Climate change, energy policy and achieving compliance through cloud-based energy management [A Wattics Guide] - Wattics
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Climate change, energy policy and achieving compliance through cloud-based energy management [A Wattics Guide]

Climate change has prompted countries the world over to accelerate efforts toward drastically cutting Greenhouse Gas (GHG) emissions from industries’ biggest polluters, while also greatly emphasizing the need for increased energy and resource efficiency. Policies like the EU’s 2010 Energy Performance of Buildings Directive (EPBD) and 2012 Energy Efficiency Directive provide a framework for such activities as well as a stable environment for investment decisions to be taken. [1

While adherence to some industry standards and best practices are optional, business and real estate owners would do well to pursue energy compliance to mandatory and non-mandatory directives and standards, which would not only decrease regulatory risk but also promote long-term sustainability and improve stakeholder relations.

Energy-saving: Key to driving sustainability

Energy-saving is a critical part of any initiative aimed at driving sustainability. It’s the job of the energy manager to analyze how and when energy is used across a business/plant/building or site and use the insights provided by their data analysis activities to devise appropriate measures to identify energy waste, opportunities for savings, determine environmental impact, drive down costs and so on.

Data analyses performed by energy managers traditionally involve complex energy modeling techniques and the application of mathematical formulas, often done in Excel, to calculate energy baselines, identify trends as well as determine the impact of external variable data such as degree days and how these influence energy consumption, demand and ultimately, savings.

Doing these complex mathematical calculations in Excel is a time-consuming and ineffective exercise requiring the collection of data from disparate sources and systems (the data is often rife with errors), manual entry of this data into custom formats and charts, and expert-level knowledge of Excel functions.


Source: Giphy

Who has the time to go through a 5-step process to build a combination chart to display the correlation between kWh and Cooling Degree Days (CDD)? Or spend an hour trying to figure out Excel’s regression capabilities in the hope to come up with the equation depicts the chiller input kW with varying chiller load?

Sound familiar? Don’t worry, you’re not alone!

The truth is, these mathematical formulas are key to helping energy managers study different data sets to determine whether any relationships exist between them. This is especially true for regression analysis where formulas are useful in establishing metrics to determine if two simultaneous events are related in real time, or using historical data to identify insights that will facilitate their decision-making.

Similarly, energy service companies use mathematics and formulas to calculate future consumption patterns and identify new trends should they introduce changes to the environment, allowing them to confidently capture the expected return on investment on a project proposal.

Source: Memecenter
The good news is that analysing your data does not have to be the laborious, manual task as you’ve come to know it, spending more time importing and exporting and manipulating data, rather than focusing on what the data is telling you about your facility/plant/building or site.

Cloud based energy management software has automated many of the time-intensive tasks associated with collecting, analysing and reporting data through a unified platform. Data can be analysed more efficiently and effectively with robust analytics tools that eliminate the complexity and more importantly, the manual calculation of formula-based energy equations to achieve the insights needed in the decision-making process toward energy-saving actions and compliance to industry standards and legislation.

cloud based energy management

In working with energy professionals around the globe, we here at Wattics have found that some of the more common calculations performed by energy practitioners, using mathematical formulas, include:

1. Calculation of baseline building energy consumption to track energy savings and performance
2. Creation of new measurements derived from the multiplication with a constant e.g. CO2, GHG, RHI emissions

2.1 How to calculate CO2
2.2 Setting CO2 emission allowances
2.3 UK Renewable Heat Incentive (RHI)
2.4 Monitoring appliances under UK RHI
2.5 EU F-Gas Regulation
2.6 CHP Quality Assurance (CHPQA)

3. Creation of condition-based formulas to identify issues across energy and non-energy data
4. Creation of virtual meters (identify the kWh of other non-monitored equipment)
5. Calculation of HDD/CDD against kWh

1. Calculation of baseline building energy consumption to track energy savings and performance

Energy baselines are used by energy managers and facility managers in their organisations as a starting point for setting energy efficiency improvement goals as well as serves as a reference tool for evaluating future efforts and overall performance trends. 

The calculation of baseline consumption is particularly important for energy service companies (ESCOs) as they typically implement energy performance contracts (EPC) based on shared savings. In this scenario, any investment undertaken to implement energy conservation methods and energy efficient technologies is assumed entirely by the ESCO. 

The ESCO guarantees that the improvements will generate energy cost savings sufficient to pay for the project over the term of the contract and they are paid based on the savings achieved (e.g. 50% savings achieved for following 5 years). The baseline (i.e. consumption levels before the energy conservation measure start) is the reference used to calculate the savings.

