ENERGY MANAGEMENT AND AUDITING

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 The Objectives of Energy Management

ENERGY
MANAGEMENT

To minimise environmental effects

To minimise energy costs / waste without affecting

production & quality

To achieve and maintain optimum energy procurement and

utilisation, throughout the organization

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 • Definition of Energy Management Energy Management
– "The strategy of adjusting and optimizing energy, using systems and
procedures so as to reduce energy requirements per unit of output while
holding constant or reducing total costs of producing the output from
these systems"

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 NEED FOR ENERGY MANAGEMENT
• There are many good reasons to manage energy:
– Cost savings: There are typically investment opportunities with a rate of
return greater than 30% available from energy efficiency.
– Concern for the environment: The Greenhouse Effect is internationally
accepted as being a problem of sufficient immediacy to warrant action,
now, to start curbing emissions. The most effective way to do this is to
reduce unnecessary energy use.
– Good energy management is simply good management practice:
Ensuring that energy use is efficient and effective should be just one
more aspect of good management within the organisation.
– Local government has a leadership role to play: Local government's
central role in the achievement of environmental improvement is
recognised internationally.
– Many energy problems are linked to service problems: Fixing these
problems has the spin-off effect of improving the quality of working
environment, which will increase staff morale and productivity. These
effects can multiply the energy savings tenfold.

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 Typical steps of Energy management
• Metering your energy consumption and collecting
1 the data.

• Finding opportunity to save money and estimating

2 how much energy each opportunity could save.

• Taking action to target the opportunities to save

3 energy

• Tracking progress by analyzing metered data(how

4 well energy saving efforts have worked)

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 Role of Energy Managers
• Benchmarking Energy Consumption
– Understanding the patterns of all forms of energy use and other utilities
is the first step in assessing the potential for efficiency savings.
– With the data available, Energy Management system can guide the plant
manager to organize and visualize key energy and other parameters in
real time thus providing a tremendous diagnostic tool for identifying and
solving energy problems and appreciating opportunities for cost savings.
– Track energy consumption
• Reduce energy intensity by 25% in 10 years
• Identify under-performing plants
• Reduction in Specific Energy consumption
– Each product manufactured will be measured by energy consumed to
make one unit of product.
– With Energy Management system, the plant manager can measure as
well as reduce energy by close monitoring of machinery run hours and
prevent idle running of machine and there by reducing the specific
energy consumption of manufactured product

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 Role of Energy Managers...contd
• Reduction in Distribution Loss
– The power received from Electricity board and captive power is being fed
through various transformers to various load centers like MCC, PCC
Pumps, Blowers, Compressors, Fan, Chillers, Lighting loads and so on.
– With the Energy Management system it is easy for plant manager to
identify energy consumed by each machinery. It is very important to
know whether power received from source is being utilized effectively
by all machines and level of the losses incurred due to distribution. By
understanding the measured value, various steps can be taken to reduce
losses. Ideally this loss should be less than 3% in any manufacturing
plant
• Reducing Peak Demand
– Regular verification of daily load profile will help plant manager to
identify and eliminate demand spikes, such as those associated with
simultaneous motor, pump, compressor start ups or schedule operation
in such a way as to reduce overall demand. This will help plant to bring
down Demand charges which need pay to Electricity Boards.

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 Role of Energy Managers...contd

• Energy Resources Planning

– Using computers, the energy balance at various nodes and system
losses to formulate and implement loss elimination schemes. Conducts
overall energy accounting.
• Eliminating Inefficient Equipment Operation
– This is highly useful in quickly spotting wasteful energy use. By reviewing
daily load profiles and comparing to bench mark levels, plant manager
can identify the instance when equipment is not performing properly or
unused equipment is left running.
• Predictive Maintenance
– Energy management system helps in “planned shut down” based on run
hours and efficiency of the equipment. This reduces down time and
helps in planning predictive maintenance.

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 Energy Managers Responsibilities
• Initiate activities to improve monitoring and process control to reduce energy costs.
• Analyze equipment performance with respect to energy efficiency.
• Ensure proper functioning and calibration of instrumentation required to assess level of
energy consumption directly or indirectly.
• Prepare information material and conduct internal workshops about the topic for other staff.
• Improve disaggregating of energy consumption data down to shop level or profit center of a
firm.
• Establish a methodology how to accurately calculate the specific energy consumption of
various products/services or activity of the firm.
• Develop and manage training program for energy efficiency at operating levels.
• Co-ordinate nomination of management personnel to external programs.
• Create knowledge bank on sectoral, national and international development on energy
efficiency technology and management system and information denomination
• Develop integrated system of energy efficiency and environmental up-gradation.
• Wide internal & external networking.
• Co-ordinate implementation of energy audit/efficiency improvement projects through
external agencies.
• Establish and/or participate in information exchange with other energy managers of the
same sector through association.

