Energy Efficiency

Innovative P4P Schemes

Improving energy efficiency as a market-based procurable resource

The SENSEI project will design, test and disseminate an innovative transaction model to enable energy efficiency upgrades to become valued through one or more of the following paths:

  • Incentive schemes that aim at steering energy efficiency interventions towards measures that are beneficial for both the building owners and the power grid;
  • Capacity mechanisms that compensate energy efficiency as a resource that achieves a permanent reduction in power consumption affecting the need for peak capacity or long-lasting ramping reserves;
  • Programs that aim at financing energy efficiency without the risk of paying for unrealized changes in power consumption.

The SENSEI model will build on innovative pay-for-performance (P4P) schemes, according to which payments for energy efficiency are made only after the efficiency improvement and are based on proven and measured savings (using pre-agreed measurement and verification methods).

To achieve this, the SENSEI project will:

  • Identify when and where energy efficiency can help defer investments in the distribution system or safely offset the need for ramping and/or peak generation capacity;
  • Increase awareness on the P4P model;
  • Propose and design new contractual arrangements to govern the transactions between the involved parties so that energy efficiency can become an exploitable resource for the power grid.