The comparison of before and after energy consumption or demand should be made on a consistent basis, using the following general M&V equation:

Savings = (Baseline Period Energy – Reporting Period Energy) ± Adjustments

energy baseline IPMVP

Source: Efficiency Valuation Organisation

The International Performance Measurement and Verification Protocol (IPMVP) incorporates the baseline calculation in its methodology. Today, the IPMVP method is widely considered the best-in-class model to calculate savings derived from energy-efficiency projects and energy performance contracting (EPC).

From these base measurements, energy managers and facility managers are able to:

      1. Understand how energy consumption contributes to operating costs;
      2. Identify ‘energy stars’ or high-performing facilities/sites that can be used as a model to be replicated across other poorer performing sites;
      3. Historical trends can be taken into account when evaluating future actions and decisions;
      4. Quickly identify and rectify deviations from a specified goal, following the implementation of energy conservation programme/initiative and/or energy efficiency technologies/retrofit;
      5. Energy use can be categorized by fuel type, operating division, facility, product line, end use, and other factors.

If a facility is submetered, a baseline can be developed for each separately submetered area in addition to the whole-building baseline to determine how an energy conservation measure (ECM) has impacted energy consumption down to appliance level. 

Wattics complies entirely with the IPMVP standard protocol initially rectified the US Energy Department and then adopted at a global level.


Who is Wattics?

Wattics provides a software-as-a-service (SaaS) cloud-based energy management and analytics platform for energy service companies, energy managers and consultants and utilities making intelligent business decisions to identify energy wastage, save money, increase sustainability and reduce carbon footprint. The white-labled platform and customer engagement portal boasts 16 robust energy analytics tools providing access to real-time energy data, projections of savings, IPMVP measurement and verification, tariff analysis, energy performance assessment, reporting and so much more. 


IPMVP measurement and verification

Figure 1: Wattics IPMVP-based M&V Project Management Tool

A step-by-step procedure shown on the right hand side of the picture above (Figure 1) shows how Wattics energy analytics allows energy managers to create an IPMVP-based M&V project in a systematic way, to include cost, set the baseline and reporting period, include routine/non-routine adjustments, identify a regression model and track the savings, which can be printed in a branded report at any time.

Non-profit organisation EVO (Efficiency Valuation Organisation) that develops, maintains, improves and publishes the International Performance Measurement and Verification Protocol (IPMVP) notes that best practice requires that measurement and verification are well integrated into the process of identifying, developing, procuring, installing and operating energy conservation measures. IPMVP’s framework requires certain activities to occur at key points in this process and describes other important activities that must be included as part of good M&V practice. [3]

[Related: Read about how the IPMVP measurement and verification standard is implemented in Wattics]

measurement and verification
IPMVP measurement and verification

Figure 2: Regression formula translated to a monitored data point in the Formula Composer

Wattics recently released its Formula Composer tool, included in the energy analytics platform, which energy managers can use to create or “compose” mathematical formulas to perform calculations across real meters, data points and any numeric value, using operators such as: +, -, /, *, ^, <, >, =, and, or, if-then-else, sin. cos, tan.

The tool eliminates the complexity of doing mathematical calculations across energy data, such as baseline energy measurements, and provides a minimalist interface to get the job done, saving tons of time otherwise spent on crunching data through Excel. 

With more than 20 operators available, the Formula Composer helps energy professionals to reach a totally new dimension in energy analysis to determine a range of new insights. Calculations/formulas created in the tool are trackable in real-time through notifications, alerts and reports.

energy management software free demo

Custom alerts for increased visibility into energy savings 

Savings accrued from energy M&V projects can be easily tracked using the Formula Composer in the Wattics dashboard, through custom alerts and notifications to monitor expected savings, and set an alert if a deviation from a new baseline (after ECM is put in place) occurs

 Custom alerts

Figure 3:  Create custom alerts/notifications for formula meter data points

See how this is done through the Wattics Formula Composer tool 



2. Creation of new measurements derived from the multiplication with a constant e.g. CO2, GHG, RHI emissions

Whether calculated on of behalf of a client or calculated as part the annual directors’ report, greenhouse gas (GHG) reporting is key to understanding the business’ environmental impact as well as how, if not properly addressed, non-compliance with mandatory could incur hefty fines and affect long-term sustainability. 

