ENERGY SAVINGS MEASUREMENT AND

VERIFICATION (M&V)
USER GUIDE
For the Kingdom of Saudi Arabia
(Version #01)

This User Guide Approved by Saudi Energy Efficiency Center’s Director General
On Feb. 1, 2017

February 2017
 Saudi Energy Efficiency Center

ACKNOWLEDGEMENT

The Energy Savings Measurement and Verification (M&V) User guide was prepared by
World Bank for Saudi Energy Efficiency Program (SEEC) as part of Saudi Energy
Efficiency Program (SEEP) activities. This User Guide is based on International
Performance Measurement and Verification Protocol (IPMVP).

This version is finalized after earlier versions of this user guide have been presented and
discussed at workshops in which different companies from private sector participated. We
would like to thank all the people who have provided their time, thoughts and contributions
to the team and to the User Guide.

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TABLE OF CONTENTS
ABBREVIATIONS AND ACRONYMS ........................................................................................................... V
DEFINITIONS OF KEY TERMS ................................................................................................................... VI
EXECUTIVE SUMMARY ........................................................................................................................... 10
SECTION 1 - INTRODUCTION – MEASUREMENT AND VERIFICATION OF ENERGY SAVINGS ..................... 11
1.1 ENERGY EFFICIENCY IN THE KINGDOM OF SAUDI ARABIA ............................................................................. 11
1.2 PURPOSE OF THIS USER GUIDE............................................................................................................... 11
1.3 WHAT IS M&V? ................................................................................................................................. 12
1.4 WHY M&V?...................................................................................................................................... 12
1.5 IMPORTANCE OF M&V IN ENERGY EFFICIENCY PROJECTS............................................................................ 13
1.6 OUTLINE OF THIS USER GUIDE ............................................................................................................... 13
SECTION 2 - OVERVIEW OF CORE CONCEPTS, PROTOCOLS AND GUIDELINES FOR M&V ......................... 15
2.1 BASIC M&V CONCEPT .................................................................................................................... 15
2.1.1 Background ........................................................................................................................... 15
2.1.2 Overview of the International Performance Measurement and Verification Protocol (IPMVP)
15
2.1.3 IPMVP as the Generally Accepted M&V Protocol ................................................................. 15
2.2 KEY PRINCIPLES .............................................................................................................................. 17
2.3 MAJOR STEPS IN CONDUCTING M&V ..................................................................................................... 17
2.4 M&V RESPONSIBILITIES – ESCO, CLIENT AND THIRD PARTY M&V AGENT .................................................... 20
2.5 IPMVP AND ISO ................................................................................................................................ 21
2.5.1 The International Standrads Organization (ISO) ................................................................... 21
2.5.2 ISO 50001:2011 – Energy Management System................................................................... 22
2.6 M&V PLANNING ................................................................................................................................ 22
2.6.1 Importance of the M&V Plan ................................................................................................ 22
2.6.2 Typical Contents of a M&V plan ........................................................................................... 23
2.6.3 Baseline Adjustments............................................................................................................ 24
2.6.4 Key Steps in M&V Planning ................................................................................................... 24
2.7 DEFINING THE BASELINE ....................................................................................................................... 26
2.7.1 Major Considerations............................................................................................................ 26
2.7.2 Baseline Adjustments Needed when usiong the Hijri Calendar ............................................ 27
2.8 ISSUES RELATED TO METERING EQUIPMENT AND SYSTEMS .......................................................................... 27
2.8.1 Metering Needs .................................................................................................................... 27
2.8.2 Metering Equipment ............................................................................................................. 28
2.8.3 Sensor and Meter Accuracy and Calibration ......................................................................... 28
2.8.4 Metering Duration ................................................................................................................ 29
2.8.5 Faulty Baseline Metering Data ............................................................................................. 30
SECTION 3 - M&V FRAMEWORK AND OPTIONS ..................................................................................... 31
3.1 BASIC EQUATIONS OF M&V.................................................................................................................. 31
3.2 THE FOUR BASIC OPTIONS FOR CONDUCTING M&V .................................................................................. 32
3.3 KEY ELEMENTS OF THE BASIC M&V FRAMEWORK ..................................................................................... 34
3.3.1 Operational Verification ....................................................................................................... 34
3.3.2 Measurement Boundary ....................................................................................................... 34
3.3.3 Selection of Baseline and Reporting Periods ......................................................................... 35
3.3.4 Baseline Adjustments............................................................................................................ 36
3.4 OPTION A – RETROFIT ISOLATION: PARTIAL MEASUREMENT ....................................................................... 37
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3.4.1 Overview ............................................................................................................................... 37

3.4.2 Key Characteristics ................................................................................................................ 37
3.4.3 Baseline Definition ................................................................................................................ 38
3.4.4 Calculations .......................................................................................................................... 38
3.4.5 Data Collection and Metering ............................................................................................... 38
3.4.6 Baseline Adjustments............................................................................................................ 39
3.4.7 Costs ..................................................................................................................................... 39
3.4.8 Best Applications .................................................................................................................. 39
3.5 OPTION B - RETROFIT ISOLATION: ALL PARAMETER MEASUREMENT ............................................................. 39
3.5.1 Overview ............................................................................................................................... 39
3.5.2 Key Characteristics ................................................................................................................ 39
3.5.3 Baseline Definition ................................................................................................................ 40
3.5.4 Calculations .......................................................................................................................... 40
3.5.5 Data Collection and Metering ............................................................................................... 40
3.5.6 Baseline adjustments ............................................................................................................ 40
3.5.7 Costs ..................................................................................................................................... 40
3.5.8 Best Applications .................................................................................................................. 40
3.6 OPTION C – WHOLE FACILITY MEASUREMENT .......................................................................................... 41
3.6.1 Overview ............................................................................................................................... 41
3.6.2 Key Characteristics ................................................................................................................ 41
3.6.3 Baseline Definition ................................................................................................................ 41
3.6.4 Calculations .......................................................................................................................... 42
3.6.5 Data Collection and Metering ............................................................................................... 43
3.6.6 Baseline Adjustments............................................................................................................ 44
3.6.7 Costs ..................................................................................................................................... 44
3.6.8 Best Applications .................................................................................................................. 44
3.7 OPTION D – CALIBRATED SIMULATION .................................................................................................... 44
3.7.1 Overview ............................................................................................................................... 44
3.7.2 Key Characteristics ................................................................................................................ 45
3.7.3 Baseline Definition ................................................................................................................ 45
3.7.4 Calculations .......................................................................................................................... 45
3.7.5 Data Collection and Metering ............................................................................................... 46
3.7.6 Baseline Adjustments............................................................................................................ 46
3.7.7 Costs ..................................................................................................................................... 46
3.7.8 Best Applications .................................................................................................................. 46
3.8 SELECTING THE OPTION ........................................................................................................................ 47
SECTION 4 - KEY ISSUES IN M&V ............................................................................................................ 50
4.1 BALANCING M&V COSTS AND BENEFITS .................................................................................................. 50
4.2 STATISTICAL APPROACHES AND UNCERTAINTY MANAGEMENT ..................................................................... 50
4.3 COST AVOIDANCE ............................................................................................................................... 51
4.4 METERING ISSUES AND OPTIONS ............................................................................................................ 51
REFERENCES ........................................................................................................................................... 52
REGRESSION FOR M&V: REFERENCE GUIDE MAY 2012, BONNEVILLE POWER ADMINISTRATION ........... 52
ANNEXES................................................................................................................................................ 53
ANNEX A ILLUSTRATIVE M&V PLAN FOR PUBLIC BUILDING ............................................................................ 53
ANNEX B M&V OPTIONS: TECHNOLOGY-SPECIFIC EEMS .............................................................................. 70
ANNEX C BASELINE ADJUSTMENTS IN ENERGY SAVINGS CALCULATIONS (EXAMPLES)............................................ 71
ANNEX D – HIJRI AND GREGORIAN CALENDAR DATE CONVERSION ......................................................................... 74
ANNEX E – METER RESOURCES........................................................................................................................ 75

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ABBREVIATIONS AND ACRONYMS

AEE Association of Energy Engineers

CMVP Certified Measurement and Verification Professional
DOE Department of Energy (U.S.)
EEM Energy Efficiency Measure
ENB Energy Baselines
ENPI Energy Performance Indicators
EPIA Energy Performance Improvement Action
ESCO Energy Service Company
ESM Energy Saving Measure
ESPC Energy Savings Performance Contract
EVO Efficiency Valuation Organization
FEMP Federal Energy Management Program
IPMVP International Performance Measurement and Verification Protocol
ISO International standards Organization
KSA Kingdom of Saudi Arabia
M&V Measurement and Verification
SEEC Saudi Energy Efficiency Center
SEEP Saudi Energy Efficiency Program
SMEs Small and Medium-Sized Enterprises
UMP Uniform Methods Protocol

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DEFINITIONS OF KEY TERMS1

Adjustments, Non-routine & Routine - Changes made to the baseline and/or the
reporting period energy use to account for changes to baseline conditions. Routine
adjustments are used to account for expected variations in independent variables; Non-
Routine adjustments are used to compensate for unexpected changes to documented
baseline conditions (see Static Factors).
Avoided energy use: The reduction in energy use that occurred in the reporting period,
relative to what would have occurred if the facility had been equipped and operated as it
was in the baseline period but under reporting period operating conditions. “Cost
avoidance” is the monetary equivalent of “avoided energy use.” Both are commonly called
savings. Normalized savings is another type of savings.
Baseline Adjustments (BLA): The non-routine adjustments arising during the reporting
period from changes in any energy-governing characteristic of the facility within the
measurement boundary except the named independent variables used for routine
adjustments.
Baseline Energy: The energy use occurring during the baseline period without
adjustments.
Baseline Period: The period of time chosen to represent operation of the facility or system
before implementation of an ESM. This period may be as short as the time required for an
instantaneous measurement of a constant quantity, or long enough to reflect one full
operating cycle of a system or facility with variable operations.
Baseline: Pertaining to the baseline period
Confidence Level: The probability that any measured value will fall within a stated range
of precision.
Constant: A term used to describe a physical parameter that does not change during a
period of interest. Minor variations may be observed in the parameter while still describing
it as constant. The magnitude of variations that are deemed to be ‘minor’ must be reported
in the M&V Plan.
Commissioning: A process for achieving, verifying and documenting the performance of
equipment to meet the operational needs of the facility within the capabilities of the design,
and to meet the design documentation and the owner's functional criteria, including
preparation of operating personnel.
Degree Day: A degree day is measure of the heating or cooling load on a facility created
by outdoor temperature. When the mean daily outdoor temperature is one degree below a

1
Derived from IPMVP Volume 1 2012 and FEMP Guidelines Version 3.

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o
stated reference temperature such as 18 C, for one day, it is defined that there is one heating
degree day.
Demand: The rate of energy use. Many utilities base a portion of their bills on the highest
(or peak) demand they measure during each billing period. Peak demand values are
sometimes referred to as simply “demand.” Electrical demand is normally expressed in
kilowatts (kW).
Energy: Energy or water use, or demand.
Energy Saving Measure (ESM): An activity or set of activities designed to increase the
energy efficiency of a facility, system or piece of equipment. ESMs may also conserve
energy without changing efficiency.
Energy Performance Contract: A contract between two or more parties where payment
is based on achieving specified results, such as reductions in energy costs or payback of
investment within a stated period.
Energy Services Company (ESCO): A firm that provides services of design and
construction of ESMs under an energy performance contract.
Estimate: A process of determining a parameter used in a savings calculation through
methods other than measuring it in the baseline and reporting periods. These methods may
range from arbitrary assumptions to engineering estimates derived from manufacturer’s
rating of equipment performance.
Facility: A building or industrial site containing several energy using systems.
Independent Variable: A parameter that is expected to change regularly and have a
measurable impact on the energy use of a system or facility.
Insolation: A measure of solar radiation energy received on a given surface area in a given
time. Alternate: the rate of delivery of direct solar radiation per unit of horizontal surface
Interactive Effects: Energy effects created by an ESM but not measured within the
measurement boundary. Interactive effects may occur both within a single fuel source and
between sources. For instance, a decrease in electrical energy for lighting may reduce
electrical cooling load but also increase gas heating requirements.
Marginal Price: The cost of one additional unit of a commodity billed under a complex
rate schedule.
Measurement and Verification (M&V): The process of using measurements to reliably
determine actual savings created within an individual facility by an energy management
program. Savings cannot be directly measured, since they represent the absence of energy
use. Instead savings are determined by comparing measured use before and after
implementation of a project, making appropriate adjustments for changes in conditions.
Measurement Boundary: A boundary drawn around equipment and/or systems to
segregate those which are relevant to savings determination from those which are not.
Metering: Collection of energy data over time at a facility through the use of measurement
devices.

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M&V Plan: The Measurement and Verification (M&V) Plan is a document that defines
project-specific M&V methods and techniques that will be used to determine savings
resulting from a specific performance contracting project
Non-Routine Adjustments: The individually engineered calculations that account for
changes in static factors within the measurement boundary since the baseline period. When
non-routine adjustments are applied to the baseline energy they are sometimes called just
“baseline adjustments.”
Normalized Savings: The reduction in energy use or cost that occurred in the reporting
period, relative to what would have occurred if the facility had been equipped and operated
as it was in the baseline period but under a normal set of conditions. These normal
conditions may be a long-term average, or those of any other chosen period of time, other
than the reporting period.
Operational Verification: Verification that the ESMs are installed and operating properly
and have the potential to generate savings. Operational verification may involve
inspections, functional performance testing, and/or data trending with analysis.
Precision: The amount by which a measured value is expected to deviate from the true
value. Precision is expressed as a “±” tolerance. Any precision statement about a measured
value should include a confidence statement. For example a meter’s precision may be rated
by the meter manufacturer as ±10% with a 95% confidence level.
Proxy: A measured parameter substituted in place of direct measurement of an energy
parameter, where a relationship between the two has been proven on site. For example, if
a relationship has been proven between the output signal from a variable speed drive
controller and the power requirements of the controlled fan, this output signal is a proxy
for fan power.
Regression Analysis: A mathematical technique that extracts parameters from a set of data
to describe the correlation of measured independent variables and dependent variables
(usually energy data).
Reporting Period: The period of time following implementation of an ESM when savings
reports adhere to the M&V Plan.
Routine Adjustments: The calculations made by a formula shown in the M&V Plan to
account for changes in selected independent variables within the measurement boundary
since the baseline period.
Savings: The reduction in energy use or cost. Physical savings may be expressed as
avoided energy use or normalized savings. Monetary savings may be expressed
analogously as “cost avoidance” or “normalized cost savings”.
Significant Digits: Non-zero digits, and zeroes having non-zero digits to their left. Note
that whole numbers (numbers displaying no decimal point) have an unlimited number of
significant digits. Whole numbers ending in zero have an unclear number of significant
digits.
Simulation Model: An assembly of algorithms that calculates energy use for a facility
based on engineering equations and user-defined parameters.

