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97 Appendix D provides detailed guidance on how to measure and verify airport GRF perfor- mance. Part 1 describes M&V processes for tracking performance. Part 2 explores options for GRF management systems. Part 1: Tracking PerformanceâM&V D1.1 What Is M&V? The concept of a GRF is based on investing in a project or process improvement that pro- vides tangible, measurable benefits that will yield financial savings that can help pay back the investment. The term âprojectâ is used in Appendix D; however, the GRF may be used to fund process improvements. To quantify the results of the project funded by the GRF, a method of tracking and documenting savings and results will be required. M&V is the industry term for this process. M&V processes grew out of the energy efficiency and energy savings performance contracting industry and, as such, industry documentation and best practices are typically asso- ciated with energy savings projects. However, the principles of M&V can be applied to a variety of project types. The intent of the M&V process is to determine savings that are attributable to a specific set of actions taken. Determining savings requires two components: â¢ Baseline Performance: A baseline represents the performance level in the absence of the action taken. â¢ Post-Implementation Performance: The actual performance level that results from the action. The savings attributable to the action is the difference between the two. It is a simple concept on the surface, but the question of savings attributable to specific actions and predicting perfor- mance in the absence of those actions has the potential to be complicated. The M&V process is not a one-size-fits-all proposition, so it needs to be developed in a way that best fits the needs and desired outcomes of the GRF. It also does not have to be a totally separate and discreet activity. Often the outcomes being measured are also being tracked for other purposes within airports. Identifying these potential overlaps can help streamline the process. The project-level results should also be tracked in a manner consistent with the GRF management tool that is selected. This section of the study provides an overview of M&V, a decision-making framework to assist airports seeking to develop an M&V protocol, and potential resources. Most M&V resources are specifically focused on utility savings, such as energy and water, but the basic tenets of savings calculations can be applied to anything that can be measured and tracked. Because of the wide range of potential projects (and specific improvement measures within those projects), the strategy for setting up GRF M&V requirements is best focused on defining an overall M&V A P P E N D I X D Measurement and Verification
98 Revolving Funds for Sustainability Projects at Airports framework with an expected process and deliverables rather than specific approaches. This will allow M&V plans that are appropriate for each project to be developed. D1.2 M&V Process The M&V process usually includes four stages: â¢ Plan development. The M&V plan will typically be developed by the entity that is tasked with overseeing the M&V process. â¢ Plan approval. All parties with a stake in the outcome of the project should have an opportu- nity to review and approve the M&V plan. â¢ Data collection. The M&V plan will identify the source of the data needed for ongoing analy- sis and the entity that is responsible for collecting it. Depending on the project, this may include a pre-installation data collection phase that documents the baseline conditions that will be used in the savings calculations. It will include a post-installation data collection phase to confirm installation and performance. â¢ Ongoing reporting. The performance period will be defined in the M&V plan, which will dictate the duration and frequency of reporting. This should also be coordinated with the GRF management system selected for overall program tracking. The GRF may choose to manage all of these stages internally or may outsource some or all of them to project teams or contracted service providers. In all cases, a GRF needs to develop a set of guiding principles for how M&V will be implemented on GRF-funded projects. These guiding principles are known as GRF M&V protocols. D1.3 Developing GRF M&V Protocols Projects funded through a GRF will fall under a variety of project types and will have a variety of variables to measure. Rather than attempting to account for all this variability upfront, a GRF should develop a set of M&V protocols that contain guidelines for how specific M&V plans are to be developed and implemented on funded projects. At a minimum, the GRF M&V protocol should cover the following: â¢ Risk allocation â¢ Measurement rigor â¢ Data gathering â¢ M&V responsibility â¢ M&V plan requirements The M&V protocol will provide the framework for developing project-specific M&V plans. It should outline the expectations of what will be addressed in the M&V plan and the approval process for the M&V plan. The M&V plan development and approval process can be used to address the various needs of the projects being funded and allow the plan to be customized to the measure or project being funded. This will include how savings are to be tracked, who will track the data, and the M&V duration. D1.3.1 Risk Allocation A key factor that influences the M&V approach is the question of which entity accepts the performance risk from the project that is implemented under the GRF. Performance risk alloca- tion determines which party takes responsibility, if the project does not generate the predicted savings. It is typically determined as part of the contract established for the project. Allocation of performance risk is a key part of M&V.