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 Step 1 :
Management

Step 2 : Establish
Energy Policy

Step 3 : Organize
Energy Team
Step 4 : Energy
Review &
Identify options
Plan
Step 5 :
Step 9 :
Prepare
Recognize
achievement

Step 10 :
Act Do Step 6 :
Execute Action
Review and Plan
improve

Step 7 :
Check Measure and
verify energy 10
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 MANAGEMENT COMMITMENT
• International energy management standards require the
support of senior managers to commit to facilitating energy
efficiency throughout their organizations. These include
commitments to establish, implement, maintain and improve
energy management systems on a regular basis.
• Specifically, managers must commit in writing to:
– Integrate energy policies and regulations into company operations;
– Incorporate energy targets into overall business strategies;
– Provide staff with energy management training;
– Conduct management reviews of energy management processes; and
– Keep energy-related equipment well maintained.

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 ENERGY POLICY
• Energy management standards encourage companies to create
energy policies specific to their company operations. But
implementation of these policies is up to the discretion of
managers and companies.
• Good energy policies:
– Are integrated with the company’s business activities, products and
services;
– Reduce energy consumption, increase efficiency and guarantee regular
system maintenance;
– Comply with applicable laws and regulations;
– Provide a framework for making and evaluating energy targets and
indicators;
– Offer employees training materials so that they can understand and
implement energy policies; and

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 ORGANIZE ENERGY TEAM
• One very important part of an energy management program is to
have top management support. More important, however, is the
selection of the energy manager, who can among other things
secure this support. The person selected for this position should be
one with a vision of what managing energy can do for the company.
• Developing a working organizational structure may be the most
important thing an energy manager can do.
• Establish an energy conservation cell within the firm with
management’s consent about the mandate is task of the cell. This
group is the core of the program. Coordinators should be selected to
supplement skills lacking in the energy manager as it is unrealistic to
think one energy manager can have all the skills in all the domains in
the industrial scenario..
• Prepare an annual activity plan and present to management
concerning financially attractive investments to reduce energy costs.
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 Energy Managers Duties
• Report to BEE and State level Designated Agency once a year. The
information with regard to the energy consumed and action taken in
the recommendation of the accredited energy auditor, as per BEE
Format.
• Establish an improved data recording, collection and analysis system
to keep track of energy consumption.
• Provide support to Accredited Energy Audit Firm retained by the
company for the conduct of energy audit.
• Provide information to BEE as demanded in the Act, and with respect
to the tasks given by a mandate, and the job description.
• Prepare a scheme for efficient use of energy and its conservation and
implement such scheme keeping in view of the economic stability of
the investment in such firm and manner as may be provided in the
regulations of the Energy Conservation Act.

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 ENERGY REVIEW AND IDENTIFY THE OPTION
Understand
Present Usage

Optimize
Understand supply
Costs
Maximize
Compare Efficiency
yourself
Match the
Understand requirement
When

Understand
Where Find the saving
opportunities

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 • The first phase involves gaining control of
your present usage, its cost, historical and
Understand
ongoing variability, and physical Present Usage

distribution. This phase involves analyzing

Optimize
usage starting at the point of purchase Understand supply
Costs
and working towards the point of use. Maximize
Compare Efficiency
• Understand your energy costs yourself
Match the
– Unlike other commodities that may be sold by Understand requirement
When
the pound, the cost of energy that your facility
uses is influenced by a variety of factors. Understand
Where Find the saving
– The cost of electricity, for example, depends opportunities

upon:Demand, Energy usage,Time-of-Use,

Power Factor
– Thermal fuels are simpler to understand than
electricity; they are typically sold by mass or
volume, although the usable energy content of
the various fuel quantities can vary widely.
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 • Compare yourself
– Two kinds of comparison are pertinent:
external, and internal.
Understand
– External comparisons: Present Usage

• How does your level of energy consumption

compare to other similar industries, facilities Understand
Optimize
supply
and sites? Costs
Maximize
• What level of consumption is achievable with Compare Efficiency
the best operating practices and industry yourself
benchmarks? Match the
Understand requirement
– These external comparisons will be valuable in When

developing realistic savings expectations, Understand

sometime called targets. Where Find the saving
opportunities
– Internal Comparisons:
• How does your consumption or energy
performance this month compare with last
month, or the best month in the past two
years, for example?
• How does one site in a multi-site operation
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compare with another? 18
 • Understand when energy is used
– The cost of electricity is influenced by the
Understand
demand and time-of-use. The electrical Present Usage
demand profile clearly shows the rate of use
of electricity over time. It is a key Optimize
Understand supply
management tool for the demand Costs
Maximize
component of your electricity bill. Compare Efficiency

• Understand where energy is used yourself

Match the
– Treat energy as you would any other Understand
When
requirement

purchased product. Building an inventory of

your electrical loads and uses of thermal Understand
Where Find the saving
energy will enable you to focus on the opportunities

largest and, consequently, the most

expensive consumers.

