| ABSTRACT | | | | HOW TO PERFORM DYNAMIC TARGETING |
| Every year energy managers need to report how | | | | The steps for Dynamic Targeting as presented above |
| much energy they saved and whether or not they | | | | are now detailed in this section: |
| met their energy savings targets. Most energy | | | | Step 1. Select a Base Year |
| managers present reports comparing their current | | | | Whether you are using static or dynamic targeting, you |
| year's usage to energy usage from a previous year. | | | | still have to choose a Base Year to compare to. A |
| Savings targets are typically a percentage of that | | | | common approach is to use the prior year. |
| previous year's usage. Setting targets and comparing | | | | Sometimes, a specific year is chosen, such as 1990 |
| in this manner usually does not generate an accurate | | | | was chosen as the Base Year for the Kyoto |
| estimate of energy actually saved. Inconsistencies | | | | Protocol. If significant changes or retrofits were |
| arise from year-to-year fluctuations in weather, | | | | made to the facility and you wish to see the effects |
| occupancy, production or other factors, which can | | | | of those changes on your budget, you should choose |
| interfere with savings results. Instead, an energy | | | | a year prior those alterations. In any case, you will |
| manager's performance should be determined by | | | | need a full year of utility bills (12 months) for your Base |
| comparing current year usage to a normalized | | | | Year. |
| baseline, which represents how much energy the | | | | Step 2. Set Savings Target Percentage |
| building would have used given current year weather | | | | Rather than have your supervisor give you a static list |
| conditions, production, occupancy, and base year | | | | of usage or cost targets you need to beat, find out |
| usage patterns. Energy savings targets should be | | | | what percentage savings is expected of you. In our |
| set based upon this dynamic baseline. Using dynamic | | | | example, Joe, the energy manager, only had to save |
| targeting, variations in weather conditions, occupancy, | | | | 5%. We call this percentage our Target Savings |
| production or other factors will not hinder the accurate | | | | Percentage. The actual Savings Target can only be |
| measure of how much the energy manager saved, | | | | calculated each month after it happens, as the Savings |
| and whether energy savings goals were indeed met. | | | | Target varies with changes in weather (production, |
| This paper explains, with an example, the differences | | | | occupancy, etc.). |
| between using a static and dynamic (weather | | | | Step 3. Determine the Relationship Between Weather |
| normalized) targeting to demonstrate energy savings. | | | | and Usage |
| | | | | This is the hard part. If your building has air |
| INTRODUCTION | | | | conditioning equipment or heating equipment, then your |
| Every year, the typical energy manager will generate, | | | | building likely has a relationship to weather. In this step, |
| or receive from management, a fixed energy budget. | | | | all we are looking for is an equation that represents |
| Throughout the rest of the year, he will be held to this | | | | how your building uses energy. An example equation |
| static standard. He may also be asked to save 5% | | | | might be: |
| from prior year's energy usage, or may simply be | | | | Baseline kWh = |
| provided with less money than the prior year. This | | | | (2064 kWh/Day * #Days ) |
| method is simple for management to understand. | | | | + ( 72 kWh/CDD * #CDDs ) |
| Either the energy manager is meeting savings targets | | | | The equation tells us that the building uses 2064 kWh |
| or he is not. Unfortunately, this method does not | | | | for every day in the billing period, and for every Cooling |
| produce a realistic picture of how much energy the | | | | Degree Day (CDD), the building uses 72 kWh. In |
| energy manager is saving. | | | | other words, short billing periods, will have fewer days, |
| Even though the building envelope, the building | | | | and thus less usage, while hot months will have more |
| equipment, and the control set points themselves may | | | | CDDs, and thus more usage. The Baseline Equation |
| not change from year to year in a static building, the | | | | was generated using Base Year billing data and Base |
| energy usage may change drastically. This change | | | | Year weather data, and represents how the building |