Measurement and Verification 99 The GRF M&V protocols should have a process for conducting a performance risk assess- ment of projects being funded to identify and allocate the performance risk. To help all parties understand the risk expectations, the protocols should require the results of the risk assessment to be displayed in a matrix that defines each performance component and which party is accept- ing the risk. D1.3.2 Measurement Rigor A successful M&V plan will apply an appropriate level of rigor to monitoring savings that is in line with the value of the savings of the project. M&V will add some level of cost to the project, whether through equipment, such as metering, or labor, such as the ongoing analysis. It is not practical to develop and implement a robust M&V plan with an associated cost that outweighs the savings or consumes a substantial portion of it. The M&V approach for a project should identify the key variables that will impact savings and potential performance factors that need to be monitored, but ideally it will not create a disproportionate financial burden on the project. As an example, M&V costs for federal Energy Savings Performance Contract proj- ects average 2% to 5% of the overall project cost (Webster et al. 2015). The rigor of the M&V approach will typically scale with the complexity of the project and the potential variability in the savings. The GRF M&V protocols should have a requirement in place indicating that projects apply- ing for funding conduct an M&V assessment to help identify an appropriate M&V approach that balances desired project outcomes and costs. Ultimately, this balance point is to be defined by the airport implementing the GRF. D1.3.3 Data Gathering Airports are large operations where monitoring and tracking performance for a variety of factors is a part of normal operations. Wherever possible, M&V data should be collected on an ongoing basis as part of an existing reporting process. Utilizing data that is already being collected has the obvious benefit of not adding a tracking burden on the operation; however, it may require that data be shared across operating groups that have not previously coordinated reporting activities. When the data required for the M&V of a specific project is not currently collected by the airport, there may be an opportunity to integrate the data collection into an existing reporting process. The data may be of interest to airport stakeholders outside of the GRF project. Under either scenario, the party responsible for collecting the data may be different from the party responsible for using that data for M&V calculations and reporting. It is important to define roles and responsibilities in the project-specific M&V plan. The GRF M&V protocols should require that the data collected for M&V be compared with data already being collected at the airport, and that airport stakeholders potentially interested in new data streams should be identified. Anytime data is being used by more than one group or for more than one purpose, it increases the likelihood that tracking will occur, and perfor- mance gaps will be noted and addressed, thus increasing the likelihood of success of the project. D1.3.4 M&V Responsibility Understanding which party is accepting the performance risk can help determine which party is best suited to implement the M&V process. No matter who implements the M&V process, it should be performed in a transparent manner, so that all parties are able to review and under- stand the M&V outcomes.
100 Revolving Funds for Sustainability Projects at Airports The GRF should have a requirement in place that projects applying for funding conduct an M&V assessment to help identify an appropriate party to implement the M&V approach. If an internal airport team approach is desired, that may be defined as the default arrangement; however, provisions should exist to allow exceptions to that rule. Utilizing a transparent M&V process can help mitigate potential conflicts of interest, because all parties will see the data and the results. D1.3.5 M&V Plan Requirements The GRF M&V protocols should include requirements for the content of the M&V plans to be developed for each project. Suggested content for a project-specific M&V plan includes the following: 1. Project contact information. Provide contact information for the parties involved. 2. Project definition. Provide an overview of the project, how savings will be generated by the project, and the estimated savings. An overall project schedule with key milestones should also be provided. 3. Selected measurement approach and measurement boundary. Discuss the approach selected and the rationale behind the decision. 4. Baseline period. The baseline period represents the facility or system performance without the project or measure being implemented. The project team should recommend a baseline period that captures a duration long enough to allow pre-installation performance to be documented. The appropriate baseline period will be tailored to the measure; it might range from short-duration spot measurement to a full year or more. 5. Baseline data. The baseline data is collected during the baseline period to establish the pre- installation operation condition. This will include specific variables to be measured and the duration of the measurements. This might include data from existing systems, such as sub- metering or building automation systems, or meters and dataloggers installed, specifically for the project. If data is shared between parties, the format of the data should also be defined. 6. Performance period. The performance period represents the expected post-installation period that will be monitored to measure and verify the savings generated by the project. This will likely be determined by the term established for participation in the GRF. 7. Post-installation data. Post-installation data represents the specific metering points that will be used to measure and verify system performance in the post-installation period. The frequency and duration of the data collection should be defined. If data is shared between parties, the format of the data should also be defined. 