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 • The second phase seeks to identify the
savings opportunities in a sequence that will
be the most cost effective. It should begin
with housekeeping measures (operational) Understand
Present Usage
before investing money in new equipment
(technological measures). The key is to look Understand
Optimize
supply
for opportunities, starting at the point of Costs
Maximize
use, working back to the point of purchase. Compare Efficiency
yourself
• Match usage to requirement Match the
requirement
Understand
– The first and most important step in realizing When

savings opportunities is to match what you Understand

actually use to what is needed. The key Where Find the saving
opportunities
consideration here is the duration of use and the
magnitude of use.
– For example, fuel savings will result from shutting
down a process heater running for 12 hours when
it is only actually required for an 8 hour shift. Or,
there are electricity savings available by avoiding
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 • Maximise system efficiencies.
– Once the need and usage are matched
Understand
properly, the next step is to ensure that the Present Usage
components of the system meeting the need
are operating as efficiently as possible. In this Optimize
Understand supply
step the impact of operating conditions, Costs
Maximize
maintenance and equipment/technology will Compare Efficiency
be considered. yourself
Match the
• Optimise the energy supply. Understand requirement
When
– Previous steps will reduce the requirements of
energy. This step seeks the optimum source or Understand
Where Find the saving
sources for your overall energy requirement. opportunities

This may include such considerations as heat

recovery systems, alternative tariff structures,
alternative fuels, or even larger measures such
as a co-generation or combined heat and
power (CHP) system.

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 Prepare
• Make sure you establish an energy baseline using the
information from the energy review – this will help you monitor
your progress and see improvements over a suitable data
period.
• The more detailed this section is, the easier it will be to
demonstrate the success of a long-term energy management
programme.

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 Execute Action Plan
• Based on the energy policy and the objectives/targets, actions
plans shall be made out, consisting of the following:
(1) Keep the program on track.
(2) Operate at different levels, but all should
- Be agreed at appropriate level and “roll up” to the senior manager with
overall responsibility for energy.
- The rolls and responsibilities of each member in the organization could be
expressed in the form of matrix.
Responsible Person Director Manager A Manager B
Sample
Measure consumption 3 2 1
Identify energy cost centers 3 4

(1): Perform work (2): Responsible for week (3): Approval authority (4): Provide advice (technical support)

- Relate actions to individual objectives and targets. Assign actions to specific

individuals, with clear deadlines for reporting & completion.
- Have all action plans agreed and approved through line management.
- Describe the resources available.
- Facilitate budget negotiations and confirm adequate budget provisions have
been made.
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 Measure and Verify Energy
• Fuel source usage breakdown can be Table (a)
tabled like Table (a):
• Tabulate Table (b) the equipment and
processes which account for the
consumption of each fuel source. It
will help in identifying the best
approach to improve energy Table (b)
efficiency.
• For companies in the industrial
sector, it is recommended to
consolidate the use by the
department Table (c). Eg. Saw mill
department, Drying department, Table (c)

Offices
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 • In order to achieve the objectives given in the policy it is
essential to evaluate the results of Total Energy Management
(TEM) implementation. There should be evaluation at all levels :
– 1) Self evaluation – This is an internal evaluation conducted by staff
within a section or work unit in every month.
– 2) Section Manager Evaluation – This is an evaluation conducted by a
section manager or a division manager who takes care of that section in
every three months in order to intensify the evaluation.
– 3) Top Management Evaluation – This is an evaluation conducted by a top
management. The evaluation results obtained could also be used for
personnel evaluation i.e. for annual increment of staff salary or giving
bonus.

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 • Sample form

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 ENERGY AUDIT

28
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 Raw Materials

Man Power USEFUL ENERGY

CONVERTED INTO
PROUDCT

Energy

ENERGY
LOSS

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 • Energy audit is a systematic study or survey to identify how
energy is being used in a building or plant, and identifies
energy savings opportunities.
• Using proper audit methods and equipment, an energy audit
provides the energy manager with essential information on
how much, where and how energy is used within an
organization (factory or building).
• 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".