| may have nothing to do with the energy manager's | | | | uses energy based upon Base Year usage patterns. |
| performance -- there are simply other factors | | | | The Baseline Equation can be simply generated using |
| involved. A year with a hotter summer may require | | | | utility bill analysis software, and can be generated using |
| more air conditioning than a normal year. A year with a | | | | spreadsheets as well (with a bit more effort). This |
| colder winter may require more heating than a normal | | | | normalization method is presented in more detail in |
| year. Doubling the production in a manufacturing plant | | | | papers and books cited in the References section of |
| will increase the usage. | | | | this paper. |
| Energy Managers that allow themselves to be held to | | | | Step 4. Determine How Much your Facility Would |
| a static budget may succeed or fail as a result of | | | | Have Used |
| factors that have nothing to do with their energy | | | | Once you have the Baseline Equation, everything is |
| conservation efforts: weather, production or | | | | simple from here. |
| occupancy, for example. If even one of these | | | | For each month in your reporting period, you will need |
| factors is not in his favor, the energy manager may | | | | to get a current-year bill, and determine the number of |
| not meet his savings goal. How fair is that? There | | | | days and Cooling Degree Days (CDDs) associated |
| is nothing worse than knowing that you are doing a | | | | with the billing period. If you are normalizing for other |
| good job, but coming up short in the eyes of | | | | variables like production, schedule or occupancy, then |
| management because you are being judged by an | | | | collect this data as well. |
| arbitrary and inaccurate standard. | | | | We know the Baseline Equation represents how the |
| BUDGETING VS. TARGETING | | | | building uses energy based upon Base Year building |
| It is understood that management needs to create | | | | usage patterns. How much would the building use |
| budgets, and needs to make best predictions of future | | | | given current weather conditions? To find this out, |
| energy costs. No one can predict the future, but best | | | | we plug into the Baseline Equation the current bill's |
| guesses must still be made. The important point | | | | number of days and CDDs, and/or other variable |
| though, is that energy managers do not need to be | | | | data. In this example, the billing period was 7/16/06 |
| held to these budgets when assessing and reporting | | | | to 8/15/06, which is 31 days, 91,000 kWh usage, and |
| on their job performance. The energy budget is a | | | | 495 CDDs. |
| financial tool, not an energy management tool. Energy | | | | Baseline kWh = |
| managers should set separate targets to which they | | | | (2064 kWh/Day * #Days ) |
| can aspire. The Static Target, treated below, is just | | | | + ( 72 kWh/CDD * #CDD ) |
| like a budget -- a number that is fixed, and has no | | | | = (2064 kWh/Day * 31 Days) |
| relation to the unmanageable factors which actually do | | | | + ( 72 kWh/CDD * 495 CDDs) |
| affect energy usage, such as weather, occupancy, | | | | = 99,624 kWh |
| hours of operation and production. | | | | Baseline kWh then represents what the building would |
| AN EXAMPLE OF THE FAILURE OF STATIC | | | | have used based upon Base Year usage patterns, |
| TARGETING | | | | and Current Year weather conditions (and number of |
| As an example, consider Joe, a first year facility | | | | days). |
| manager in Lincoln, Nebraska who tried to meet his 5% | | | | This is a Dynamic Baseline. If it were much cooler, |
| energy reduction target by shutting off his air handlers | | | | (i.e., there were only 100 CDDs), the Baseline kWh |
| during unoccupied hours during the summer months. | | | | would have been much less. |
| He started the strategy in July and continued through | | | | Step 5. Determine Current Month Target |
| October. During the cold months, he did not shut off | | | | In our example, we expected a 5% savings Target. |
| the equipment. | | | | So we take Baseline kWh and multiply it by 95% to |
| Imagine his surprise when viewing the bills and finding | | | | get what our target usage amount was. |
| that there were no energy savings in the summer | | | | Target kWh = |
| months. "How could that be?" Joe wondered. | | | | Baseline kWh * (1 - Savings %) |
| Figure 1 presents actual utility bills for this store. | | | | = 99,624 kWh * 95% |
| Notice, are no energy savings to be found. | | | | = 94,643 kWh |