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Static Factors: Those characteristics of a facility that affect energy use, within the chosen
measurement boundary, but which are not used as the basis for any routine adjustments.
These characteristics include fixed, environmental, operational and maintenance
characteristics. They may be constant or varying.
Verification: The process of examining a report prepared by others to comment on its
suitability for the intended purpose.

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EXECUTIVE SUMMARY

The Government of the Kingdom of Saudi Arabia (KSA) has recognized the high potential for energy
efficiency improvement and has embarked upon a number of major energy efficiency initiatives. The
KSA’s interest in pursuing energy efficiency is driven by the potential financial and economic benefits
at the fiscal and strategic levels. Hence, the Saudi Energy Efficiency Center (SEEC) was established to
promote energy efficiency across the key sectors and unify the effort of government and non-government
players in achieving the energy efficiency goals for KSA. SEEC has launched a Saudi Energy Efficiency
Program (SEEP) which focuses on improving energy efficiency EE across the buildings, industry, and
transport sectors, along with emphasis on formulating and implementing EE policies.
One of the important objectives of SEEP is the establishment of policies and programs to facilitate the
implementation of energy efficiency measures in buildings. To accomplish this objective, SEEP has
deployed several initiatives to promote the development of a thriving Energy Services Companies
(ESCO’s) sector and the scale up demand-side energy efficiency implementation in buildings in the KSA
using the energy savings performance contracting (ESPC) approach. A critical element for the successful
implementation of ESPC for building energy efficiency requires the adoption, promotion and widespread
utilization of a robust and practical measurement and verification (M&V) framework for assessing the
resulting energy savings. SEEP therefore is establishing the methodologies, protocols, and plans for
M&V and has prepared this M&V User Guide for the KSA.
In preparing this User Guide on M&V, SEEP drew from international experience to establish a
framework for conducting M&V in the KSA. International experience over the past 20 years has revealed
that the practice of M&V typically involves the need for educated individuals guided by a set of
principles, following common methods, and using consistent terminology.
Accordingly, all major M&V documents are guidelines, laying out general procedures to be adapted to
each specific situation under consideration. In addition to general procedures, all guidelines emphasize
the need for a site specific M&V plan based on common terminology. Perhaps the most widely adopted
international standard is the International Performance Measurement and Verification Protocol (IPMVP).
This User Guide draws frequently from the core concepts of M&V as defined in IPMVP.
While a common set of procedures and definitions, as set out in this User Guide, is a key element in the
development of a robust M&V capability, it must be accompanied by the development of human
resources to implement the M&V procedures. A community of individuals, at varying levels of
responsibilities and capabilities depending on their job descriptions, must be developed to implement
and review the M&V documents. Also, this community must be able to communicate frequently to share
experience and build trust in the critical exercise of verifying energy efficiency savings.
This User Guide provides an overview of the framework that SEEP has developed to assure that Best
Practice M&V methods become the norm in all areas of the ESPC program in the KSA, both within
government projects and in the general economy. Through best practice quality M&V, the KSA can
ensure the success of all performance-based EE programs.

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SECTION 1 - INTRODUCTION – MEASUREMENT AND VERIFICATION OF

ENERGY SAVINGS

1.1 ENERGY EFFICIENCY IN THE KINGDOM OF SAUDI ARABIA

While the Kingdom of Saudi Arabia (KSA) is blessed with abundant energy resources, it also has one of
the world's most inefficient energy economies, with a very high energy intensity. Recognizing the high
potential for energy efficiency improvement, the Government of the KSA is now embarking upon a
number of major energy efficiency initiatives.
The KSA’s interest in pursuing energy efficiency is driven by the potential financial and economic
benefits at the fiscal and strategic levels. The underlying rationale for investing public funds in promoting
energy efficiency (EE) is based on the principles of cost-effectiveness. Specifically, increased energy
efficiency can bring the following benefits to KSA:
 Free up millions of barrels of oil for export
 Enhance national energy security
 Improve reliability of electricity supply to consumers
 Help avoid adding capital intensive power generation stations
 Open up new employment opportunities
 Generate more carbon savings at lower investment cost than renewable energy
Hence, the Saudi Energy Efficiency Center (SEEC) was established to promote energy efficiency across
the key sectors and unify the effort of government and non-government players in achieving the energy
efficiency goals for KSA. SEEC has launched a Saudi Energy Efficiency Program (SEEP) which focuses
on improving EE across the buildings, industry, and transport sectors, along with emphasis on
formulating and implementing EE policies.
One of the important objectives of SEEP is the establishment of policies and programs to facilitate the
implementation of energy efficiency measures in buildings. To accomplish this objective, SEEP has
deployed several initiatives to promote the development of a thriving Energy Services Companies
(ESCO’s) sector and the scale up demand-side energy efficiency implementation in buildings in the KSA
using the energy savings performance contracting (ESPC) approach.
The successful implementation of a financial incentive-driven energy savings performance contracting
regime for implementing building energy efficiency measures (in both the public and private sectors)
requires the availability and use of a robust and practical framework for the measurement and verification
(M&V) of the savings resulting from the building EE projects. The KSA therefore needs to establish the
methodologies, protocols, and plans for measurement and verification of energy savings resulting from
EE projects in public and private buildings.

1.2 PURPOSE OF THIS USER GUIDE

International experience with implementation of EE projects in buildings (as well as in other sectors such
as SMEs and large industry) demonstrates that the long-term success of energy savings projects has been
hampered by the inability of project implementing partners (that is, building owners, ESCOs, and
financiers) to agree on how the energy savings can be measured and verified to prove that the projects
have been successful in meeting the expected results as laid out in the ESPCs. The development of
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internationally accepted methods and protocols for measurement and verification (M&V) of energy
savings has facilitated the art, science and practice of M&V to support EE projects implemented using
the ESPC approach.
This M&V User guide presents the guidelines and approaches, synthesized from the best available
knowledge from international experience and practice of M&V. It presents procedures that, when
implemented, allow building owners and managers, building operators, private ESCOs, and financial
institutions who are likely to provide project financing for EE projects, to quantify the performance of
an implemented Energy Efficiency Measure (EEM) by measuring and verifying the energy savings
achieved by the EEM. Using the internationally accepted M&V protocol and guidelines presented in this
User Guide allows various issues associated with achieving these savings to be identified vis-a-vis the
risks and responsibilities allocated to the various parties engaged in the EE project.
International experience indicates that while building energy engineers and facility managers have
monitored energy consumption in their facilities, there have been concerns about the accuracy and
validity of many of the reported results. This User Guide provides the formal M&V protocol and practices
to ensure that the reported energy and cost savings are valid and verifiable.

1.3 WHAT IS M&V?

Measurement and verification (M&V) methods are used to measure and verify, in a defined, disciplined,
rigorous and transparent way, the energy savings resulting from implementation of energy efficiency
measures (EEMs), which have been planned and designed to improve the energy performance of a
specific facility or group of specific facilities. This is done without regard to the energy performance of
any facility other than the one at which a change in energy infrastructure is implemented. This is in
contrast to other methods that monitor, target, benchmark, rate, or simply analyze and report energy
performance of buildings by reference to groups of other similar facilities. An M&V protocol and
associated plan provides certainty to all implementing stakeholders that reported results related to energy
savings are real and verifiable.

1.4 WHY M&V?

There are many compelling reasons for both public and private sector building owners and managers to
increase the accuracy and transparency of their measurement and reporting of the energy performance of
their facilities. Some of these reasons include:
 Reducing the pressures on operating budgets by cost reductions through improved in energy
efficiency
 Increasing demands from government and private building owners for performance
measurement and accountability against targets and promised savings outcomes
 Increasing awareness of the economic, environmental, health and social costs of inefficient
energy use
 Increasing compliance requirements from Governments to reduce GHG emissions.
 Justifying the use of public funds for supporting building EE implementation through
financial incentives
 Increasing the comfort level of financiers who provide financing for EE projects

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1.5 IMPORTANCE OF M&V IN ENERGY EFFICIENCY PROJECTS

M&V is critical to project implementers who need to assure project owners that the EE project is
achieving energy and cost savings. Therefore, M&V is important to:
 Building owners and managers, facility managers, plant and process engineers, financial
controllers and procurement officers
 Energy Service Companies (ESCO) and other energy service providers (ESPs), including:
 energy auditors and energy management
 consultants, who provide advice or deliver energy savings through an energy saving
performance contract (ESPC), or other similar performance-based contracting
arrangements
 Persons involved in developing, managing and/or reporting on energy savings policies and
programs for a portfolio of facilities.
This Guide provides information for all parties involved in or benefiting from measuring and verifying
the results of energy savings projects. It is useful for:
 ESCOs and other ESPs when planning and implementing M&V for their projects
 Facility owners and managers who need to satisfy themselves about the soundness of the
M&V for their project and evaluate the M&V results reported by ESCOs and ESPs
 Government agencies in planning and reporting energy savings and greenhouse gas
reductions
 Anyone who is involved in the quantification and verification of reductions in GHG emissions
resulting from the EE project
 Governments interested in providing reliable and credible information to energy users
regarding the benefits of energy saving projects.

1.6 OUTLINE OF THIS USER GUIDE

Section 2 of this User Guide presents an overview of the core concepts of M&V, summarizes some of
the M&V methodologies and protocols used internationally, and provides an overview of the
International Performance Measurement and Verification Protocol (IPMVP), the most commonly used
M&V protocol. The section provides a summary of the fundamental principles of M&V and describes
the major steps in conducting M&V. In addition the section provides a discussion of the M&V planning
process and describes the major steps in this process. It also includes a discussion of the definition of the
baseline upon which the energy savings calculations are based and provides an overview of the need for
and the approaches used in adjustments to the baseline. Finally, it provides a discussion of metering and
measurement issues.
Section 3 of the User Guide focuses on the M&V framework and the four major M&V options. It presents
the basic equations of M&V and key elements of the M&V framework. The section then provides a
detailed discussion of the four M&V Options:
 Option A: Retrofit Isolation – Key Parameter Measurement
 Option B: Retrofit Isolation – All Parameter Measurement
 Option C: Whole Facility Analysis
 Option D: Calibrated Simulation

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For each Option, Section 3 presents an overview and defines the key characteristics of M&V Plan, that
is, baseline definition, calculation procedures, data collection and metering considerations, baseline
adjustments, costs and best applications.
Section 4 discusses some of the key issues in M&V, including balancing M&V costs and benefits,
statistical approaches and uncertainty management, and cost avoidance.
The Annexes provide additional details on M&V protocols and guidelines, an illustrative M&V plan for
public buildings, M&V options for technology-specific EEMs and corrections in translating date and
time stamps between Hijri and Gregorian calendars.

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SECTION 2 - OVERVIEW OF CORE CONCEPTS, PROTOCOLS AND

GUIDELINES FOR M&V
2.1 BASIC M&V CONCEPT
2.1.1 Background
SEEP seeks to develop a general measurement and verification (M&V) capability within the Kingdom
of Saudi Arabia to support the development of the ESCO industry and ESPC market in general, and to
facilitate the operations of the sector, particularly in the buildings EE sector. With respect to M&V
methodologies, the simplest is the deemed or stipulated savings approach, under which the participants
agree to the unit energy savings and the operational utilization factors for the retrofit measures and use
simple formulas to calculate the energy savings. However, this approach may not be suitable for more
complex retrofits (such as whole building retrofits) where more formal M&V methodologies may be
necessary.
For more formal M&V, a number of approaches are available. The most common and widely accepted
set of approaches are detailed in the International Performance Measurement and Verification Protocol
(IPMVP), which provides an overview of current best practice techniques available for verifying results
of energy efficiency in buildings and industrial facilities. Although IPMVP emerged in the US, it is now
applied globally and many countries have adopted IPMVP or its core principles in developing their own
M&V Protocols and plans.
2.1.2 Overview of the International Performance Measurement and Verification Protocol
(IPMVP)
The International Performance Measurement and Verification Protocol (IPMVP) was developed in the
U.S. by a coalition of researchers and practitioners to provide a flexible framework of M&V options that
allows practitioners to craft the best M&V plans for their projects. IPMVP was originally developed in
1996 (as the North American Energy Measurement and Verification Protocol, renamed as IPMVP in
1997) and has undergone a number of modifications and improvements over the years. Its development
and management is now under an independent organization, Efficiency Valuation Organization2 (EVO)
which is dedicated to creating tools and training individuals to quantify the results of EE projects and
programs.
2.1.3 IPMVP as the Generally Accepted M&V Protocol
IPMVP has now become the most widely accepted M&V protocol worldwide and represents the starting
point for almost all global activity in M&V. It is currently being used in over 20 countries either as the
framework specified by Energy Valuation Organization (EVO) or with an adaptation of IPMVP
customized to the local needs.
Around the world, the ESCO industry has adopted IPMVP as the common framework for defining
Measurement and Verification operations. The strengths of IPMVP are:
 It was developed by a group of experts with substantial experience in EE programs.
 It was developed as a high level tool to provide maximum flexibility to its users while
maintaining strict requirements for transparency and efficacy of application.
 It provides four different options that address the wide range of EE retrofit measures and their

2
EVO is responsible for the management, support and training related to the use of IPMVP for conducting M&V.

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characteristics with respect to measurement of energy and cost savings.

 It has a management and support structure through EVO that provides technical assistance
and services to users.
 It can be easily adapted by users to a wide range of different types of projects
 EVO has developed a formal training program based on IPMVP for M&V practitioners and
has collaborated with the U.S. Association of Energy Engineers (AEE) to develop the CMVP
certification program for M&V professionals
 It provides international credibility for energy savings reports, thereby increasing the value to
a beneficiary or purchaser of the associated energy savings
 It benefits from active participation of a worldwide network of volunteers who provide
updates on the latest application of methods.
Each adopting organization of IPMVP typically brings unique requirements for how IPMVP may best
be applied in each context. Perhaps the best example of this is the FEMP M&V Guidelines. The FEMP
Guidelines were developed simultaneously with the IPMVP (and by mostly the same individuals) with
the goal of providing specific guidance on how to apply IPMVP within U.S. Federal contracts. One of
the important advantages of IPMVP is that it has a structure in place to modify and improve the protocol
and associated methodologies as new requirements emerge.

