The Uniform Methods Project (UMP), establishes an approach based, on industry-accepted methods for calculation and verification of savings pertaining to energy efficiency measures and programs. The UMP provides a valuable step-by-step set of calculation methods and M&V approaches, as well as best practices for the components involved in each. The UMP protocols increase the transparency of savings estimates, which provides for better management of various types of uncertainties associated with energy efficiency programs. Furthermore, they provide a stable framework on which to build successful portions of an energy efficiency program, addressing the components that typically provide the most uncertainty and risk.
The Unified Methods Project and the Environmental Defense Fund’s (EDF) Investor Confidence Project (ICP) are very synergistic and related, but serve different purposes for a different audience. The ICP Protocols are designed to provide for more stable, predictable and reliable savings outcomes and most importantly to enable investors to make informed, cost effective, forward looking underwriting decisions, while UMP is primarily focused on supporting the historical M&V required by most Public Utility Commissions and Utilities.
We believe that future iterations of the ICP Protocols can be supplemented by the specific details pertaining to calculation and M&V methods and best-practices defined by the UMP. The synergies between the two protocols will encourage deal flow and market efficiencies by enabling networks of project originators, such as engineering firms, facility managers, contractors, energy service companies and portfolio owners, to develop investment quality energy efficiency projects and bring those projects to a marketplace of energy service companies, insurers, financial institutions, and utility programs without requiring repetitive and expensive additional engineering steps, while minimizing risk and uncertainty.
ICP is fundamentally focused on delivering solutions to investors that make forward-looking investment decisions rather than evaluations of what happened in the past. Unlike Public Utility Commissions, who have the luxury of assessing performance historically, investors must evaluate an investment and make an underwriting decision in advance. To enable underwriting it is essential to correlate M&V with a taxonomy that describes attributes of a conforming type of project so that investors can associate M&V results with project attributes that enable them to determine if a given project, or pool of projects, is in fact the same as past projects where data exists and therefore they can assume similar performance and returns.
The Investor Confidence Project looks forward to leveraging the important clarity that UMP brings to M&V in our full Energy Performance Protocols to deliver even more clear and reliable results to drive investment in the energy efficiency market. We intend to begin integrating sections of the UMP into future protocols which we believe will both improve the reliability of the ICP protocols, and extend UMP to support the investment necessary to achieve the potential of retrofitting the built environment.