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 Objectives of Energy Audit
1) Identifying quality and cost of various energy inputs.
2) Assessing present pattern of energy consumption in
different cost centre of operations.
3) Relating energy inputs and production output
4) Identifying potential areas of thermal and electrical energy
economy.
5) Highlighting wastage in major areas.
6) Fixing energy savings potential targets for individual cost
centers
7) Implementation of measures for energy conservation and
realization of savings.

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 The Role of an Energy Audit

Identify first which areas in your establishment

unnecessarily consume too much energy.

Which is the most cost-effective to improve

An energy audit identifies where energy is being

consumed

Assesses energy saving opportunities

It will save money where it counts the most .

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 Outcome of Energy Audit
• This will indicate the performance at the overall plant or process
level.
• The energy manager can compare these performances against
past and future levels for a proper energy management.
• The main part of the energy audit report are energy savings
proposals comprising of technical and economic analysis of
projects.
• Looking at the final output, an energy audit can also be defined
as a systematic search for energy conservation opportunities.

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 • The type of Energy Audit to be performed depends on:
– Function and type of industry
– Depth to which final audit is needed, and
– Potential and magnitude of cost reduction desired

• Thus Energy Audit can be classified into the following two types.
i) Preliminary Audit
ii) Detailed Audit

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 – Preliminary Energy Audit is an initial data gathering effort which is also
known as “brief audit” or “walk-through audit”.
– Normally uses available data and is completed without or with very
simple measurement.
– Output normally consists of no-cost or low-cost measures for energy
efficiency.

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 • Preliminary energy audit is a
relatively quick exercise to:
– Establish energy consumption
pattern in the organization
– Estimate the scope for saving  Introduction
 Overview of current systems in place
– Identify the most likely (and the • How much energy is being consumed;

easiest) areas for attention • What type of energy is being consumed

• The performance of the facility compared

– Identify immediate (especially with other similar facilities;

• The characteristic performance of the
no-/low-cost) improvements/ facility
Scope of work for energy audit
savings  Recommendations and the associated
costs and savings
– Set a 'reference point‘  Conclusions

– Identify areas for more detailed

study/measurement
– Preliminary energy audit uses
existing, or easily obtained data

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 • 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

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 PRE-AUDIT PHASE

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 PRE-AUDIT PHASE ....Contd

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 AUDIT PHASE
• Depending on the nature and complexity of the site, a
comprehensive audit can take from several weeks to several
months to complete.
• Detailed studies to establish, and investigate, energy and
material balances for specific plant departments or items of
process equipment are carried out.
• Whenever possible, checks of plant operations are carried out
over extended periods of time, at nights and at weekends as
well as during normal daytime working hours, to ensure that
nothing is overlooked.

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 AUDIT PHASE ...Contd
• The audit report will include a description of energy inputs and
product outputs by major department or by major processing
function, and will evaluate the efficiency of each step of the
manufacturing process.
• Means of improving these efficiencies will be listed, and at least a
preliminary assessment of the cost of the improvements will be
made to indicate the expected payback on any capital investment
needed.
• The audit report should conclude with specific recommendations
for detailed engineering studies and feasibility analyses, which
must then be performed to justify the implementation of those
conservation measures that require investments.

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 AUDIT PHASE ...Contd

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 AUDIT PHASE ...Contd

• Energy auditor must interview the supervisors and equipment

operators to collect information related to the equipment.
• Maintenance manager has to be discussed with to know about
types of lighting, lamps, size of motors, A/c plant and electrical
load and related performance problems.

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 AUDIT PHASE ...Contd
• Draw process flow diagram and list process steps; identify waste
streams and obvious energy wastage
– An overview of unit operations, important process steps, areas of
material and energy use and sources of waste generation should be
gathered and should be represented in a flowchart as shown in the figure
below. Existing drawings, records and shop floor walk through will help in
making this flow chart. Simultaneously the team should identify the
various inputs & output streams at each process step.

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 • An overview of unit operations, important process steps,
material and energy use and waste generation is then
assembled in the form of process flow diagram.
• Information from existing drawings, records and shop floor
survey will help in preparing the flow chart.
• Simultaneously the team should identify the various inputs and
output streams at each process step.