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2.2 KEY PRINCIPLES

The fundamental principles of M&V, as described by EVO, are summarized in Figure 2.1.
Figure 2.1 – Fundamental Principles of Good M&V

Source: Efficiency Valuation Organization, International Performance Measurement and Verification

Protocol: Concepts and Options for Determining Energy and Water Savings, Volume 1, EVO 10000 –
1:2012, January 2012.

2.3 MAJOR STEPS IN CONDUCTING M&V

The major steps in conducting M&V illustrated in Figure 2.2. These include:
1. Identify the energy efficiency measure(s)
2. Define the M&V approach
3. Design the M&V
4. Prepare M&V plan
5. Develop baseline data
6. Develop analysis and modeling approach
7. Implement EE measure(s)
8. Collect post-installation data
9. Conduct energy savings analysis
10. Prepare M&V report

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Figure 2.2 – Major Steps in Conducting M&V

1 • Identify the energy efficiency measure(s)

2 • Define the M&V approach

3 • Design the M&V

4 • Prepare M&V plan

5 • Develop baseline data

6 • Develop analysis and modeling approach

7 • Implement EE measure(s)

8 • Collect post-installation data

9
• Conduct energy savings analysis

10 • Prepare M&V report

Source: Prepared by authors

A summary of the key characteristics of each step is provided below.
Identify the energy efficiency measure(s)
The first step in the M&V process is the identification of the proposed energy efficiency measures
(EEMs), which are typically identified during a detailed energy audit or investment grade audit. In this
step the client, ESCO and the M&V agent need to all agree on the EEMs to be considered in the M&V
plan and prepare a description of the energy efficiency project, where it will be implemented, how and
why. The expected outcome including estimated energy and demand savings should be defined as these
will form the basis for M&V planning.
Define the M&V approach
In this step, the parties evaluate the energy efficiency project at a high level in order to determine the
M&V drivers, define how M&V should be pursued, and what general form it should take. Usually there
are compelling reasons that direct this decision and all that remains is to decide how to proceed. It may
be necessary to spend time preparing an initial M&V design and plan so that the client and ESCO can
consider the cost and timing issues in cooperation with the M&V agent.

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Design the M&V

In this important step the proposed EEM(s) and desired M&V outcomes are reviewed to determine the
feasibility and expected level of effort to perform the M&V. The four main M&V options are considered
and assessed with respect to the characteristics of each EEM to define the most cost-effective option to
use. Other important M&V design elements include measurement boundary, key parameters, interactive
effects, operating cycle and additionality3. The selected M&V design will determine the project’s
resource needs in terms of equipment, personnel, budget, tasks and timing and may need to be reviewed
by the concerned parties to agree to the M&V approach and costs.
Prepare M&V plan
The M&V plan is a very important guiding document and defines the process and outcomes from the
initial M&V planning stage, in a structured format, ensuring that all of the key details are captured. A
more detailed discussion of the M&V plan is provided in Section 2.6 below. In general, the M&V plan
will include:
 Description of the intended approach
 Measurement boundary and M&V Options
 Definitionof how measurements will be conducted (parameters to be measured, when and
how)
 Details of any assumptions or stipulations
 Identification of variables that affect energy use and how adjustments will be calculated
 Description of savings calculation methods and energy cost rates to be applied
 Other basic project details (resources, timing, budget, inputs, and desired outcomes).
Develop baseline data
The first step in the implementation of the M&V is to measure and collect the data 4 on the existing
building characteristics, energy using equipment, operational parameters, and energy use in order to
define the baseline prior to the implementation of the EEM(s). This step may require the installation and
calibration of metering and measurement equipment (as needed for the selected options). Additional
discussion on the baseline definition is provided in Section 2.7.
Develop analysis and modeling approach
Using the baseline and the building characteristics, operational parameters and equipment data, the M&V
agent develops the analysis and modeling approach to try to relate energy consumption to the relevant
independent variable(s). The inherent uncertainty of any energy models estimated is quantified.
Implement EE measure(s)
This step involves the installation and commissioning of the EEM(s) and assuring that “steady state”
operation is achieved.

3
Energy Saving Measures may involve changing the primary fuel that drives the equipment. In this case rules for what ESMs
are allowed must be documented in the ESP contract.
4
This data may originate in the EEM audit phase, or additional data collection may be conducted to support M&V needs.

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Collect post-installation data

Post-installation data is collected using the data measurement and collection process used for developing
the baseline, consistent with the nature of EEM(s) installed. As before, metering and measurement
equipment is installed and calibrated as appropriate and measurements are conducted for the post-
installation performance period (with the period as defined in the M&V plan). An important element of
this step is the identification of whether any of the major variables affecting energy consumption (Static
Factors) have changed from the baseline conditions, and if so, defining and quantifying the changes.
Conduct energy savings analysis
The baseline and post-retrofit data are analyzed in accordance with the M&V plan, and the energy and
demand savings are calculated. Components of uncertainty are combined and calculated to support the
overall savings claim. To the extent that some of the baseline conditions may have changed, the baseline
is “adjusted” by utilizing the analysis and modeling developed for the M&V to estimate the “adjusted
baseline” using the changes in the independent variables influencing energy consumption.
Alternatively, both the baseline and post-retrofit datasets are adjusted to the same set of conditions and
“normalized savings” are calculated. Adjustments may also be made to baseline or post retrofit data to
account for non-routine adjustments, due to temporary or permanent changes in conditions. In many
cases these are made through engineering calculations.
Where these adjustments are complex and/or will significantly impact the savings analysis, further
metering and measurement may be required.
Savings may be extrapolated outside the measured period as defined in the M&V plan (e.g. to cover a
full 12 months). This may be required where a short term or sample based approach has been used to
determine measured savings. This may involve the use of additional data, such as annual weather
patterns.
Prepare M&V report
This final step consists of the preparation of the energy savings report in accordance with the M&V plan.
It is important that the report describes the savings result, as well as any the baseline and post-installation
data, any adjustments made to the baseline, and the rationale thereof. To the extent appropriate the report
should also include comments on the precision and confidence level of the results.
Depending on the M&V plan, the reporting may be one-off or on an ongoing basis over a period of time.

2.4 M&V RESPONSIBILITIES – ESCO, CLIENT AND THIRD PARTY M&V AGENT
In ESCO contracts using the ESPC approach, M&V may be conducted by the client, by the ESCO, or by
a mutually selected M&V agent. The discussion herein assumes that the client and ESCO have selected
a mutually acceptable M&V agent. In such situations the M&V effort needs to be a collaborative effort
among the client, ESCO and the M&V agent. In situations where no M&V agent has been selected, the
roles of the agent are usually assumed by the ESCO unless the client directs the ESCO otherwise.
Table 2.1 below highlights the responsibilities of the three parties in the M&V Process.

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Table 2.1 – M&V Responsibilities

Source: Prepared by authors

2.5 IPMVP AND ISO

2.5.1 The International Standrads Organization (ISO)
As demonstrated by the large number of user guides listed in Annex A, there is no shortage of general
guidance on applying the IPMVP. The International Standards Organization (ISO) released one
particularly important source of guidance in 20115. ISO published the first of a series of standards (ISO
50001) that are intended to help organizations reduce energy use and cost.
ISO 50001, provides a framework for anyone wishing to adopt energy management best practices.
Follow-on standards, such as 50006 and 50015 are efforts to address the requirements for setting up
baselines and measuring progress towards successfully implementing 50001.
A brief description of the International Standards Organization 50001 follows.

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2.5.2 ISO 50001:2011 – Energy Management System6

ISO 50001 is based on the management system model of continual improvement also used for other well-
known standards such as ISO 9001 or ISO 14001. This makes it easier for organizations to integrate
energy management into their overall efforts to improve quality and environmental management.
ISO 50001:2011 provides a framework of requirements for organizations to:
 Develop a policy for more efficient use of energy
 Fix targets and objectives to meet the policy
 Use data to better understand and make decisions about energy use
 Measure the results
 Review how well the policy works, and continually improve energy management.
Two standards released in 2014 support implementation of ISO 50001.
 ISO 50006:2014, Energy management systems -- Measuring energy performance using
energy baselines (EnB) and energy performance indicators (EnPI) -- General principles and
guidance provides practical guidance on how to meet the requirements of ISO 50001, and
therefore manage their energy performance.
 ISO 50015:2014, Energy management systems -- Measurement and verification of energy
performance of organizations -- General principles and guidance provides a set of principles
and guidelines for Measurement and Verification, thereby increasing the credibility of energy
performance.
The fundamental concepts included in the ISO series of standards are materially aligned with IPMVP.
However, because 50001 focuses on overall performance of energy system – energy inputs AND
organization outputs – it adopts different terminology for similar concepts. For example, the IPMVP
defines energy savings projects as “energy conservation measures” or EEMs. In the ISO documents, the
energy project is called an “Energy Performance Improvement Action”, or EPIA 7.

2.6 M&V PLANNING

2.6.1 Importance of the M&V Plan
Because ESCO contracts are performance-based, appropriate protocols need to be developed and agreed
on regarding how energy savings will be measured and verified so payments can be made to the ESCO.
The M&V plan is a document that defines project-specific M&V procedures and methods for determining
the energy savings. The M&V Plan is central to proper savings determination and is the basis of
verification. The plan is essential to assure the transparency of processes and the quality and credibility
of achieved outcomes.
A good M&V plan ensures that all the needed data and computational processes will be available for the
savings determination within an acceptable budget. An important objective of the M&V plan is to arrive
at a balance between cost and accuracy.
The M&V may be conducted by the client, the ESCO, or a qualified independent third party agent
selected by the client and the ESCO. Since inadequate M&V systems could lead to disputes that would

6
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7
EVO has (2016) developed a class on how to apply IPMVP within the ISO 50001/50015 standards)

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undermine the benefits of ESPCs, the third party option is often used. The M&V cost is generally borne
directly by the client, although when the ESCO conducts the M&V, the cost may be included in the
ESCO’s project costs.
2.6.2 Typical Contents of a M&V plan
The objectives, design and constraints of the project and the proposed EEMs have a major influence on
the structure and contents of the M&V Plan, as do the facility’s major energy equipment and usage
patterns. The amount of variation in energy use patterns and the estimated impact of the EEMs help to
establish the amount of effort needed to determine savings. Generally, variable loads or operating hours
require more rigorous measurement and computation processes. Such issues will affect the amount of
effort required in collecting the data and in performing the computations.
While the specific elements of the M&V plan will depend on the nature of the project and individual
EEMs, the M&V plan should generally include the following:
 Description of energy efficiency measures and their intended results
 Definition of the M&V objectives and constraints consistent with the energy savings project
objectives and constraints
 Identification of the measurement boundary and the M&V options to be utilized
 Operational verification procedures that will be used to verify successful implementation of
each EEM.
 Documentation of the baseline conditions (facility characteristics, equipment data,
operational considerations, and energy consumption data)
 Definition of the responsibilities for the monitoring of the energy use data and baseline
conditions
 Specification of measurement equipment, measurement points, measurement period (pre- and
post-installation) and measurement analysis.
 Identification of any planned changes in the building characteristics or operations
 Definition of analytical procedures and models to be used
 Identification of the post-installation period conditions
 Specification of M&V options & analysis procedures, algorithms, and assumptions
 Specification of software, budget, and resource needs
 Specification of the energy prices to be used for calculating cost savings
 Specification of the accuracy and uncertainty in the savings estimates and quality assurance
procedures to minimize the risk
 Methods for making relevant baseline adjustments.
 Definition of the reporting format for the M&V results.
In addition, for M&V Options A and D the following considerations need to be included:
 For Option A, documentation details of any stipulated parameters showing the overall
significance of these parameters to the total expected saving and describing the uncertainty
inherent in the stipulation.
 For Option D, documentation of the details (name and version number) of the simulation
software, providing details of input files, output files, weather reference files, measurements,
assumptions and calibration, accuracy, etc.
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2.6.3 Baseline Adjustments.

An important element in the M&V process is the definition of the baseline, which specifies the pre-
implementation conditions against which the savings (or other specified performance parameters) are
measured. During the term of the ESPC, non-routine changes in the defined baseline may occur that
could affect the level of energy savings or performance. Such changes may include:
 Changes in facility use or operating conditions
 Changes in occupancy
 Changes in equipment operating schedules
 Changes in indoor environmental conditions (such as thermostat settings)
 Changes in outdoor environmental conditions (solar shading, etc)
 Additions of new energy-using equipment
 Facility refurbishment or rehabilitation
It is important to include in the M&V plan specific provisions regarding what changes would require
changing the baseline, how such changes will be identified and tracked, and how the baseline should be
modified in case such changes occur. Additional details on baseline adjustments for each of the four
M&V options are provided in Section 3.8
2.6.4 Key Steps in M&V Planning
Figure 2.3 illustrates the key steps in M&V planning.
These steps, as defined in the FEMP M&V Guidelines are described below:
Step 1: Develop a list of project and EEM-level objectives and constraints that relate to
measurement and verification of savings.
A project-specific list should be developed based on key topics that will affect the M&V plan for the
project and/or EEMs. Some typical objectives and constraints for M&V are listed below.
Typical Objectives
 Track energy savings through utility metering
 Verify energy performance continuously
 Verify energy performance annually
 Track post-retrofit consumption
 Track performance of individual measures
 Adjust baseline for changes
 Maximize infrastructure by using least-cost M&V option

8
When using M&V plans using Option A, changes in facility operations that are outside of the control of the ESCO are
typically ignored in lieu of stipulated values based on informed assumptions.

