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Chapter-2

Energy Management

Y K Sharma, SDE(BS-E), 9412739241(M)

E-Mail ID: yogeshsharma@bsnl.co.in

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Energy Management

Introduction:

The fundamental goal of energy management is to produce goods and provide services
with the least cost and least environmental effect. One definition of energy management
is: “The judicious and effective use of energy to maximize profits (minimize costs) and
enhance competitive positions”
The objective of Energy Management is to achieve and maintain optimum energy
procurement and utilisation, throughout the organization and to minimise energy costs /
waste without affecting production & quality.

Objectives:

At the end of this lesson, participants will be able to understand:

Concept of Energy Management
Energy management Strategy
Energy Auditing

Principles of Energy Management:

The principles of Energy Management involve the following:

i) Procure all the energy needed at the lowest possible

ii) Manage energy use at the highest energy efficiency
iii) Reusing and recycling energy by cascading
iv) Use the most appropriate technology
v) Reduce the avoidable losses.

Within these principles lies a complex matrix of knowledge and skill requirements. For
example, managing energy use at the highest energy efficiency can involve activities
ranging from auditing, to specifying retrofit measures and analyzing the resulting return
on investment, to monitoring and targeting, to conducting employee and tenant awareness
educational programs, and more. The energy manager typically will have responsibility
for advising senior management on energy reduction strategies, for gaining commitment
throughout the organization, for managing the implementation of measures, and for
dealing effectively with contractors and energy suppliers.

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Energy Management Strategy:

Energy management should be seen as a continuous process. Strategies should be

reviewed annually and revised as necessary. The key activities are outlined below:

1. Identify a Strategic Corporate Approach

The starting point in energy management is to identify a strategic corporate approach to
energy management. Clear accountability for energy management needs to be
established, appropriate financial and staffing resources must be allocated, and reporting
procedures initiated. An energy management program requires commitment from the
whole organisation in order to be successful.

2. Appoint Energy Manager

The energy manager, who should be a senior staff member, will be responsible for the
overall coordination of the program and will report directly to top management. Energy
managers need to have a technical background, need to be familiar with the
organisation‟s activities and have appropriate technical support.

3. Set up an Energy Monitoring and Reporting System

Successful energy management requires the establishment of a system to collect, analyse
and report on the organisation‟s energy costs and consumption. This will enable an
overview of energy use and its related costs, as well as facilitating the identification of
savings that might otherwise not be detected. The system needs to record both historical
and ongoing energy use, as well as cost information from billing data, and be capable of
producing summary reports on a regular basis. This information will provide the means
by which trends can be analysed and tariffs reviewed.

4.Conduct Energy Audit

An energy audit establishes both where and how energy is being used, and the potential
for energy savings. It includes a walk-through survey, a review of energy using systems,
analysis of energy use and the preparation of an energy budget, and provides a baseline
from which energy consumption can be compared over time. An audit can be conducted
by an employee of the organization who has appropriate expertise, or by a specialist
energy-auditing firm. An energy audit report also includes recommendations for actions,
which will result in energy and cost savings. It should also indicate the costs and savings
for each recommended action, and a priority order of implementation.

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5. Formalize an Energy Management Policy Statement

A written energy management policy will guide efforts to improve energy efficiency, and
represents a commitment to saving energy. It will also help to ensure that the success of
the program is not dependent on particular individuals in the organization. An energy
management policy statement includes a declaration of commitment from senior
management, as well as general aims and specific targets relating to energy consumption
reduction, timetables, budgetary limits and Organisation of management resources.

6. Prepare and Undertake a Detailed Project Implementation Plan

A project implementation plan should be developed as part of the energy audit and be
endorsed by management. The plan should include an implementation time table and
state any funding and budgetary requirements. Projects may range from establishing or
changing operational procedures to ensure that plant and equipment use minimum
energy, renegotiating electricity supply arrangements etc. to adopting asset acquisition
programs that will reduce energy consumption.

7. Implement a Staff Awareness and Training Program

A key ingredient to the success of an energy management program is maintaining a high
level of awareness among staff. This can be achieved in a number of ways, including
formal training, newsletters, posters and publications, and by incorporating energy
management into existing training programs. It is important to communicate program
plans and case studies that demonstrate savings, and to report results at least at 12-month
intervals. Staff may need training from specialists on energy saving practices and
equipment.

8. Annual Review
An energy management program will be more effective if its results are reviewed
annually. Review of energy management policy and strategies will form the basis for
developing an implementation plan for the next 12 months.

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Energy Audit
Types and Methodology:

Energy Audit is the key to a systematic approach for decision-making in the area of
energy management. It attempts to balance the total energy inputs with its use, and
serves to identify all the energy streams in a facility. It quantifies energy usage according
to its discrete functions. Industrial energy audit is an effective tool in defining and
pursuing comprehensive energy management programme.

As per the Energy Conservation Act, 2001, Energy Audit is defined as “the verification,
monitoring and analysis of use of energy including submission of technical report
containing recommendations for improving energy efficiency with cost benefit analysis
and an action plan to reduce energy consumption”.

