contracts. It also allows for continuous improvement – the activity of measuring savings accurately identifies areas where there may be shortfalls and opportunities for rectification, as well as further energy efficiency improvements. In summary, M&V is intended to verify the effectiveness of energy and carbon saving initiatives, to ensure accountability, and support sustainable energy management.
This article was written and published in EiBI June 2024. Written by our Director, Hilary Wood PMVE.
Hilary Wood PMVE, Director at Independent Measurement & Verification (M&V) Experts, EEVS, and EVO accredited M&V trainer.
What is Measurement & Verification (M&V)?
Measurement and Verification (M&V) refers to the process of quantifying energy savings attributable to energy efficiency measures implemented in buildings or industrial facilities. It involves using a structured approach to confirm the savings achieved and to ensure that the energy performance improvements are measurable, sustainable, and attributable to the specific technologies and services that have been implemented.
Where is it used?
M&V can be used in any situation where it is important to understand the performance impact (e.g.savings and value for money) of energy efficiency or decarbonisation projects . As organisations seek pathways to net zero, M&V is key in order to understand the success, or otherwise, of these projects. M&V is also a crucial to the commercial side of energy saving investments - in particular where minimum levels of energy or cost savings have been guaranteed by a supplier, or where a share of the savings is incorporated into a commercial arrangement between supplier and customer. These deals are often referred to as Energy Performance Contracts.
Why is an M&V needed to determine the energy savings from a scheme?
One of the key challenges when measuring the impact of energy saving projects and programmes (as distinct from renewable or low carbon energy generation) is that energy savings cannot be measured directly. This is because a saving represents energy that is no longer being used as a result of the measures that have implemented. So whilst energy consumption can be directly measured (i.e. via a meter), to determine the avoided energy, metered consumption needs to be compared to the energy consumption that would otherwise have been used had the project not taken place – i.e. the counterfactual, or “business-as-usual” case.
Some calculations or estimates are necessary when finding the counterfactual consumption, and these will usually be derived from the baseline energy behaviour with some “adjustments” likely to be accounted for. More on adjustments later, but because these are involved, it is almost always the case that an energy saving measured through a structured M&V process will be different from a simple comparison of energy data e.g. one week before and after a project, or the current year compared with the previous year.
Finally, because there are calculations and estimates involved, these will introduce some uncertainty into the calculation of savings. It is important to understand the uncertainty relative to the value of the expected saving to assess whether the M&V method is suitable.
M&V is needed to disaggregate results of energy efficiency or decarbonisation projects from what would have happened had the project not taken place, and potentially also from other consumption-impacting changes that are happening at the same time.
Avoided Energy: Adapted from Figure 2: Savings or Avoided Energy Consumption or Demand (IPMVP Core Concepts March 2022 EVO 10000 – 1:2022)
M&V Protocols and Standards
Before discussing M&V processes and methodologies, it is worth recognising some of the key protocols and standards for guidance on these processes:
International Performance Measurement and Verification Protocol (IPMVP):
Developed and owned by the Efficiency Valuation Organization (EVO), IPMVP is an internationally recognised framework for M&V, offering detailed guidance on measuring energy savings. Its key principles set out that good practice M&V should be:
Accurate
Complete
Conservative
Relevant
Transparent
It provides 4 options for evaluating Energy Efficiency Measures, detailed later in this article.
ISO 50015: This is the international standard on Measurement & Verification principles and guidance, following a “Plan-Do-Check-Act” format and documentation management process that will be familiar from international standards in general. This standard and key International Standards related to energy management (ISO 50001 etc) have been well covered in module 3 of series 14. However, key to note is that it is method agnostic and using one or more of the options from IPMVP would meet this aspect of the requirements.
Key Components of M&V
Before considering M&V methods in more detail, it is useful to consider the process in general, particularly because the sequence of steps plays a part in ensuring that the outcome is transparent and accurate. An overview of the M&V process for a typical project is as follows:
Measurement & Verification Planning:
Before any EEMs have been deployed, an M&V Plan should be prepared to detail the methodologies and calculations that will be used to quantify energy savings. It identifies what will be measured, the frequency of those measurements, the data collection methods, and any instrumentation required. This will include establishing relevant baselines, where the purpose is to calculate the energy consumption that would have occurred without the implementation of the measures. The baseline should account for factors such as weather variations, production levels (in industrial settings), occupancy patterns, and any other relevant variables.
The plan should be agreed between all relevant parties – the end-user, supplier and independent M&V advisor where they are used - and completed prior to any energy efficiency or decarbonisation works commencing.
