Project Summary

RetroMeter will provide and demonstraste a consistent methodology to accurately meter the energy and cost savings of retrofit energy efficiency measures, unlocking pay-for-performance financing, increasing uptake and leading to reduced costs for consumers and additional flexible services for the DNO.

Innovation Justification

Our Innovation Challenge is 4 - Accelerating decarbonisation of major energy demands: Improving efficiency at different levels in the energy system.

Our unique innovation id the development of a Metered Energy Savings approach that enables independent evaluators to use a householder's smart meter data, freely available weather data and a set of calculations (ie a methodology) to quantify the impact of an energy efficiency intervention (of any size). Our research has shown that this methodology has the potential to be highly accurate, low cost/easy to deploy and open source, ie can be used, interrogated and validated by all market actors and thus has the potential for universal adoption/mandation (ie by government) to underpin existing and new markets for energy efficiency.

Learning

The Discovery Phase identified suitable sources and methodologies for the MES solution finding:

• An existing open-source methodology CalTRACK is broadly effective, but fails to account for external changes (e.g. energy pricve changes, Covid).
• Comparison-based methodologies (e.g. GRIDmeter) account for external changes but are dependent on access to lots of smart meter data

The Discovery phase also identified comfort take-back (ie homeowners preferencing increasing indoor warmth over lower use after retrofit) as a confounder, we believe direct quantification could be achieved by combining the above approaches with a new physics-based model in Alpha - a novel and unique innovation in retrofit evaluation.

To inform methodology development, in Alpha, we will measure property pre-retrofit heat loss with the development of an algorithm or a commercial measurement solution.

Challenge

We have engaged with Recurve, who developed CalTRACK and joined LF Energy, the international federation for open-source energy initiatives. We've engaged directly with DESNZ and Ofgem in the context of REMA (Review of Energy Market Arrangements) and engaged with a wider sectoral stakeholder group of 57 organisations via an Advisory Group and direct meetings.

Other approaches

RetroMeter shares some similarity with methods explored by the SMETER programme, the key difference being that MES includes not only the building fabric impact of retrofit, but the post-retrofit behavioural impact on energy use as well. This reduces the tendency to overestimate savings, as well as tying more directly to energy bill reductions that are expected by consumers and financers. Commercial actors, such as Knauf, have developed "black box" approaches to quantifying retrofit impact but they lack the external validation or wider sectoral trust-building necessary to create an energy system wide standard and their accuracy is unknown.

TRL

The readiness level for the solution moved during Discovery up to 3-4, and we predict that post-Alpha these will move to 6.

Size and scale

Our challenge relates to developing a standard methodology to improve efficiency at different levels in the energy system, with specific reference to enabling domestic retrofit. Developing the MES approach requires data on thousands of homes as well as a demonstration on hundreds of homes to verify its efficacy. Our Alpha phase project benefits from a collaboration with Hildebrand to secure the necessary data and lays the foundation for a Beta phase demonstration with hundreds of homes.

Price control funding

Whilst the need for a MES approach is clear, the fact that one does not yet exist will not impact DNO operations under RIIO-ED2, but instead results in lost opportunities and lost potential future energy system and consumer benefits. There is therefore no business-as-usual mechanism to fund this innovation.

Counterfactual

We have assessed simple smart meter assessment as a way to quantify energy savings, but this fails to account for multiple confounding factors. We assessed Heat Transfer Coefficient methods and found them incomplete, this integrating them into our more holistic approach.

Impacts and Benefits

Currently, energy consumers are struggling in a rapidly changing energy market. Not only are energy bills more expensive than in recent memory, but a changing energy mix adds costly network reinforcement costs onto the bills of all consumers, adversely affecting those living in fuel poverty more than any other group.

A lack of available data on the impact of domestic retrofit and other energy technologies, such as electric vehicles, have made it difficult for grid operators to forecast demand changes and constraints across the network. This is primarily due to a lack of accurate, appropriate Metered Energy Savings (MES) methodologies. Current methodologies for "measuring" energy savings provide low confidence intervals and prevent uptake at-scale.

This lack of low-cost MES ensures that measuring and motivating the retrofit of UK housing nation-wide is stunted by a lack of certainty and quality assurance. This is because organisations have not been able to ascertain a "high-quality" installation without improved modelling methods, minimising access to flexibility revenues for consumers/aggregators and performance-related revenues for contractors.

The downstream impacts on the UK energy transition and retrofit market are notable: currently almost no Pay for Performance (P4P) domestic retrofit services operate in the UK, no open-source methodology enabling residential P4P or access to network flexibility revenues, and limited industry progress on making such a solution opne-source and available. Making such a solution open-source and accessible to a range of UK actors would unlock considerable benefits across the market, including access to new revenue streams, more equitable distributions of risk and rewards and accelerated delivery of essential greenhouse gas abatements.

The value of these benefits is notable, with the envisaged programme (see attached Cost Benefit Analysis) expected to deliver £13.47m of value (whole life NPV) to a relatively small area within Manchester, of jsut 6 substation catchments (~1500 homes). This will be acheived by deploying a "fabric-first" approach, reducing size of heat pump required and leading to a reduced contribution to peak demand. This will allow DNOs to defer reinforcement of network assets, promote the uptake of other energy efficiency measures and accurately quantify the outcomes of retrofit programmes to enable improved demand forecasting. Together this will lead to improved investment plans as well as quantification of the flexibility services provided by customers, and the revenue streams which can motivate these.

An additonal £20,000 could be garnered from fllexibility services revenues under this model. Without any retrofit actopn, this area would need £180,000 of traditional reinforcement investment to maintain current service levels. Additional value could be catalysed from these retrofits through energy efficiency measures unrelated to space heating, such as LED lighting, installation of renewable generation, etc. At a household level, this programme would create £8,980 of net present value over 45 years.

The RetroMeter consortium is confident in delivering value to the market, based in part on our achievements from the Discovery phase. The following benefits have already been reaslised through Project delivery:

• Multiple benefits quantified, with up to £1136 of value found for a comfort, air quality and real estate improvements, plus a further £1107 in bill savings and £320 through ECO flex. Our value stack validated the potential outset at the start of the Discovery phase, and will enable further aggregation in future phases.
• Validating the model with high residential complexity unlocks additional revenue streams for industrial and commercial deferral of network reinforcement.
• Application of such a metered savings retrofit offer would save at least 15.7ktCO2e/year from reduced peak consumption, and could defer up to 101 substation replacements per year, if applied to all expected heat pump installations under DFES scenarios.