Real-time energy savings metering is ‘critical’ for retrofitting

A report by a coalition of industry experts has recommended the creation of a new protocol for measuring energy savings in retrofitted homes in real-time.

The Green Finance Institute’s Coalition for the Energy Efficiency of Buildings (CEEB) says a national, standardised way to measure the energy saved by retrofit works is “vital” to unlocking up to £65 billion of investment needed to decarbonise the existing building stock.

The report, titled Towards a protocol for metered energy savings in UK buildings, says the protocol would measure energy savings in buildings by calculating a counterfactual baseline – the estimated amount of energy that would have been used in a specific building had an energy efficiency retrofit not taken place.

Actual energy use after the retrofit is then compared against this baseline in order to quantify – or ‘meter’ – the amount of energy use avoided.

Currently the industry cannot directly measure the counterfactual baseline so the overall saving is estimated, an approach known as deeming.

While this approach is relatively simple to administer, downsides include the fact that estimates may have no resemblance to the actual savings made on household energy bills. Deemed savings also fail to distinguish between a bad installation and a good one, so quality work from energy efficiency contractors is not incentivised. For finance institutions, the estimation is too imprecise to calculate the risks and returns underpinning the economics of financial products and services.

However, the report argues that technology is now sufficiently sophisticated to turn efficiency into a time and location specific smart resource by ‘metering’ energy savings.

While energy efficiency cannot actually be metered because it is not directly quantifiable, it is possible to meter usage on an accurate, frequent basis using a smart meter. It is then possible to calculate the savings by comparing meter reading data to the estimated counterfactual baseline.

This approach, known as measurement and verification (M and V), has been used in large, non-residential energy efficiency projects for several years.

Metered energy savings takes the principles of M and V and embeds them in an automated software platform. The software takes meter readings and other inputs such as local temperature conditions and uses a fixed, transparent, open-source methodology to calculate near-real-time savings and avoided megawatt hours of energy use.

It is hoped this new protocol would create “confidence and certainty” around retrofit performance, as well as enabling new forms of contracting and procurement between energy utilities, networks and aggregators of energy efficiency projects.

Additionally insurers will have accurate risk data with which to underwrite energy-efficiency programmes, providing protection for both consumers and investors, and enabling contractors to offer performance guarantees.

Rhian-Mari Thomas, chief executive of the Green Finance Institute, said: “It is vital to design and embed a more accurate, granular and real-time approach to measuring energy savings than is currently available.

“Adoption of a metered energy savings protocol by the energy and retrofit sectors would build confidence among the finance community and benefit consumers looking to decarbonise their homes, thereby creating the enabling conditions for the retrofit finance market to scale at the pace the UK desperately needs.”

George Simms, senior project manager at CEEB member Energy Systems Catapult, said: “A standardised approach for measuring energy savings will help to improve consumer confidence in the market and help make financing retrofit more straightforward.

“It’s an important part of creating a good customer journey to help people decarbonise their homes.”