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Figure 2.3 – Key Steps in M&V Planning

Source: Federal Energy Management Program, FEMP M&V Guidelines Version 3.0 - FEMP Planning Tool,
Washington, DC, 2008.
Typical Constraints
 Historical utility data not available
 Lack of dedicated utility meters
 High degree of Interaction between EEMs
 EEMs scope affects a very small portion of overall utility baseline
It is appropriate to identify objectives and constraints that may apply, but for which enough information
is not yet available, as these items may be significant to the M&V approach selected. These uncertain
items should be clarified as early in the project as possible if they drive the approach selected. A priority
(high, medium, or low) can be assigned to each objective and constraint identified to help with the
evaluation. High-priority objectives and constraints have the strongest influence on M&V selection and
should be considered most important in the evaluation.
Step 2: Select an M&V option for evaluation (Options A, B, C, or D).
Project and EEM-level objectives and constraints must be evaluated to identify the most appropriate M&V
option. The nature of the objective or constraint will either lend itself to or rule out specific M&V options,
including a retrofit isolation approach (Options A and B), a whole-building utility data analysis (Option C),
or a calibrated simulation (Option D).

One should determine if a single M&V Option can be used and is desirable for the entire project or if a more
custom M&V approach is required for the proposed set of EEMs. If one of the important project-level
objectives or constraints is not met, another M&V option should be selected for evaluation. If none of the
M&V Options can satisfy project level objectives and constraints, an appropriate M&V Option should be

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selected for the first EEM and the evaluation process should be completed following Steps 3 through 5. This
process should be followed until an M&V approach is defined for EEM.
Step 3: Evaluate the savings risk associated with the selected M&V option(s).
To perform this exercise, a custom list of risk elements should be developed based on project and EEM
specifics. Typical risk elements for ESPC projects include:
 Operating hours
 Environmental/process loads
 User participation
 Weather
 Equipment performance
 Major changes to the facilities
 Savings risk associated with the performance of O&M, repair, and replacement
Step 4: Estimate costs for the M&V option.
If one M&V option has been selected for all EEMs, the cost of using this M&V option in relation to
savings risks should be estimated. If a custom approach is being followed for individual EEMs, Steps 3
and 4 should be repeated for each EEM until an M&V option has been associated with each EEM. Then,
the cost of using the selected M&V options should be estimated.
If the M&V requirements and the savings risk fail to justify the M&V expenses one should return to Step
2.
Step 5: Document the M&V plan.
If all the M&V requirements are met and the savings risk justify the M&V expenses, proceed with the
development of the M&V plan for the project.

2.7 DEFINING THE BASELINE

2.7.1 Major Considerations
The documentation of baseline conditions is perhaps the most important element of M&V planning. The
baseline documentation needs to include the following items.
 Identification of the baseline period
 All energy consumption and demand data collected for the pre-installation period
 All data on the independent variables that influence energy consumption (such as building
occupancy, operating conditions, weather data, etc.), collected for the period corresponding
to the energy consumption data
 All static factors for a period coinciding with the energy consumption data, such as:
 Occupancy type, density and periods
 Operating conditions for each baseline operating period and season, other than the
independent variables (for example, lighting levels, space temperature, humidity and
ventilation levels).
 An assessment of thermal comfort and/or indoor air quality (IAQ) may also prove
useful in cases where the new system performs differently than the old inefficient

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system.
 Description of any baseline conditions that fall short of required conditions. For example, if
the space is under-heated or under-cooled during the baseline, but the EEM will restore the
appropriate temperature.
 Details of all adjustments that are necessary to the baseline energy data to reflect the expected
improvement from baseline conditions.
 Size, type, and insulation of any relevant building envelope elements such as walls, roofs,
doors, windows.
 Equipment inventory, including nameplate data, location, and condition. Photographs or
videotapes are effective ways to record equipment condition.
 Equipment operating practices (such as schedules and set-points, actual temperatures and
pressures, etc.)
 Significant equipment problems or outages, if any, during the baseline period.
The baseline documentation typically requires well-documented audits, surveys, inspections and/or
short-term metering activities. The extent of this information is determined by the measurement boundary
chosen or the scope of the savings determination.
When whole-facility M&V methods are employed all facility equipment and conditions should be
documented in the baseline.
2.7.2 Baseline Adjustments Needed when usiong the Hijri Calendar
Some portion of the energy use in a building is related to seasonal variations, typically to outdoor
temperature. Energy savings calculations often require adjustments to account for these seasonal
variations. The Gregorian calendar is based on solar cycles and typically is aligned with solar-driven
seasonal variations. Many energy-related software tools use the Gregorian calendar. In the KSA energy
use data is often reported using the Hijri calendar, which is lunar-based. The Hijri year is about 11 days
shorter than the Gregorian calendar. Since the Hijri calendar is not related to the solar cycle, the
relationship of the Hijri months to the climate changes each year.
Historical weather data (including temperature) is generally reported using the Gregorian calendar.
Baseline adjustments often involve weather-related independent variables. Energy savings calculations
that require adjustments can be calculated independently of any particular calendar. When using
adjustments, the critical requirement is that the post-retrofit energy use be compared to what the energy
use in the facility would have been under similar conditions (see discussion of adjustments in Section
3.2.4). The fact that weather driven factors often dominate, and weather typically varies with the solar
cycle, does not adversely impact the savings calculation.
Additional discussion and an example are provided in Annex D.

2.8 ISSUES RELATED TO METERING EQUIPMENT AND SYSTEMS

2.8.1 Metering Needs
To determine energy savings, some measurement may need to be conducted to identify the pre-
installation and post-installation conditions. These measurements typically include energy consumption
and energy-related variables. Metering issues that should be considered in preparing a project-specific
M&V Plan are discussed below.
A project-specific M&V Plan should demonstrate that any metering and analysis will be conducted in a

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consistent and logical manner and with a level of accuracy acceptable to all parties. Metering and
monitoring reports must specify exactly what was measured, how and when the measurements were
made, what meter or meters were used, and who conducted these measurements. Any metering protocols
that will be followed must be specified.
Issues covered below include types of meters, meter accuracy and calibration, metering protocols,
duration of metering, and the use of samples.
2.8.2 Metering Equipment
Many types of equipment are available to collect and analyze system-wide HVAC data, control data, and
lighting performance data. Data may include power (kW), energy (kWh), and operating parameters such as
temperature, humidity, pressure, flow rates, status, and lighting levels. Data can be collected through one-
time measurements or can be recorded in user-defined intervals. Prices, applications, and complexity of
these tools vary.

For data collection, storage, and reporting, there are two general categories of metering equipment for
M&V activities: data loggers and energy management systems.
Data loggers range from simple battery-powered portable devices to more complex tools that can collect
inputs from up to 30 transducers. The most simple portable data loggers collect information about a single
variable (such as light fixture on/off status or amp draw from a motor). Others can capture multiple inputs
(such as voltage, power factor, and amperage) and perform some calculations. Portable data loggers tend
to be inexpensive per unit, but are more limited in applications. The downloading of data is usually done
manually off site through a connection to a personal computer, although modem connections are
sometimes used. Battery-powered portable loggers can offer non-intrusive monitoring within an
occupied area, are relatively simple to use, and are inexpensive. More complex data loggers can collect
information from a range of different inputs, conduct some analyses, prepare reports, and, typically
through modems, download information for remote data collection. Permanently installed data loggers
tend to be relatively expensive (when transducer and installation costs are included) and, if hard-wired,
not very portable, which is an issue when only short-term measurements are required.
Energy management systems are used for controlling systems. These would logically be an excellent
option since such systems are often already in place and have data collection, trending, and computing
capability; however, caution should be exercised, as many systems are not designed for data storage and
reporting, and many operators are not familiar with M&V requirements.
2.8.3 Sensor and Meter Accuracy and Calibration
Before any data are collected, all sensors and meters should be reviewed to ensure that they are
appropriate for the application. The accuracy of the device used to collect data can significantly affect
the validity of the data collected and increase the level of error that is introduced in any calculations.
Often, measurement error will be the primary source of uncertainty in a savings value. Using high-quality
sensors for gathering key data can help increase the accuracy of savings estimates.
Equipment accuracies provided by the manufacturer are meaningful only if the equipment is in
calibration. Sensors and meters used to collect M&V data should be calibrated to known standards (such
as those of the National Institute of Standards and Technology). Forms indicating that calibration has
been conducted are a required part of the M&V reports.
For the calibration to be valid the equipment used to calibrate the sensors and meters must be of a greater
accuracy than the sensors or meters themselves. Calibration methods for a variety of applications are
included in ASHRAE Guideline 14-2002 and 14-2014.

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Calibration certificate is required and it must be issued from: 1) The National Measurement and Calibration
Center (NMCC); or 2) Accredited laboratory by the Saudi Accreditation Committee (SAC); or 3) full
member of the International Laboratory Accreditation Cooperation (ILAC)"

2.8.4 Metering Duration

The duration of metering and monitoring must be sufficient to ensure an accurate representation of the amount
of energy used by the affected equipment both before and after project installation. The appropriate
measurements should be taken within a specified and representative time period. These measurements can
then be used to determine time-of-use and annual energy consumption. The time period of measurement must
be representative of the long-term (i.e., annual) performance of the EEM or system. For example, lighting
retrofits in a 24-hour warehouse that is operated every day of the year may require only a few days of
metering. However, a chiller retrofit may require metering throughout the cooling season or perhaps for 1
month each season of the year.

The required length of the metering period depends on the type of EEM or system. Some common
scenarios are discussed below.
 For equipment that operates according to a well-defined schedule under a constant load, such
as a constant-speed exhaust fan motor, the period required to determine annual savings could
be quite short. In such a case, short-term energy savings can be extrapolated easily to the
entire year.
 If the project’s energy use varies across both day and season, as with air-conditioning
equipment, a much longer monitoring period may be required to characterize the system. In
a case like that, long-term data are used to determine annual energy savings. When the
metering is complete, the limits of the model used to characterize the system must be defined.
For example, if data were taken on the chiller system only when the outside air temperature
ranged from 50°F to 70°F, then the resulting chiller model would be valid only within the
model limits of 50°F to 70°F.
 For some types of projects, metering time periods may be uncertain. For example, there is
still controversy over how long lighting operating hours must be measured in office buildings
to determine a representative indication of annual operating hours. In these situations, an
agreement is required between the project parties to determine the appropriate measurement
period and accuracy level for the EEM(s) or systems under consideration. For lighting
projects, 3 weeks of monitoring during non-holiday periods is typically effective.
 For some projects, forcing a system to go through all of its operating modes in a short period
of time can reduce the metering time period. For example, a variable-speed drive ventilation
system that is controlled by outside air temperature may require months of data collection to
capture a full range of performance data. However, if the control system were overridden to
force it to operate in various modes, the data collection might take only a day. This approach
should be used with caution, as additional monitoring may be required to determine the
system’s relationship to independent variables.

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2.8.5 Faulty Baseline Metering Data

Some M&V strategies rely on the existence of high quality utility billing meters to document baseline
consumption. However, in some cases, the existing building metering may not be accurate/calibrated, or
the meter readings may not be sufficiently consistent to allow the M&V practitioner to create a suitable
baseline. Furthermore, while modern metering technology is available at reasonable cost for this type of
application, there are situations where the project timeline will not allow for sufficient time to create a
statistically representative baseline. In these cases, the M&V plan may consider the technique of back
casting. The Superior Energy Performance M&V Protocol 9 provides a description of this technique.

9
Energy Intensity Baselining and Tracking Guidance, January 2015

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SECTION 3 - M&V FRAMEWORK AND OPTIONS

3.1 BASIC EQUATIONS OF M&V
One of the major advantages of IPMVP is the range of options provided in the overall IPMVP framework.
The basic philosophy adopted by IPMVP is that energy savings cannot be directly measured, since
savings represent the absence of energy use or demand. Therefore, savings are determined by comparing
measured use or demand before and after implementation of a program, making suitable adjustments for
changes in conditions.
The basic equations for energy and cost savings are:
Equation 1:
Energy Savings = Baseline Energy Use - Post-Installation Energy Use
+/- Adjustments
Equation 2:
Cost Savings = Rate Baseline * (Baseline Energy use) – Rate Baseline * (Post–Installation
energy use) +/- Adjustments

The application of these equations may be simple (as shown in Figure 3.1a below) or complex (as shown
in Figure 3.1b)
Figure 3.1 – Measuring Energy Savings

Simple Not so simple

140
1,000,000
120

100
750,000
kWh

80

60
500,000
40

20
250,000
0 Baseline Period Performance
1Before After
2 Savings
3 Period
Month
(a) (b)

Source: Efficiency Valuation Organization, International Performance Measurement and

Verification Protocol: Concepts and Options for Determining Energy and Water Savings,
Volume 1, EVO 10000 – 1:2012, January 2012.

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3.2 THE FOUR BASIC OPTIONS FOR CONDUCTING M&V

IPMVP has developed four Options to address the range of retrofit situations that may commonly be
observed in ESPC projects. These are referred to as:
 Option A: Retrofit Isolation – Key Parameter Measurement
 Option B: Retrofit Isolation – All Parameter Measurement
 Option C: Whole Facility Analysis
 Option D: Calibrated Simulation
Figure 3.2 provides an illustration of these options and Table 3.1 summarizes their application. The
subsequent subsections provide details on these four options.
Figure 3.2 – Illustration of IPMVP Options

Options A & B are

retrofit isolation
methods.
Options C & D are
whole-facility
methods.
The difference is
where the
boundary lines are
drawn.

Source: Prepared by authors based on IPMVP documents

Table 3.1 – IPMVP Options and Savings Calculations

Source: Prepared by authors

As can be inferred from figure 3.2 and table 3.1, the IPMVP options provide the capabilities to measure

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and verify energy savings in a wide range of retrofit circumstances. A summary of the key characteristics
of these options is provided below:
Option A
This is the simplest option and involves the lowest cost. Using this option, energy quantities in Equation
(1) above can be derived using a combination of measurements of some parameters and estimates of the
others. Such estimates are generally used where it can be shown that the combined uncertainty from all
such estimates will not significantly affect the overall reported savings. Generally performance
parameters are measured (before and after), and usage parameters may be estimated
This Option is used where the “potential to perform” needs to be verified but accurate savings estimation
is not necessary. The key features of this approach are simplicity and low cost, but it requires agreement
between the host facility and the ESCO on the parameters to be measured and estimated.
Option B
Under Option B, some or all parameters are measured periodically or continuously. This option is
applicable when accurate savings estimation is necessary and long-term performance needs to be tracked.
This option reduces the uncertainty in the savings estimates, particularly when the load patterns and
savings from the retrofit are variable. It may require metering and therefore entails more effort and
therefore more cost.
The key features of this Option are that more accurate savings estimates are obtained (than Option A)
and the option facilitates improved O&M and ongoing commissioning.
Option C
Option C considers energy use and cost of the entire facility, not of specific equipment. It requires the
use of utility meters, whole-facility meters, or sub-meters to assess the energy performance of a total
facility. The measurement boundary encompasses either the whole facility or a major section and
includes load that are not subject to EE measures. This Option determines the collective savings of all
EE retrofit measures applied to the part of the facility monitored by the energy meter. Also, since whole-
facility meters are used, savings reported under Option C include the positive or negative effects of any
non-project changes made in the facility. It may therefore require baseline adjustments to reveal what
changes resulted from the EE measures.
The key feature of this option is that it saving are reported for an entire facility and include any
interactions among multiple measures that may be implemented.
Option D
Option D involves the use of computer simulation software to calculate the energy use for one or both of
the pre-installation and post-installation situations. The simulation model must be "calibrated" so that it
appropriately represents the actual energy use pattern of the facility. Option D may be used to assess the
performance of all EE measures in a facility, similar to Option C. However, the Option D simulation tool
allows the estimation of the savings attributable to each EE retrofit measure, as calculated by the
simulation program.
Option D is very flexible, but requires significant effort. It is applicable in situations such as new
construction, implementation of energy management & control systems, major building use changes, and
building envelope modifications & additions. It requires the use of specialized software and tools that
require substantial skills and experience.