| Unfortunately for our energy manager, the summer of | | | | Step 6. Determine if you are Meeting Your Target |
| 2005 was a hot summer for the Upper Midwest. As | | | | First, let's calculate energy savings. |
| a result, energy managers might have had a difficult | | | | Savings = |
| time meeting their energy savings targets, as the | | | | Baseline kWh - Actual kWh |
| higher temperatures led to increased air conditioning | | | | = 99,624 kWh - 91,000 kWh |
| usage, overriding any real energy savings gained. As | | | | = 8,624 kWh |
| you can see in Figure 2, there was a large increase in | | | | Now for Targets -- compare the current month bill to |
| cooling degree days for Lincoln in 2005 as compared | | | | the current month target usage. If we are meeting |
| to 2004. | | | | the target, then Actual kWh will equal or be less than |
| What Joe perhaps didn't realize is that the hotter | | | | the Target kWh. Deviation is the difference between |
| summer likely resulted in increased air conditioning | | | | the two. |
| usage, which obscured the savings he actually did | | | | Target kWh = 94,643 kWh |
| achieve by shutting off the air handlers. But that | | | | Actual kWh = 91,000 kWh |
| doesn't really matter, since he was being held to a | | | | Deviation = Target kWh - Actual kWh = 3,643 kWh. |
| Static Target. His manager took the prior year's | | | | For this month, our energy manager did indeed |
| monthly usage, subtracted 5%, and held Joe to that | | | | manage to meet his Target. However, if we just |
| standard. That sounded simple when Joe started the | | | | used a static target, then we would have seen, |
| job. Unfortunately, due to the hot summer, Joe would | | | | Target kWh = |
| have to save a lot more than 5% to offset the | | | | Base Year kWh *95% |
| increased usage due to additional air conditioning. | | | | = 81,800 kWh * 95% |
| This is only an example, but this is a real phenomenon | | | | = 77,710 kWh |
| that affects all energy managers whose buildings have | | | | Actual kWh = 91,000 kWh |
| space conditioning mechanical equipment. When | | | | Deviation = Target kWh - Actual kWh = -13,290 kWh. |
| using a static measure such as simple utility bill | | | | Using Static Targeting, the energy manager would not |
| comparison, weather does affect how much savings | | | | have met the Target at all, but would have been |
| you report. Hot summers and cold winters will eat | | | | showing a large increase in usage. August 2005 was |
| into real savings. Conversely, cool summers and | | | | hot compared to August 2004 (Figure 2) -- it follows |
| warm winters will exaggerate any true savings. For | | | | that there was an increase in usage from August |
| this reason, it doesn't make sense to set energy usage | | | | 2004 to August 2005. |
| targets based upon a prior year's usage. A hot | | | | Step 7. Convert Energy Units into Dollars |
| summer or a cold winter could preclude you from | | | | Since management is usually interested in Dollars, you |
| reaching your savings goal. | | | | will need to convert your energy numbers into |
| Since the bills already have the hot summer (and | | | | Dollars. There are many ways to handle this. The |
| consequent additional air conditioning usage) already | | | | simplest way is just to use blended rates. From the |
| added into them, then it would be best if the target did | | | | current month's bill, divide total cost by total usage, and |
| as well. Then the affect of weather could be | | | | apply this ratio to your savings. |
| cancelled out from both the target and actual bills, | | | | Current Bill kWh = 91,000 |
| leaving only savings. This is exactly what Dynamic | | | | Current Bill $ = $7,587 |
| Targeting does. | | | | Blended Rate = $ 7,587 / 91,000 kWh = $0.083 / kWh |
| ...AND THE SUCCESS OF DYNAMIC TARGETING | | | | Now convert the energy numbers into Dollars. |
| If Joe had used Dynamic Targeting, he would have | | | | Savings $ = 8624 kWh * $0.083/kWh = $719 |
| seen savings as shown in Figure 3 instead. Shutting | | | | Target $ = 94,643 kWh * $0.083/kWh = $7891 |
| off the air handlers actually did save energy, and he | | | | Actual $ = $7587 (from bills) |
| was able to save 5.9% for the year. He (and his | | | | CONCLUSION |
| manager) just didn't know it. | | | | In order for energy managers to provide reliable |
| STATIC TARGETING VS. DYNAMIC TARGETING | | | | metrics for setting and meeting energy savings |
