Thursday, August 20, 2009

McKinsey Describes IPMVP as Foundational

In a July 2009 wide ranging report, the global consulting firm McKinsey & Company provided analysis of the barriers to energy efficiency in the USA, on page 107 in the printed report, it identifies the need to achieve “appropriate” evaluation, measurement and verification (EM&V). Interestingly it wisely notes that: “providing a ‘perfect’ EM&V system is not possible; instead, a ‘sufficient’ EM&V system” is needed.
The report further describes that ‘sufficient’ EM&V should be:
a) consistent (internally consistent and stable over time);
b) simple in design (to balance value against complexity and cost); and
c) involve both measurement of energy consumption and review of activities undertaken.
IPMVP is described as a “shared foundation for EM&V” which “might provide the consistent methodology upon which energy efficiency program managers can build.”
From the report:
As California's efforts to improve energy efficiency have show, even in a state that has taken a relatively aggressive approach to capturing energy efficiency, the issues surrounding attribution can be complex. Detailed EM&V programs that cause a slowdown in the pursuit of energy efficiency are unlikely to merit their expense. Fore example, in some California programs, discussions of attribution sought to resolve differences of $70 million in incentives, of a total program spend of $2.1 billion - with benefits that exceed $4 billion. A detailed EM&V program that risks disruption the pursuit of energy efficiency is unlikely to deliver savings equal to the opportunity cost. For example, slowing the capture of the $4 billion in benefits by four months decreases their present value by $70 million.
The International Performance Measurement and Verification Protocol (IPMVP) provides a basis for analyzing project-level savings from energy efficiency measures. Though the IPMVP primarily address project savings in commercial and industrial sectors, it could provide the basis for broader measurement of energy efficiency programs. Development of this protocol has been supported by the Department of Energy and provides the basis for measurement in federal Energy Services Performance Contracts. A shared foundation for EM&V of this sort might provide the consistent methodology upon which energy efficiency programs managers can build.
Nathan Shetterley (
EVO Director of New Media