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 Example

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 Identification of Energy Conservation
Opportunities
• Fuel substitution: Identifying the appropriate fuel for efficient energy
conversion
• Energy generation :Identifying Efficiency opportunities in energy
conversion equipment/utility such as captive power generation, steam
generation in boilers, thermic fluid heating, optimal loading of DG
sets, minimum excess air combustion with boilers/thermic fluid
heating, optimising existing efficiencies, efficient energy conversion
equipment, biomass gasifiers, Cogeneration, high efficiency DG sets,
etc.
• Energy distribution: Identifying Efficiency opportunities network such
as transformers, cables, switchgears and power factor improvement in
electrical systems and chilled water, cooling water, hot water,
compressed air, Etc.
• Energy usage by processes: This is where the major opportunity for
improvement and many of them are hidden. Process analysis is useful
tool for process integration measures.
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 Technical and Economic feasibility
• The technical feasibility should address the following issues
– Technology availability, space, skilled manpower, reliability, service etc
– The impact of energy efficiency measure on safety, quality, production or
process.
– The maintenance requirements and spares availability The Economic
viability often becomes the key parameter for the management
acceptance. The economic analysis can be conducted by using a variety
of methods. Example: Pay back method, Internal Rate of Return method,
Net Present Value method etc. For low investment short duration
measures, which have attractive economic viability, simplest of the
methods, payback is usually sufficient

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 Classification of Energy Conservation Measures
• Based on energy audit and analyses of the plant, a number of
potential energy saving projects may be identified. These may
be classified into three categories:
1. Low cost - high return;
2. Medium cost - medium return;
3. High cost - high return
• Normally the low cost - high return projects receive priority
• Projects relating to energy cascading and process changes
almost always involve high costs coupled with high returns, and
may require careful scrutiny before funds can be committed.

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 Energy Audit Reporting Format
• After successfully carried out energy audit energy
manager/energy auditor should report to the top management
for effective communication and implementation.
• A typical energy audit reporting contents and format are given
below. The following format is applicable for most of the
industries. However the format can be suitably modified for
specific requirement applicable for a particular type of industry.

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 • The following Tables can be used as guidance for energy audit
assessment and reporting in executive summary.

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 Instruments and Metering used for Energy
Audit

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  This power quality analyzer is a multi-
 A fyrite is a volumetric gas function power analyzer device that measure
analysis device. precisely direct current, alternating current, AC-
 The device is used to voltage, DC-voltage the intensity of DC or AC,
measure the concentration of a phase rotation and idle, apparent and effective
selected gas in a sample of power.
gas.  Nowadays, power quality analyzers have
 The gas is “selected” by many features such as, insulated current input,
choosing the composition of the measurement of harmonics, AC and DC current
liquid inside the analyzer. measurement, AC and DC voltage
measurement, frequency measurement, phase
rotation measurement and idle, apparent and
effective power measurement.
 All this data can also be logged and
9/23/2024 analysed with the delivered PC-Software. 62
  Fuel Efficiency Monitor
measures Oxygen and
temperature of the flue gas.
 Calorific values of common  Combustion analyzer instrument
fuels are fed into the has in-built chemical cells which
microprocessor which calculates measure various gases such as O2,
the combustion efficiency CO, NOX and SOX.

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 Contact thermometers are
thermocouples which measure for
example flue gas, hot air, hot
water temperatures by insertion of  Infra red Thermometer is a non-
probe into the stream. contact type measurement which when
 For surface temperature, a directed at a heat source directly gives the
leaf type probe is used with the temperature read out.
same instrument.  This instrument is useful for measuring
hot spots in furnaces, surface
temperatures etc.
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  In Pitot Tube and
manometer, Pitot tube
measures Air velocity in
ducts and inclined
manometer for further
calculation of flows.

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  Water flow meter non-contact flow
measuring device using Doppler effect /
Ultra sonic principle.
 There is a transmitter and receiver
which are positioned on opposite sides of
the pipe.
 The meter directly gives the flow. Water
and other fluid flows can be easily
measured with this meter.

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  In any audit exercise speed measurements are critical as they may
change with frequency, belt slip and loading.
 A simple tachometer is a contact type instrument which can be used
where direct measurement is possible. Non-contact tachometers are also
available.
 More sophisticated and safer ones are non-contact instruments such as
stroboscopes.

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  The Ultrasonic Leak Detector
instruments are available detect
leaks of compressed air and other  Lux meters help in measuring
gases which are normally not Illumination levels.
possible to detect with human It consists of a photo cell which senses
abilities. the light output, converts to electrical
impulses which are calibrated as lux.

