A Practical Approach to Managing Uncertainty in the Measurement and Verification of Energy Efficiency Savings

Abstract

Measurement and verification (M&V) is fundamental in determining the impact of energy efficiency (EE) interventions. However, accurately quantifying the EE savings on complex industrial systems can present several technical challenges. It is of critical importance that these challenges be practically addressed within regulatory requirements when applying for tax-based EE incentives. In this study, the key uncertainties affecting the M&V of Section 12L EE tax incentive applications are identified. A novel approach provides practical guidelines to manage and mitigate uncertainty. This approach ensures that reported savings are a fair and compliant reflection of the actual savings achieved. The presented case studies show that uncertainty can affect up to 30 per cent of reported savings. This emphasises the significant impact of uncertainty, and quantifies the benefit of compliant uncertainty management. Ultimately, this study provides valuable insight into the practical implementation of tax-based directives intended to stimulate sustainable development. OPSOMMINGMeet en verifieer (M&V) is fundamenteel om impak van energiedoeltreffendheid intervensies te bepaal. Die akkurate kwantifisering van die energie besparings op komplekse industriële stelsels kan egter verskeie tegniese uitdagings bied. Dit is van kritieke belang dat hierdie uitdagings prakties aangespreek word binne regulatoriese vereistes van belasting gebaseerde aansporingsprogramme. In hierdie studie word die kern onsekerhede geïdentifiseer wat die Seksie 12L belasting aansporingprogram beïnvloed. 'n Nuwe benadering wat gebaseer is op praktiese riglyne word voorgestel om hierdie onsekerhede te bestuur. Die benadering verseker dat gerapporteerde besparings 'n regverdige weerspieëling weergee van die werklike besparings wat behaal word. Die implementering van die benadering op vier gevallestudies toon dat onsekerheid tot 30 persent van gerapporteerde besparings kan beïnvloed. Dit beklemtoon die beduidende impak van onsekerheid en motiveer dus die belangrike rol van onsekerheidsbestuur. Hierdie studie bied waardevolle insig tot die praktiese implementering van belasting gebaseerde programme wat daarop gemik is om volhoubare ontwikkeling te stimuleer. 1BACKGROUND AND RELEVANCE The 12L tax incentiveThe South African government has committed itself to a 32 per cent reduction in greenhouse gas (GHG) emissions by 2020 and to a 42 per cent reduction by 2025 [1]. This is part of a global effort to address the threat of anthropic climate change in the context of sustainable development [2]. 129The focus of climate change mitigation is on implementing laws, policies, and regulations that promote sustainable development. Good M&V practice will therefore play a key role in the practical application of the 12L tax incentive. Role of M&V in 12L tax incentive applicationsEnergy saving measures (ESMs) include a wide range of activities dedicated to improving EE and decreasing GHG emissions. However, several challenges arise when administrating the actual benefits...

A systematic decision support system to objectively evaluate retrospective energy efficiency modelling options

“…There are, however, apparently a number of challenges to overcome (Du Toit, 2011), given that in 2016 only 14 Section 12L certificates were successfully issued out of a total 108 registered applications (SANEDI, 2016). A key challenge is to accurately calculate and verify the achieved energy savings, while adhering to the strict rules and regulations, as stated in the Section 12L Regulations (Booysen, 2014;Hamer et al, 2017;National Treasury, 2013). This challenge is a significant concern, as the calculated EE savings directly impact the Section 12L tax allowance certificate value (Booysen, 2014;Hamer et al, 2017).…”

“…A key challenge is to accurately calculate and verify the achieved energy savings, while adhering to the strict rules and regulations, as stated in the Section 12L Regulations (Booysen, 2014;Hamer et al, 2017;National Treasury, 2013). This challenge is a significant concern, as the calculated EE savings directly impact the Section 12L tax allowance certificate value (Booysen, 2014;Hamer et al, 2017). With the aim of mitigating the concerns and challenges associated with the incentive, various M&V practices are mandatory and stipulated in the Section 12L regulatory structure.…”

“…With the aim of mitigating the concerns and challenges associated with the incentive, various M&V practices are mandatory and stipulated in the Section 12L regulatory structure. One such measure is the requirement that the quantified EE savings must be verified by an independent M&V body accredited by the South African National Accreditation System (SANAS) (Campbell et al, 2017;GreenCape, 2015;Hamer et al, 2017;National Treasury, 2013). Furthermore, the M&V process is required to be traceable, accurate and transparent, to ensure the protection of all stakeholders involved (Campbell, 2016;Hamer et al, 2017).…”

“…One such measure is the requirement that the quantified EE savings must be verified by an independent M&V body accredited by the South African National Accreditation System (SANAS) (Campbell et al, 2017;GreenCape, 2015;Hamer et al, 2017;National Treasury, 2013). Furthermore, the M&V process is required to be traceable, accurate and transparent, to ensure the protection of all stakeholders involved (Campbell, 2016;Hamer et al, 2017). The M&V practice thus forms a crucial part in the practical application of Section 12L and will therefore be discussed in the next section.…”

“…This includes evaluating either a portion of the facility or the entire facility to assess the EE savings. Various methodologies are available in literature to identify and evaluate the feasibility of measurement boundaries (Booysen, 2014;Efficiency Valuation Organisation, 2012;Hamer, et al, 2017;Janse van Rensburg, 2015;SABS, 2017). Once a measurement boundary has been established, an accurate dataset must be compiled.…”