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Application to the KSA ESCO market

The IPMVP options outlined above can address the anticipated EE retrofits in buildings implemented by
ESCOs in the KSA. International experience has demonstrated that the IPMVP options can be easily
adapted to the types of retrofits expected in the KSA public and private buildings market.
For example, the four options would be applicable to the following situations:
 Option A – Simple lighting retrofits
 Option B – Complex or large lighting retrofits, chillers
 Option C - Whole building retrofits (involving lighting, HVAC and other EE measures)
 Option D – Complex retrofits and new construction.

3.3 KEY ELEMENTS OF THE BASIC M&V FRAMEWORK

3.3.1 Operational Verification
Operational verification serves as a low-cost initial step for achieving the energy savings potential and
should precede the main M&V activities. Operational verification is not the responsibility of the M&V
agent but should be included as part of a performance contract.
Operational verification methods are outlined in Table 3.1. Selection of a given approach depends
on the characteristics of the EEM(s) as noted in the table.
For independent review of reported savings, the M&V agent shall satisfy itself that the EEM is
based on sound scientific principles and that independent evidence exists to support any ex -ante
claims made for its efficacy.
3.3.2 Measurement Boundary
M&V of savings may be determined for an entire facility or simply for a portion of it, depending upon
the EEM(s) and the main purpose of the calculation and reporting.
 If the purpose of reporting is to help manage only the equipment affected by the savings
program, the measurement boundary should be drawn around that equipment. Then all
significant energy requirements of the equipment within the boundary can be determined. This
approach is used in the Retrofit Isolation Options A and B.
 If the purpose of reporting is to help manage total facility energy performance, the
measurement of energy for the entire facility can be used to assess performance and savings.
The measurement boundary in this case encompasses the whole facility, as in Option C.
 If baseline or reporting period data are unreliable or unavailable, energy data calculated from
a calibrated simulation program can take the place of the missing data, for either part or all of
the facility. The measurement boundary can be drawn accordingly. This approach is used
under Option D.
Some of the energy requirements of the systems or equipment being assessed may arise outside a practical
measurement boundary. Nevertheless, all energy effects of the EEM(s) should be considered. Those
energy effects that are significant should be determined from measurements; the rest may be estimated
or ignored.
Any energy effects occurring beyond the measurement boundary are called interactive effects. The M&V
agent may need to find a way to estimate the magnitude of these interactive effects in order to determine
the savings. Alternatively they may be ignored as long as the M&V Plan includes discussion of each

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effect and its likely magnitude.

Table 3.2 – Operational Verification

Source: Efficiency Valuation Organization, International Performance Measurement and Verification

Protocol: Concepts and Options for Determining Energy and Water Savings, Volume 1, EVO 10000 –
1:2012, January 2012.

3.3.3 Selection of Baseline and Reporting Periods

Care should be taken in selecting the period of time to be used as the baseline period and the reporting
period. Strategies for each are discussed below.
Baseline Period
The baseline period should be established to:
 Represent all operating modes of the facility. This period should span a full operating cycle
from maximum energy use to minimum.
 Fairly represent all operating conditions of a normal operating cycle. For example, though a
year may be chosen as the baseline period, if data is missing during the selected year for one
month, comparable data for the same month in a different year should be used to ensure the
baseline record does not under represent operating conditions of the missing month(s).
 Include only time periods for which information on all fixed and variable energy-governing
factors is available. Extension of baseline periods backwards in time to include multiple
cycles of operation requires information on all such factors throughout the longer baseline
period in order to properly derive baseline adjustments.

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 Coincide with the period immediately before commitment to undertake the retrofit. Any
period further back in time may not reflect the conditions existing before installation and may
therefore not provide a proper baseline for measuring the effect of just the EEM(s).
Reporting Period
The client and ESCO should determine the length of the reporting period based on the nature of the
ESCO performance guarantees. The reporting period usually encompasses at least one normal operating
cycle of the equipment or facility. Some projects may cease reporting savings after a defined "test" period
ranging from an instantaneous reading to a period as long as year or two.
The length of any reporting period should be determined with due consideration of the life of the EEM(s)
and the likelihood of degradation of originally achieved savings over time. Regardless of the length of
the reporting period, metering may be left in place to provide feedback of operating data for routine
energy and facility management purposes and to detect subsequent adverse changes in performance.
If reducing the frequency of savings measurement after initial proof of performance, other on site
monitoring activities could be intensified to ensure savings remain in place.
3.3.4 Baseline Adjustments
The “Adjustments” term shown in Equations (1) and (2) above should be computed from the changes in
any of the factors influencing the energy consumption characteristics of equipment within the
measurement boundary.

Importance of Adjustments
There are benefits to all parties in minimizing risks to reported savings from unexpected material changes
to the assumed baseline conditions. If the changes are ignored:
 The reported savings could include savings that are not attributable to EEM(s) and
consequently give benefits to the ESCO at the expense of the client.
 Conversely, the reported savings could exclude savings that are attributable to the EEM(s)
and consequently disadvantage the ESCO to the benefit of the client.
The above are both dependent on the contractual arrangements as specified in the ESPC for handling
shortfalls in expected (or guaranteed) savings and/or sharing excess savings. Whether the savings are
guaranteed, promised or just expected, it is in the best interest of all parties to ensure that best efforts are
devoted to minimize any errors in the reported savings.
Two types of adjustments should be considered:
Routine Adjustments
For any factors that may be expected to change routinely during the reporting period a variety of
techniques can be used to define the adjustment methodology. Routine Adjustments are made for
predictable changes in conditions between the base period and the reporting periods. The factors most
often used for routine adjustments are seasonal or cyclical, such as weather, occupancy, or operating
hours. Techniques for such adjustments may be as simple as a constant value (no adjustment) or as
complex as a several multiple parameter non-linear equations (developed using statistical methods such
as regression analysis) correlating energy consumption with one or more independent variables.
Routine adjustments are generally made for factors:

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 that can be expected to continue influencing energy use throughout the reporting period, and
 For which a specific relationship can be identified and predetermined, before the EEM
installation, on how these specific factors influence energy use over time.
The details of routine adjustment calculation methods, including specification of the exact data analysis
procedures, algorithms and assumptions, should be pre-defined in the M&V Plan and agreed by the
interested parties.
Non-Routine Adjustments
Non-routine adjustments may be required for factors that are not usually expected to change (but might),
such as: the facility size, design and operation of installed equipment, operating hours of the building, or
the type of occupancy. These factors, referred to as static factors, need to be monitored in the case that
changes do occur during the reporting period.
Non-routine Adjustments are made for unpredictable changes in factors that influence energy
consumption. The only real criterion of whether a non-routine adjustment should be made is that all
concerned parties agree on the amount, timing and period of the adjustment. There are no specific
guidelines or limitations on the calculation methods and processes used for non-routine adjustments.
A discussion of non-routine adjustments in provided for some of the M&V options in the detailed
discussion below.

3.4 OPTION A – RETROFIT ISOLATION: PARTIAL MEASUREMENT

3.4.1 Overview
Options A and B are referred to as Retrofit isolation options. These are applicable when only the
performance of the systems affected by the EEM(s) is of concern, either due to the responsibilities
assigned to the ESCO in an ESPC, or due to the savings from the EEM(s) being too small to be detected
in the time available using Option C. These options can be use where:
 Interactive effects of the EEM(s) on the energy use of other equipment can be reasonably
estimated, or assumed to be insignificant.
 Possible changes to the facility, beyond the measurement boundary, would be difficult to
identify or assess.
 The independent variables, which affect energy use, are not excessively difficult or expensive
to monitor.
 Sub-meters already exist or can be easily installed to isolate energy use of systems.
Under Option A - Retrofit Isolation: Partial Measurement, the energy quantities in Equation (1) can be
derived from a computation using a combination of measurements of some parameters and estimates of
the others. Such estimates should only be used where it can be demonstrated and agreed that the combined
uncertainty from all such estimates will not significantly affect the overall reported savings. The M&V
plan should define which parameters to measure and which to estimate by considering each parameter’s
contribution to the overall uncertainty of the reported savings.
The estimated values and analysis of their significance should be included in the M&V Plan.

3.4.2 Key Characteristics

Option A uses stipulated values in savings estimates and is appropriate if some or all of the following
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apply:
 The EEM(s) have a high probability of delivering the expected savings, contribute a small
percentage to the overall project savings and to the overall project uncertainty.
 The client is willing to accept the savings risk and/or has experience with similar EEM(s)
 The ESCO has no control over the factor (e.g. operating hours)
 The cost of measurement is not justified by the value of the reduced uncertainty or cannot be
justified for other uses
The savings calculations for Option A are engineering-based and use the stipulated factor and the changes
in the non-stipulated performance or operation factor.
3.4.3 Baseline Definition
The estimated values may be based on historical data such as recorded operating hours from the baseline,
equipment manufacturer’s published ratings, laboratory tests, or typical weather data. If a parameter,
such as hours of use is known to be constant in both the baseline and reporting periods, and is not expected
to be impacted by the EEM(s), then its measurement in the reporting period may be sufficient.
Wherever a parameter, known to vary independently, is not measured in the facility during both the
baseline and reporting periods, the parameter should be treated as an estimate. The selection of which
factor(s) to measure may also be considered relative to the objectives of the project or the duties of a
contractor undertaking some EEM-performance risk. Where a factor is significant to assessing
performance, it should be measured. Other factors beyond the ESCO’s control may be estimated.
3.4.4 Calculations
Engineering calculations or mathematical modeling may be used to assess the significance of the errors
in estimating any parameter in the reported savings. For example if operating hours of some equipment
are to be estimated, but may range from 2,100 to 2,300 hours per year, the calculated savings at 2,100
and 2,300 hours should be computed and the difference evaluated for its significance to the expected
savings. The combined effect of all such possible estimations should be assessed before determining
whether sufficient measurement is in place.10
An example application of Option A is an EEM involving the installation of high efficiency lighting
fixtures, without changing the lighting periods. Savings can be determined using Option A by metering
the lighting-circuit power draw before and after installation while estimating the operating period.
3.4.5 Data Collection and Metering
If a parameter, such as hours of use is known to be constant and not expected to be impacted by the
EEM(s), then its measurement in the reporting period is sufficient. The reporting period measurement of
such constant parameter can also be considered a measurement of its baseline value.
Wherever a parameter, known to vary independently, is not measured in the facility during both the
baseline and reporting periods, the parameter should be treated as an estimate (agreed upon by all parties).
The selection of which factor(s) to measure may also be considered relative to the objectives of the
project or the duties of the ESCO undertaking some EEM-performance risk. Where a factor is significant

10
Software for performing estimates of the contribution to uncertainty is available as proprietary (Oracle Crystal Ball) or open
source (R http://www.r-project.org) products.

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to assessing performance, it should be measured. Other factors beyond the ESCO’s control can be
estimated.
3.4.6 Baseline Adjustments
Under Option A, there is generally no need for adjustments, routine or non-routine, depending upon the
specification of the measurement boundary, the nature of any estimated values, the length of the reporting
period, and the amount of time between baseline measurements and reporting-period measurements.
3.4.7 Costs
Due to the simplicity of Option A, this method is likely to be less costly than the other Options, since the
cost of estimating a parameter is often significantly less than the cost of measurement. However, in some
situations where estimation is the only possible route, a good estimate may be costlier than if simple
direct measurement were possible. Cost planning for Option A should consider all elements: analysis,
estimation, meter installation, and the ongoing cost to read and record data.

3.4.8 Best Applications

Option A is mainly intended for retrofits where either “performance” or “operations” factors can be spot
or short-term measured before and after the retrofit and the other factor can be stipulated (not measured).
Option A is best applied where:
 Estimation of non-key parameters may avoid possibly difficult non-routine adjustments when
future changes happen within the measurement boundary.
 The uncertainty created by the estimates is acceptable.
 The continued effectiveness of the EEM(s) can be assessed by simple routine re-testing of
key parameters.
 Estimation of some parameters is less costly than measurement of them under Option B or
simulation under Option D.
 The key parameter(s) used in computing savings can be readily identified. Key parameters
are parameters used to judge the performance of the project or the ESCO.

3.5 OPTION B - RETROFIT ISOLATION: ALL PARAMETER MEASUREMENT

3.5.1 Overview
Option B is a fully measured retrofit isolation method. It is similar to the Option A except that no
stipulations are allowed and all parameters are measured periodically or continuously. Option B is used
for specific EEMs involving retrofits to specific components, sub-systems or systems and involves
isolation of the energy use of the equipment affected by the EEM(s). The savings created by most types
of EEM(s) can be determined with Option B.
3.5.2 Key Characteristics
Option B is typically used when any or all of the following conditions apply:
 For simple equipment replacement projects with savings that are less than 20% of the total

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facility energy use as recorded by a relevant utility meter or a sub-meter.

