module 12: quality assurance - department of energy energy... · module 13: project development...

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DEPARTMENT OF MINERALS AND ENERGYDME-Danida Capacity Building in Energy Efficiency & Renewable Energy

Module 12: QualityAssurance

Ensuring that auditscomply with DMErequirements

DME Supervising Engineers Course 2

DEPARTMENT ofMINERALS and ENERGY

Learning Objectives

Describe the essential features of the DME AuditGuidelinesSummarize the prescribed process forpreliminary and detailed auditsEnsure that the preliminary and detailed auditsaddress all required assessment issuesEnsure that appropriate service providers for theaudit and quality assurance are selected



AuditProcess

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AuditProcess



Parties to the Process

Energy Supplier(utilities)Site ManagementESCOQuality AssurerDMEDPW



Preliminary Audit

Purposethe need for or meritsof a detailed audit,based on performanceindices:

consumption index

demand index

Stepshistorical analysiscollect building datademand profilewalk-throughtariff analysis

MJ/m2/year

VAaverage/m2/month

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Preliminary AuditFindings

Building performanceindicesDemand profileanalysisPotential savingsopportunitiesConfirmation of tariff



Detailed Audit

Purposeidentify specificmeasures to reduceconsumption, demand,cost

Stepsexamine site drawingsprepare load inventoryassess demand profileassess all energy loadareasprovide baselinecriterionassess tariff changeopportunity



EMO Checklist

LightingHVACBuilding envelopeDomestic hot and cold waterSteam distributionFuel switchingCompressed air

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Quality AssuranceIssues

Ensure that the process is followedSelect the right ESCOSelect the right Quality Assurer

•Education of employees, in particularadditional specific Energy Managementrelated certification or degrees.•Expertise and integrity of company.•Reference projects and other experience.•Stability of company (assets / turnover).•Professional indemnity and contractor’sliability insurances.

•Education of employees, in particularadditional specific Energy Managementrelated certification or degrees.•Expertise and integrity of company.•Reference projects and other experience.•Stability of company (assets / turnover).•Professional indemnity and contractor’sliability insurances.


Module 13: ProjectDevelopment Cycle

Planning, Implementationand Evaluation



Learning Objectives

Design and document a projectDevelop the necessary documentation forproject approvalDevelop the necessary documentation forsecuring financingSelect contract types and contractorsMonitor project implementation

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The steps in the PDC

Project Definition and ScopeTechnical DesignFinancingContractingImplementation and Monitoring



Step 1: Project Definitionand Scope

Internal• facility manager

identifies a package ofenergy-savingsopportunities duringthe day to day energymanagementactivities, or fromfacility audits.

External• systematic energy

audits undertaken bya reputable energymanagementconsultant, energyservice company



Criteria for Prioritisation

Cost-effectivenessSustainability of the savingsEase of quantifying, monitoring, andverifying savingsAvailability of technologyOther environmental and social costs andbenefits

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Step 2: Technical Design

The proposed technologies, process modifications,equipment replacements and other measuresProduct/technology/material supply chainCommercial viability of the measures (IRR, NPV, cashflow, payback)Any special technical complexitiesPreliminary designs, manufacturer’s name and contactdetails, and capital cost estimateOrganisational and management plan forimplementation



Step 3: FinancialProposal

Amount of financing already securedProject cost structure• investment required at each stage• proposed investment structure (debt-equity)• risk mechanisms (insurance, currency exposure,

guarantees, etc.)

Use of proceeds from the loanCertification on due diligence and efficiency



Loan Agreements

Conditions regarding goods and servicesprocurementInspection provisionsConditions regarding insuranceInformation requirementsTermination provisions

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ESCO Services

An energy efficiency opportunity analysisProject developmentEngineeringFinancingConstruction/implementationTrainingMeasurement and verification



Benefits of 3rd PartyFinancing

Reduced or eliminatedneed for corporate capitalAccelerate existingenergy efficiencyprograms and buildingrenewalHelping manage debtthrough off balance sheetfinancingDecreased operatingcosts

