There are infinite ways in which energy savings can be incentivised using rigorous measurement and verification methods, writes Hamish McGovern.

Energy management businesses are lining up to ride the next wave of innovative energy savings opportunities emerging with the support of measurable and verifiable energy saving projects. These projects will make up a significant portion of various state government program targets stretching to 2050. Additional incentives will be available when various states roll out their peak demand reduction targets, enabling smart load shifting and storage to be further rewarded.

Under strict state government rules, regulations and specifications and international standards, scheme-approved businesses work with customers to apply measurement and verification (M&V) methodology to model and deliver energy savings. Ultimately, those savings will result in a financial incentive that will help offset the cost of the upgrade for the customer. Incentives are provided as energy efficiency certificates which equate to one MW of energy savings.

Under the programs, energy retailers are required to purchase a quantity of certificates each year equivalent to a percentage of their energy sales. Under M&V, this carrot to mobilise and sustain a project is rewarded in stages as the savings are verified over time, about 6-18 months from installation. Savings can translate to hundreds of thousands of dollars of incentives for major upgrades, with a similar magnitude of annual bill savings.

How does M&V work?

Under the M&V method, measurements are performed on existing equipment, plant or sites typically in the form of a site audit by a certified M&V professional. It is a complex process that uses the international performance measurement and verification protocol.

This project-specific information is used to build an engineering model of energy use per unit of production. The model considers production inputs and outputs and other critical variables and constants like air temperature and batch volumes. To determine how energy consumption can be reduced per unit of production if specific energy efficiency upgrades are to be undertaken, a mathematical regression analysis is developed.

Energy consumption needs to be measurable over a reasonable period prior to the upgrade. For example: for a site using hourly or daily data, from a boundary meter reading over a period of one year; or for air compressors, energy consumption per one second for a week. Boundary metering or localised sub-metering needs to be installed to support the case for rewarding energy savings.

The model must be statistically significant and able to demonstrate actual baseline energy use and, post retrofit, adjusted baseline with energy savings achieved. Those demonstrated savings are what will be financially rewarded under the energy savings schemes.

Measurement and verification case studies

Blooming big savings for Van Wyk greenhouses

This unique project replaced two gas-fired boilers totalling 7MW with a renewable 3MW biomass boiler that uses 4,650 tonnes of locally supplied wood chip waste from forestry and timber operations. (Waste wood from sustainable forestry is part of the natural carbon cycle and is therefore a renewable energy source.)

The biomass boiler operates continually and feeds water into a custom-built two-million-litre insulated buffer tank. The tank acts as a large thermal battery from which heat is drawn overnight and during cold weather to regulate the temperature in adjacent glasshouses, essential for quality production.

Van Wyk Flowers Supply is one of Victoria’s largest cut flower/plant farm businesses and supplies local and international markets. The business had already invested in a 350kW solar PV system to power irrigation and other energy needs onsite and faced variable and escalating gas prices. This innovative project was delivered by biomass boiler and energy systems expert Enriva along with certified MV professionals from Northmore Gordon (Wattly), who developed and implemented all required aspects under the Victorian Energy Upgrades program.

The rewards have been well worth the wait, saving $300,000 a year on energy bills and with a financial incentive via the Victorian Energy Upgrades scheme of more than $450,000. Part of the reward is due to the fuel-switch to a renewable source.

Chill pill for data centre saves $50,000 a year, earns $85,000 incentive

Data centres are highly temperature sensitive and can’t risk power interruptions. Under the guidance of a certified MV professional 5G Networks determined it needed to upgrade its data centres across a range of locations in Sydney and Melbourne. Energy efficiency upgrades were a crucial part the solution to reduce running costs and optimise equipment function, lifetime and safety.

Northmore Gordon (Wattly) developed an M&V plan, collecting site data and supporting evidence and building baseline and post-retrofit operating models to calculate actual energy savings. The retrofit included installation of high-efficiency uninterrupted power supply system and new battery system. A new building management system was implemented with temperature, set point and chiller optimisation.

Annual energy bill savings of more than $50,000 have been achieved as well as an incentive under the Victorian Energy Upgrades program of around $85,000 provided to 5G Networks.

Steelmakers increase voltage and reduce electrode erosion

Molycop has been manufacturing steel products for more than a century and continually seeks to improve plant efficiency at its Waratah site in NSW, where it manufactures steel grinding balls and train wheels. Grinding balls are used in milling and regrind applications for mineral processing, extraction and other grinding applications.

The site’s pioneering electric arc furnace – the first of its type installed in the southern hemisphere for steel-making – was upgraded, including energy conservation measures and improvements to production. The gas burners were modified from standard to swirl type to operate at a higher temperature, which reduced energy consumption by the main electric furnace while at the same time increasing the voltage and efficiency of the furnace. In turn, there is lower erosion of the electrodes. Modification of the electric arc furnace and gas burners has reduced greenhouse emissions by about 25,000 tonnes CO2-e over the next 10 years. The upgrade attracted an incentive via the NSW Energy Savings Scheme of over $500,000 following installation, based on measured energy savings.

Metro Trains reduce in-train light maintenance costs by 95%

Metro Trains Melbourne operates 226 carriage trains across 1,000 kilometres of track, transporting 450,000 people a day. As a critical part of a commitment to modernise the 38-year-old Comeng fleet, in-train lighting was upgraded across 136 carriages. A total of 14,100 fluorescent lights were replaced with LEDs, reducing annual lighting maintenance costs by 95%, and with energy savings providing an incentive of $570,000 to be received within 18 months of the upgrade.

The upgrade will reduce carbon emissions by more than 20,000 tonnes CO2-e over the next 10 years. This project was undertaken under the Victorian Energy Upgrades project-based, as it did not qualify under other methods such as commercial building, outdoor or public lighting. The end-to-end process to claim certificates was managed by Northmore Gordon (Wattly).


Hamish McGovern is vice-president of the Energy Savings Industry Association.