Abstract
End-use energy efficiency is a cost-effective and rapidly deployable strategy for significantly reducing greenhouse gas (GHG) emissions and energy costs. Energy savings certificates (ESCs)—instruments assigning the property rights to energy savings or attributes of those savings—are becoming an effective tool for meeting energy savings and GHG targets. The efficacy of ESCs will depend on the market’s ability to (1) verify the amount of savings that they certify along with the uncertainty of those savings (i.e., quantify their value), (2) clearly assign ownership rights to that value (i.e., state exactly who owns what) and (3) efficiently buy and sell those rights between interested parties (i.e., conduct simple transactions). The measurement and verification (M&V) system governing ESCs will critically impact whether these three criteria are satisfied. An M&V system for ESCs requires the fundamental elements of an M&V system for any regulated energy-efficiency program, but must also address more explicitly the above-mentioned criteria. In this paper, the authors discuss the International Performance Measurement and Verification Protocol (IPMVP) and specific elements of an M&V system that address components of an ESC system.
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Notes
For an excellent overview of ESCs, the authors direct the readers to Hamrin et al. (2007)
Seconday markets might include such financial instruments as bundled loans or other securities
Approximately 300 individuals have been CMVP-certified at time of writing. Training has been conducted in South Africa, Taiwan, and China. EVO recently completed its first “train-the-trainer” course in Taiwan. This marks the first attempt to create a sustainable source of trained professionals to conduct IPMVP-standard M&V. See www.evo-world.org for more on EVO’s training.
“Standard calculations” are accepted engineering algorithms that support energy savings estimates
The double coincidence of wants problem is an important category of transaction costs that impose severe limitations on economies lacking money and thus dominated by barter or other in-kind transactions. The problem is caused by the improbability of the wants, needs or events that cause or motivate a transaction occurring at the same time and the same place. The term “double coincidence of wants” is attributed to William Stanley Jevons (Ostroy and Starr 1990, p. 24).
“Lemon,” as used here means a defective or unsatisfactory product. In American English it is commonly applied to used cars. George Akerlof’s 1990 paper on “The Market for Lemons: Quality Uncertainty and Market Mechanisms” discusses the failure of the used car market.
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Meyers, S., Kromer, S. Measurement and verification strategies for energy savings certificates: meeting the challenges of an uncertain world. Energy Efficiency 1, 313–321 (2008). https://doi.org/10.1007/s12053-008-9019-5
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DOI: https://doi.org/10.1007/s12053-008-9019-5