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  Typical energy audit team:
 Leader / Coordinator
 Engineer (Thermal / Mechanical)
 Engineer (Electrical)
 Technicians (Process / Mechanical / Electrical)
• THREE-LEVEL APPROACH TO FORMING ENERGY AUDIT TEAM

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 ENERGY MONITORING AND TARGETING

75
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 • Energy monitoring and targeting is primarily a management
technique that uses energy information as a basis to eliminate
waste, reduce and control current level of energy use and
improve the existing operating procedures.
• It builds on the principle "you can't manage what you don't
measure". It essentially combines the principles of energy use
and statistics.
• Monitoring is essentially aimed at establishing the existing
pattern of energy consumption, targeting is the identification
of energy consumption level which is desirable as a
management goal to work towards energy conservation.

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 • Monitoring
– Monitoring is the regular collection of information on energy use. Its
purpose is to establish a basis of management control, to determine
when and why energy consumption is deviating from an established
pattern, and as a basis for taking management action where necessary.
Monitoring is essentially aimed at preserving an established pattern.
• Targeting
 is the identification of levels of energy consumption, which is desirable as
a management objective to work toward.
• Reporting
 involves “closing the loop” by putting the management information
generated from the monitoring process in a form that enables ongoing
control of energy use, the achievement of reduction targets, and the
verification of savings.

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 • Monitoring and Targeting is a management technique in which
all plant and building utilities such as fuel, steam, refrigeration,
compressed air, water, effluent, and electricity are managed as
controllable resources in the same way that raw materials,
finished product inventory, building occupancy, personnel and
capital are managed.
• It involves a systematic, disciplined division of the facility into
Energy Cost Centers.
• The utilities used in each centre are closely monitored, and the
energy used is compared with production volume or any other
suitable measure of operation.
• Once this information is available on a regular basis, targets can
be set, variances can be spotted and interpreted, and remedial
actions can be taken and implemented

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 Elements of Monitoring & Targeting System
• The essential elements of M&T system are:
– Recording -Measuring and recording energy consumption
– Analysing -Correlating energy consumption to a measured output, such
as production quantity
– Comparing -Comparing energy consumption to an appropriate standard
or benchmark
– Setting Targets -Setting targets to reduce or control energy consumption
– Monitoring -Comparing energy consumption to the set target on a
regular basis
– Reporting -Reporting the results including any variances from the targets
which have been set
– Controlling -Implementing management measures to correct any
variances, which may have occurred.

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 • Particularly M&T system will involve the following:
– Checking the accuracy of energy invoices
– Allocating energy costs to specific departments (Energy Accounting
Centres)
– Determining energy performance/efficiency
– Recording energy use, so that projects intended to improve energy
efficiency can be checked
– Highlighting performance problems in equipment or systems

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 • Determining the relationship of energy use to key performance
indicators will allow you to determine:
– Whether your current energy is better or worse than before
– Trends in energy consumption that reflects seasonal, weekly, and other
operational parameters
– How much your future energy use is likely to vary if you change aspects
of your business
– Specific areas of wasted energy
– Comparison with other business with similar characteristics - This
"benchmarking" process will provide valuable indications of effectiveness
of your operations as well as energy use
– How much your business has reacted to changes in the past
– How to develop performance targets for an energy management
program

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 • Information related to energy use may be obtained from
following sources:
– Plant level information can be derived from financial accounting
systems-utilities cost centre
– Plant department level information can be found in comparative energy
consumption data for a group of similar facilities, service entrance meter
readings etc.
– System level (for example, boiler plant) performance data can be
determined from submetering data
– Equipment level information can be obtained from nameplate data, run-
time and schedule information, sub-metered data on specific energy
consuming equipment.

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 Steps in M&T
• Data and Information Analysis
– Collect Energy consumption, energy cost and production data over a
period of time eg. For a year or two
– After collection the next stage of the monitoring process is to study and
analyse the data to understand what is happening in the plant. It is
strongly recommended that the data be presented graphically.
– Plot both energy and production on the same chart - most likely using
two y-axes.

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 – Plot will help in calculating Specific Energy Consumption (SEC), which is
energy consumption per unit of production
– Level of production may have an effect on the specific consumption. For
example, the very low SEC occurred when there was a record level of
production.

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 • Next step is to gain more understanding of the relationship of
energy and production, and to provide us with some basis for
performance measurement.
• We can use it to derive a "standard" for the up-coming year's
consumption.

Total Energy = M x production + C

M is the energy consumption

directly related to production
(variable)

C is the Fixed energy

consumption

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 • CUSUM is a powerful technique for developing management
information regarding the energy performance of a plant, or an
energy-consuming system such as an oven or furnace, for
example.
• It distinguishes between significant events affecting
performance—faults or improvements—and noise.
• CUSUM stands for 'CUmulative SUM of differences', where
'difference' refers to differences between the actual
consumption and the consumption you expect on the basis of
some established pattern—what we have called the energy
performance model.