 When energy savings per individual EEM are required
 When interactive effects can be ignored or stipulated using estimating methods that do not
involve long-term measurements
 When the independent explanatory variables that affect energy use are not complex,
excessively difficult or expensive to monitor
 When sub-meters already exist that record energy use of sub-systems or systems that are to
be retrofitted.
3.5.3 Baseline Definition
The baseline definition is similar to Option A, except that all of the parameters influencing energy
consumption are measured in both the baseline and reporting periods.
3.5.4 Calculations
Option B calculations are similar to Option A. As in Option A, there may be no need for adjustments,
routine or non-routine, depending upon the location of the measurement boundary, the length of the
reporting period, or the amount of time between the baseline and reporting period measurements.
3.5.5 Data Collection and Metering
Option B involves data collection and measurement of a number of parameters. This option is likely to
require the addition of special meters, on either a short term or permanent basis. These meters may be
installed during an energy audit to help characterize the energy use before design of the EEM(s), or
meters may be installed to measure the baseline defined in the M&V Plan.
Meters should be calibrated as recommended by the equipment manufacturer, and following procedures
of recognized measurement authorities. Primary standards and no less than third order standard traceable
calibration equipment should be utilized wherever possible. Sensors and metering equipment should be
selected based in part on the ease of calibration and the ability to hold calibration. An attractive solution
is the selection of equipment that is self-calibrating.
3.5.6 Baseline adjustments
Under Option B, as in Option A, there is generally no need for adjustments, routine or non-routine,
depending upon the specification of the measurement boundary, the nature of any estimated values, the
length of the reporting period, and the amount of time between baseline measurements and reporting-
period measurements.
3.5.7 Costs
The degree of difficulty and costs for Option B increase relative to Option A because the metering
complexity increases. Option B methods will therefore generally be more difficult and costly than those
of Option A. However, Option B will produce more accurate results where load and/or savings patterns
are likely to be variable. These additional costs may be justifiable when the ESCO is responsible for and
guarantees energy savings and there is significant variation in operations.
3.5.8 Best Applications
In addition to the items listed above in 3.3.1, Option B is best applied where:
 Meters added for isolation purposes will be used for other purposes such as operational
feedback or tenant billing.
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 Measurement of parameters is less costly than Option D simulations or Option C non-routine

adjustments.
 Savings or operations within the measurement boundary are variable.

3.6 OPTION C – WHOLE FACILITY MEASUREMENT

3.6.1 Overview
Option C involves use of measurement data from utility meters or whole building sub-meters and/or
regression modeling to determine energy savings for the total site, facility or building, depending on the
location of the metering point. This Option involves collecting historical whole-facility energy use and
the continuous measurement of whole-facility post-installation energy use. Energy savings are estimated
by performing simple utility bill comparisons or by statistically representative models of whole-facility
energy consumption.
In general, Option C is used for projects involving complex equipment replacement and controls in which
expected energy savings are relatively large. Option C is also relevant where there is a high degree of
interaction between the installed EEM(s) or between EEM(s) and the rest of the facility, or when the
isolation and metering of individual EEM(s) is difficult and expensive.
3.6.2 Key Characteristics
Option C is intended for projects where expected savings are large compared to the random or
unexplained energy variations which occur at the whole-facility level. If savings are large compared to
the unexplained variations in the baseline-energy data, then identifying savings will be possible. Also
the longer the period of savings analysis after EEM installation, the impact of short-term unexplained
variations is less significant. A typical rule is that Option C is utilized when savings are expected to
exceed 10% of the baseline energy.
Option C determines the collective savings of all EEMs applied to a facility which has energy use
measured by a meter. It assesses the combined impact of all EEMs (which may be of different types),
but not individual impacts of each EEM. Also, since whole-facility meters are used, savings reported
under Option C include the impact of any other non-EEM factors influencing the measured energy use.
3.6.3 Baseline Definition
Option C requires substantial efforts for developing an appropriate baseline. Utility metering data can be
used for documenting energy consumption (see additional discussion of metering data in 3.5.5 below.
A very important consideration under Option C is the identification and measurement of regularly
changing parameters affecting a facility’s energy use, called independent variables. Common
independent variables are weather, operating characteristics, and occupancy. Weather has many
dimensions, but for whole-facility analysis, weather is often just outdoor dry-bulb temperature.
Operational characteristics are generally represented by operating hours and equipment schedules.
Occupancy is defined in many ways depending on the type of facility, such as hotel room occupancy,
office-building occupancy hours, occupied days (weekdays/weekends), or restaurant-meal sales.
Mathematical modeling can assess independent variables if they are cyclical. Regression analysis and
other forms of mathematical modeling can determine the number of independent variables to consider in
the baseline data. Parameters, which may have a significant effect on the baseline energy use, should be
included in the routine adjustments when determining savings. Independent variables should be measured
and recorded at the same time as the energy data. For example, weather data should be recorded daily so
they can be totaled to correspond with the exact monthly utility energy-metering period, which may be

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different from the calendar month.

3.6.4 Calculations
Option C uses mathematical models to calculate savings. The model can be a simple bill-matching model
(with no adjustment factors) replicating the measured data for all the baseline billing periods as the best
estimate of the baseline energy use for all corresponding post-installation billing periods. A “bill
matching” model is valid when no non-EEM factors, such as weather or occupancy, influence energy
use measured during the base period.
The most common Option C model is derived from regression analysis by correlating energy use with
one or more independent explanatory variables, such as weather severity, occupancy or building
operating mode. In certain facilities where there is a significant difference between the facility’s energy
use during a period (for example during the school year and holidays), separate regression models may
need to be developed for the different usage periods.
Figure 3.3 illustrates the Option C savings calculations using regression analysis. The basic calculation
steps are as follows:
 Develop an appropriate Baseline Model for the base period that represents the normal
operation. This is done by performing a multivariate regression analysis of the base period
energy use and selected statistically significant explanatory variables.
 Use the Baseline Model and the post-installation explanatory variables to calculate the
Adjusted Baseline Energy in the reporting period.11
 Calculate the energy savings by taking the difference between the Adjusted Baseline Energy
and the measured reporting energy use.

11
The period to time after the installation of EEM’s is sometimes called, Performance Period, Post-Retrofit Period or
Reporting Period. For the purposes of this User Guide, these terms are equivalent.

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Figure 3.3 – Option C Savings Calculations

Source: The Australasian Energy Performance Contracting Association, A Best Practice Guide to
Measurement and Verification of Energy Savings, prepared for Innovation Access Program of
AusIndustry, 2004.

3.6.5 Data Collection and Metering

Whole-facility energy measurements can use the utility meters. Utility-meter data is considered 100%
accurate for determining savings because the meter readings define the energy bill. Where utility supply
is only measured at a central point in a facility or group of facilities, sub-meters are needed at each facility
or group of facilities for which individual performance is to be assessed. Several meters may be used to
measure the flow of one energy type into a facility. If a meter supplies energy to a system or equipment
that interacts with other energy systems or equipment, directly or indirectly, this meter’s data should be
included in the whole-facility savings determination.
Savings need to be determined separately for each meter or sub-meter serving a facility so that
performance changes can be assessed for separately metered parts of the facility. However, where a meter
measures only a small fraction of the energy use, it may be totaled with the larger meter(s) to reduce
data-management tasks. When electrical meters are combined this way, it should be recognized that small
consumption meters often do not have demand data associated with them so that the totalized
consumption data will no longer provide meaningful load factor information.
If several different meters are read on separate days, then each meter having a unique billing period
should be separately analyzed. The resultant savings can be combined after analysis of each individual
meter, as long as the meter reading dates are appropriately reported.
If any of the energy data are missing from the reporting period, a mathematical model can be created to

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fill in missing data. However the reported savings for the missing period should identify such "missing
data."
3.6.6 Baseline Adjustments
A primary challenge in Option C is the identification of facility changes (changes to Static Factors) that
would require non-routine adjustments, particularly when savings need to be monitored for long periods.
Therefore, it is necessary to perform periodic inspections of all equipment and operations in the facility
during the reporting period. These inspections identify changes in the static factors from baseline
conditions. Such inspections may be part of regular monitoring to ensure that the intended operating
methods are still being followed.
3.6.7 Costs
The cost of Option C depends on the source of the energy data and the difficulty of tracking the static
factors within the measurement boundary to enable non-routine adjustments during the reporting period.
The utility meter or an existing sub-meter works well if the meter data is properly recorded. This choice
requires no extra metering cost.
The cost of tracking changes in static factors depends on the facility size, the likelihood of changes in
these factors, the difficulty of detecting changes, and the surveillance procedures already in place.
Option C also involves the cost for the mathematical modeling. Therefore, in general, Option C is likely
to be more expensive than the retrofit isolation approaches in Options A and B.
3.6.8 Best Applications
Option C is best applied when:
 There are many types of EEMs in one facility.
 The energy performance of the whole facility will be assessed, not just the EEMs.
 The EEMs involve activities whose individual energy use is difficult to separately measure
(or example, operator training, wall or window upgrades)
 The savings are large (>10%) compared to the variance in the baseline data, during the
reporting period
 Retrofit-Isolation techniques (Option A or B) are excessively complex.
 Interactive effects or interactions between EEMs are substantial.
 Major future changes to the facility are not expected during the reporting period.
 A system of tracking static factors can be established to enable possible future non-routine
adjustments.
 Reasonable correlations can be found between energy use and other independent variables.

3.7 OPTION D – CALIBRATED SIMULATION

3.7.1 Overview
Option D uses computer simulation software to predict facility energy use for the base period and/or
reporting period. Proper implementation of Option D requires the simulation model to be calibrated so
that it predicts energy use patterns that reasonably match actual metered utility consumption data from
either the base period or a post-installation period. Similar to Option C, Option D may be used to assess
the performance of all EEMs in a facility. Also, like Options A and B, Option D may also be used to

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assess just the performance of an individual equipment, subsystem or system within a facility. In this
case, the calibration data and any ongoing measurement must be obtained from meters that isolate the
energy use of the individual system from the rest of the facility.
Option D is most useful when the base period data do not exist or are unavailable. This situation may
occur for a new facility with EEMs that have to be assessed separately from the rest of the facility. It may
also occur where there are no facility sub-meters to provide base period data but these meters may be
available after installation of the EEMs. Option D can also be used when the post-retrofit measurement
data are unavailable or where the impact of non-EEM factors cannot be quantified with sufficient
accuracy and confidence to estimate Baseline Adjustments.
Option D should be used instead of Option C when the expected savings are not large enough to be
separated from variations in the facility’s utility meter data. Option D may also be used when the savings
for individual EEMs have to be determined but the Option A or B isolation approach is too difficult or
costly.
3.7.2 Key Characteristics
The major challenges with Option D are accurate computer modeling and calibration to measured energy
data. To control the costs of this method while maintaining reasonable accuracy, the following points
should be considered when using Option D:
 Simulation analysis should be conducted by trained personnel who are experienced with both
the software and the calibration techniques.
 Input data should represent the best available information including as much as possible of
available actual performance data from key components in the facility
 The simulation inputs need to be adjusted so its results match both the demand and
consumption data from monthly utility bills, within acceptable tolerances (i.e. "calibrated").
 Close agreement between predicted and actual annual total energy is usually insufficient
 Demonstration that the simulation adequately predicts the energy behavior of the facility
Option D requires careful documentation. Simulation printouts, survey data, and the metering or
monitoring data used to define input values and calibrate the simulation model should be kept in paper
and electronic files. The version number should be declared of publicly available software, so that another
person can review the computations.
3.7.3 Baseline Definition
When Option D is used on an existing building/facility, the baseline definition is for the whole facility
and uses information sources similar to Option C. However, the baseline in Option D also requires
detailed facility characteristics to allow computer modeling and simulation.
When Option D is used on a new construction project, the baseline is an output of the calibrated
simulation model.
3.7.4 Calculations
Whole-building-simulation programs usually use hourly calculation techniques. However, simplified
HVAC system models may also be used if the building’s heat losses, heat gains, internal loads, and
HVAC systems are simple. Other types of special-purpose programs may be used to simulate energy use
and operation of specific equipment such as chillers or district cooling systems.
Any software used must be well documented and well understood by the user. Due to the wide variety

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of available methods, it is prudent to receive acceptance by the client of the proposed modeling program
before commencing analysis.
The savings calculations under Option D are based on one or more complex estimates of energy use. The
accuracy of the savings depends on how well the simulation models actual equipment performance, and
how well calibrated it is to metered energy performance.
Calibration is achieved by verifying that the simulation model reasonably predicts the energy patterns of
the facility by comparing model results to a set of calibration data. These calibration data include
measured energy data, independent variables and static factor.
Calibration of building simulations is usually done with 12 monthly utility bills. These bills should be
from a period of stable operation. Detailed operating data from the facility help to develop the calibration
data. These data might include operating characteristics, occupancy, weather, loads and equipment
efficiency. Some variables may be measured for short intervals (day, week or month) or extracted from
existing operating logs. The accuracy of meters should be verified for critical measurements. If resources
permit, building ventilation and infiltration should be measured because these quantities often vary
widely from expectations. One-time measurements will improve simulation accuracy without much
additional cost. On/off tests can measure lighting, receptacle loads and motor control centers. These tests
can be performed over a weekend using a data logger or building automation system to record whole-
facility energy use, usually at one-minute intervals,
3.7.5 Data Collection and Metering
The data collection involves both energy data and data on the independent variables. The approach for
data collection and metering is similar to Option C, but may also involve collecting detailed construction
and schedule data
3.7.6 Baseline Adjustments
If the simulation model is properly calibrated, it will represent the effects of the changes in the
independent variables and make the needed adjustments.
3.7.7 Costs
Option D requires considerable effort to collect the required data, enter it into the simulation model and
calibrate the model. It also requires substantial professional skills in modeling and simulation. Therefore
it represents the most expensive option,
3.7.8 Best Applications
Option D is best applied where:
 Either baseline energy data or reporting-period energy data, but not both, are unavailable or
unreliable.
 There are too many EEMs to assess using Options A or B.
 The EEMs involve diffuse activities, which cannot easily be isolated from the rest of the
facility
 The performance of each EEM needs to be estimated individually within a multiple-EEM
project, but the costs of Options A or B are excessive.
 Interactions between EEMs or interactive effects are complex, making the isolation
techniques of Options A and B impractical.
 Major future changes to the facility are expected during the reporting period, and there is no
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way to track the changes and/or account for their impact on energy use.
 The facility and the EEMs can be modeled by well-documented simulation software.
 The selected simulation software can predict metered calibration data with acceptable
accuracy.

3.8 SELECTING THE OPTION

The selection of the M&V Option is a decision that is made collectively by the client, the ESCO and the
M&V agent. The choice depends on the characteristics of the energy saving project, the specific EEM(s)
proposed, data availability, budget and professional judgment.
Figure 3.4 outlines the common logic used in the selection of the M&V option.

