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EDF’s Investor Confidence Project (ICP):
Building Confidence in Energy Savings
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The Investor Confidence Project
• Efficiency Lifecycle Framework
1. Baselining • Core Requirements • Rate Analysis, Demand, Load Profile, Interval Data
2. Savings Projections 3. Design, Construction, Commissioning4. Ongoing Commissioning5. Measurement and Verification (M&V)
– Enables a clear definition of the complete process necessary to ensure performance
– Can house multiple standards for different building types and business models
• Energy Efficiency Performance Protocol - Large Commercial (EEPP-LC)– Create an accepted best practice approach to Large Commercial building retrofitting
– Uses existing and accepted industry practices and standards
– Define “appraisal pack” of documentation for EE Performance
– A standardized approach to delivering investment ready project to market
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Managing Project Risk Factors
Performance Risk
Credit Risk
Asset Risk
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Market Actors
• Building Owners– Achieve acceptable ROI on their specific project
– Access financing
• Origination Partners – Be able to close business leveraging ESAs and other products
– Allow for distributed models
• Energy Service Companies– Deal flow with reasonable transaction costs through channels
– Manageable performance risk
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Market Actors
• Financial Markets – Ensure performance risk is managed correctly (by someone)
– Correlate project performance with asset risk
– Create large pools of consistent projects
• Insurance Industry– Underwrite performance risk with a narrower band
• Utilities / Capacity Markets– Bet on demand reductions to meet capacity needs, and achieve regulatory mandates
– Manage EM&V risk
– Treat Energy Efficiency as resource procurement
– Access forward capacity markets
• Carbon Markets?– AB32 in California
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Performance Risk Barriers
• Project Demand– Lack of standards puts engineering overhead on each firm– Channels are rendered ineffective– Lack of transparency has created market inefficiencies
• Savings Uncertainty– Lots of winners and losers (variance), creating uncertainty – Many approaches to savings estimation, installation, commissioning, etc.– Averages penalize performing projects, and incentivize low quality
• Actuarial Data– Lack of quality and quantity of data results in a high degree of uncertainty– Getting data from industry, finance, and the energy sector is challenging– Data does not describe all factors that impact performance
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Energy Efficiency Performance Protocol
First Energy Efficiency Performance Protocol designed for Large Commercial projects (EEPP-LC):
• Large Buildings, where the cost of improvements and size of savings justifies greater time and effort in pre- and post- development energy analysis
• Whole Building Retrofits, projects that involve multiple measures with interactive effects rather than a single piece of equipment
• High Performing Projects, projects with sufficient depth necessary for pre- and post-retrofit meter data yields (i.e., savings can be anticipated to be of greater magnitude than noise)
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Energy Efficiency Performance Protocol
• Required Elements• Required Procedures• Required Documentation
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Energy Efficiency Performance Protocol
• Required Elements• Required Procedures• Required Documentation
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Project Performance PackageEEPP standard documentation similar to an appraisal package:
• Prescribed methods
• Consistent taxonomy
• Accepted measurement
• Auditable results
• Standardized documentation
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Adoption Strategy
• STEP 1: Engagement of market players – Finance Companies– Utilities – Energy Services Companies– Insurers– Asset Owners
• STEP 2: Outreach to project origination channels – Engineering Firms– Facility Management– Portfolio Managers,– Contractors,– Others?
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Next Steps
• Become an ICP Partner– Specify EEPP-LC as your company’s standard for large commercial EE projects
• Participate in the Process– Refining the EEPP-LC– Developing new sector and business model specific protocols
• Hospitality, Multifamily, Residential , Health Care, Schools, etc.
• Help the ICP Reach Critical Mass– A rising tide floats all boats– Help identify and engage additional channel and market partners