U19EE1002

ENERGY CONSERVATION AND

MANAGEMENT
Course Outcome
At the end of this course the student will
be able to,

Assess role of energy in global economic

development.

Explain methodology of energy audit and

concept of instruments used.

Discuss various lamps and design energy

efficient illumination schemes.


Introduction

electricity act 2003

standards
environment
ENERGY CONSERVATION
in buildings
Global environmentalissues

CONSERVATION
energy balance
Energy efficiency Payback period
Carbon footprint
Non-renewable MANAGEMENT
Energy conservation
LIGHTING SYSTEMS building code
Benchmarking Audit Financial Audit

ECM
Energy costs
ENERGY
Solar

Need for energy audit

CONSERVATION &Energy flow
MANAGEMENT Illumination

Renewable
Coal ENERGY SCENARIO AND BASICS energy scenario
issues power basics
ENERGY EFFICIENT OPPORTUNITIES Energy efficiency
utilities
energy management and audit Wind Oil labeling
performance Energy saving opportunities
 UNIT - II

ENERGY MANAGEMENT AND

AUDIT
Definition and objectives of energy management and audit – need for
energy audit – types of energy audit – methodology for conducting
detailed energy audit – ENCON opportunities and measures – energy
audit report. energy costs – benchmarking – energy performance –
fuel and energy substitution – instruments and metering for energy
audit – basic principles, components of material and energy balance –
Sankey diagram – financial analysis terms – payback period, ROI, NPV,
IRR.
nition of Energy Management & Audit
Definition
"The judicious and effective use of energy to maximize profits
(minimize costs) and enhance competitive positions"

Or

"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"
ctives of Energy Management & Audit

To achieve and maintain optimum energy procurement and

utilisation, throughout the organization.

To minimise energy costs / waste without affecting production

& quality

To minimise environmental effects.

Needs of Energy Audit

As per the Energy Conservation Act, 2001, Energy Audit is

defined as,
“Energy Audit means 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".
Needs of Energy Audit
Three top operating expenses are often found to be energy (both electrical and
thermal), labour and materials.

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.

Such an audit programme will help to keep focus on variations which occur in the
energy costs, availability and reliability of supply of energy, decide on appropriate
energy mix, identify energy conservation technologies, retrofit for energy
conservation equipment etc.
 Contd…
 In general, Energy Audit is the translation of conservation ideas into
realities, by lending technically feasible solutions with economic and
other organizational considerations within a specified time frame.

 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
- Potential and magnitude of cost reduction desired

Thus Energy Audit can be classified into the following 3 types.

i) Preliminary Audit
ii) Targeted Energy Audit
iii) Detailed Audit
iv) Investment Grade 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
 Preliminary Energy Audit Methodology

Scope of Preliminary (Walk Through) Energy Audit Methodology :

No-cost Energy Management:

 Contd…
Low-cost Energy Management:

Areas for Detailed Study / Measurement :

Targeted Energy Audits

Targeted energy audits often results for preliminary audits.

Based on the preliminary audit data and detailed analysis on
specified target projects.

Example:-
- Lighting
- Boiler
- Steam System
- Compressed Air
Detailed Energy Audit Methodology

Detailed energy auditing is carried out in three phases:

I - Pre Audit Phase Phase
II - Audit Phase Phase
III - Post Audit Phase
Ten Steps Methodology for Detailed Energy Audit
Contd…
Contd…
Contd…
 Phase I -Pre Audit Phase Activities
During the initial site visit the Energy Auditor/Engineer
should carry out the following actions: -
• Discuss with the site's senior management the aims of the
energy audit.
• Discuss economic guidelines associated with the
recommendations of the audit.
• Analyse the major energy consumption data with the
relevant personnel.
• Obtain site drawings where available - building layout,
steam distribution, compressed air distribution, electricity
distribution etc.
• Tour the site accompanied by engineering/production
Outcome of the Phase I -Pre Audit
Phase Activities
Phase II- Detailed Energy Audit Activities
Information to be collected during the detailed audit includes:
 Cont
d…
Energy audit team should ensure that the following baseline data’s are collected:
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, efficienct energy
conversion equipment, biomass gasifiers,
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.
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
Work Sheet for Economic Feasibility
 Classification of Energy
Conservation Measures
Classified into three categories:
1. Low cost - high return
2. Medium cost - medium return
3. High cost - high return
Energy Audit Reporting Format