Energy Audit:

In any industry, the three top operating expenses are often found to be energy (both
electrical and thermal), labour and materials. If one were to relate to the manageability of
the cost or potential cost savings in each of the above components, energy would
invariably emerge as a top ranker, and thus energy management function constitutes a
strategic area for cost reduction. Energy Audit will help to understand more about the
ways energy and fuel are used in any industry, and help in identifying the areas where
waste can occur and where scope for improvement exists.

The primary objective of Energy Audit is to determine ways to reduce energy

consumption per unit of product output or to lower operating costs. Energy Audit
provides a “ bench-mark” (Reference Point) for managing energy in the organization and
also provides the basis for planning a more effective use of energy throughout the
organization.

Type of Energy Audit

The type of Energy Audit to be performed depends on:

Function and type of industry

Depth to which final audit is needed, and

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Potential and magnitude of cost reduction desired

Thus Energy Audit can be classified into the following two types.

Preliminary Audit
Detailed Audit

Preliminary Energy Audit Methodology:

Preliminary energy audit is a relatively quick exercise to:

Establish energy consumption in the organization

Estimate the scope for saving
Identify the most likely (and the easiest areas for attention
Identify immediate (especially no-/low-cost) improvements/ savings
Set a „reference point‟
Identify areas for more detailed study/measurement
Preliminary energy audit uses existing, or easily obtained data

Detailed Energy Audit Methodology:

A comprehensive audit provides a detailed energy project implementation plan for a

facility, since it evaluates all major energy using systems. This type of audit offers the
most accurate estimate of energy savings and cost. It considers the interactive effects of
all projects, accounts for the energy use of all major equipment, and includes detailed
energy cost saving calculations and project cost.

In a comprehensive audit, one of the key elements is the energy balance. This is based on
an inventory of energy using systems, assumptions of current operating conditions and
calculations of energy use. This estimated use is then compared to utility bill charges.
Detailed energy auditing is carried out in three phases: Phase I, II and III.

Phase I - Pre Audit Phase

Phase II - Audit Phase
Phase III - Post Audit Phase

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Ten Steps Methodology for Detailed Energy Audit

Step
PLAN OF ACTION PURPOSE / RESULTS
No

Phase I –Pre Audit Phase

Resource planning, Establish/organize a Energy
Step 1 Plan and organise audit team
Walk through Audit Organize Instruments & time frame
Informal Interview with Energy Macro Data collection (suitable to type of
Manager, Production / Plant industry.)
Manager Familiarization of process/plant activities
First hand observation & Assessment of current
level operation and practices

Step 2
Conduct of brief meeting / Building up cooperation
awareness programme with all Issue questionnaire for each department
divisional heads and persons Orientation, awareness creation
concerned (2-3 hrs.)

Phase II –Audit Phase

Step 3 Historic data analysis, Baseline data collection
Primary data gathering, Process Prepare process flow charts
Flow Diagram, & Energy Utility All service utilities system diagram (Example:
Diagram Single line power distribution diagram, water,
compressed air & steam distribution.
Design, operating data and schedule of operation
Annual Energy Bill and energy consumption
pattern (Refer manual, log sheet, name plate,
interview)

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Conduct survey and monitoring

Step 4 Measurements :
Motor survey, Insulation, and Lighting survey
with portable instruments for collection of more
and accurate data. Confirm and compare
operating data with design data.

Trials/Experiments:
24 hours power monitoring (MD, PF, kWh etc.).

Conduct of detailed trials

/experiments for selected Load variations trends in pumps, fan
Step 5
energy guzzlers compressors etc.

Equipments Performance experiments etc

Analysis of energy use

Step6 Energy and Material balance & energy
loss/waste analysis

Identification and development

of Energy Conservation Identification & Consolidation ENCON
Step 7 (ENCON) opportunities measures
Conceive, develop, and refine ideas
Review the previous ideas suggested by unit
personal
Review the previous ideas suggested by energy
audit if any
Use brainstorming and value analysis techniques
Contact vendors for new/efficient technology

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Cost benefit analysis

Step 8 Assess technical feasibility, economic viability
and prioritization of ENCON options for
implementation
Select the most promising projects
Prioritise by low, medium, long term measures

Reporting & Presentation to the

Top Management Documentation, Report Presentation to the top
Step9
Management.
Phase III –Post Audit phase

Step10 Implementation and Follow-up Assist and Implement ENCON recommendation

measures and Monitor the performance
Action plan, Schedule for implementation
Follow-up and periodic review

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Energy Management system:

Energy Management- Barriers in Implementation

The main barriers in implementation of Energy management programs in the

organization are:

Managerial Barriers

Energy management is side-lined as a technical specialty

Line management is inadequate
There is insufficient interest and driving force from above
There is little incentive for departmental managers and general staff to save
energy.