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 • If consumption continues to follow the established pattern, the
differences between the actual consumption and the
established pattern will be small and randomly either positive or
negative. The cumulative sum of these differences over time,
CUSUM, will stay near zero.
• Once a change in pattern occurs due to the presence of a fault
or to some improvement in the process being monitored, the
distribution of the differences about zero becomes less
symmetrical and their cumulative sum, CUSUM, increases or
decreases with time.
• The plot will provide how effective
the energy conserving measures
yield fruitful outcome.

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 • Targeting is a vital part of energy management as it encourages
us to determine how low, a level of energy consumption is
achievable.
• In monitoring you are trying to maintain an existing level of
efficiency. In targeting you decide to what level energy
consumption can be reduced.
• All targets have two elements:
– measure of the level to which consumption can be reduced
– the time by which the reduction will be achieved.
• Targets related to those achievable by better, or more skilled
operators and management need to be distinguished from
those that involve capital investment.
• Targeting should become a dynamic process in which continued
monitoring acts as an input to the fine-tuning of medium- and
long-term targets. This is an element of a continuous
improvement cycle.
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 Reporting
• Reporting within a monitoring and targeting system has a number
of functions:
– to create motivation for energy saving actions;
– to report regularly on performance;
– to monitor overall utility costs;
– to monitor cost savings.
• In planning a reporting structure, there are two basic questions
that need to be answered:
– Question 1: Who needs energy information?
– Question 2: What information do recipients need?

» SAMPLE REPORT GENERATION

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 ENERGY BENCH MARKING

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 • Energy benchmarking is defined as ‘a macroscopic level of
performance assessment, using metrics to measure its
performance relative to other building/energy consuming
device or its previous performance’ .

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 • Bench marking methods can be categorized into white box
method, gray box method and black box method.
– A white box method is also termed as first principle based method,
which embeds physical constraints into the modelling of building
components, and thus requires large amount of design documentations.
– A black box method uses data fitting techniques rather than physical
knowledge, therefore requires a pre-selected statistical model and
training data.
– The principle of gray box method lies in the middle between white box
method and black box method, it combines both physical knowledge of
the system and data fitting techniques to derive a useful energy model.

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 • Benchmarking of energy consumption internally (historical /
trend analysis) and externally (across similar industries) are
two powerful tools for performance assessment and logical
evolution of avenues for improvement.
– Historical data well documented helps to bring out energy consumption
and cost trends month-wise / day-wise.
– Trend analysis of energy consumption, cost, relevant production
features, specific energy consumption, help to understand effects of
capacity utilization on energy use efficiency and costs on a broader scale.
– External benchmarking relates to inter-unit comparison across a group
of similar units. However, it would be important to ascertain similarities,
as otherwise findings can be grossly misleading.

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 • Few comparative factors, which need to be looked into while
benchmarking externally are:
• Scale of operation
• Vintage of technology
• Raw material specifications and quality
• Product specifications and quality
• Benchmarking energy performance permits
– Quantification of fixed and variable energy consumption trends vis-à-vis
production levels
– Comparison of the industry energy performance with respect to various
production levels (capacity utilization)
– Identification of best practices (based on the external benchmarking
data)
– Scope and margin available for energy consumption and cost reduction
– Basis for monitoring and target setting exercises.

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 • While such benchmarks are referred to, related crucial process
parameters need mentioning for meaningful comparison among
peers. For instance, in the above case:
– For a cement plant - type of cement, blaine number (fineness) i.e. Portland
and process used (wet/dry) are to be reported alongside kWh/MT figure.
– For a textile unit - average count, type of yarn i.e. polyester/cotton, is to be
reported along side kWh/square meter.
– For a paper plant - paper type, raw material (recycling extent), GSM quality is
some important factors to be reported along with kWh/MT, kCal/Kg figures.
– For a power plant / cogeneration plant - plant % loading, condenser
vacuum, inlet cool ing water temperature, would be important factors to be
mentione
– For an Air conditioning (A/c) plant - Chilled water temperature level and
refrigeration load (TR) are crucial for comparing kW/TR.d alongside heat rate
(kCal/kWh).
– Diesel power plant performance - is to be compared at similar loading %,
steady run condition etc.

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 Understanding Energy Costs

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 Understanding Energy Costs
• Understanding energy cost is vital factor for awareness creation
and saving calculation.
• In many industries sufficient meters may not be available to
measure all the energy used. In such cases, invoices for fuels
and electricity will be useful.
• The annual company balance sheet is the other sources where
fuel cost and power are given with production related
information.

