Developing Model ESCO Performance Contracts
5. GETTING STARTED WITH AN EPC PROJECT – DEVELOPING A M&V PLAN The preparation of an M&V Plan is the single most important M&V activity in an energy savings project. It is central to proper savings determination, and is the basis of verification. A plan is essential to assure the transparency of processes and the quality and credibility of achieved outcomes. 5.1. M&V for Industrial EE Projects Measurement and verification of the energy savings is typically one of the most difficult issues for any Customer to deal with, due to the combination of technical and commercial issues involved. Most Customers will be implementing their first EPC and as a result will not have the experience to know what to expect or watch out for during the preparation of the contract. Agreement of both parties for a methodology on M&V creates a risk management tool for either party. A good M&V plan is one that reduces the risk and makes the project viable. The central role of M&V in a performance contracting is as follows: Tool for defining and controlling risks of the project and Helps control for uncertainty about savings; and Is the basis for payments (shortfalls, excesses savings)19 Where does the M&V plan fit into an Energy Efficiency project? Energy Audit/ Identification of EE opprtunities
Install Energy Efficiecny Project
Select EE Opportunities
Develop an M&V Plan
Collect Data/ Measure
Measure and Verify Savings
The principal issue to tackle through M&V is this: once an energy conservation measure has been implemented, the original system will often have been altered to such an extent that it is unfeasible (if not impossible) to undertake M&V retroactively. It is therefore important that M&V be initiated at the planning and feasibility stages of a project. Practical Advice When creating an M&V Plan, one should be mindful of the project scope - expected level of savings and investment in the project.
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A less accurate and less expensive M&V Plan is better than an incomplete or poorly Best Practice to EPC – EEC executed M&V Plan which is theoretically more complex and more accurate. | 29
