RetroMeter project: Why metered energy savings?

by Blog

Retrofitting is fundamental to decarbonisation and will play an important role in reducing the UK’s emissions. This refers to energy efficiency measures or renewables that are fitted to a property to improve its energy efficiency. However, the estimation of energy and cost savings associated with such measures means that investors and consumers lack confidence in measures needed. Currently in its second phase, the RetroMeter project seeks to investigate how savings can be measured and actual savings achieved at all levels in the system. 

Despite the benefits that can be delivered to businesses, households and to the wider energy system, successive residential retrofit programmes such as the Green Deal or ECO, have struggled to incentivise mass uptake in the UK. One reason for this is the lack of homeowner and landlord confidence that retrofit measures will deliver the anticipated energy and cost savings. A barrier to these programmes has been the reliance on the methodology used across the UK and Europe to determine savings, known as deeming, through Energy Performance Certificates (EPC). 

The RetroMeter project offers a different approach. Metered energy savings (MES) is a meter-based method that calculates avoided energy use by comparing actual energy use post-intervention to a weather normalised counterfactual baseline. This was pioneered at Recurve in the US through OpenEEMeter. The RetroMeter project is building further on this OpenEEMeter methodology to accurately meter energy and cost savings of retrofit energy efficiency measures using UK smart meter data. In this way,  RetroMeter aims to build consumer and investor confidence in retrofit in the UK, by enabling the success of energy efficiency works to be measured and the actual savings achieved to be quantified. 

Financial investment through P4P approach 

Energy efficiency is much more difficult to finance in comparison to solar and wind energy for example, because these can be metered and returns quantified. The MES approach could bridge this gap by unlocking pay-for-performance (P4P) investment in the UK and reducing the ‘performance gap’ by only paying for delivered rather than estimated savings.

By using advanced Measurement and Verification (M&V) techniques to accurately baseline energy usage, aggregators can sell pooled savings from retrofitted homes to long-term finance providers in return for upfront investment in the costs of retrofit. As highlighted by the Green Finance Institute’s report, this approach could encourage long term investment based on financial flows between the involved parties that are linked to actual metered and weather-normalised energy savings. This spreads the consumer’s costs so they can experience the many benefits of energy efficiency, meanwhile the finance provider generates returns on investment through savings. 

This could be transformational for this sector in the UK as energy efficiency could become a resource to be more easily procured and managed, to establish real markets for efficiency and flexibility. For the UK, this would seek to replace the current deemed approach, which estimates future savings from particular measures. Overcoming financial and behavioural barriers can accelerate market transformation towards energy efficient buildings. P4P encourages monitoring and optimisation of energy performance, leading to continuous efficiency gains and bringing more flexibility in the grid. 

However, applying MES through the RetroMeter project is not without its challenges. Despite similar daily energy usage trends around times of heating and eating, every house and consumer is different, leading to many factors that influence the behaviour of domestic energy usage, creating a challenge for the measurement. 

Who could benefit and how? 

The Retrometer project could present benefits to Distribution Network Operators (DNOs), householders, the grid and to greater national benefits. 

DNOs are currently faced with a significant capacity problem as electricity demand is set to double by 2050 and currently the grid is not ready to roll out the process of electrification of heat. The measuring and valuing of retrofit savings will help DNOs, such as Electricity North West, to facilitate planning for future energy demand and investment, as it is possible to use the data on past metered retrofit savings to project future energy use. This could allow faster connections to the network and greater flexibility in the grid. It could facilitate better planning for the various impacts of heat pump roll out, including reduction in gas usage, increase in electricity usage but to a lesser degree with fabric measures than without, and potential for flexibility in heat pumps to reduce the peak load. 

Further to this, increasing certainty in energy performance outcomes is one way to develop greater customer confidence in retrofit to work towards the UK’s reduction in domestic emissions, as well as the developing of new financing approaches in the sector. The RetroMeter project provides an opportunity to apply figures on savings and measurements. By utilising accessible datasets such as smart meter data, shared with the consent of households, the project can focus on real world experiences of investigating MES to support widespread adoption. Through the project Carbon Co-op, an energy services co-operative helping people and communities to make reductions in domestic carbon emissions, are operating the pilot study in Manchester. This should allow energy efficiency and demand side load shaping to take its place as a crucial part of the UK’s energy system decarbonisation. 

The RetroMeter project is funded by energy network users and consumers through the Strategic Innovation Fund, a programme from the UK’s independent energy regulator Ofgem managed in partnership with Innovate UK. It is being led by Electricity North West in collaboration with EP Group, Carbon Co-op, Manchester City Council and Energy Systems Catapult and hopes to deliver for both consumers and networks and pave the way for MES in the UK. By demonstrating the value of MES, looking at MES methodologies and how data management can be integrated into the customer retrofit journey, the project hopes to show how the MES approach could play a role in making retrofit energy efficiency measures more appealing and attainable based on improving the reliability of energy savings estimates. P4P holds immense promise for accelerating energy efficiency in buildings, aligning interests of stakeholders, eliminating financial barriers and driving market transformation. 

EP Group is looking at the business models, aggregation and scaling of the model of RetroMeter to see how this could reach to a societal level and regional scale through appropriate and retrofit schemes. Moving forward, there are many aspects that could be investigated, for example a focus on the health value to the wider economy through retrofit and how institutional health actors could be involved.