Refer PDF File

 Energy Costs

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
 Fuel Costs
Few are listed below:
 Fuel oil
 Low Sulphur Heavy Stock
(LSHS)
 Light Diesel Oil (LDO)
 Liquefied Petroleum Gas
(LPG)
 COAL
 LIGNITE
 WOOD ETC.
Benchmarking and Energy Performance

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 Permit

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.
 Fuel and Energy Substitution
Fuel substitution: Substituting existing fossil fuel with more efficient and
less cost/less polluting fuel such as natural gas, biogas and locally available agro-
residues.

Few examples of fuel substitution

• Natural gas is increasingly the fuel of choice as fuel and
feedstock in the fertilizer, petro chemicals, power and sponge
iron industries.
• Replacement of coal by coconut shells, rice husk etc.
• Replacement of Light diesel oil( LDO) by low sulphur heavy
stock (LSHS)
Few examples of energy substitution
Replacement of electric heaters by steam heaters
 Replacement of steam based hotwater by solar systems
 Basic Principles
If the unit operation, whatever its nature is seen as a whole it may be
represented diagrammatically as a box, as shown in Figure. The mass and
energy going into the box must balance with the mass and energy coming out.
 Sankey Diagram
The Sankey diagram is very useful tool to represent an
entire input and output energy flow in any energy equipment
or system such as boiler, fired heaters, furnaces after carrying out
energy balance calculation. This diagram represents visually
various outputs and losses so that energy managers can focus
on finding improvements in a prioritized manner.
Material Balances
The first step is to look at the three basic
categories: materials in, materials out and
materials stored. Then the materials in each
category have to be considered whether they are
to be treated as a whole, a gross mass balance, or
whether various constituents should be treated
separately and if so what constituents.
 Energy Balances
Energy takes many forms, such as heat, kinetic
energy, chemical energy, potential energy but because of
inter conversions it is not always easy to isolate separate
constituents of energy balances.
 What is the Payback
Period?
The Payback Period shows how long it takes for a
business to recoup an investment. This type of analysis
allows firms to compare alternative investment
opportunities and decide on a project that returns its
investment in the shortest time, if that criteria is
important to them.
The payback period refers to the amount of time it
takes to recover the cost of an investment or how
long it takes for an investor to reach breakeven.
Account and fund managers use the payback period
to determine whether to go through with an investment.
Shorter paybacks mean more attractive investments,
while longer payback periods are less desirable.
The payback period is calculated by dividing the
amount of the investment by the annual cash flow.
dvantages and Disadvantages
Advantages of payback period are:
Payback period is very simple to calculate.
It can be a measure of risk inherent in a project. Since cash flows that occur later in a project's life are
considered more uncertain, payback period provides an indication of how certain the project cash
inflows are.
For companies facing liquidity problems, it provides a good ranking of projects that would return
money early.
Disadvantages of payback period are:
Payback period does not take into account the time value of money which is a serious drawback
since it can lead to wrong decisions. A variation of payback method that attempts to address this
drawback is called discounted payback period method.
It does not take into account, the cash flows that occur after the payback period. This means that a
project having very good cash inflows but beyond its payback period may be ignored.
 Return on Investment (ROI)

Return on Investment (ROI) is a performance measure used

to evaluate the efficiency of an investment or compare the
efficiency of a number of different investments.
 Net Present Value (NPV)
Net present value (NPV) is the difference between
the present value of cash inflows and the
present value of cash outflows over a period of time.
 Internal Rate of Return (IRR)
The internal rate of return is a metric used in financial
analysis to estimate the profitability of potential
investments.
IRR is the annual rate of growth an investment is expected to generate.
IRR is calculated using the same concept as NPV, except it sets the NPV
equal to zero.
IRR is ideal for analyzing capital budgeting projects to understand and
compare potential rates of annual return over time.
Thank You