8. Savings calculation methodology. A description of the savings calculations to be used to compare baseline performance with post-installation performance should be included. This should also include any adjustments that will be required to account for impacts to the proj- ect performance that are not associated with the project. Given the growth many airports are experiencing, it is likely this will be a factor in many cases. Additionally, the methodology description should include any key input data, such as emissions factors for various fuels and utility costs that are used for financial calculations. 9. Reporting frequency and formats. The post-installation reporting frequency should align with the goals of the GRF and be in a format compatible with the GRF management system. Depending on the project structure, a comparison of the expected savings with the actual savings might be requested to help track performance. D1.4 M&V Methodologies and References The following references provide information and guidance for project-level M&V. An air- port that is developing M&V protocols for a GRF should understand the various methodologies
Measurement and Verification 101 that can be used for a project when setting those requirements. The following guidelines and references provide information on M&V processes including guidance on selecting a project- or measure-level M&V approach, defining baselines, identifying variables to be measured post- installation, and savings calculations. D1.4.1 International Performance Measurement and Verification Protocol One of the most widely recognized M&V documents is the International Performance Mea- surement and Verification Protocol (IPMVP) (Efficiency Valuation Organization n.d.). The Efficiency Valuation Organization (EVO), a non-profit corporation, assembles and oversees an IPMVP Committee of industry volunteers to develop and maintain the IPMVP. EVO pub- lishes the documents. IPMVP provides guidance on developing and implementing M&V plans for energy and water savings projects. It provides a framework and guidance for developing specific M&V plans and discusses considerations to be taken into account when developing an M&V plan. IPMVP defines various methodologies and approaches for ongoing savings M&V, from iso- lating the savings at the system or measure level to measuring savings at the whole-building level. Understanding this protocol may help an airport set the M&V guidelines for its GRF. The protocol is available for purchase on EVOâs website. IPMVP outlines four options (approaches) for measuring savings: â¢ IPMVP Option A: Measure Isolation: Key Parameters. This method is based on engineering calculations and partial measurement of key parameters to verify the savings resulting from specific measures. See Figure 16 (Webster et al. 2015). â¢ IPMVP Option B: Measure Isolation: All Parameters. This method is based on engineering calculations and ongoing site measurements to verify the savings resulting from the change in energy use of the affected system. See Figure 16 (Webster et al. 2015). â¢ IPMVP Option C: Whole Facility/Meter Analysis. This method uses whole-facility monthly or interval utility billing, or submetering energy use information, to evaluate savings. It com- pares the facility energy load profile in the baseline period with the energy load profile after implementation of the project. This method is mainly applicable to comprehensive projects Figure 16. Retrofit isolation options.
102 Revolving Funds for Sustainability Projects at Airports on existing facilities that involve multiple measures with interactive effects between measures. Baselines are typically normalized to account for operating variables that may differ between the baseline and post-installation periods such as weather, number of passengers, or some other quantifiable variable. Any potential changes to the building load profile that are not associated with the project also need to be taken into account by making adjustments to the savings calculations. See Figure 17 (Webster et al. 2015). â¢ IPMVP Option D: Simulation Model. This method uses an energy simulation model of the facility that is calibrated to the facility meter or submeter data. Two scenarios of the model are created, one with the baseline conditions and one with post-installation conditions. Savings are calculated based on the energy consumption difference between the two. Option D is often used for new construction and comprehensive renovations in which there is no dis- tinct baseline energy data available. Any potential changes to the building load profile that are not associated with the project also need to be taken into account by making adjust- ments within the simulation models. See Figure 17 (Webster et al. 2015). D1.4.2 ASHRAE Guideline 14 Another resource for planning and implementing project level M&V is Guideline 14-2014 Measurement of Energy, Demand and Water Savings developed and published by ASHRAE (ASHRAE 2014). Guideline 14 presents three M&V approaches that are similar to three of the four approaches provided in IPMVP, one at the measure level and two at the whole-building level. Guideline 14 is focused on the savings calculation methodologies and provides more details for savings calculations using these options than the IPMVP does. It is a detailed technical document; however, understanding these guidelines may help an airport set the M&V guide- lines for its GRF. The guideline is available for purchase on ASHRAEâs website. D1.4.3 Uniform Methods Project IPMVP provides a framework for developing and implementing M&V plans, but it does not provide specific methods and calculations that should be applied to various energy savings mea- sures. The U.S. Department of Energy (U.S. DOE) is currently developing a set of M&V pro- tocols that will allow for consistent energy savings calculations for specific measures under the Uniform Methods Project (UMP) titled the Uniform Methods Project: Determining Energy Figure 17. Whole-facility and calibrated simulation options.