Implementation of Energy Efficiency Measures:
Energy efficiency measures are implemented according to the project design. The M&V Plan should specify “Operational Verification” (OV) activities relevant to testing of EEMs as they are first installed to ensure they are commissioned effectively and performing their intended function(s). OV serves as a low cost initial step for assessing savings potential, and mitigates the risk of installation defects not being identified until further down the line when the full verification process commences.
Depending on the nature and complexity of the measures being implemented, the implementation phase or “construction” period, may take several weeks or months.
Savings Reporting:
After the energy efficiency measures are in place, data on energy consumption or performance is collected according to the M&V Plan. The M&V Plan will have set out the required processes and in general will require the post-project data to be compared to the baseline to determine the actual energy savings achieved.
The requirements of the specific project should be clear from the Savings Report – for example, for a guaranteed savings project, was the guarantee met? And if not, what is the reconciliation process, noting that this should be set out within the contractual documentation, if not the M&V Plan itself.
IPMVP M&V Approaches
IPMVP sets out four M&V options that can be applied depending on the requirements of a specific project. For example, requirements include the nature of the EEMs, the value of the energy savings and ongoing maintenance responsibilities for the EEMs. The list is not exhaustive, and consideration should be given to ensure the approach is suitable – for a given EEM, more than one approach may be possible.
In setting out the different options, IPMVP considers the Measurement Boundary. For a facility or building in general there are two broad measurement boundaries, either the whole site, or isolated loads within the site, such as lighting, motors, or cooling loads.
Measurement Boundaries for M&V – Whole Site and Example Isolated Measurement Boundaries
IPMVP further breaks these down, with Option A and Option B describing isolated Measurement Boundaries and Option C and Option D describing Whole Facility Measurement Boundaries (although technically Option D could also be applied at a submeter level).
Option A: Retrofit Isolation, Key Parameter(s)
Measurement of energy is derived from the measurement of one or more key parameters, and estimation of the others. To illustrate this, take the common application of Option A for lighting retrofit projects – often the lighting load is measured before and after the retrofit and operating hours estimated. So measured lighting load (kW) is the key parameter and hours of operation (h) the estimated parameter. The difference in lighting load before and after the EEM can be multiplied by the estimated operating hours to provide a saving in kWh terms.
A clamp meter used to take wattage readings of light fittings
The estimated parameter will introduce some uncertainty, so it is important that all parties agree on any estimates. But for the lighting example, the measurement focusses on what a supplier is responsible for (reduction of lighting load) and not a parameter outside of their control (the end-user’s operations).
An advantage of this approach is that it is relatively low cost, quick to obtain the required measurements and savings are not impacted by changes outside of the measurement boundary.
Option B: Retrofit Isolation with All Parameter Measurement
Option B focusses on an isolated measurement boundary, similarly to Option A, but is required to measure all relevant parameters within the boundary of the EEMs. This option can be applied where the EEM can be isolated and equipment impacted has a variable load such that baseline energy consumption within the measurement boundary is variable.
The measurement will likely require the installation of a submeter if there isn’t one already in place, and to record data for long enough to capture a full cycle of operating conditions for the isolated load.
Typical applications would include EEMs applied to cooling/ventilation systems, drives and controls, where the savings achieved are likely to vary over time according to variable demand, but where the load itself can be isolated via metering of its kWh consumption.
An advantage of this approach is that energy savings can be isolated from other changes outside of the measurement boundary, but it is likely that new metering is required, and sufficient time to allow a full range of operating conditions must be captured.
Option C: Whole Facility Measurement
This approach uses the whole-building energy data to determine savings, which is often captured via the electricity and gas data from fiscal meters. It is worth noting that if any on-site generation is already in place, this should also be included in calculating total building consumption.
This approach will result in the measurement of the combined impact of all EEMs deployed within a building, which may be useful if there are interactions between the different measures, or if some are not possible to isolate. It will, however, capture any changes within the facility that are not part of the project being measured. This may require careful monitoring if any such changes are likely to be material as it could lead to challenges in disaggregating the impact of the facility changes from the impact of energy efficiency measures, which is especially important where performance guarantees are involved.
Under Option C, mathematical models of consumption data are often developed, typically using regression analysis to account for variables such as external temperature or building occupancy. This results in an “adjusted” baseline such as the one below calculated for a facility’s utility electricity data, which can then be extended over the reporting period:
Energy consumption modelling for electricity– actual data against the “adjusted” baseline model
Typically, a whole facility approach is used where savings are expected to be material (>10% of total building consumption) and where ongoing performance measurement is important. An advantage of the approach is that historic utility energy data is usually readily available for most non-domestic buildings in the UK.