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 • Energy invoices can be used for the following purposes:
– They provide a record of energy purchased in a given year, which gives a
base-line for future reference
– Energy invoices may indicate the potential for savings when related to
production requirements or to air conditioning requirements/space
heating etc.
– When electricity is purchased on the basis of maximum demand tariff
– They can suggest where savings are most likely to be made.
– In later years invoices can be used to quantify the energy and cost
savings made through energy conservation measures

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 Understanding Electricity consumption in
India

• At the all-India level (Figure 3), while domestic and agriculture consumers together account for
nearly half (49%) of the total electricity sales, their contribution to revenues was just about
one-third (31%). This is nearly inversely true for industrial consumers, whose total consumption
is 30% of total electricity sales in the country and their revenue contribution was 42%.
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 How electricity is charged?
Electricity could be charge as follows :
• Simple (or Fixed) Rate
– The Simple Rate program is simply that. Simple. The utility charges $0.xx
cents per kilowatt-hour used
– Example : kWh used:2,300 Rate per kWh:$0.1125
Calculation:2,300 x $0.1125 = $258.75
• Tiered (or Step) Rate
– One would think the concept of this rate would be to encourage
conservation by charging a higher rate as the usage increased. This makes
sense.
– Example : Energy Charge for the first 500 kWh:500 kWh x $0.1001 = $ 50.05
Energy Charge for the remaining 1800 kWh:1800 kWh x $0.1500 = $ 270.00
Subtotal= $ 320.05

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 • Time of Use (TOU)
– The concept is to charge the consumer the highest rate during peak
usage periods in order to persuade the consumer to be more
conscientious in their conservation efforts.
– A TOU rate plan requires a special electric meter to be installed; this
meter is able to keep up with usage during specific times of the day, and
report the usage to the utility at intervals so that the utility can bill
accurately for the usage.
• Demand Rates
– Demand rates are typically associated with commercial or industrial
facilities.
– Accompanying a Demand Rate will generally be a low kWh charge for
the energy consumed throughout the billing period; this is then added to
the Demand Charge.

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 • Tiered within Time of Use
– This is an unusual rate, but not uncommon. This rate is too complicated
for an individual to keep up with without technology assistance. The rate
can get even more complicated as some utilities maintain this rate
structure on a DAILY basis.
– Example, let’s say you have 3 TOU periods throughout the day.
• Off-Peak from midnight until 10AM
• Mid-peak from 10AM until 5PM
• Peak from 5PM until 11:59PM
– To really complicate things the utility might add 2, 3, or 4 tiers within
each of the above. So the rate would have a formula that would look
something like this:
• Off-Peak from midnight until 10AM (1st 10 kWh @ $0.04, 11-20kWh @
$0.06, 21+kWh @$0.08)
• Mid-peak from 10AM until 5PM (1st 20 kWh @ $0.10, 21-40kWh @ $0.16,
41+kWh @$0.19)
• Peak from 5PM until 11:59PM (1st 25 kWh @ $0.20, 26-45kWh @ $0.22,
46+kWh @$0.28)
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 • Seasonal (4 Seasons)
– Seasonal charges (Winter, Spring, Summer, Fall) are pretty standard in
the industry. Some utilities charge a higher rate during Winter and
Summer, as they are the seasons that require the most energy (primarily
due to Heating and Air Conditioning) ... and it costs more to produce
more energy. So the utilities pass the extra costs on to the consumer.
• Weekend / Holidays
– Weekend and Holiday Rates generally only apply to those on Tiered or
Time of Use Rate plans. Rates on Saturday and Sunday are at their lowest
rates. There are no Tiers or TOU rates on weekends or holidays. Energy is
charged at an Off-Peak rate for the entire period.
• Any combination of the above

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 • The total cost levied on the consumer is divided into three parts usually
referred as 3 part tariff system.

Here,
a = fixed cost independent of the maximum demand and energy consumed.
This cost takes into account the cost of land, labor, interest on capital cost,
depreciation, etc.
b = constant which when multiplied by maximum KW demand gives the semi-
fixed cost. This takes into account the size of power plant as maximum demand
determines the size of power plant.
c = a constant which when multiplied by actual energy consumed KW-h gives
the running cost which8m takes into account the cost of fuel consumed in producing
power.
• Thus the total amount paid by the consumer depends on its maximum
demand, actual energy consumed plus some constant sum of money.
• All these costs are calculated on active power consumed. It is mandatory for
the consumer to maintain a power factor of 0.8 or above otherwise penalty
is levied on them depending on the deviation.

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