Cost-effectiveness for Monitoring, Reporting and Verification

Although MRV costs should normally be low relative to the monetary value of the savings being evaluated, they can play a role in the overall costs of a scheme. Decisions on MRV need to be shaped by the balance between the value-added of additional monitoring and the resulting higher robustness of energy savings. Thus, there is no golden rule of how a MRV system has to be designed to be cost-effective. However, there are important drivers for MRV costs that policy makers have to take into consideration. The following report looks at these drivers and discusses the main ways that can reduce those costs and, thus, render MRV more cost-effective.

The cost drivers for MRV of energy efficiency policies include:

  • Number of participants
  • Eligibility criteria
  • Documentation and reporting requirements
  • Calculation of energy savings
  • Data collection process
  • Verification and evaluation

The first two drivers are part of basic decisions on policy design; the remaining four drivers can be influenced independently of policy design decisions.

Clear and transparent rules in relation to MRV need to be adequately communicated to all actors. This is a prerequisite for lowering the administrative burden of MRV in all kinds of energy efficiency schemes. Including the actors in the process of defining the last four drivers is advisable. It is equally important to provide actors with sufficient information in a timely way when starting a new policy in order to avoid confusion, poor data quality, and ultimately, less solid energy savings.

In the Article 7 mix, a general pragmatic approach could be to implement more robust MRV procedures for measures with high expected energy savings and less demanding procedures for those with lower expected energy savings.

Thus, this report on Cost-effectiveness for Monitoring Reporting and Verification presents the cost drivers for energy efficiency policies and proposals on what to consider when defining and redesigning MRV procedure

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