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Lack of senior management commitment

Senior management unaware of potential savings
Higher priority given to “more important” issues
It is seen as an overhead cost
Energy is consumed by a large number of users
Users are unaware of energy use and costs

Technical

Getting accurate data on time is a key problem

Monitoring and targeting is not integrated with financial accounting
Output is not reported to either users or senior managers in a form they can
readily understand and use.
Users have no information on how to make savings

Energy Management – Issues involved in Implementation:

Four vital requirements for a successful energy management

Total support of top management
Strategy plan,
An effective monitoring system
Technical ability

Various issues involved in implementation of Energy management programs in the

organization are:

Top Management Support

The decision of company management to control energy costs is a vital first step. This
must be clearly stated and understood by all within the company. Senior management
should participate in energy committee meetings or in other energy related activities.

One of the roles of the top management is to publish a formal statement of its energy
policy, which can be used to define company activities in energy matters for its
employees. It can also serve to inform the general public about the company commitment
to energy efficiency.

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Finally, an important part of top management commitment is to empower those given

responsibility for implementing the energy management programme. The evidence of top
management commitment will be seen in the level of support given to the Energy
manager, especially such resources as manpower, budget etc.

Planning
Planning of an energy management strategy needs to be carried out at various levels
within an organization.

At the corporate level, a favorable climate should be created which will facilitate
planning at other levels in the organization. At this level, planning will provide overall
direction in setting targets.

These targets should be specific, verifiable and attainable. These objectives should be
communicated clearly throughout the whole organization.

Accountability

Periodical reporting to the Management is needed for controlling all energy management
activities, budget etc. Clear delegation of responsibilities, reporting procedures and
accountability should be assigned for all stakeholders likes energy users, energy
committee, energy managers, energy coordinators and top management.

One of the key factors, which often work against energy efficiency, is poor management
of the structure of the system within which the costs of energy are incurred. If the people
who control the ability to change energy use are not responsible for the energy budget,
then the costs of energy efficiency will always be viewed as a distraction from core
business. However, if we allocate a single budget to cover energy purchase, energy
management activities and energy efficiency investment, the controllers and operators of
this budget have a strong motivation to work to reduce energy expenditure. Furthermore,
this approach allows innovative management of the budget, by allowing savings to be re-
invested into further energy efficiency measures.

Thus, it is strongly recommended that an integrated energy purchase and energy

management budget be developed as part of the energy management action plan.

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Motivation of Employees

One of the most successful means of motivating employees is through “awareness”.

Employees can be stimulated to support an energy management program if they are
informed of (1) the amount of energy they are using (2) the costs involved (3) the critical
part that energy plays in the continued viability of their job (4) the many ways they can
save energy in their operation (5) the relationship between production rate and energy
consumption and (6) the seriousness of the energy problem and its potential effects upon
the nation economy in the future.

Another effective way to motivate employees is through recognition. Employees should

be involved personally in setting realistic but challenging energy conservation goals
through involvement cum commitment.

Fostering reasonable competition between departments is another healthy practice. It

motivates individuals to set their sights higher and to work harder to achieve their goals.

Potential areas for motivating employees to generate ideas in saving energy are rewards,
especially as financial rewards, job security, job enrichment, public recognition and
greater authority etc

Marketing and Communicating

Although, the main function of energy management is to control energy consumption and
provide information to support decision making, there is also a need to promote energy
management and marketing of various activities. Promoting energy management involves
the following key objectives:

Raising awareness of the importance of energy efficiency to cost control and

environmental conservation
Promoting energy efficiency measures
Publishing your achievements in energy management inside and outside the organization

Many companies want to capitalize on any corporate activity that improves their image in
their marketplace. Implementation of energy conservation and environmental protection
measures –indicative of a good corporate citizen - should be made known to customers
and community.

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Through effective communication, Energy Manager needs to engage the attention of

various groups and motivate them to follow his advice and adapt better practice. In
particular, energy manager has to promote respect for energy management and increase
its take-off.

Training

Training that pertains to energy management takes many form, depending on who are the
target audience. Training may include the complex technical issues that relate to energy
efficient technologies as well as general programs that increase awareness among general
staff such as.

Awareness of energy efficiency as a corporate priority

Understanding of issues
Commitment to achievement of goals
Understanding of personal impact on energy consumption

There are many ways to approach training at this level. The important principle is that the
development of a staff training program requires some considerable thought about the
present needs, knowledge and attitudes of staff. Performing a training needs assessment
would be of immense help in providing the required inputs.

Energy forums, training days, seminars and talks all offer opportunities to create energy
awareness and to build commitment. Energy managers can make presentations to all
kinds of gatherings, for example: board meetings, management team meetings, and
seminars for budget holders and middle managers.

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QUESTIONS

1.Define “ Energy Management”. What are the objectives of Energy Management .

2. List out the five (5) basic Objective of Energy Management.
3. What are the key activities involved in Energy Management. Briefly explain each
Activity
4. Define Energy Audit as per Energy Conservation Act 2001.
5. Mention the steps involved in Detailed Energy Audit.
6. What are the barriers in Implementing Energy Management Programme.
7. Expalin “Accountability” while implementing Energy Management Programme.
8 What are the issues to be taken up while training of Energy Management.
9.What are the four (4) vital requirement for successful Energy Manager.
10.What is the importance of re- assess the Implementation plan.

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