Measurement, Verification and Additionality of Electricity Demand Reductions : Final report – recast

Abstract

This project supports the Electricity Demand Reduction (EDR) project in the Department of Energy and Climate Change (DECC). It was commissioned to explore the needs and requirements for a robust approach to measurement, verification and additionality (M&V and additionality) of electricity demand reduction projects in the context of providing financial incentives for electricity efficiency. DECC defines financial incentives as incentives that provide direct payment to electricity efficiency projects in exchange for demand reduction (i.e. kWh saved). The focus of the financial incentive considered in this M&V and additionality advice is on large efficiency projects or efficiency programmes (aggregation of small projects) in order to reduce the administrative burden of the scheme. The purpose of an M&V and additionality approach is to filter the efficiency projects in order to pay only for permanent (long-term kWh saved) and additional (compared to a baseline) electricity demand savings. Main issues 1. Needs and requirements for a robust approach to M&V and additionality in the context of a financial incentive for electricity efficiency 2. Risks of failure to address the M&V and additionality issues 3. Lessons from international comparators for feasibility of UK M&V and additionality 4. Key challenges for identifying an M&V and additionality approach in the context of a financial incentive for efficiency in the UK 5. Suitability of the International Performance Measurement and Verification Protocol (IPMVP) for the Electricity Demand Reduction Project.