Measurement and Verification 103 Efficiency Program Savings (U.S. Department of Energy n.d.-c). UMP provides specific savings calculation methodologies for common energy efficiency measures that are based on IPMVP recommendations. UMP provides measure descriptions, savings calculation methodologies, M&V considerations including IPMVP options, data requirements for M&V, and alternatives for lower-cost M&V options. The measure-specific documents are detailed technical docu- ments, but understanding what UMP is and how it is structured may help an airport set the M&V guidelines for its GRF. UMP documents are available for free download online. D1.4.4 State and Regional Technical Reference Manuals Many states have implemented utility energy efficiency programs. To help standardize savings calculations across program participants, many of those states have developed documents that provide guidance on energy savings calculations (or the state participates in a regional effort). These documents are commonly referred to as Technical Reference Manuals (TRMs). Although not specifically related to the process of M&V, they do provide standardized methods for esti- mating energy savings from common energy efficiency measures. As a result, they provide an excellent reference for potential energy efficiency measures and potential examples of savings calculation methodologies. TRMs are typically focused on measures that have relatively straight- forward savings calculations and do not include custom measures. If the measures being funded by the GRF are also receiving utility efficiency program incen- tives, the project team may want to use a TRM to estimate savings. One caveat for the use of TRM savings methodologies is that they are intended to estimate the collective savings from the measures within the territory or region covered by the TRM. Depending on the measure and its variables, the TRM savings calculations may include assumptions and streamlined savings factors that are based on research studies and past utility program data. Because they represent âtypicalâ savings, the assumptions and savings factors may differ from the actual conditions at the site. These factors can often be easily updated with the appropriate variables at the airport, if needed, but an understanding of the measure savings calculations within the TRM is needed. D1.5 Choosing the Right Approach When choosing an M&V approach for a specific project, the airport should seek an appro- priate balance of cost and rigor that meets the desired risk tolerance. Table 12 provides a summary of the various options for M&V approaches. The decision tree in Figure 18 can also be used to help select an appropriate M&V option for a given project. D1.5.1 Risk Allocation Once an airport understands which aspects of the performance risk it is accepting, it can better understand the implication of various M&V approaches. Ultimately, the airport needs to agree to the level of performance risk it is accepting, understand the level of performance risk others are accepting, and understand how performance is being tracked. On a given project, the risk allocation is likely to be separated into different parts, with por- tions assigned to various entities. For example, the variables that impact savings and who is responsible for them for a specific project may include the following: â¢ Equipment efficiency. New equipment is installed that requires less energy to perform the same function that is currently performed by existing equipment. An implementation con- tractor may accept the performance risk for the equipment efficiency it is installing.
104 Revolving Funds for Sustainability Projects at Airports â¢ Operating schedule. The new equipment will only save energy relative to the old equipment when it is operating. Airport operating hours are not under the control of the implementation contractor, so the airport may accept the performance risk associated with operating hours. â¢ Equipment maintenance. Ongoing maintenance of the new equipment may be required to ensure proper operation. Depending on the contract structure, either the implementation contractor or the airport may accept the performance risk associated with maintenance. It is likely that whichever entity is required to perform the maintenance will accept the perfor- mance risk. â¢ External variables. Performance risk for external variables, such as weather, are not under the control of the implementation contractor or the airport. These variables can typically be tracked, so their impact on the savings can be quantified. Performance risk associated with Table 12. Summary of M&V approaches.
Measurement and Verification 105 external variables is typically assigned to the airport. The potential impacts of these variables should be understood by the airport. Although not specifically related to M&V, a project structure that includes performance expectations and an allocation of the performance risk should also include a mechanism for dispute resolution in the project contract. Dispute resolution should be considered when devel- oping the M&V plan, because the output from the M&V process will be an indicator of a per- formance issue. D1.5.2 M&V Responsibilities Each of these M&V stages can be assigned to any party for a given project. A single entity can be assigned responsibility for the whole process or each stage may be split amongst the team. Options for assignment of the M&V responsibilities include the following: â¢ GRF manager. The airport GRF team or an assigned internal representative can take respon- sibility for the M&V process. The benefit of using an internal resource is that the airport retains control over the process and internal resources may have a lower overall cost than external resources. The challenge is making sure the internal resource has experience with M&V, or has access to a resource with experience, and has the availability to support the Figure 18. M&V decision tree.
