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Creating Certificates through Measurement & Verification.

Creating ACCUs, ESCs & VEECs

Energy efficiency upgrades, switching to cleaner fuel sources, and installing renewable generation technologies all come in many forms. The question is, can these projects generate carbon credits to create an additional revenue stream? 

Thousands of companies are committing to further emission reductions, and many more are taking steps to reduce their energy and fuel costs. The vital balance with any intervention is to ensure that both the financial and environmental cases balance. This is where the benefit of measurement and verification for energy upgrade projects is fully revealed.   

If you have a single project, or many small projects, that will result in energy savings or a switch to cleaner fuel, we can evaluate the viability of a certificate creation project via a Project Impact Assessment through Measurement and Verification (PIAM&V).

 

What is a PIAM&V? 

A Project Impact Assessment through Measurement and Verification (PIAM&V) is a process where energy or fuel usage are measured and modelled for a site (or for aggregated sites) before any upgrades are implemented to form a Baseline. Once the upgrades are completed, the new energy or fuel consumption is measured and modelled against the site’s activity. This allows calculation of the C0equivalent emissions that have been saved through the project to be calculated, and certificates are created based on the abatement that has resulted. 

In its simplest form, we have a pre-project measurement and a post-project measurement, which when compared, calculates the energy savings or fuel savings that have been achieved. Depending on the upgrade that has been performed and the site’s location, several scheme specific factors are applied. Certificates are created on the difference between the two measurement periods. The below graph demonstrates this.

How is it different from a deemed activity? 

Deemed activities, such as commercial lighting and heat pump upgrades in Victoria and New South Wales, follow a routine calculation to estimate energy savings based on the approved product and typical hours of use. Certificates are calculated for a period specified by the scheme which can range from 8 to 11.7 years. These certificates are claimed upfront when the upgrade is completed.

With measured and verified (M&V) projects, the certificates are created based on the site’s actual savings. To do this, baseline and reporting periods are required, which may range from 6 weeks to 12 months each. 

Certificate crediting periods through PIAM&V are dependent on the scheme the project is established under. They may be created in either an M&V deemed approach, where the savings calculated through M&V are multiplied by 10 years and created upfront. Or, alternatively, through annual creation for 7-10 years. 

Deemed activities cover routine installations that are on a small to medium scale. M&V projects may become beneficial where:

  • The operating hours exceed a normal work day 
  • The upgrade is not an approved activity 
  • Multiple upgrades are occurring at once 
  • The energy savings are high 
  • The upgrade involved fuel switching 
  • A number of sites can be aggregated

An evaluation of the viability of a deemed activity compared to a PIAM&V project can be completed by our team to give you confidence that the project’s certificate creation method best represents the total energy or fuel savings.

 

Does a site’s location impact its eligibility?

A site’s location will impact the scheme that is available. There is a federal based scheme, and three major state based schemes for energy efficiency upgrades. 

 

Emissions Reduction Fund (ERF) 

Location: Federal 

Certificates Created: Australian Carbon Credit Units (ACCUs)

Crediting Period: 7 Years with Annual Measurement and Creation 

Energy Savings Scheme (ESS) 

Location: New South Wales

Certificates Created: Energy Savings Certificates (ESCs) 

Crediting Period: 9.9 Years Deemed or 10 Years with Annual Creation

Victorian Energy Upgrades (VEU) 

Location: Victoria 

Certificates Created: Victorian Energy Efficiency Certificates (VEECs) 

Crediting Period: 9.9 Years Deemed or 10 Years with Annual Creation

Retailer Energy Productivity Scheme (REPS)

Location: South Australia

Certificates Created: Retailer Energy Productivity Scheme (REPS) as a gigajoule target (GJ) (Created under the commercial target)

Crediting Period: 10 Years

 

What Activities are eligible to create certificates under PIAM&V?

Our advice is that if you have a single project or many small projects that will result in high energy savings or a switch to cleaner fuel, we can evaluate the viability of a certificate creation project through PIAM&V.

Example Projects:

  • Machinery Upgrades 
  • HVAC Upgrades 
  • Fleets switching from Internal Combustion Engines to Electric Vehicles
  • Lighting Upgrades 
  • Efficient Machinery Distributor under an Aggregated Method 
  • Process Heating Upgrades

 

What is the financial outcome? 

Certificates are a tradable commodity and their value is determined by the market spot and forward pricing. When the certificates are monetised, they create an additional revenue stream for the project. Our specialist team will model the project to give you a certificate volume and financial estimate based on the projected energy or fuel savings for each project. 

If Carbon Neutrality or Net Zero is an internal requirement, these certificates can either be surrendered or traded to acquire alternative offsets.

 

How do I mitigate the risk of market fluctuations?

By engaging Ecovantage as your PIAM&V partner, we secure the certificate value for forward created certificates on signing. This protects your project from market volatility, and provides a layer of security that is vital to many projects. We assist you in navigating Forward Creation, Annual Creation and Top Up methods where relevant for your project.

 

How do I explore PIAM&V? 

To explore a specific project, a concept, or a product wide opportunity, contact our Measurement and Verification specialists.

Speak with a Specialist

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