Appendix B 379
The value of these energy/demand savings are computed from the
marginal prices as:
electricity consumption = $113,300
electric demand = $13,700
steam = $70,970
Total = $197,970
Appendix B
Uncertainty
Note: Use of statistical techniques such as sampling in determining
energy savings is relatively unsophisticated compared to the exact
science of statistics. Nonetheless, relatively simple statistical methods
are helpful in explaining the results of an energy saving program and
securing confidence and financing. The MVP uses the language of sta-
tistics, such as confidence levels and sampling, in a way that reflects
best industry practices, and not as prescribed in statistics textbooks.
These methods may not be statistically rigorous, but do provide suf-
ficient confidence to complete and finance projects.
INTRODUCTION
Instrumentation Error
The magnitude of instrumentation errors is given by manufactur-
er’s specifications. Typically instrumentation errors are small, and are
not the major source of error in estimating savings.
Modeling Error
Modeling error refers to errors in the models used to estimate
parameters of interest from the data collection. Biases in these models
arise from model miss-specification. Miss-specification errors include:
- omitting important terms from the model.