106 Revolving Funds for Sustainability Projects at Airports process. Depending on the project focus, various entities at the airport may contribute to different stages. For example, the energy management team may be responsible for M&V implementation for a project that is focused on generating energy savings, and the facili- ties management team may be responsible for a project to increase recycling rates. Gener- ally, having the airport responsible for M&V will potentially result in the best outcome, but depending on the project contract structure, airport staff may have a real or perceived conflict of interest in the outcome of the M&V analysis. â¢ Project implementation team. A member of the team implementing the project can take responsibility for any aspect of the M&V process. The potential benefits include access to M&V specialists on the project implementation team, convenience for the airport staff, and a strong understanding from the implementerâs perspective of the project and variables that may impact performance. The main drawback to this approach is that, depending on the project contract structure, the implementer may have a vested interest in the outcome of the M&V process, that is, the implementer may have a real or perceived conflict of interest in reporting the savings. â¢ Third party. An independent third party that has no financial stake in the outcome of the project can provide an unbiased approach to the M&V process. The third party can be hired by the airport or the implementer. A benefit of this approach is that a third party can be selected that specializes in M&V. The main drawback to this approach is typically the cost associated with engaging a third party. It is possible to supplement an internal team with a third-party resource to provide guidance and insight when needed. This may be particularly helpful when the GRF is initially being established. The third party could also be used to review and validate the M&V reporting performed by others. D1.5.3 IPMVP Options IPMVP provides these four options for determining conservation measure savings: IPMVP Option A: Measure Isolation: Key Parameters. This method is based on engineer- ing calculations and partial measurement of key parameters to verify the savings resulting from specific measures. For example, savings associated with a lighting efficiency upgrade might be determined using the following: - - 1,000 Quantity of fixtures verified by physical count Baseline watts per fixture based on published data Post Installation watts per fixture based on published data Operating hours of fixtures key parameter measured using runtime data loggers Demand kW Savings Quantity of fixtures baseline watts per fixture post installation watts per fixture W kW Energy kWh Savings Demand kW Savings Operating Hours ( ) ( ) ( ) ( ) ( ) ( ) ( ) ( ) = Ã â = Ã In this example, the savings are generated by three variables: the number of lighting fixtures, the change in lighting fixture wattage, and the operating hours of the lighting. The quantity of fixtures is verified once, the wattage savings is assumed to be constant based on published data, and the measured variable is the operating hours of the lighting fixtures. For the purposes of long- term M&V, the operating hours is the only measurement of a key parameter that is required. IPMVP Option B: Measure Isolation: All Parameters. This method is based on engineer- ing calculations and ongoing site measurements to verify the savings resulting from the change
Measurement and Verification 107 in energy use of the affected system. For example, savings associated with the installation of a higher efficiency motor and variable frequency drive with controls to modify operation of a pump from constant volume to variable volume might be determined using the following: - - - Baseline kW and kWh based on measurements of motor during baseline Post installation kW and kWh based on measurements of motor after implementation Demand kW Savings Baseline kW Post installation kW Energy kWh Savings Baseline kWh Post installation kWh ( ) ( ) ( ) ( ) = â = â In this example, the savings are generated by several variables, but they are all captured within the single measurement of motor kW and kWh. IPMVP Option C: Whole Facility/Meter Analysis. This method uses whole-facility monthly or interval utility billing, or submetering energy use information, to evaluate savings. It compares the facility energy load profile in the baseline period with the energy load profile after implementation of the project. This method is mainly applicable to comprehensive projects on existing facilities that involve multiple measures with interactive effects between measures. Baselines are typically normalized to account for operating variables that may differ between the baseline and post-installation periods such as weather, number of passengers, or some other quantifiable variable. Any potential changes to the building load profile that are not associated with the project also need to be taken into account by making adjustments to the savings calcu- lations. For example, savings from a major HVAC and controls upgrade might be determined using the following: - , - - - - Baseline kW and kWh based on whole facility meter or submeter data during baseline normalized for operating variables Post installation kW and kWh based on whole facility meter or submeter data after implementation Demand kW Savings Baseline kW Post installation kW Adjustments Energy kWh Savings Baseline kWh Post installation kWh Adjustments ( ) ( ) ( ) ( ) ( ) ( ) = â Â± = â Â± In this example, the savings are generated by many variables, but they are all captured within the single measurement of facility level kW and kWh. Under this scenario, an example of an adjustment might be that a lighting upgrade project was also performed at this facility that was not funded through the GRF, so the savings from that measure would be removed from the savings calculation. IPMVP Option D: Simulation Model. This method uses an