Option D: Calibrated Simulation
Where no baseline data exists, energy simulation software can be used to predict building consumption. Models will capture the physics and information about the energy systems in the measurement boundary (which although typically applied at a whole facility level under Option D, could also be applied to a sub-set of building consumption). Engineering calculations use these details to predict consumption, which is then calibrated against actual building energy use once data is available. These simulations can be run with and without EEMs in order to estimate their impact.
The advantage of this approach is that it allows for evaluation in the absence of building energy data (e.g. for new buildings), but should note that the evaluation of energy savings will be based on the calculations used in the simulation software, unlike the in-situ measurements used for the other IPMVP approaches.
What are “Adjustments”?
“Adjustments” have been referenced in this article and are often used in M&V, so what is meant by them and why are they relevant? It is worth first noting that there are two general types of adjustment – “Routine” and “Non Routine” as follows.
Routine Adjustments
These describe changes made to baseline or reporting period data to account for expected changes in energy consumption or demand. For example, as external temperature becomes colder, heating fuel consumption would be expected to increase, or if a manufacturing facility produces less, its consumption would be expected to reduce. Weather and production are examples of “independent variables” – these influence energy consumption and for a fair comparison with and without EEMs they should be taken into account. As noted under the Option C description, this is often achieved by developing a mathematical model using regression analysis, allowing statistical metrics to validate the model and provide information about how well variation in energy data is explained by independent variables.
Non-Routine Adjustments
These describe unexpected changes within a measurement boundary resulting from changes in aspects of a facility that would usually remain static. For example, building floor space/area, primary use, material changes in plant and equipment. Such changes will need to be taken into account and their value estimated – this is often achieved via an engineering calculation specific to the change identified.
Such changes can present a challenge for M&V, especially if they are not well monitored as this can lead to a lack of good information and potentially disagreement between interested parties. Outlining a process for capturing and calculating non-routine adjustments is important for M&V, particularly to enable transparency in the savings reporting.
Dealing with Uncertainty
M&V addresses the challenge of uncertainty - it is important to consider whether a proposed method will yield sufficiently low uncertainty that the expected savings can actually be measured. An outline of the key sources of uncertainty are as follows:
Modelling – mathematical models are often used in M&V to quantify relationships between independent variables (weather, production etc) and energy consumption. The statistical technique of regression analysis allows M&V practitioners to do this and to understand the error associated with their models.
Metering – devices used to measure energy, power, or other key parameters and variables will have some error in terms of their precision and accuracy, details of which should be available from the meter’s manufacturer. Note that under IPMVP, utility meters can be considered 100% accurate for M&V purposes since the measured consumption is directly related to billing cost.
Sampling – when similar EEMs are deployed multiple times – light fittings for example - a sampling approach is often used as a way of reducing measurement cost, but consideration should be given when doing this so that the uncertainty doesn’t increase outside of acceptable limits.
Following a structured M&V process means that each of these sources of uncertainty will be considered and can be evaluated relative to the value of the energy savings. Where uncertainty is considered too high, this may result in alternative M&V approaches to be taken, but ultimately assessment of uncertainty should help all parties in understanding the underlying measurement risk.
Professional Qualifications
To enable the recognition and to develop the expertise of energy professionals involved in Measurement & Verification, the “M&V Fundamentals and IPMVP” course leading to the “Certified Measurement & Verification Professional” (CMVP) was jointly developed by the Efficiency Valuation Organisation (EVO, who own the IPMVP) and the Association of Energy Engineers (AEE). This course has run in various locations worldwide for well over a decade and continues to be run by the AEE.
In 2022, EVO created two new certifications, which, following their global survey of 2019, reflect industry wide interest in the further enhancement of the knowledge and skills of M&V Professionals. The Performance Measurement & Verification Analyst (PMVA) certification is EVO’s programme for M&V fundamentals, whilst the Performance Measurement & Verification Expert (PMVE) certification establishes an advanced level qualification in IPMVP and M&V to distinguish individuals who are regularly involved in preparing or assessing M&V Plans.
Summary
A well-structured M&V process brings transparency to reported savings, providing clear evidence of energy and carbon reductions and supports the risk management of performance-based contracts. It also allows for continuous improvement – the activity of measuring savings accurately identifies areas where there may be shortfalls and opportunities for rectification, as well as further energy efficiency improvements. In summary, M&V is intended to verify the effectiveness of energy and carbon saving initiatives, to ensure accountability, and support sustainable energy management.