| It is best to allow your savings target to fluctuate with | | | | targets, a dynamic energy usage target should be |
| changes in weather. This involves weather | | | | established. Static Targets are typically a percentage |
| normalizing your utility bills, and is called Dynamic | | | | of a prior year's usage. Variations in weather can |
| Targeting. Using this method, you compare what | | | | drastically affect energy usage of HVAC equipment in |
| your target usage should be (based upon current | | | | current year bills, thereby rendering the comparison of |
| weather conditions) with how much the building actually | | | | current year bills to Static Targets useless. Dynamic |
| did use. | | | | Targets modulate in response to variations in weather |
| There are a few steps involved in this process. | | | | (or other variables), thereby allowing the affect of |
| Implementing the steps is not that difficult, but the | | | | fluctuations in weather (or other variables) to be |
| concepts may be difficult to grasp at first because it is | | | | removed from the energy savings equation. Dynamic |
| so different from simply comparing current year usage | | | | Targets are established as a percentage of Baseline |
| to a past year's usage and applying a percentage. | | | | energy usage, which is determined using linear |
| This extra work is worth the effort, because the | | | | regression analysis. This process is described in the |
| dynamic method results in a more accurate portrayal | | | | International Performance Measurement and |
| of true energy savings, and can save the energy | | | | Verification Protocol, and implemented in utility bill |
| manager from reporting failure when, in fact, he | | | | analysis software, and can be reproduced in |
| succeeded. In some cases, not using dynamic | | | | spreadsheet applications. |
| targeting could cost an energy manager his job. | | | | REFERENCES |
| The steps for Static Targeting are: | | | | A Best Practice Guide to Measurement and |
| - Select a Base Year with which to compare | | | | Verification of Energy Savings, Australasian Energy |
| future usage | | | | Performance Contracting Association for the |
| - Set savings targets as a percent of usage | | | | Innovation Access Program of AusIndustry in the |
| Then, each month... | | | | Australian Department of Industry Tourism and |
| - Compare current year usage to the target | | | | Resources, 2004. |
| usage amount to see if you are meeting your goal. | | | | ASHRAE (2002). Measurement of Energy and |
| - Convert the actual, target and deviance | | | | Demand Savings. ASHRAE Guideline 14-2002. Atlanta, |
| amounts into Dollars. | | | | GA: American Society of Heating, Refrigerating and |
| The steps for using Dynamic Targeting are: | | | | Air-Conditioning Engineers, Inc. |
| - Select a Base Year with which to compare | | | | Avina, J 2007, "An Energy Manager's Introduction to |
| future usage | | | | Weather Normalization of Utility Bills", Web Based |
| - Set savings target percentage | | | | Enterprise Energy and Facility Management Systems, |
| - Determine the relationship between weather | | | | by Barney Capehart, Fairmont Press, Chapter 33, pp. |
| data and utility usage during the Base Year | | | | 329-339. |
| Then, each month... | | | | Avina, J, 2006, "Three Powerful Utility Bill Analysis |
| - Determine how much energy your facility would | | | | Methods for the Energy Manager", 2006 World Energy |
| have used during the current year given current year | | | | Engineering Congress Proceedings. |
| weather conditions | | | | 2007 International Performance Measurement and |
| - Determine target usage amounts | | | | Verification Protocol (IPMVP) Volume I on Concepts |
| - Compare actual usage to the target usage | | | | and Options for Determining Energy and Water |
| amount to see if you are meeting your goal. | | | | Savings, Efficiency Valuation Organization |
| - Convert the actual, target and deviance | | | | Metrix Version 4.2 User's Manual, 2007, Abraxas |
| amounts into Dollars. | | | | Energy Consulting, 839 Higuera St., Suite J, San Luis |
| Dynamic Targeting can be done using spreadsheets, | | | | Obispo, CA 93401 |
| although utility bill analysis software greatly simplifies | | | | Sonderegger, R.C. 1998. "A Baseline Model for Utility Bill |
| the task. | | | | Analysis Using Both Weather and |
| The remainder of this paper will detail the procedure | | | | Non-Weather-Related Variables". ASHRAE |
| involved in using Dynamic Targeting. | | | | Transactions, Vol. 104, Part 2, pp. 859-870. |