energy simulation model of the facility that is calibrated to the facility meter or submeter data. Two scenarios of the model are created, one with the baseline conditions and one with post-installation conditions. Savings are calculated based on the energy consumption difference between the two. Option D is often used for new construction and comprehensive renovations in which there is no distinct baseline energy data available. The models are calibrated to hourly or monthly facility-level meter data, and submetering data within the facility can be used to verify model inputs and outputs, such as submeter data from lighting, plug loads, or gas. Normalization for operating variables that may differ between the baseline and post-installation periods, such as weather, number of pas- sengers, or some other quantifiable variable are accommodated within the simulation models. Any potential changes to the building load profile that are not associated with the project also
108 Revolving Funds for Sustainability Projects at Airports need to be taken into account by making adjustments within the simulation models. Using the same example from Option C, savings from a major HVAC and controls upgrade might be determined using the following: - - - - - Baseline kW and kWh based on whole facility simulation model Post installation kW and kWh based on whole facility simulation model Demand kW Savings Baseline kW Post installation kW Energy kWh Savings Baseline kWh Post installation kWh ( ) ( ) ( ) ( ) ( ) ( ) = â = â In this example, adjustments for impacts to the load profiles that are not associated with the measures are already accounted for within the model. Part 2: GRF Management Systems One of the essential tasks of establishing a self-managed GRF is organizing and tracking the financial and project data associated with operating the fund. Part 2 explores the essential pieces of any GRF management system. It goes on to discuss the options available to an airport look- ing for this system: a build-it-yourself spreadsheet route or the use of an existing web platform designed for GRF management. The GRF Management System Options section weighs the trade- offs of each option. D2.1 Requirements for GRF Management System At a minimum, a GRF management system must be able to track the financial inflows and outflows of the fund and produce an accurate accounting of the fund balance and expected returns. A good GRF management system should also help the GRF management team track the pipeline of potential projects, track project-level performance data for funded projects, and provide useful reporting features and visualizations. Part 2 describes the critical aspects that make up a good GRF management system and provides example metrics/data points that should be tracked in each area. D2.1.1 Financial Health Tracking A GRF management system must be able to record the financial flows from the GRF to the project or entity implementing the project, and then from the resultant avoided costs (savings) back into the GRF. The tracking system must ensure that the full project cost is repaid to the GRF to maintain the fund over time and also account for modifications to the amount repaid at each interval (if it is less than 100% of savings accrued during that period or includes addi- tional payments to grow the GRF). Any rebates received from utility programs or other sources should be recorded. Finally, transactions that affect the fund but do not pertain to specific projects must also be tallied. Together, these features allow the system to keep track of the total fund value and account balance available for investment in projects. Metrics for Measuring Success: Fund Financial Health â¢ Total fund value â¢ Outstanding loans â¢ Available cash balance â¢ End of fiscal year projected balance â¢ Amount invested to date
Measurement and Verification 109 â¢ Amount saved to date â¢ Aggregate project expenditures â¢ Aggregate loan repayments â¢ Aggregate rebates received â¢ Aggregate non-project transactions D2.1.2 Project-Level Tracking The tracking of project-level data is another pillar of sound GRF management. The institu- tion should differentiate between proposed projects, for which savings metrics can be calculated for evaluation purposes, and projects that are currently underway or have been completed. For each project status, the GRF management system should record project-specific details such as a title and descriptionâproviding context and information about new equipmentâas well as quantitative metrics tallying the energy and resource savings accruing from the project. Cost savings and other financial metrics that highlight the projectâs success as an investment should also be calculated. The management system should also keep track of transactions associated with each project. For each project, the system should record an expenditure transaction (when the costs of materials and labor are paid for) and a project loan repayment (when project savings are returned to the GRF), noting any rebates received and factoring them into the financial calculations. To increase the accuracy of a projectâs quantitative data, it should be possible to update the unit cost and amount of the resource saved each yearâespecially if M&V tech- niques are used. Metrics for Measuring Success: Project-Level Tracking â¢ Project status (proposed, in-progress, completed) â¢ Project name/title â¢ Project type (lighting, HVAC, etc.) â¢ Project description (types/amounts of equipment installed and other details) â¢ Resource types saved â¢ Resource units of measurement â¢ Unit cost â¢ Annual unit savings â¢ Project lifespan â¢ Project approval date â¢ Project installation start date â¢ Project completion date â¢ Lifetime ROI â¢ Annual ROI â¢ Simple payback period â¢ Adjusted payback period (if charging an interest rate or planning to repay savings beyond project cost) â¢ Net present value (NPV) â¢ Internal rate of return (IRR) â¢ Unit cost per metric ton of CO2e abated â¢ Annual financial savings â¢ Annual energy savings â¢ Annual carbon emissions reduced â¢ Annual water savings â¢ Annual waste savings â¢ Lifetime financial savings â¢ Lifetime energy savings â¢ Lifetime carbon emissions reduced