Various government-led initiatives provide incentives encouraging the implementation of energy efficient behaviours and actions. The UK Carbon Reduction Commitment (CRC) for example, allows companies to get refunds for deployed energy-efficiency measures. Under the CRC Energy Efficiency Scheme, participants are obliged to collate information on and report on their energy supplies, as well as buy and surrender allowances equal to the CO2 emissions they generate. Other advantages of proactively monitoring carbon emissions include decreased regulatory risk, decreased costs, and an improved corporate reputation in the eyes of customers and investors alike. Below are the conversion factors UK companies need to apply when calculating CO2 [4]:

CRC energy efficiency scheme order

With Wattics, not only can energy managers calculate the CO2 emitted from their operations/buildings, they are also able to set emission allowances and be notified if that limit is exceeded due to additional CO2 emitted. CO2 data can either be imported or calculated from kWh consumed provided that the right conversion factor is entered. 

2.1 How to calculate CO2

To calculate CO2 emissions for your monitored site, you need to use the relevant conversion factor or multiplier to create a composite CO2 meter which will multiply the total consumption of the building/plant/site or a section of it by the appropriate conversion factor.

If conversion factors supplied in the table above are applied as an example, the composite CO2 meter will look like this:

Name of monitored area x Conversion Factor

In the Wattics platform, the calculation will look like the following:

Eg. Best Resorts ? Alpha Hotel ? Bar * 0.381460

carbon emissions calculation
Figure 4: CRC calculation through the Formula Composer

2.2 Setting CO2 emission allowances

Monitoring, reporting and verification (MRV) of emissions play a key role in the credibility of any emission trading system, ensuring that ‘a tonne emitted is a tonne reported’ [5]

Tradable emission allowances are allocated to participants in the market. In the European Union Emissions Trading System (EU ETS), this is done via a mixture of free allocation and auctions. One allowance would give a single market participant the right to emit 1 tonne of CO2 (or its equivalent). Under the scheme, companies are required to monitor and report their emissions each year and surrender enough emission allowances to cover their annual emissions.

If a company is likely to emit more than their allocation, it has a choice between taking measures to reduce their emissions or buying additional allowances; either from the secondary market – e.g. companies who hold allowances they do not need – or from Member State held auctions.

Wattics allows customers to set emission allowances that they will receive or buy for any given year. This is displayed as a benchmark within the breakdown tab or it can be set as a threshold and trigger a notification alert.

Through the Formula Composer, you can create a virtual data point to show and track what total emissions are. The Formula Composer allows you to combine various data points and apply applicable conversion factors to calculate your emissions. This, in turn, can be compared to what emission allowances you have and allow you to surrender enough allowances to cover all of your emissions and avoid any fines being imposed. Similarly, you could use the tool to calculate any allowances that are not required and trade them.

See how this is done through the Wattics Formula Composer tool


Other GHG emissions calculated using the Formula Composer:

2.3 UK Renewable Heat Incentive (RHI)

The Formula Composer tool is useful toward compliance with sustainability criteria under the Non-Domestic Renewable Heat Incentive. The Non-Domestic Renewable Heat Incentive (RHI) is a government environmental programme that provides financial incentives to increase the uptake of renewable heat by businesses, the public sector and non-profit organisations. Eligible installations receive quarterly payments over 20 years based on the amount of heat generated.

The technologies currently covered by the scheme include:

• solid biomass
• Combined Heat and Power (CHP) systems for solid biomass, waste, geothermal and biogas
• solid biomass contained in waste
• heat pumps (ground source, water source and air-to-water)
• solar thermal
• geothermal
• biomethane
• biogas

The Formula Composer tool can be used to create and track Renewable Heat Incentive (RHI) formulas. The values in the formula will then be in accordance with the default values and input data available at:

Sustainability Self-Reporting Guidance and the UK Solid and Gaseous Biomass Carbon Calculator

For example, for biomass and biogas plants producing heat only, the GHG emissions value to report to Ofgem must be calculated using the following formula:

Biomass greenhouse gas equation

For biomass and biogas plants producing heat and power, the GHG emissions value to report to Ofgem must be calculated using the following formula:

heat and power ofgem equation


E = the GHG emissions expressed in Kg of CO2(eq) per MJ of heat produced from the production of the biomass or biogas

ηh = the efficiency of the plant in the generation of heat, which is equal to H/F, where:

H = the total heat produced by the plant in the form of liquid or steam in the relevant quarter from all fuels used in that plant

F = the energy content (net calorific value) of all those fuels (MJ) in the relevant quarter

ηel = the efficiency of the plant in the generation of electricity, which is equal to A/F, where

A = the total electricity generated by the plant from all fuels used in that plant (MJ) in the relevant quarter

Ch = 0.3546 where the temperature of the heat produced by the plant in the form of liquid or steam is <150 °C; or

= (T – 273)/T, where T is the temperature in Kelvin of the heat produced by the plant in the form of liquid or steam.