Turn-key installationParticipation of localenergy utilitiesEnhanced staff trainingSavings fundrepayments, based onperformance againstquantifiable resultsTransferred risk to a thirdparty (ESCO)



Step 4: ContractingOptions

Traditional contractExtended technical guarantee/serviceExtended financing termsGuaranteed savings performance contractShared savings performance contract

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ESCO Contract TypesFirst Out - ESCO retains savings until an agreed-uponfinancial goal is achieved; client company then receivesfuture savingsShared Savings - ESCO and client company sharesavings as they are achievedGuaranteed Savings - ESCO guarantees project costs(exclusive of client add-ons); debt service is covered bythe income stream.Discounted Energy Savings (Chauffage) - Clientcompany pays ESCO a fee equal to the base yearenergy bill minus an agreed upon discount; ESCO paysactual energy bill



Step 5: ImplementationGuidelines

Limit long lead timesManage out-of-pocket developmentcosts by focusing effortsManage construction carefully


Module 14: M&V

Savings Verification

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Learning ObjectivesIdentify the key concepts involved in savings verificationDefine the kinds of data required for energy performance analysis,and analyze energy consumption as a function of degree-daysDefine the fundamental relationship for determining savings for agiven ECMDescribe the elements of a verification planIdentify the data and information required to define base yearconditionsDescribe and select from the four methods of savings verificationDescribe techniques for developing an energy performance modelApply adjustments to the base year conditions



Working Definitions

Measurement andVerification:

a process ofquantifying energyconsumption beforeand after an EMO isimplemented toverify and report onthe savings actuallyachieved

Monitoring andTargeting

a managementtechnique to “keepoperations efficient”, andto “monitor utility costs”--management strategiesto drive energy costsdownwards as acontinuous improvementcycle



Why Measure & Verify?to increase energy savingsto reduce the cost of financingprojectsto encourage better projectengineeringto demonstrate and capture thevalue of reduced GHG emissionsto increase public understandingof energy management as a publicpolicy toolto promote and achieve resourceefficiency and environmentalobjectives

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Spend more to reducecosts?

M & VIncreases theconfidence of fundersin sufficient savings tomake debt paymentsreduces theinvestment riskreduces the expectedrate of return of theinvestment—and yourcosts of borrowing



Determining Savings

Savings = Adjusted Baseline Use – Post Installation Use

Two Questions:

•What adjustments to the baselineperformance are required?

• What measurements are required todetermine post-installation performance?



The IPMVP - M&VOptions

To what extent canthe retrofit bemeasured separatelyfrom other facilitycomponents?To what extent canperformance variablesbe measured?

www.ipmvp.org

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Four IPMVP Options

A. Partially Measured Retrofit IsolationWith assumptions/stipulations

B. Retrofit IsolationFully measured

C. Whole Facilityor sub-metered part

D. Calibrated SimulationWith software



Statistical Basis forM&V

(UA + Cp N V) = slope

Degree-days

H

} c

•Degree-days = a measureof the need for heating orcooling in a building

•Heating degree-days(HDD) = Σ(Tbase-h - Tavg. )

•Cooling degree-days(CDD) = Σ(Tavg. - Tbase-c)



Regression Analysis

Linear Regression of Baseline Energy vs. HDD

y = 20.789x + 693.63R2 = 0.9546

02000400060008000

100001200014000160001800020000

0 200 400 600 800 1000

HDD (oC)

Tota

l kW

h

Linear Regression of Baseline Energy vs. HDD

y = 20.789x + 693.63R2 = 0.9546

02000400060008000

100001200014000160001800020000

0 200 400 600 800 1000

HDD (oC)

Tota

l kW

h

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Variants of RegressionPattern



Define base yearperformance

Utility consumption and derived dataelectricity, power factor, fuels, water, others

Independent variablesweather factors (HDD & CDD),occupancy type, density and periodsSpace conditionsEquipment (load) inventoryOperating practicesEquipment problems or outages



Adjustments

Changes in weather or occupancyChanges in operating scheduleTenant improvementsChanges in building function

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Adjustments and IPMVPOption

Option A: partial retrofit isolation - manyperformance variables are stipulatedOption B: retrofit isolation - adjustmentsapplied in the performance modelOption C: whole building - adjustmentsapplied in the performance modelOption D: simulation - adjustments built intothe simulation