110 Revolving Funds for Sustainability Projects at Airports â¢ Lifetime water savings â¢ Lifetime waste savings â¢ To date financial savings â¢ To date energy savings â¢ To date carbon emissions reduced â¢ To date water savings â¢ To date waste savings â¢ Project cost â¢ Project loan repayments â¢ Rebates received D2.1.3 Reporting and Sharing To get a big-picture view of the fundâs track record, the GRF management system should also be able to calculate aggregate metrics for the full portfolio, such as total savings and other finan- cial metrics. Other optional functions should also be considered, such as the ability to generate visual representations of project dataâcharts and graphsâthat can be important for conveying the impact of the GRF to outside stakeholders. Being able to monitor particular data points over time or view data at the facility level may also be useful. Finally, having a system for sharing project data with other institutions that are also aiming to improve their energy and resource efficiency can facilitate best practice sharing and allow for benchmarking against peers. The ease with which this data is shared is therefore an important consideration. Metrics for Measuring Success: Aggregate Reporting â¢ Number of projects funded â¢ Average cost â¢ Average annual ROI â¢ Average payback period â¢ Average project lifespan â¢ Average annual financial savings â¢ Average annual energy savings â¢ Average annual carbon emissions reduced â¢ Average annual water savings â¢ Average annual waste savings â¢ Average unit cost/MTCO2e abated â¢ To date financial savings â¢ To date energy savings â¢ To date carbon emissions reduced â¢ To date water savings â¢ To date waste savings â¢ Savings by project type â¢ Savings by facility â¢ Savings by campus (group of buildings) â¢ Savings by custom project group â¢ Net cash flow over time Ease of Use and Security. A good GRF management system should be accessible to stake- holders who may not have day-to-day familiarity with the workings of the fund. It is important for facilities staff or other fund managers to periodically collaborate with other offices, espe- cially financial decision-makers, who need to be informed about the evaluation of proposed
Measurement and Verification 111 projects or the outcomes of completed ones. Having an intuitive system becomes even more important when personnel change and new staff are assigned to manage the GRF. The GRF management system must be secure and backed up to ensure data integrity and preservation. D2.2 GRF Management System Options There are two common options for GRF tracking: (1) building your own system via data management/spreadsheet software like Excel or (2) utilizing an existing project-management tool. When setting up a GRF, an airport must identify a tracking system that meets the require- ments outlined as well as other organizational priorities. D2.2.1 Excel-Based Tracking The first route that an airport can take is to design its own GRF management system from the ground up, explored here through the spreadsheet software Excel. In designing the system, it may be useful to split up the features into different sheets: â¢ Sheet instructions â¢ Fund financials â¢ Project-level tracking â¢ Aggregate calculations â¢ Reports Stakeholders outside the facilities office must be able to read and understand the spreadsheet. It may be necessary to have a group meeting, so that all fund overseers can be informed about how the system works, if there are areas to avoid, and what their responsibilities are in using it. The sheet instructions would include descriptions of each part of the overall spreadsheet, defi- nitions for all terminology and metrics calculated (perhaps with written-out formulas), guid- ance for how the sheet must be maintained, and an explanation about who is responsible for each section. Care must be taken not to create multiple versions of the spreadsheet, if it is man- aged by multiple people. It should also be backed up regularly. See Figure 19 for an example of an airport Excel-based GRF spreadsheet. The fund financials sheet will be used to keep track of the total fund value and fund balance over time. It must communicate with the project-level tracking sheet, so that projects selected for financing through the GRF have their actual project cost (expenditure) logged, reducing the fund balance. Whenever project savings are returned to the fund, this must be logged (increas- ing the fund balance), and the remaining project loan should be reduced accordingly. Rebates received by projects and returned to the fund must appear here, increasing the fund balance. Any fund transactions not associated with a project must be included, but they should be clearly separated from project-linked transactions. The project-level tracking sheet is where all resource reduction data and project savings data are housed. The sheet should track the resource(s) or fuel(s) saved by each project, cor- responding units of measurement, unit cost, number of units saved annually, and the project lifespan. This data allows you to generate both resource and financial savings across different time spans. To calculate carbon emissions savings, you will have to incorporate the carbon intensity of the resources or fuels being saved. The carbon intensity of numerous fuels can be taken from the U.S. government mandatory reporting rule factors (U.S. Electronic Code of Federal Regulations 2019). Carbon emissions factors for electricity at U.S.-based institu- tions are available via the Environmental Protection Agencyâs (EPAâs) Emissions & Genera- tion Resource Integrated Database (eGRID) (U.S. Environmental Protection Agency n.d.). Also, projects will have to be clearly delineated by status: proposed, in-progress, or completed.
Figure 19. Example of GRF spreadsheet with basic functionality.