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Figure 3.4 – Illustrative Process for Selecting M&V Option

Source: Efficiency Valuation Organization, International Performance Measurement and Verification

Protocol: Concepts and Options for Determining Energy and Water Savings, Volume 1, EVO 10000 –
1:2012, January 2012.

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Table 3.3 provides information on some of the factors that need to be considered in selecting the M&V
option.
Table 3.3 – Factors Influencing Selection of M&V Option

Source: The Australasian Energy Performance Contracting Association, A Best Practice Guide to Measurement
and Verification of Energy Savings, prepared for Innovation Access Program of AusIndustry, 2004.

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SECTION 4 - KEY ISSUES IN M&V

M&V is both a science and an art. There are many possible ways to perform M&V on any single project.
And there are always trade-offs to be made when designing the M&V plan for a specific project. This
section covers several of the key issues users will face in performing M&V.

4.1 BALANCING M&V COSTS AND BENEFITS

The goal of every M&V project is an accurate and cost-effective assessment of the results of the energy
efficiency measure. However, the accuracy of M&V is never perfect, and in fact is often a function of
how much is spent to perform the M&V. For example, higher precision meters may produce a final
result with lower uncertainty, but they will cost more. Similarly, when the M&V project relies on
sampling, a larger sample size will usually result in higher confidence. The participants responsible for
creating and approving the M&V plan must consider how much accuracy they require, at what cost.
There is no single answer the question of how much to spend on M&V for any project. Factors to be
considered are:
 Risk tolerance
 What is the value to all parties to know the correct savings value?
 Risk sharing and responsibility
 Who is responsible for assuring the Energy Saving Measure is performing properly?
Who is responsible for the ongoing operation of the facility?
 Requirement for accuracy
 Will savings be reported to another agency with specific requirements for accuracy,
such as under an emissions credit scheme?
 Existence of data on similar projects
 Are savings from the technology/project well documented and predictable, based on
a record of past projects?
 The use of Guaranteed Savings
 Over-predicting the actual performance of the project and guaranteeing a fraction of
the expected savings may assure savings.

4.2 STATISTICAL APPROACHES AND UNCERTAINTY MANAGEMENT

As mentioned above, the results of M&V projects are never perfectly certain. The fundamental equation
of M&V, as practiced in IPMVP, requires comparing actual measured energy use to a hypothetical value
of what would have happened without the project. This hypothetical value, or counterfactual, is typically
the result of a model whose output is the expected energy consumption of the facility without the energy
efficiency project. The model is often a source of uncertainty. Metered energy data is another source of
uncertainty. Finally, any sampled data adds uncertainty. Statistics is the language used to bring these
three types of uncertainty together to report overall uncertainty for a savings assessment.
Having acknowledged that uncertainty is present in every savings calculation, it is a fundamental
requirement of IPMVP-compliant M&V to perform an assessment of the uncertainty. The uncertainty
assessment must be performed for each project based on the specific modeling, instrumentation and

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sampling proposed for the M&V12

4.3 COST AVOIDANCE

Energy efficiency projects often must conform to economic criteria. They must meet specific cost/benefit
or return on investment thresholds. With energy savings performance contracts, there is often additional
scrutiny placed on the economic returns of the project. Measurements of economic returns require both
cost and savings information. Of these two, the cost information is typically much easier to collect.
However, as mentioned above, the physical energy savings related to the project may be uncertain. The
financial impact of savings is typically even more uncertain.
Accurate calculations of cost avoidance require at a minimum:
 Detailed rate structure.
 Demand Charges
 Energy charges
 Other related energy billing charges (power factor correction)
Finally, the time at which the savings occur, captured in a Savings Load Profile, is required to accurately
calculate the cost avoidance.
Further guidance for assigning financial value to energy savings estimates will be provided in a separate
document.

4.4 METERING ISSUES AND OPTIONS

As noted frequently in this User Guide, metering of energy to support M&V comes in two main forms,
utility billing meters and special purpose metering installed on either the whole facility or specific loads
of interest. Utility billing data is frequently preferred due to the low cost and relative accuracy of utility
meters. However, in many areas, and in some parts of the KSA, utility readings of building meters may
not be consistent and/or historical utility data may not be available. In these cases, it is often possible to
substitute dedicated metering equipment to monitor the entire facility.
A wide range of metering is available for measuring either the whole faculty or sub-systems (sub-
metering). Sub-meters can be used to measure the energy supplied to parts of a building or facility or
specific equipment. They are normally provided by the energy service provider as part of the project and
can be read manually or remotely by data collection systems. The required standard of accuracy for sub-
meters is usually less than that for utility meters but is typically adequate for M&V purposes. See
ASHRAE Guideline 14-2002, 14-2014 or FEMP M&V Guidelines Version 3 for more information on
metering options.

12
See IPMVP 2012 for a thorough discussion of the role of uncertainty in M&V planning.

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REFERENCES

ASHRAE Guideline 14-2002 – Measurement of Energy and Demand Savings. Atlanta, Ga.: American
Society of Heating, Refrigerating and Air-Conditioning Engineers.

ASHRAE Guideline 14-2014 – Measurement of Energy and Demand Savings. Atlanta, Ga.: American
Society of Heating, Refrigerating and Air-Conditioning Engineers.

Australasian Energy Performance Contracting Association, A Best Practice Guide to Measurement and
Verification of Energy Savings, prepared for Innovation Access Program of AusIndustry, 2004.

IPMVP. 2012. International Performance Measurement and Verification Protocol Volume I: Concepts
and Options for Determining Energy and Water Savings. EVO 10000 – 1:2012. Washington, D.C.:
Efficiency Valuation Organization.

M&V Guidelines: Measurement and Verification for Federal Energy Projects Version 3.0: U.S.
Department of Energy

Regression for M&V: Reference Guide May 2012, Bonneville Power Administration

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ANNEXES
ANNEX A ILLUSTRATIVE M&V PLAN FOR PUBLIC BUILDING

BACKGROUND AND FACILITY DESCRIPTION

Public Building A is located in Riyadh. The programs offered in this institution are grouped in the
following categories:
 Motorized equipment;
 Leather, textile and clothing;
 Restaurant and catering.
Table 1: Description of the Public Building A

Year constructed 1968

Floor area 28000 m2

Energy sources and uses  Electricity

 Lighting
 Ventilation
 Air conditioning
 Chillers
 Computer hardware
 Other

Energy consumption at 43,200 GJ

reporting period

Energy intensity at reporting 1.54 kWh/m2

period

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ENERGY CONSERVATION MEASURES

Table 2 presents the energy conservation measures that will be implemented as part of this project and
the expected savings calculated by the ESCO.
Table 2: List of Energy Conservation Measures

ECM Description Annual

Savings

1 Evaporative Cooling for Chillers 500,000

SAR

2 Chiller Controls 100,000

SAR

3 Variable Speed Drives Variable frequency drives will be added to 200,000

reduce air flow into this room. Flow will be SAR
controlled based on cafeteria occupancy and
vent hood use. To optimize the system,
motion detectors, CO2 sensors and zone
dampers will be installed.

5 Optimization of ventilation 50,000 SAR

system controls

7 Space Temperature Control Temperature set points will be lowered at 25,000 SAR
night by 2 °C—a very conservative value. If
this reduction does not cause building users
any discomfort or inconvenience, the
building manager will further lower
temperature set points.

Table 3 summarizes the savings expected from this project as estimated by the ESCO.
Table 3: Estimate of Total Project Savings

Annual Annual Savings Savings Savings

Consumption Consumption
Before After

Electricity 12,000,000 6,000,000 kWh 6,000,000 kWh 1,000,000 SAR 50%

kWh

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MEASUREMENT OPTION AND BOUNDARY

IPMVP Option Used to Determine Savings

Option C
According to the IPMVP Core Concepts 2014 or Volume 1 2012

Justification of the Selected Option, Gain/Reporting Period Ratio

The retrofit package contains several measures that will have interactive effects. The overall package
is expected to save a large enough fraction of the total energy that the savings will be more than twice
the uncertainty in savings. The electric meter can be used as the M&V meter.

Measurement Boundary

Option C: Whole Facility

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BASELINE: PERIOD, ENERGY AND CONDITIONS

1. Identification of the Baseline Period

The baseline period starts on 1/1/1434, and ends on 30/12/1434, corresponding to a one-year period.
Baseline Electricity Consumption and Demand
Baseline electricity consumption and demand data come from actual readings shown on Saudi Electric
Company invoices.
Table 4 presents the baseline electricity consumption.
Table 4: Facility’s Baseline Electricity Consumption

Hijri Western Dependent Variable

# of
Begin End Begin End days Energy kWh

01/01/1434 01/02/1434 11/15/12 12/15/12 30 1013720

01/02/1434 01/03/1434 12/15/12 1/13/13 29 1100000

01/03/1434 01/04/1434 1/13/13 2/12/13 30 1400000

01/04/1434 01/05/1434 2/12/13 3/13/13 29 1600000

01/05/1434 01/06/1434 3/13/13 4/12/13 30 1700000

01/06/1434 01/07/1434 04/12/13 5/11/13 29 1800000

01/07/1434 01/08/1434 5/11/13 6/10/13 30 1900000

01/08/1434 01/09/1434 6/10/13 7/9/13 29 1990000

01/09/1434 01/10/1434 7/9/13 8/8/13 30 2040000

01/10/1434 01/11/1434 8/8/13 9/6/13 29 2100000

01/11/1434 01/12/1434 9/6/13 10/6/13 30 1800000

01/12/1434 30/12/1434 10/6/13 11/4/13 29 1750000

2. Independent Variables
Independent variables include factors that can affect the facility’s energy consumption or demand and
that will be systematically included to determine the periodic adjustment of the baseline during the
reporting period.
For electricity consumption, the relevant independent variables are the cooling degree-days (CDD) and
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the Solar Insolation, as shown in Table 5.

Cooling degree-days are calculated on a reference of 18°C, using data from wunderground.com. The
Solar Insolation data come from weather station SAU_King-Khaled-IAP_404370.

Table 5: Independent Variables for Electricity Consumption

Riyadh Office Building

Meter Reading Dates Independent Variables

Hijri Month Begin End CDD Solar Insolation

Dhū al-
01/01/1434 01/02/1434 100 59
Qa‘dah
Dhū al-
01/02/1434 01/03/1434 150 81
Ḥijjah
01/03/1434 01/04/1434 350 209
Muḥarram
01/04/1434 01/05/1434 450 265
Ṣafar
Rabī‘ al-
01/05/1434 01/06/1434 500 295
awwal
Rabī‘ ath-
01/06/1434 01/07/1434 550 328
thānī
Jumādá al-
01/07/1434 01/08/1434 600 361
ūlá
Jumādá al-
01/08/1434 01/09/1434 650 392
ākhirah
01/09/1434 01/10/1434 670 400
Rajab
01/10/1434 01/11/1434 700 421
Sha‘bān
01/11/1434 01/12/1434 600 359
Ramaḍān
01/12/1434 30/12/1434 550 329
Shawwāl

3. Baseline Static Factors

Static factors include equipment and operating characteristics that are recorded as part of the Detailed
Feasibility Study (DFS).There is no change anticipated in the M&V plan for these factors. However, if a
change occurs in the data and parameters, the baseline must be adjusted (permanently or temporarily).
Table 6 identifies a series of static factors to be monitored for this project.

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Table 6: Static factors

Static factors Source of Data

Building or area utilization Interview with building operators

Building occupancy rate Detailed feasibility study of the energy efficiency project

Building floor area Floor drawings

Number and capacity of heating, Appendices 1 and 2 of the present M&V plan
ventilation, and air conditioning systems
(HVAC)

Building standards and legislation ASHRAE or equivalent appropriate standard.

governing ambient conditions

Building utilization schedule Appendix 2 of the present M&V plan and detailed
feasibility study of the energy efficiency project

Hours of operation of HVAC systems Appendix 2 of the present M&V plan

Lighting hours of operations Detailed feasibility study of the energy efficiency project

Outdoor air supply rate Detailed feasibility study of the energy efficiency project

Temperature setpoints Detailed feasibility study of the energy efficiency project

Hot and chilled water temperature Detailed feasibility study of the energy efficiency project

The project’s static factors include information gathered on the building before project implementation.
These should not affect the implemented measures. Appendices I and II present the inventories and
schedules of the building’s main energy consuming.

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REPORTING PERIOD
The reporting period starts after ECM implementation. The reporting period is indeterminate, and
reconciliation will be performed at a minimum of annually for the term of the contract. A one-year
reporting period corresponds to a period of 12 consecutive Hijri months. The reporting period starts on
the date of substantial completion of implemented ECMs.

DESCRIPTION OF THE BASELINE ADJUSTMENT METHODOLOGY

The following section presents the methods for baseline adjustment according to changes in independent
variables and static factors.
Basis for Adjustment

Retained Option Equation

Avoided energy use 13 Savings = (Baseline Energy – Reporting Period Energy) ± Routine
(or energy savings) Adjustments ± Non- Routine Adjustments

In the avoided energy use equation, the calculation of “baseline energy” and “routine adjustments” will
be performed simultaneously through the baseline mathematical model. The same applies to the avoided
demand calculation.

Routine Adjustments
For each energy source, mathematical models allow baseline adjustments according to relevant
independent variables. This section presents appropriate mathematical models for electricity and natural
gas.
Electricity
Baseline electricity consumption data are adjusted according to the following equation:
y = c1 x1 + c2 x2 + C
where
y = Adjusted electricity consumption (kWh);
x1 = Heating degree-days (°C);
x2 = Number of class days;
C = Baseline consumption (kWh).
The regression analysis is considered satisfactory according to generally accepted standards for this type
of analysis. Table 7 presents statistical indicators for this regression.

13
IPMVP Core Concepts 2014 section 5.3.3

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Table 7: Regression Analysis Statistics for Electricity

Multiple Coefficient of Determination Value Recommendations

Coefficient of determination (R2) > 0.75

Coefficient of variation of the RMSE < 0.2

t-statistic (for variable x1) < -2 or > 2

t-statistic (for variable x2) < -2 or > 2

t-statistic (for baseline consumption) < -2 or > 2

Non-routine Adjustments
Baseline adjustment in case of equipment addition/removal/shutdown or change in operation
In the event that the facility adds/removes/shuts down equipment or changes its operations, data will be
collected from drawings and specifications, equipment specifications, manufacturer and contractor
information and/or short-term measurement campaigns. The procedure will be based on the impact of
such changes on static factors. The new devices’ operating hours may be estimated, at the client's
convenience, based on the type of use.
Adjustments will be defined either as temporary (applicable to a portion of the reporting period) or
permanent (remains in effect for the rest of the reporting period).

