Use of Quantitative Uncertainty Analysis to Support M&VDecisions in ESPCs

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Measurement and Verification (M&V) is a critical elementof an Energy Savings Performance Contract (ESPC) - without M&V, thereisno way to confirm that the projected savings in an ESPC are in factbeing realized. For any given energy conservation measure in an ESPC,there are usually several M&V choices, which will vary in terms ofmeasurement uncertainty, cost, and technical feasibility. Typically,M&V decisions are made almost solely based on engineering judgmentand experience, with little, if any, quantitative uncertainty analysis(QUA). This paper describes the results of a pilot project initiated bythe Department of Energy s Federal Energy Management Program to explorethe use of Monte-Carlo simulation ... continued below

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Mathew, Paul A.; Koehling, Erick & Kumar, Satish May 11, 2005.

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Measurement and Verification (M&V) is a critical elementof an Energy Savings Performance Contract (ESPC) - without M&V, thereisno way to confirm that the projected savings in an ESPC are in factbeing realized. For any given energy conservation measure in an ESPC,there are usually several M&V choices, which will vary in terms ofmeasurement uncertainty, cost, and technical feasibility. Typically,M&V decisions are made almost solely based on engineering judgmentand experience, with little, if any, quantitative uncertainty analysis(QUA). This paper describes the results of a pilot project initiated bythe Department of Energy s Federal Energy Management Program to explorethe use of Monte-Carlo simulation to assess savings uncertainty andthereby augment the M&V decision-making process in ESPCs. The intentwas to use QUA selectively in combination with heuristic knowledge, inorder to obtain quantitative estimates of the savings uncertainty withoutthe burden of a comprehensive "bottoms-up" QUA. This approach was used toanalyze the savings uncertainty in an ESPC for a large federal agency.The QUA was seamlessly integrated into the ESPC development process andthe incremental effort was relatively small with user-friendly tools thatare commercially available. As the case study illustrates, in some casesthe QUA simply confirms intuitive or qualitative information, while inother cases, it provides insight that suggests revisiting the M&Vplan. The case study also showed that M&V decisions should beinformed by the portfolio risk diversification. By providing quantitativeuncertainty information, QUA can effectively augment the M&Vdecision-making process as well as the overall ESPC financialanalysis.

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  • Journal Name: Energy Engineering; Journal Volume: 103; Journal Issue: 2; Related Information: Journal Publication Date: Feb./Mar.2006

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  • Report No.: LBNL--58498
  • Grant Number: DE-AC02-05CH11231
  • Office of Scientific & Technical Information Report Number: 900705
  • Archival Resource Key: ark:/67531/metadc887902

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Office of Scientific & Technical Information Technical Reports

Reports, articles and other documents harvested from the Office of Scientific and Technical Information.

Office of Scientific and Technical Information (OSTI) is the Department of Energy (DOE) office that collects, preserves, and disseminates DOE-sponsored research and development (R&D) results that are the outcomes of R&D projects or other funded activities at DOE labs and facilities nationwide and grantees at universities and other institutions.

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  • May 11, 2005

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  • Sept. 22, 2016, 2:13 a.m.

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  • Sept. 30, 2016, 12:58 p.m.

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Mathew, Paul A.; Koehling, Erick & Kumar, Satish. Use of Quantitative Uncertainty Analysis to Support M&VDecisions in ESPCs, article, May 11, 2005; Berkeley, California. (digital.library.unt.edu/ark:/67531/metadc887902/: accessed November 25, 2017), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.