Measurement and Verification 113 You will have to decide whether to evaluate proposed projects in the same spreadsheet as proj- ects that have received GRF financing (and whether to keep them all in a single project-level tracking sheet), or whether to create a separate file. To get a high-level picture of the GRFâs track record, there should be an aggregate calcula- tions sheet that incorporates the data from all project entries. Just like the project-level tracking sheet, you must separate the proposed projects from those that are in-progress or completed (so as to avoid lumping hypothetical data together with projected and realized data). This sheet can feature a mix of averages for all financed projects (in-progress and completed), such as average annual financial or energy savings, as well as total calculations (e.g., lifetime carbon savings). You can compare the data calculated in this sheet against the project evaluation criteria outlined in the GRF charter to see how well your project portfolio is adhering to the desired GRF impact. Finally, there should be a reports section where charts and graphs can be generated from your savings data. You may decide to keep these charts alongside the projects or aggregate calculations from which they are derived or set up a separate sheet for them. The existing sheets will easily allow for project-level and whole portfolio graphs, but if additional detail is desired (e.g., viewing savings by facility or project type), then project data may have to be arranged into custom groups. Please see the example figures (Figures 20, 21 and 22) derived from the only currently available software service (described in section D2.2.2), illustrating the qualitative and quan- titative project-level data that should be included in any spreadsheet-based tracking system. Other essential pieces including the tracking of fund finances and calculation of aggregate metrics would also have to be added, if an airport chooses to develop its own spreadsheet approach. Figure 20. Key financial metrics functionality (featured with permission from SEI).
114 Revolving Funds for Sustainability Projects at Airports D2.2.2 Software Solutions Pre-existing software solutions can be used in conjunction with an Excel-based spreadsheet approach, such as using energy tracking software to measure and aggregate energy use across a portfolio, or it can be used to manage the entire fund. At the time of writing this report, there was only one existing software package for GRF fund management (Sustainable Endowments Institute n.d.-k). This section describes optimal capabilities of GRF software regardless of product and service provider. Software platforms allow for password-protected access to fund and project data by all stake- holders, who can collaboratively follow and manage the GRF. Online GRF platforms ideally are divided into several sections: A Dashboard page presents the GRFâs financial position, including the total fund value, outstanding project loans, and available balance. A mix of financial and environmental metrics calculated for projects funded to date, such as average annual ROI, average payback period, Figure 21. Project performance (featured with permission from SEI).
Measurement and Verification 115 and energy/carbon/water/waste reduced to date, are displayed as well. This page is also where all financial flows are logged in a master ledger for the GRF. The Dashboard can list all the project-related expenditures and rebates, the project savings returned to the fund, and all non- project deposits and withdrawals organized in chronological order by fiscal year. A Projects page displays all projects in a table that contains the project title, status (proposed, in-progress, or completed), project type, cost, and various savings metrics. The table can be converted into a map that depicts the location of the project facilities. Calculations made above the table of projects show a mix of averages for several characteristics (cost, payback period, ROI, and financial/energy/carbon savings) as well as totals (cumulative cost, total to date finan- cial savings). Filters on this page allow you to isolate specific groups of projects by project type, facility, cost, or custom tags, among many other options. As you filter through your projects, ideally GRF-related software will automatically recalculate all the average and total metrics to present the impact of your selected group of investments. Because proposed projects are clearly delineated from in-progress and completed projects, isolating and evaluating proposed projects is straightforward. A Project Details page contains all the qualitative and quantitative data for each project. The data entered by the user is organized on the left side of the page, including the projectâs description, project type, approval/completion timeline, and location of the project facilities. In Figure 21, the right side of the page features the calculations: energy/financial/carbon savings Figure 22. Performance report summary (featured with permission from SEI).
116 Revolving Funds for Sustainability Projects at Airports annually, to date, and over the project lifespan, followed by several financial metrics including payback period, ROI, NPV, and unit cost per metric ton of CO2e abated. Below this information, there is a table that records the resource price and amount saved each fiscal year (data can be updated based on M&V) and informs the user about the amount of cost savings that should be returned to the GRF each year (based on the guidelines described on the Settings page). Notes and attachments (such as blueprints or before and after photos) can also be added to the project on the Project Details page. Ideally, all information can be shared either by generating it as a static document file or by sharing a web link that allows read-only access to anyone. A Reports page allows users to build graphs and charts from their project data, visualizing the impact of their investments. You can build a solid bar graph showing savings accrued each year from all in-progress and completed projects, or have the bars split into color-coded pieces that relay the savings contribution from each individual project. Savings can also be graphed by facility, campus/site, project type, or by custom project groups. These options can be used to illustrate energy/water/waste savings, as well as financial and carbon savings. Other financially oriented graphs are available as well, including cash flow and expenditures. A table below the graph or chart displays the numerical information from which the figure is created. It may be useful if this information can be downloaded and included within reports to communicate the GRFâs impact.