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Energy Price Adjustments

Cost savings are determined by applying the appropriate price schedule in the following equation:
Cost savings = Cb – Cr
where
Cb = Cost of baseline energy plus any routine or non-routine adjustments;
Cr = Cost of reporting period energy plus any routine or non-routine adjustments.
Cost savings should be determined by applying the same price schedule when computing both Cb and
Cr.
Electricity: Electricity consumption costs used for savings calculation (baseline or reporting period) are
based on Saudi Electric Company Rate effective during the reporting period.
In case of a significant energy rate increase, no ceiling price has been established.

METER SPECIFICATIONS
For Option C, the main meters measuring total building energy consumption and demand are as follows:
 Saudi Electric meter (Saudi Elec- Meter-1)
These meters are deemed to comply with IPMVP requirements, without any additional validation.

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MONITORING RESPONSIBILITIES
Table 8: Monitoring Responsibilities – Energy Data

Person in Charge Data Frequency

Government Building A Monthly

Table 9: Monitoring Responsibilities – Independent Variables

Person in Charge Data Frequency

ESCO: Cooling Degree Days – collected from Monthly

xxx

Solar insolation data – downloaded Monthly

from xxx

Table 10: Monitoring Responsibilities – Static Factors

Person in Charge Data Frequency

Government Building A – Changes in occupancy schedules Monthly

building supervisor
Changes in systems schedules

Equipment addition/removal/shutdown Addition: 5 days after

in the building Removal: 5 days
before
Shutdown: Once a
month

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EXPECTED ACCURACY
A) Hypothesis:
1) Confidence level: 90 %. It has been agreed that 10% of all measurements may fall out of the
uncertainty bandwidth: the confidence interval, as expressed below.
2) Metering uncertainties:
The meters are official utility meters. Therefore, in accordance with IPMVP, we consider them as 100%
accurate and do not combine any metering uncertainty component in our uncertainty propagation
equation.
3) Weather and occupation data
Weather data is collected from a wunderground.com. We have agreed that no uncertainty will be
considered.
4) Solar Insolation
This data has been collected from http://weather.whiteboxtechnologies.com

B) Method
The IPMVP Statistics and Uncertainty method has been applied, considering a post retrofit period of
twelve months.

C) Results
Table 11: Expected Accuracy & Confidence Level

Energy Expected accuracy Confidence interval Confidence Level

on guaranteed on Guaranteed
savings savings (Sa)

Electricity +/- 6% 36% <=Sa=> 32% 90%

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REPORT RESPONSIBILITIES
Table 12: Report Responsibility

Person in Charge ESCO

Frequency Annually

Date of Transmission Fifteen days following the receipt of utility billing data

BUDGET
Table 13: Budget

Instrumentation Readings/Analysis/Report

Baseline Period $0 (Providers’ meters are $2,500

already in place)
Reporting Period $2,000/year

Savings will be calculated on the basis of Option C and will use energy providers’ meters already in
place (utility). However, around $25,000 will be allotted for submetering implementation, to monitor
twelve 600 V electrical panels. Submetering will serve several purposes:
 To ensure savings are attained for all ECMs described in table 2;
 To perform accurate adjustments, such as for new equipment additions not provided
for in this current project;
 To detect poor performance early.
A $2,000/year budget has to be set aside for savings monitoring.

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FORMAT OF THE M&V REPORT

M&V report for the Government Building A
Date

Facility consumption and demand data (utility bills)

a) Electricity consumption and demand data
b) Natural gas consumption data
c) Summary chart of facility consumptions and demands
Baseline period adjustment data
a) Independent variables
b) Static factors
Readjusted baseline period calculation
Energy savings calculations (kWh, m3 and $)
Evaluation of cumulative savings from the start of the project, on a yearly basis

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QUALITY ASSURANCE
The following procedure will be used to ensure the quality of the energy savings calculations and all
other related activities in preparing the reports.
> Only professionals with Certified Measurement and Verification Professional (CMVP)
certification may calculate the savings and adjustments. Moreover, all savings calculations will be
based on fundamental engineering principles and performed to the best of the knowledge of the
professionals involved. Each calculation will be verified by another person who knows the project
and has the required skills.
> All savings calculations will be based on the energy data (electricity, natural gas, oil, etc.) from the
copies of the bills from the energy suppliers, like (utility)
> Each calculation will be verified by the qualified person in charge of doing so.
> Independent variables: All meteorological data will come from (government weather station) a,
more specifically, from http://weather.whiteboxtechnologies.com
> Static factor: Information related to project static factor changes will be sent by the project’s
internal supervisor (client) to be analyzed by the CMVP-accredited professional to determine the
direct and indirect impacts on projected savings. This professional will then be able to make the
necessary adjustments for the reference year to determine the real savings of the measures
implemented.

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APPENDIX I
HVAC SYSTEM INVENTORY AT THE GOVERNMENT BUILDING A
Table 14: Air Conditioning System Inventory

Brand Type Condenser Model Evaporator

Model

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Table 15: Ventilation System Inventory

Brand Model Power Service Area

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APPENDIX II
MAIN SYSTEMS OPERATING SCHEDULES
AT THE GOVERNMENT BUILDING A

Table 16 - Main Systems Operating Schedules

at THE Government Building A

System Service Sunday Monday Tuesday Wednesday Thursday Friday Saturday

Area

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ANNEX B M&V OPTIONS: TECHNOLOGY-SPECIFIC EEMS

Measurement and Verification is always site-specific, and any particular M&V plan must
take into consideration the details of the project under consideration. However there are
general approaches to various categories of technologies that may prove useful to M&V
practitioners.

 ASHRAE Guideline 14-2002 Annex C Examples

Annex C of the 2002 version of Guideline 14 provides examples of the Whole Building
Approach and Retrofit Isolation Approaches.

 ASHRAE Guideline 14-2014 Annex E Examples

ASHRAE 14-2014 takes a different approach. Annex E is a normative annex and is

required for those wishing to claim adherence to Guideline14. Annex E provides specific
calculation approaches for Pumps, Fans, Chillers, Boilers & Furnaces, Lighting and
Unitary and Split Condensing Equipment.

 FEMP Version 3 – 2008

The FEMP Guideline provides Technology Application examples for common retrofits.

Section 11 Technology Applications

 Lighting Efficiency
 Constant-Speed Motors
 Variable-Speed Motors
 Chillers
 Geothermal Heat Pumps
 Renewable Energy Projects
 New Construction

Efficiency Valuation Organization (EVO) – www.evo-world.org

EVO publishes and updates the IPMVP on a regular basis. Recent versions (2009,2012)
of Volume 1 contain examples of M&V plans for common retrofit applications.

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ANNEX C BASELINE ADJUSTMENTS IN ENERGY SAVINGS CALCULATIONS

(EXAMPLES)

Adjustments are a key topic within M&V. The IPMVP defines two categories of
adjustments, Routine and Non-routine. Other M&V Guidance documents contain similar
concepts.
Current best practice for utilizing adjustments in energy savings baselines is focused
primarily on monthly billing data. While the same concepts can be applied to more granular
(daily, hourly, 15 minute) data, the mathematics to support the calculation and associated
statements of uncertainty are more fully developed for monthly data.
There are many good guides on the proper methods of creating regression models for the
purpose of calculating savings. The IPMVP provides straightforward instructions for the
most common applications. ASHRAE Guideline 14-2002 and 14-2014 provide more
detailed calculations. The Bonneville Power Authority published workbooks specifically
addressing the use of regression models for baseline adjustments14.
A simple example is described:
An office building in Riyadh is the candidate for a performance contract. During the
Detailed Feasibility Study, the ESCO collects a year of monthly energy consumption data
to better understand how the facility uses energy and to establish the baseline. After a quick
review, the ESCO determines that the energy consumption follows a pattern that appears
to correspond to the weather. In this case, summer energy consumption is higher than
winter. The ESCO then collects weather data from the same periods in the form of average
daily temperature, or precalculated Cooling Degree Days (CDD) as in table 1. The ESCO
performs a simple regression analysis to better understand the mathematical relationship
between the kWh consumption and the CDD.

14
Regression for M&V: Reference Guide, May, 2012

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Table 1: Monthly Energy Consumption Data & Weather Data

Riyadh Office Building

kWh vs CDD
Dependent Independent
Hijri Western Variable Variable
# of
Begin End Begin End days Energy kWh CDD
Dhū al-Qa‘dah 01/01/1434 01/02/1434 11/15/12 12/15/12 30 1013720 100
Dhū al-Ḥijjah 01/02/1434 01/03/1434 12/15/12 1/13/13 29 1018819 150
Muḥarram 01/03/1434 01/04/1434 1/13/13 2/12/13 30 1042000 350
Ṣafar 01/04/1434 01/05/1434 2/12/13 3/13/13 29 1058321 450
Rabī‘ al-awwal 01/05/1434 01/06/1434 3/13/13 4/12/13 30 1064099 500
Rabī‘ ath-thānī 01/06/1434 01/07/1434 04/12/13 5/11/13 29 1068824 550
Jumādá al-ūlá 01/07/1434 01/08/1434 5/11/13 6/10/13 30 1095006 600
Jumādá al-
ākhirah 01/08/1434 01/09/1434 6/10/13 7/9/13 29 1078000 650
Rajab 01/09/1434 01/10/1434 7/9/13 8/8/13 30 1081068 670
Sha‘bān 01/10/1434 01/11/1434 8/8/13 9/6/13 29 1088581 700
Ramaḍān 01/11/1434 01/12/1434 9/6/13 10/6/13 30 1067200 600
Shawwāl 01/12/1434 30/12/1434 10/6/13 11/4/13 29 1061600 550

Figure 1 shows the results of the regression analysis indicate that there is a strong
relationship between CDD and energy consumption. The ESCO then creates the M&V
Plan, providing the raw data and all calculations.

Figure 1: Regression Analysis between the kWh Consumption and CDD.

Baseline

2500000
y = 1777.7x + 813202
2000000 R² = 0.9893

1500000 Baseline
Linear (Baseline)
1000000

500000

0
0 200 400 600 800

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After the project is completed, the ESCO collects several months of reporting period data.
The reporting period data set has both the new monthly energy consumption and the CDD
for that period. The CDD data are used to “adjust” the baseline to the actual reporting
period conditions. The previously developed baseline equation is used to calculate what
the baseline consumption would have been for each reporting period. The CDD for each
reporting period month are used to calculate the adjusted baseline. Figure 2 shows the
difference between the adjusted baseline and the actual consumption for each period is the
energy savings achieved.

Figure 2: The Difference between the Adjusted Baseline and the Actual
Consumption

Adjusted
Baseline vs. Retrofit
2,500,000

2,000,000

1,500,000
Retrofit
1,000,000 Adjusted Baseline

500,000

-
0 200 400 600 800

As these calculations will be performed for every month in the reporting period, and the
baseline equation (model) will not change, these are called “routine adjustments”.
Next, imagine that after two years time the ESCO notices that some characteristics of the
original building have been changed. A large office building next to the project site was
demolished, causing an increase in solar insolation to the building. The utility bills
increased as the building was subjected to higher insolation (resulting in increased cooling
loads). As these new demands for energy were not calculated in the original baseline
model, the baseline must be adjusted to account for the higher energy bills. Because this
type of adjustment cannot be predicted and is not expected to recur, these adjustments are
called “non-routine”. Each non-routine adjustment is a custom calculation based on the
engineering facts of the situation.
This simple example of two types of adjustments is representative of a large percentage of
Option C M&V plans. More sophisticated approaches are possible, and described in detail
in ASHRAE, the BPA Regression for M&V Reference Guide and other advanced
documents.

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ANNEX D – HIJRI AND GREGORIAN CALENDAR DATE CONVERSION

Energy baseline and reporting period data are often associated with a range of applicable
dates. Often these dates are based roughly on calendar month periods. While many
common energy baseline tools are based on the Gregorian calendar, Hijri calendar dates
may be used for baseline and reporting periods as well. As discussed in the Annex C, the
critical relationship in energy baseline models is that of the period of the independent
variable(s) and the dependent variable. So long as all variables are based on the same time
period, the system of dates selected (Hijri vs. Gregorian) is not relevant.
Microsoft Excel15 has a data format function that allows automatic conversion between
Hijri and Gregorian calendars. To obtain the Hijri date for any Gregorian date, simply
format the cell using “B2dd/mm/yyyy”. To convert a Hijri date to Gregorian, format the
cell using “B1mm/dd/yyyy”.

Table 1: Hijri Date to Gregorian Format

Hijri Western
Begin End Begin End # of days
Dhū al-Qa‘dah 01/01/1434 01/02/1434 11/15/12 12/15/12 30
Dhū al-Ḥijjah 01/02/1434 01/03/1434 12/15/12 1/13/13 29
Muḥarram 01/03/1434 01/04/1434 1/13/13 2/12/13 30
Ṣafar 01/04/1434 01/05/1434 2/12/13 3/13/13 29
Rabī‘ al-awwal 01/05/1434 01/06/1434 3/13/13 4/12/13 30
Rabī‘ ath-thānī 01/06/1434 01/07/1434 04/12/13 5/11/13 29
Jumādá al-ūlá 01/07/1434 01/08/1434 5/11/13 6/10/13 30
Jumādá al-ākhirah 01/08/1434 01/09/1434 6/10/13 7/9/13 29
Rajab 01/09/1434 01/10/1434 7/9/13 8/8/13 30
Sha‘bān 01/10/1434 01/11/1434 8/8/13 9/6/13 29
Ramaḍān 01/11/1434 01/12/1434 9/6/13 10/6/13 30
Shawwāl 01/12/1434 30/12/1434 10/6/13 11/4/13 29

15
Microsoft Excel 2010

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ANNEX E – METER RESOURCES

Web site links

Pacific Energy Center – San Francisco, California
http://www.pge.com/mybusiness/edusafety/training/pec/toolbox/tll/form/index.jsp

Smart Buildings Center – Seattle, Washington

http://www.smartbuildingscenter.org/tool-library/

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