Option Selection

project costsexpected savingscomplexity and number of measures installedanticipated changes to post-installation facilityor system usagetolerance for uncertainty or risk of savings beingachievedrisk allocation between the owner and thecontractor



M&V Cost andUncertainty

How muchuncertainty can wetolerate?The lower theacceptableuncertainty thehigher the cost

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A Structured Approach

M&V

App

lied

to R

etro

fits

M&V

Pla

nnin

g Pr

oces

s

M&V

Met

hod

Sele

ctio

n

Base YearEnergy Data

BaselineAdjustments

Is Available

None Available

Select M&VMethod

Straight-forward

Complex&/or

Difficult

InteractiveEffects

Scope ofDetermination

Nature ofECMS

WholeBuilding

Single or Group of ECM's

Significant andNot Easily Measured

Insignificant, Measurable or Stipulable

Multiple Complex or Diffuse (cannot be isolated)

Single or Multiple Simple

Possible and cost effectivewith existing and new

meters and measurement

Option DOption COption BOption A

ECM'sisolation

is...

RelativeSavings

Low(< noise)

Possible with metering and stipulation

Define OngoingV&M andReporting

Define & SpecifyMetering

Equipment

Test PerformanceModel for

Uncertainty etc..

DevelopPerformance

Model

Define Post ECMPeriod

Define Base YearPerformance

Select M&VMethod

Prepare theM&V Plan

Model OK

RevisePerformance

Model

NO,Needs Revision

Yes

NO,Approach

notSuitable

Document Plan

Done

M&V Process

Prepare theOrganization

Implement theECM's

Implement the M&VPlan

Design EnergySavings Program

Identify, Select andAssess the ECM's

Apply M&VPerformance Model

to OngoingManagement

SelectImplementation

Method

Save !

Implement theECM'sImplement the

ECM'sPrepare theM&V Plan



Define Post-EMO Period

TimePlanned changes to base yearconditionsConditions for comparison of baseyear and post-EMO periodNon-routine baseline adjustments



Develop EnergyPerformance Model

Select data analysis techniquesDevelop algorithms & equationsEstablish assumptions & stipulationsDevelop spreadsheets/ acquiresoftware

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Test/Revise PerformanceModel

Quantify expectedaccuracy/uncertaintyAssess budget impact ofaccuracy/uncertainty changesDefine a cost effective level ofaccuracy/uncertainty acceptable to allparties



Define and specifymetering equipment

Make use of available dataEMS, BMS, other systems

MeterAccuracyPrecisionCalibrationCommissioning



Define Ongoing M&VActivities

FrequencyMeter reading and witnessingData analysisQuality assurance proceduresReport formats and content

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Implement the EMOs

Install energy efficient equipmentInstall M&V measurement equipmentCommission new systems andequipment



Implement the M&VPlan

Collect dataApply performance modelMake non-routine baselineadjustmentsReport/document energy savingsCalculate energy cost savings andGHG emission reductions as needed



Risk Factors

Financial, Operational andPerformanceAssess potential impactIdentifyAssign &/or clarify responsibility formanagement and mitigation

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Financial Risk Factor

Interest ratesEnergy pricesConstruction costsM&V CostsDelaysMajor changes in facility



Operational Risk Factors

Operating hoursEquipment loadsWeatherLife of equipmentUser participation



Performance Risk Factor

Equipment performanceMaintenanceOperation

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Applying Price & GHGFactors to Energy Savings

Use incremental (marginal) prices forElectrical energy & demandThermal contract demand (gas, steam etc.)Thermal energy

GHG emissions factors (kg/TJ or kg/kWhetc.)

Provincial marginal or averageNational marginal or average



Applying Energy PricesNeed to know:

Energy saved (kWh, GJ)By time-of-day for TOU rates

Demand saved (kVA, l/day, kg/hr)For on/off peak periods

Other factors:Transformer creditsDemand ratchetsPower factorOther discounts/surcharges

module 12: quality assurance - department of energy energy... · module 13: project development...

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