Measure. Verify. Repeat. Why You Should Collect Energy Data – and Use It

By John Schinter

A large company that spent nearly $30 million annually on energy across its U.S. portfolio recently reduced its usage by more than 7 percent over a three-year period, saving millions of dollars a year.

With the help of a well thought-out portfolio energy management program and an increased commitment to renewable energy, the company is on track to meet its five-year goal to reduce CO2 emissions by 15 percent.

This company used standard energy management tactics, but the case still illustrates the importance of measurement and verification (M&V). The fact that energy and environmental data across a large portfolio can be accurately measured and reported at all is far from typical. More importantly, the sophisticated tracking and reporting system that captured the data also helped the energy management team maximize results by quickly identifying and correcting the most serious inefficiencies.

There are many ways to measure and verify energy efficiency. Engineers generally equate M&V with International Performance Measurement & Verification Protocol (IPMVP), the industry standard offered by Efficiency Valuation Organization (EVO), as a way to measure systems in isolation or conduct whole-building comparisons. EPA’s Energy Star Portfolio Manager has gained wide acceptance as an effective way to baseline efficiency and to quantify degrees of progress over time. ASHRAE also has standards for determining a baseline.

LEED draws on IPMVP, Energy Star and ASHRAE for various standards of measurement, but the new Operations & Maintenance standard which replaced the Existing Buildings standard does not provide any specific credit for M&V follow-through. Buildings get credit for installing meters and owners are expected to have a plan for monitoring the data, but whether the data is collected and used productively is an open question.

In 2008, the New Buildings Institute concluded a study funded by the U.S. Green Building Council with support from the EPA on the energy performance of LEED for new construction buildings. Of the 552 LEED certified buildings invited to participate in the study, 250 owners were willing to supply information, but only 121 could supply energy usage data typically found on monthly bills. Moreover, even though about 40 of the participating buildings had achieved credits that mandated M&V for at least one year of operation, only four could provide actual M&V data.

In short, a LEED building manager who can maintain a good Energy Star rating may have no motivation to monitor energy usage. Corporate facility managers, however, are strongly motivated to do so, whether or not their buildings are recognized by LEED or Energy Star.

Not only are facility managers under pressure to continually lower costs, but corporations increasingly need to report reductions in carbon emissions, a large percentage of which may come from their buildings. Here the M&V challenge is not limited to a single property but to every owner-occupied property in the company’s portfolio, often numbering in the hundreds of buildings.

Hence, there are five levels of granularity in M&V: from the portfolio down to buildings to systems to machines and finally to components. Can any M&V system effectively encompass all these levels?
The answer is yes, it can and is being done at investor and corporate portfolios on behalf of clients headquartered in the Chicago area and elsewhere. In fact, it is easier in some ways to identify opportunities for improvement when a building can be compared to a larger portfolio.

The key is to gather information from each property on a timely basis in a program that automatically translates numerical data into a series of on-demand charts and graphs. Graphically expressed, the relevant data can be viewed on one computer screen–an interface known as a dashboard–for any type of information, time period and level of stakeholder, from concise overviews of large portfolios to detailed single-facility assessments. The dashboard data also facilitates accounting procedures by integrating with bill processing and payment firms for automatic uploading of information.

A dashboard user follows a practice known as “management by exception,” which in essence means looking for data that is out of synch. The dashboard makes this easy: when one bar in a chart is longer or shorter than the others, or when a line on a graph suddenly lurches, it is worth further investigation to determine what has happened. With an interactive system, investigation may be a matter of clicking on a property or a time period to drill down to the next level of information, or deeper if necessary.

For example, the dashboard for a company with a dozen similar plants shows that one has significantly higher electric bills than the others after adjusting for climate. Clicking on a year-over-year history of that property’s bills as well as data over the past three months, it appears that the increase has occurred in the past 60 days.

On-site staff reports identify a small number of projects during that time period that could account for the change; by analyzing the meter data from systems relating to those projects, the on-site team is quickly able to isolate the piece of equipment that was installed incorrectly.

Note in this example that the centralized dashboard data need not include every component or even every piece of equipment in the building. The centralized energy management needs only enough measurement data to determine anomalies. Once a problem has been detected, the investigative work is at least partly in the hands of the on-site team, which can look at meter data and interview team members to diagnose the problem and take corrective action.

Such a system is the fastest and most cost-effective way to achieve energy savings because it engages both the centralized team and the on-site team in identifying priorities for improvement and in developing a cost-benefit equation for improvements.

An on-site manager dealing with an old, inefficient system might make the case that an upgrade is necessary, but that case will be much stronger when the portfolio director can see the cost differential between that building and others like it. The ability to quickly compare the running cost of inefficiency with the one-time cost of replacement facilitates the decision-making process and ultimately leads to a program that balances energy efficiency and cost effectiveness.

In this way, measurement and verification becomes not just an academic exercise or a rote process to ensure a property’s re-certification, but an essential part of a portfolio energy management program that will save owners and occupants millions of dollars over time.


As President of Energy and Sustainability Services at Jones Lang LaSalle, John Schinter directs teams that in 2008 reduced energy use by 790 million kWh at client facilities, saving those companies $95 million and avoiding 438,000 tons of GHG emissions. John also works with JLL teams with 116 completed or current LEED projects totaling more than 35 MSF worldwide. The Association of Energy Engineers named Schinter 2008 Energy Engineer of the Year. He can be reached at john.schinter@am.jll.com.

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