2.4 Monitoring appliances under UK RHI                                                                                                     

Wattics enables the monitoring of various appliances such as biomass boilers, ground to water heat pumps, solar thermal panels and so on towards claims on the Renewable Heat Incentive. This includes electricity and heat energy.

Once electricity and heat are monitored, the Formula Composer enables energy managers to create a formula meter called Seasonal Performance Factor (SPF) for heat pumps for example. The formula of the SPF is:

seasonal performance factor

Eg. A heat pump with an SPF of 2.5 will on average, deliver 2.5kWh of heat for every 1kWh of electricity it uses.

SPF can be calculated by dividing the total heat energy output per annum (kWh) by the total input electricity per annum (kWh) in the tool.

2.5 EU F‑Gas Regulation

Fluorinated gases (F‑gases) are a group of artificial gases used in various industrial applications. According to the EU, of the three groups of F‑gases (hydrofluorocarbons (HFCs), perfluorocarbons (PFCs) and sulphur hexafluoride (SF6)), hydrofluorocarbons (HFCs) are by far the most relevant F‑gases from a climate perspective. [6] The January 2015 EU regulation on F‑gas limits the total amount of the most important F‑gases that can be sold in the EU from 2015 onwards and phasing them down in steps to one-fifth of 2014 sales in 2030. [7] The Commission has prepared guidance documents outlining the obligations for users and technicians of refrigeration, air conditioning and heat pumps reporting on F‑gases under the new regulation (EU No 517/2014).

Wattics allows inserting metadata associated with a monitored point. This can be used to insert information of F‑gas labels attached to equipment containing F‑gas. Using the information of such label in the Wattics Formula Composer, the system can convert the kWh of the monitored point into CO2.

kyoto protocol greenhouse gases
Source: Environmental Protection Agency

Customers can set the monthly/annual F‑gas quota and closely monitor the progress against quota. In addition, Wattics notifications can be used to monitor the phase-down that must happen in the coming years as shown in the table below:

f gas kyoto protocol greenhouse gases
Source: Environmental Protection Agency

Wattics’ Sentinel machine-learning analytics, used for adaptive identification of consumption abnormalities, can be instrumental for early identification of loss of refrigerant, which dramatically increases the production of F‑gas.  According to the Environmental Protection Agency, it is typical to find that 80 % of annual leakage comes from only 20 % of the refrigeration systems. [8]

2.6 CHP Quality Assurance (CHPQA)

Wattics and it Customer Success team are instrumental in helping its customers complete the appropriate sections of the CHPQA F2, F3 or F4 submission forms for the SoS (CHP) exemption certificate.

For CHP Quality Assurance, Wattics offers a one-stop-shop solution allowing to monitor both heat and power. Wattics is compatible with European Measuring Instruments Directive (MID)-certified meters such as ISKRA meters and can offer electrical installers and commissioners in the UK to have the CHP monitoring system up and running seamlessly.


energy monitoring

Such meters have GPRS capability and have been successfully used to monitor both heat and power. Through the Wattics Formula Composer, energy managers are able to set notifications, alerts and reports in order to comply with the CHPQA self-assessment.

In order for the CHPQA certificate to be issued, energy managers are required to submit the following monthly energy figures: (1) electricity generated (2) fuel consumed (3) heat utilised. With Wattics these values can be imported directly from the CHP provided that the unit can be configured to push CSV files or by commissioning a Wattics Octopus gateway to read data from the meters. Furthermore, additional calculations are necessary for determining the overall efficiency (the “Quality Index”) of the scheme in order to resubmit form F4 for each year with scheme performance details for the previous calendar year. To this end, Wattics can help by creating a Formula Composer data point with the function that would determine the quality index.

energy management software free demo

3. Creation of condition-based formulas to identify issues across energy and non-energy data

Condition-based formulas help you make a logical test of data using the “IF” function along with other logical functions like AND, OR, NOT, TRUE and FALSE, allowing you to create a basic logical argument of “If (this), then (that)”.

A lot of work goes into measuring and verifying an energy conservation measure or retrofit. Apart from measuring the kWh savings accrued from a project, it is important to know that the measure/retrofit implemented continues to produce the desired results or is on track to achieve a predetermined goal. Creating mathematical formulas based on specific events or conditions can help energy managers ascertain if there has been a deviation from a benchmark/goal. These condition-based formulas, from which “alerts” can be created are useful in drawing attention to any abnormalities that could occur. 

The possibilities are virtually endless when creating condition-based calculations using the Formula Composer in the Wattics dashboard. Operators such as +, -, /, *, ^, <, >, =, and, or, if-then-else, sin. cos, tan allows you to manipulate data to dig deeper to determine the results of energy/cost saving actions as well as better understand how, where, what and when energy is being used. Calculations using the formula composer can vary in complexity, demonstrating the effectiveness of the tool for both simple calculations such as calculating net kWh values “production-consumption” or establishing the ratio of grid-generated power vs renewables used by a set of appliances/equipment. 

The video below demonstrates how the Formula Composer can be used to calculate how much surplus solar energy is produced by a site and sold to the grid.

 See how this is done through the Wattics Formula Composer tool


4. Creation of virtual meters (identify the kWh of other non-monitored equipment)

A virtual meter is a mathematical model that uses process conditions to calculate flow rates instead of using a physical meter, helping you measure more with less. 

Energy managers and building owners work with the goal of attaining as close to 100% visibility as possible into certain buildings so they can use that to model similar buildings. There are some circuits that would be a waste to monitor due to the cost and because they have a constant or steady consumption that will not fluctuate like the internet provider’s electric panel in buildings for example. Creating virtual meters for these types or group of appliances/circuits are necessary to be able to report on total energy consumption in a building – a requirement for energy professionals pursuing ISO 50001 certification. 

ISO 50001 defines how businesses and other organisations should establish, implement, maintain and improve an energy management system (EnMS), like Wattics energy analytics. It also provides a framework of requirements for organizations to:

      • Develop a policy for more efficient use of energy
      • Fix targets and objectives to meet the energy management policy
      • Use data to better understand and make decisions about energy use
      • Measure the results
      • Review how well the policy works, and
      • Continually improve energy management [9]

The ISO 50001 has been implemented by countless large and small commercial and industrial companies around the world since its ratification in 2011, helping businesses improve energy efficiency, enhance credibility in the tendering process and well as reduce greenhouse gas emissions and meet EU ETS and carbon reduction commitments.

[Related: Using Wattics to achieve the ISO 5001 energy management standard]

 Apart from ISO 50001 requirements, other cases in which energy managers can apply the Formula Composer for the creation of virtual meters include:

      • Grouping meters for department cost control, either electrical or gas or other costs
      • Apportioning common area energy consumption
      • Measurement and Verification (M&V) to demonstrate the effectiveness of an energy efficiency project
      • Managing intricate parent-child meter hierarchies

See how this is applied  through the Wattics Formula Composer tool


5. Calculation of HDD/CDD against kWh – Using degree days to calculate energy consumption

Outside temperature is the principal driver that dictates energy demand as changes in temperature greatly influence the amount of energy used to heat or cool buildings, and so Heating Degree Days (HDD) and Cooling Degree Days (CDD) are important metrics to take into account when attempting to establish the impact on kWh consumption, as well as to estimate future energy demand and associated cost. 

Colder weather during the winter season increases the demand for heating and hot weather conversely, increases demand electricity for cooling and thus pushes up demand for fuels coal and natural gas. The price of these commodities (natural gas coal) has a significant influence on their supply and demand, and thus could be said that weather can help predict variations is the price. Other valuable insights gathered from HDD/CDD include:

      1. Evaluating the success of savings measures and energy efficiency projects
      2. Detecting faults in heating systems and their control                                                             
      3. Preparing annual budgets

Wattics automates the process of importing degree days in its energy analytics platform, helping energy consultants use degree days to normalise kWh usage to determine the efficacy of energy efficiency projects.

See how this is done through the Wattics Formula Composer tool


As we inch closer to 2020 and 2030 climate targets, compliance to mandatory and non-mandatory legislation and certification will become a critical component shaping day-to-day business activities and operations. In order to comply with regulation, energy professionals require the tools that will enable them to analyse, report and make sense of their energy data in the most effective and efficient way. Spending hours doing mathematical analysis in excel is no longer a viable option for energy professionals who seek an intelligent, simple, accurate and agile solution for which to analyse energy data to make informed business decisions. Wattics outlines the
10 Top Reasons For Using Cloud Based Energy Management Solutions.

If you would like to know more about how Wattics can help you achieve your energy efficiency and compliance goals, get in touch with us by filling out the form below:












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